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Nature of Suit Code: 422
Nature of Suit: Bankruptcy Appeals Rule 28 USC 158
Cause of Action: 

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PUBLISH 

UNITED STATES COURT OF APPEALS 

FOR THE TENTH CIRCUIT 

NIKKI DEE MAUS, 

Debtor-Appellee, 

FILED 

United States Court of Appeals 

Tenth Cirf!uit 

JAN 2 81988 

ROBERT L. HOECKER 

Clerk 

v. No. 8 5-2389 

JESSE R. MAUS, 

Appellant. 

Appeal from the United States District Court 

for the District of Kansas 

(D.C. No. 85-1563-K) 

Submitted on the briefs: 

Charles F. Harris of Kaplan, McMillan and Harris of Wichita, 

Kansas, for Debtor-Appellee. 

Donald B. Clark of Wichita, Kansas, for Appellant. 

Before SEYMOUR, MOORE, and ANDERSON, Circuit Judges. 

SEYMOUR, Circuit Judge. 

Appellate Case: 85-2389 Document: 01019290852 Date Filed: 01/28/1988 Page: 1 
Nikki Maus filed a voluntary bankruptcy petition and claimed 

certain real property exempt as her homestead under 11 U.S.C. 

§ 522(b)(2)(A) (1982) and Kan. Stat. Ann. § 60-2301 (1983). She 

subsequently filed an application with the bankruptcy court under 

11 U.S.C. § 522(f)(l) to avoid the alleged lien of her ex-husband, 

Jesse R. Maus, on this property. The bankruptcy court denied 

Nikki's petition. She appealed to the district court, which 

concluded, contrary to the bankruptcy court, that Jesse's claim 

against the homestead was an avoidable judicial lien under section 

522(f)(l). Jesse appeals, 1 and we affirm the decision of the 

district court. 

I . 

Nikki and Jesse were divorced July 31, 1981. They had 

entered into a property settlement agreement which was incorporated into the divorce decree. This agreement provides in 

relevant part: 

"D. [Nikki] be, and she is hereby granted as her 

sole and separate property, free and clear of any and 

all claims of [Jesse], the following: 

* * * 

1 After exam~n~ng the briefs and appellate record, this panel 

has determined unanimously that oral argument would not materially 

assist the determination of this appeal. See Fed. R. App. P. 

34(a); lOth Cir. R. 34.1.8. The cause is therefore ordered 

submitted without oral argument. 

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Appellate Case: 85-2389 Document: 01019290852 Date Filed: 01/28/1988 Page: 2 
That real property legally described as follows, 

to-wit: 

The South 660 feet of the East 561 feet of the 

Southeast Quarter (SE!) of the Southwest 

Quarter (SW!) of Section 15, Township 27 

South, Range 4 West of the 6th P.M., Sedgwick 

County, Kansas. 

"F. [Nikki) shall pay to [Jesse) the sum of 

Twenty-Two Thousand Dollars ($22,000.00) on or before 

the lst day of September, 1985, subject to any credit as 

mentioned in paragraph E hereinabove, [resulting from 

Jesse's failure to convey marketable title within thirty 

days), all without interest. 

"G. Should [Nikki) sell or convey the real 

property first hereinabove described prior to July 1, 

1984, [Jesse] shall be entitled to receive 40% of the 

net proceeds of the sale of the same, after deduction 

and payment of the existing mortgage thereon and all 

reasonable costs and expenses of sale, including a 

realtor's commission". 

Rec., vol. I, doc. 2, at 2-3 (emphasis added). 2 

Nikki subsequently refinanced the mortgage on this property 

and granted a second mortgage. In February 1984, the holder of 

the second mortgage began foreclosure proceedings. Nikki filed 

for bankruptcy several months later, claiming the property as 

homestead under section 522(b)(2)(A) and listing $22,000 as an 

unsecured obligation to Jesse. She subsequently applied to avoid 

any lien Jesse might have on the property. 

2 The parties and the courts below apparently agreed that Nikki 

Maus was obligated either to pay Jesse $22,000 on or before 

September 1, 1985, or to pay him 40% of the net proceeds from the 

property if she sold it before July 1, 1984. 

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Appellate Case: 85-2389 Document: 01019290852 Date Filed: 01/28/1988 Page: 3 
Nikki contended in the bankruptcy court that Jesse's claim as 

a result of the $22,000 debt does not constitute a lien. She 

argued alternatively that if the debt is a lien against the 

homestead property, at most it is an avoidable judicial lien 

within the meaning of 11 u.s.c. § 522(f)(l). The bankruptcy court 

held that the debt constitutes a lien against the homestead, and 

that the lien was not a judicial lien but a consensual lien in the 

nature of a security agreement and thus not avoidable within the 

ambit of§ 522(f)(l). The district court agreed, without citing 

any authority, that Jesse's judgment against Nikki represents a 

lien on her homestead. Contrary to the bankruptcy court, however, 

the court further concluded that this lien is an avoidable 

judicial lien under section 522(f)(l). 

II. 

Section 522(c)(l) provides that homestead property is not 

liable for the debtor's debts except for those specified in 

section 523(a)(5), which excepts from discharge debts "to a 

spouse, former spouse, or child of the debtor, for alimony to, 

maintenance for, or support of such spouse or child, in connection 

with a separation agreement, divorce decree, or property settlement agreement II 11 u.s.c. § 523(a)(5) (1982). 3 

Significantly, property settlements are not included in the 

3 This provision has since been modified in a fashion not 

relevant to this case. 

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Appellate Case: 85-2389 Document: 01019290852 Date Filed: 01/28/1988 Page: 4 
section 523(a) exceptions to discharge, and courts generally have 

held that unsecured debts representing property settlements are 

dischargeable in bankruptcy. See Brody & Brody v. Birdseye (In re 

Birdseye), 548 F.2d 321, 322 (lOth Cir. 1977); see also Singer v. 

Singer (In re Singer), 787 F.2d 1033, 1034 (6th Cir. 1986); In re 

Coil, 680 F.2d 1170, 1171 (7th Cir. 1982); Albin v. Albin (In re 

Albin), 591 F.2d 94, 96-97 (9th Cir. 1979). 

In addition, section 522(f)(l) states that "the debtor may 

avoid the fixing of a lien on an interest of the debtor in 

property to the extent that such lien impairs an exemption to 

which the debtor would have been entitled under subsection (b) of 

this section [homestead], if such lien is--1) a judicial 

lien •••. " 11 u.s.c. § 522(f)(l). Section 522(f)(l) thus 

allows the debtor to avoid a lien if it is 1) a judicial lien, 2) 

on an interest of the debtor in property. A judicial lien is 

defined as a "lien obtained by judgment, levy, sequestration, or 

other legal or equitable process or proceeding .... " ll U.S.C. 

S 101(27) (1982) (currently codified at 11 U.S.C.A. § 101(32) 

(West Supp. 1987)). 

In sum, Nikki may avoid Jesse's claim either if it is merely 

a debt stemming from a property settlement rather than a lien, or 

if it is a judicial lien on her own property. 

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Appellate Case: 85-2389 Document: 01019290852 Date Filed: 01/28/1988 Page: 5 
A. 

Nikki argues first that no lien was created in the divorce 

decree. The settlement agreement, supra at 2-3, does not by its 

own terms give Jess~ a lien on the property to enforce Nikki's 

payment obligation. To the contrary, the agreement specifically 

states that Nikki is to hold the property free of any claim by 

Jesse. The divorce decree contains no additional language 

creating a lien against the homestead property. The determination 

of the bankruptcy court that the debt constitutes a consensual 

lien flies in the face of the express language of the settlement 

agreement which specifically states that the property is not 

subject to any interest of Jesse. 

Under Kansas law, however, 

"Any judgment rendered in this state on or after January 

10, 1977, by a court of the United States, or any 

judgment rendered by a district court of this state on 

or after such date in an action commenced under chapter 

60 of the Kansas Statutes Annotated shall be a lien on 

the real estate of the debtor within the county in which 

judgment is rendered." 

Kan. Stat. Ann. § 60-2202(a) (1983}. 4 Divorce proceedings in 

Kansas are commenced under chapter 60, see Kan. Stat. Ann. §§ 

4 After the divorce decree was entered, this provision was 

slightly modified to eliminate language not relevant to our 

consideration. See Kan. Stat. Ann. 60-2202 (1986 Cum. Supp.). 

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Appellate Case: 85-2389 Document: 01019290852 Date Filed: 01/28/1988 Page: 6 
60-1601 et. ~' and the record reveals that the subject property 

is located in the county in which the divorce was granted. 

Nikki argues that, notwithstanding the judgment lien statute, 

a judgment creditor ~n Kansas cannot obtain a lien on the debtor's 

homestead, citing as authority Jones v. Saint Francis Hospital, 

225 Kan. 649, 594 P.2d 162 (1979). However, Jones did not involve 

a judgment rendered in divorce proceedings. Kansas law is clear 

that when the divorce decree itself imposes a lien on real estate 

to secure a money judgment, that lien can attach to homestead 

property. See Bohl v. Bohl, 234 Kan. 227, 670 P.2d 1344 (1983). 

We have found no case in which the Kansas courts have considered 

whether a money judgment in a divorce decree can give rise to a 

lien on homestead property by the operation of section 60-2202 

when the decree does not specifically create a lien. Although 

the instant case falls into the latter uncertain category, we need 

not decide the issue. Even if such a lien were created, we agree 

with the district court that it would be a judicial lien as 

defined in 11 U.S.C. § 101(27). 

B. 

The bankruptcy court held that the lien it found in the 

divorce decree was a consensual lien created by the settlement 

agreement and not avoidable under the Bankruptcy Act. As we have 

noted, however, the settlement agreement specifically states that 

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Appellate Case: 85-2389 Document: 01019290852 Date Filed: 01/28/1988 Page: 7 
the homestead property is granted to Nikki free and clear of all 

claims of Jesse. The facts here are therefore distinguishable 

from those cases relied on by the bankruptcy court in which the 

decree itself embodies an agreement to create a lien on the 

property to enforce ·the property settlement. See, ~· In re 

Jackson, No. 83-20194 (Bankr. D. Kan. Aug. 30, 1983); In re Cox, 

No. 83-40010 (Bankr. D. Kan. Sept. 30, 1983); see also Wicks v. 

Wicks (In re Wicks), 26 Bankr. 769 (Bankr. D. Minn. 1982); Dunn v. 

Dunn (In re Dunn), 10 Bankr. 385 (Bankr. W.D. Okla. 1981). The 

case of Cowan v. Cowan (In re Scott), 12 Bankr. 613 (Bankr. W.D. 

Okla. 1981), is likewise distinguishable because there the court 

granted a lien in the divorce decree to secure the property 

settlement. 

We thus conclude that if the decree imposes a lien at all, it 

is a judgment lien under Kan. Stat. Ann. § 60-2202(a). Consequently, it is a judicial lien as defined in 11 u.s.c. § 101(27). 

c. 

Assuming that a judicial lien was created in this case, the 

question remains whether the lien attached to the debtor's 

interest in the property. See id. § 522(f)(l). Many courts have 

struggled to find theories under which a lien to enforce a 

property settlement survives bankruptcy. One theory holds that 

the lien does not attach to an interest of the debtor because the 

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Appellate Case: 85-2389 Document: 01019290852 Date Filed: 01/28/1988 Page: 8 
ex-spouse seeking to enforce the lien has a pre-existing interest 

in the property by virtue of the marital relationship. Under this 

theory~ the pre-existing interest does not pass to the debtor 

spouse under the divorce decree, and the lien attaches to the 

preexisting interest of the creditor spouse rather than to any 

interest of the debtor spouse. See Boyd v. Robinson (In re Boyd), 

741 F.2d 1112 (8th Cir. 1984). The problem with this convoluted 

theory is that, as the dissent in Boyd points out, id. at 1115, 

the decree gives one party title outright and that is the interest 

to which the lien attaches. 

Under Kansas law, moreover, the court in a divorce proceeding 

may award the marital property entirely to one party so long as 

the overall division is fair. See Cady v. Cady, 224 Kan. 339, 581 

P.2d 358 (1978); Gronquist v. Gronquist, 7 Kan. App. 583, 644 P.2d 

1365, 1367 (1982). Once a divorce petition is filed, "each spouse 

becomes the owner of a vested, but undetermined, interest in all 

the property individually or jointly held. The court is obligated 

to divide the property in a just and equitable manner, regardless 

of the title or origin of the property." Cady, 581 P.2d at 362-

63. The court may cut off all of a spouse's rights to property by 

using specific language, as was done here. See Linson v. Johnson, 

223 Kan. 442, 575 P.2d 504, 505 (1978). This construction of the 

nature of marital rights in Kansas by the Kansas courts clearly 

defeats the theory of a pre-existing property interest which is 

not extinguished by the divorce decree. We therefore conclude 

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that any lien in this case attached to an interest of the debtor 

within the meaning of section 522(f)(l). 

III. 

In sum, we hold that Nikki Maus may avoid Jesse's judicial 

lien on her homestead under section 522(f)(l). 5 In so doing, we 

recognize that our decision may produce questionable results in 

some circumstances. However, we agree with the district court's 

observation that the policy considerations at issue have been 

weighed by Congress and embodied in the language of the Bankruptcy 

Act. It is the prerogative of Congress and not of the courts to 

adjust that balance. 

AFFIRMED. 

5 We reject out of hand the bankruptcy court's alternative 

ruling that Jesse's interest was tantamount to an equitable 

mortgage arising from a constructive trust. Under Kansas law, 

'[a] constructive trust ..• arises in those cases where a person 

by fraud, actual or constructive, or by any form of unconscionable 

conduct, or questionable ethics has obtained or holds title to 

property which in equity and good conscience he ought not to 

possess or which justly belongs to another." Minich v. Kuns (In 

re Estate of Zimmerman), 207 Kan. 354, 485 P.2d 215, 218 (1971). 

A constructive trust will not be imposed unless an "aroma of 

wrongdoing permeates the atmosphere." Robertson v. Yeakel (In re 

Topeka Motor Freight, Inc.), 553 F.2d 1227, 1231 (lOth Cir. 1977) 

(quoting In re Zimmerman, 475 P.2d at 218). The bankruptcy court 

here made no fact findings to support the imposition of a 

constructive trust, and the record is devoid of any evidence that 

the requisite circumstances were present. Moreover, ll U.S.C. 

§ 523(a)(2)(A) specifically covers the requirements for declaring 

a debt nondischargeable on the basis of fraud. These elements are 

strict and must be shown by clear and convincing evidence. See 

Driggs v. Black (In re Black), 787 F.2d 503, 505 (lOth Cir. 1986). 

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