UNITED STATES COURT OF APPEALS 

FOR THE TENTH CIRCUIT 

_________________________________ 

In re: JERRY GRANT, 

 Debtor. 

-------------------- 

JUNE CLABAUGH, 

 Appellant, 

v. 

JERRY GRANT, 

 Appellee. 

No. 16-6062 

(BAP No. 15-035-WO) 

(Bankruptcy Appellate Panel) 

_________________________________ 

ORDER AND JUDGMENT*

_________________________________ 

Before MATHESON, McKAY, and O’BRIEN, Circuit Judges. 

_________________________________ 

June Clabaugh appeals from a decision of the Tenth Circuit Bankruptcy 

Appellate Panel (BAP) that affirmed the bankruptcy court’s order avoiding her 

judicial lien on debtor Jerry Grant’s home because it impaired his homestead 

exemption. We have jurisdiction under 28 U.S.C. § 158(d)(1) and affirm. 

 *

 After examining the briefs and appellate record, this panel has determined 

unanimously to honor the parties’ request for a decision on the briefs without oral 

argument. See Fed. R. App. P. 34(f); 10th Cir. R. 34.1(G). The case is therefore 

submitted without oral argument. This order and judgment is not binding precedent, 

except under the doctrines of law of the case, res judicata, and collateral estoppel. It 

may be cited, however, for its persuasive value consistent with Fed. R. App. P. 32.1 

and 10th Cir. R. 32.1. 

FILED 

United States Court of Appeals

Tenth Circuit 

September 20, 2016

Elisabeth A. Shumaker 

Clerk of Court
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I. BACKGROUND 

Ms. Clabaugh inherited valuable coins and heirlooms worth as much as 

$2 million from her father and placed them in a safe deposit box. The bank lost the 

ownership records and, in attempting to locate the owner, used information in the box 

to contact Mr. Grant. Mr. Grant falsely told the bank he was the personal 

representative of Ms. Clabaugh’s father’s estate. He took possession of the box’s 

contents and says he sold them for $488.00. 

Ms. Clabaugh sued the bank and Mr. Grant when she discovered what 

happened. She settled with the bank and obtained a $1.25 million judgment against 

Mr. Grant for conversion. See Clabaugh v. Grant (In re First Am. Bank & Trust), 

347 P.3d 1044, 1049-51. (Okla. Civ. App. 2014) (affirming conversion judgment and 

damage award, reversing fraud judgment), cert. denied (Mar. 30, 2015). Ms. 

Clabaugh recorded her judgment, which by operation of state law attached a judicial 

lien on Mr. Grant’s real estate, including his residence. 

Mr. Grant declared bankruptcy and listed his residence as his homestead 

exemption. Oklahoma’s Constitution and laws permit a person’s principal residence 

to be exempt from attachment or forced sale for payment of debts. See Jones, 

Givens, Gotcher & Bogan, P.C. v. Berger, 46 P.3d 698, 701 (Okla. 2002) (citing 

Okla. Const. art. 12, § 2; Okla. Stat. Ann. tit. 31, § 1(A)). Ms. Clabaugh initially 

objected to the homestead exemption, arguing Mr. Grant used the property as a 

business, but later withdrew her objection. 
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Mr. Grant then moved under 11 U.S.C. § 522(f)(1)(A) to avoid 

Ms. Clabaugh’s judicial lien on his home. The Bankruptcy Code permits a debtor to 

avoid a judicial lien if it impairs an exemption the debtor is entitled to claim, such as 

a homestead exemption permitted by state law. See id. The bankruptcy court granted 

the motion over Ms. Clabaugh’s objections. The court found that Mr. Grant met all 

of § 522(f)(1)(A)’s requirements because Ms. Clabaugh’s claim was based on a 

judicial lien, it impaired his homestead exemption, and he possessed the residential 

property at the time the lien attached. See Farrey v. Sanderfoot, 500 U.S. 291, 295-

96 (1991) (listing requirements to avoid a judicial lien under § 522(f)(1)(A)). The 

bankruptcy court later ruled that Mr. Grant’s debt to Ms. Clabaugh was 

nondischargeable because he had willfully and maliciously injured her property by 

conversion. See 11 U.S.C. § 523(a)(6) (debts arising from “willful and malicious 

injury by the debtor to another entity or to the property of another entity” are 

nondischargeable). 

Ms. Clabaugh appealed the § 522(f)(1)(A) avoidance order to the BAP, which 

affirmed, holding that the bankruptcy court lacked authority under the Bankruptcy 

Code to deny Mr. Grant’s § 522(f)(1)(A) motion. She now appeals to this court. 

II. DISCUSSION 

 Despite what happened to Ms. Clabaugh and her success in obtaining the 

conversion judgment against Mr. Grant, we are bound by Supreme Court precedent 

and the Bankruptcy Code to affirm. “In an appeal from a final decision of a 

bankruptcy court, we independently review the bankruptcy court’s decision, applying 
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the same standard as the bankruptcy appellate panel or district court.” In re 

Millennium Multiple Emp’r Welfare Benefit Plan, 772 F.3d 634, 638 (10th Cir. 2014) 

(brackets and internal quotation marks omitted). We review the bankruptcy court’s 

legal conclusions de novo and its factual findings for clear error. Id. at 639. 

Ms. Clabaugh’s first two appellate arguments challenge the validity of 

Mr. Grant’s homestead exemption, claiming Mr. Grant is ineligible because he is 

single. She did not raise this objection to the homestead exemption in the bankruptcy 

court; indeed, after withdrawing her objection contending Mr. Grant used the 

property as a business, she expressly told the court she was not contesting the validity 

of Mr. Grant’s homestead exemption. Aplt. App. at 388, 390. Because Ms. 

Clabaugh intentionally relinquished her objections to the homestead exemption 

before the bankruptcy court, her first two arguments are waived, and we will not 

consider them. Paycom Payroll, LLC v. Richison, 758 F.3d 1198, 1203 (10th Cir. 

2014). 

Ms. Clabaugh’s third, fourth, fifth, and sixth arguments all contend that the 

bankruptcy court has the equitable power to deny Mr. Grant’s right to avoid the 

judgment lien on his home under § 522(f)(1)(A) because Mr. Grant is a dishonest 

debtor who is concealing his assets from the court, including her coins and 

heirlooms, and because his debt is nondischargeable under § 523(a)(6). 

Ms. Clabaugh does not dispute that Mr. Grant meets all of the statutory requirements 

for avoiding her judicial lien under § 522(f)(1)(A), and she cites no statutory 

provision in the Bankruptcy Code that would limit this exemption. Rather, she 
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argues the court has the inherent equitable power to deny this exemption. She relies 

upon Marrama v. Citizens Bank of Massachusetts, 549 U.S. 365 (2007), which held 

that a bankruptcy court has the equitable power under 11 U.S.C. § 105 to deny a 

Chapter 7 debtor’s right to convert to a Chapter 13 bankruptcy if the debtor is an 

atypical dishonest debtor who acted in bad faith. 549 U.S. at 371, 374-75. She 

contends Mr. Grant acted in bad faith and cites cases holding that equity will not 

suffer a wrong without a remedy. 

But as the both the bankruptcy court and the BAP explained here, the Supreme 

Court’s decision in Law v. Siegel, 134 S. Ct. 1188 (2014), refined Marrama’s 

holding, and unanimously rejected her arguments. Siegel held the Bankruptcy Code 

does not confer “a general, equitable power in bankruptcy courts to deny exemptions 

based on a debtor’s bad-faith conduct.” 134 S. Ct. at 1196; id. at 1197 (“Marrama

most certainly did not endorse, even in dictum, the view that equitable considerations 

permit a bankruptcy court to contravene express provisions of the [Bankruptcy] 

Code.”). The debtor in Siegel created a fictitious and fraudulent lien on his home to 

eliminate any equity and maximize his homestead exemption. The bankruptcy court 

granted the trustee’s motion to surcharge the debtor’s exemption to offset the 

exorbitant litigation costs of uncovering the debtor’s fraud. The Supreme Court held 

that the bankruptcy court exceeded its inherent equitable powers in doing so, 

however, because it contravened the specific provisions of § 522 regarding the 

debtor’s valid homestead exemption. Id. at 1195-96. 
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Siegel recognized that a bankruptcy court has broad equitable powers under 

§ 105 “to issue any order . . . necessary or appropriate to carry out the provisions of 

the Bankruptcy Code” and has “inherent power to sanction abusive litigation 

practices.” 134 S. Ct. at 1194 (ellipsis and internal quotation marks omitted). But it 

also said any equitable powers possessed by “the bankruptcy courts must and can 

only be exercised within the confines of the Bankruptcy Code,” id. (internal 

quotation marks omitted), and “§ 522 does not give courts discretion to grant or 

withhold exemptions based on whatever considerations they deem appropriate,” id. at 

1196. “[T]he court may not refuse to honor the [§ 522] exemption absent a valid 

statutory basis for doing so,” nor may it add exceptions not found in the statute. Id. 

The Court noted that bankruptcy courts retain “authority to respond to debtor 

misconduct with meaningful sanctions[,]” including authority to deny a dishonest 

debtor discharge, id. at 1198, but made clear that “federal law provides no authority 

for bankruptcy courts to deny an exemption on a ground not specified in the Code,” 

id. at 1197 (emphasis omitted). 

Ms. Clabaugh attempts to distinguish her case from Siegel, arguing that 

(1) Mr. Grant is a more extreme, atypical dishonest debtor than the debtor in Siegel;

(2) the debtor in Siegel had not been found guilty of conversion; and (3) the trustee in 

Siegel failed to file a timely objection to the homestead exemption. Although Siegel

involved different misconduct than Mr. Grant’s, its broad holding is dispositive of 

this case. However persuasive Ms. Clabaugh’s equitable arguments may be, we 

agree with the BAP that, under Siegel, the bankruptcy court could not exercise its 
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equitable powers to deny Mr. Grant’s § 522(f)(1)(A) avoidance motion because there 

is no statutory basis to do so. 134 S. Ct. at 1196-97; see also Ellmann v. Baker (In re 

Baker), 791 F.3d 677, 683 (6th Cir. 2015) (“[U]nder Siegel, bankruptcy courts do not 

have authority to use their equitable powers to disallow exemptions or amendments 

to exemptions due to bad faith or misconduct.”). 

Finally, Ms. Clabaugh’s remaining arguments assert Mr. Grant should be 

denied a discharge under § 523(a)(6). The bankruptcy court already ruled in 

Ms. Clabaugh’s favor that Mr. Grant’s debt is nondischargable under § 523(a)(6), so 

these arguments are moot. 

III. CONCLUSION 

For the foregoing reasons and for substantially the same reasons stated by the 

BAP in its order dated February 4, 2016, we affirm. 

ENTERED FOR THE COURT, 

Scott M. Matheson, Jr. 

Circuit Judge