Legal Document

500 U.S. 291 111 S.Ct. 1825 114 L.Ed.2d 337 Jeanne FARREY, fka Sanderfoot, Petitioner,v.Gerald J. SANDERFOOT. No. 90-350. Argued March 25, 1991. Decided May 23, Syllabus When petitioner Farrey and respondent Sanderfoot divorced, a Wisconsin court awarded each one-half of their marital estate. Among other things, the decree Farrey's interest in family home real estate to ordered him make payments equalize net assets. To secure award, granted lien against Sanderfoot's property. did not pay subsequently filed for bankruptcy, listing as exempt homestead The Bankruptcy Court denied his motion avoid under 11 U.S.C. § 522(f)(1)—which provides, inter alia, that debtor "may fixing [judicial] on an property"—finding could be avoided because it protected pre-existing District reversed, Appeals affirmed. Held: 1. Section 522(f)(1) requires have possessed which attached, before interest. statute does permit avoidance any property, but instead expressly permits "the debtor." A takes place acquires interest, by definition, is debtor's This reading fully comports with 522(f)'s purpose, protect its legislative history, suggests Congress primarily intended device thwart creditors who, sensing impending rush obtain judgment defeat exemptions. where at no point without judicial would allow lienholders defrauded through conveyance encumbered prospective debtor. Pp. 295-299. 2. cannot 522(f)(1). parties agree that, state law, divorce extinguished joint tenancy, had undivided created new interests old. Thus, her fixed rather fee simple he was simultaneously lien. result same even if merely reordered couple's interests, since fastened only what been never already having fixed. use Code deprive protection own neither follow statute's language nor serve main goal. 299-301. 899 F.2d 598 (CA7 1990), reversed remanded. WHITE, J., delivered opinion Court, REHNQUIST, C.J., MARSHALL, BLACKMUN, STEVENS, O'CONNOR, KENNEDY, SOUTER, JJ., joined, all penultimate paragraph Part III SCALIA, joined. concurring opinion, Brady C. Williamson, Madison, Wis., petitioner. Harvey G. Samson, Appleton, respondent. Justice WHITE Court. 1 In this case we consider whether 522(f) allows homestead, former spouse extinguishes previous event secures more than value non-debtor spouse's We hold not. 2 * Petitioner Gerald were married August 12, 1966. couple eventually built 27 acres land Hortonville, Wisconsin, they raised three children. On September 1986, Outagamie County entered bench decision granting property division resolved contested issues terminated marriage. See Wis.Stat. 767.37(3) (1989-1990). written followed February 5, 1987. 3 party $60,600.68 reflected Wisconsin's statutory presumption "be divided equally between parties." 767.255. sole title house, subject mortgage valued $104,000.00, most personal For share, received remaining items proceeds from court-ordered auction furniture home. also allocated liabilities. Under preliminary calculation assets debts, stood receive award $59,508.79, while otherwise $1,091.90. insure equal, $29,208.44, half difference amount two installments: January 10, 1987, April provided "shall [Sanderfoot] total money due pursuant Order i.e. shall remain attached . until paid full." (App. Pet. Cert. 57a). 4 made required complied order court. Instead, 4, voluntarily Chapter 7 bankruptcy. listed schedule bankruptcy petition Exercising option invoke federal exemption, 522(b)(2)(A), claimed "to $40,000" 815.20 (1989-1990).1 He provision dispute, 522(f)(1), claiming impaired exemption. objected motion, divest home.2 holding re 83 B.R. 564 (ED Wis.1988). concluding avoidable "is property." 92 802 5 panel 1990). reasoned proceeding dissolved "created dissolution evidenced lien, Mr. Id., 602. Noting issue caused split among Courts Appeals, relied those decisions termed "faithful plain section 522(f)." Ibid. (citing Pederson, 875 781 (CA9 1989); Maus v. Maus, 837 935 (CA10 1988); Boyd Robinson, 741 1112, 1115 (CA8 1984) (Ross, dissenting)). 6 Judge Posner, dissent, argued 522(f), must time places Posner concluded gave entire favor Farrey, attach husband. dissent's conclusion result, though rationale, Boyd, supra, Borman, 886 273 1989), Donahue, 862 259 1988). certiorari resolve conflict authority. 495 ----, 507, 112 519 (1990). now reverse Appeals' remand. II 8 provides relevant part: 9 "Notwithstanding waiver exemptions, may extent such impairs exemption entitled subsection (b) section, is— 10 "(1) ." establishes several conditions avoided, one issue. Hart, 50 956, 960 (Bkrtcy Ct.Nev.1985). challenge determination F.2d, 603-605, do address question here. determined waived id., 603, agree. Owen Owen, --- 1833, ---- (1991). presented obtained decree. 12 key portion states following phrase means so long currently Posner's lead, reads text permitting some after 13 Farrey. No asserts verbs underlying possess anything standard legal meaning: "avoid" meaning "annul" or "undo," see Black's Law Dictionary 136 (6th ed. 1990); H.R.Rep. 95-595, pp. 126-127 (1977), U.S.Code Cong. & Admin.News 1978, p. 5787, "fix" "fasten liability upon," Dictionary, 637. say undo Rather, fixing" gerund "fixing" refers temporal event. That event—the fastening liability—presupposes object onto can fasten. defines "an Therefore, unless she terms 522(f)(1).3 14 provision's purpose history. United States Ron Pair Enterprises, Inc., 489 235, 242, 109 1026, 1031, 103 290 (1989). enacted broad protecting S.Rep. 95-989, 77 (1978); 126-127. Ordinarily, liens secured survive particular, well settled when valid enforced Louisville Joint Stock Land Bank Radford, 295 555, 582-583, 55 854, 859-860, 79 L.Ed. 1593 (1935), including Long Bullard, 117 617, 620-621, 917, 918, 29 1004 (1886). generally preserved principle comprehensively revised law Reform Act Pub.L. 95-598, Stat. 2587, 522(c)(2)(A)(i). But liens. See, e.g., 545 (statutory liens). 15 terms, extends cases involving What specific history exists principal reason singled out are commonly used accords debts. As House Report stated: 16 "The first right [§ ] actions bring action shortly provide relief overburdened If creditor beats into court, nevertheless exemptions." 595, 126-127, 6087-6088. 17 One factor supporting view courthouse Congress' contemporaneous elimination 67 1898 Act, 30 564. Prior repeal, 67(a) invalidated insolvent within four months filing. eliminated insolvency timing requirements. It possible simply decided leave exemptions exposed despite longstanding policy doing so. given history's express concern over follows handle old job "giv[ing] certain rights available current respect 126, 6087. 18 Conversely, text, indicate concerned with. acquired Neither contends otherwise. avoided; instead, "fixing took definition Nor apply preventing beating courthouse, There there. these circumstances, fact, McCormick, 911, 913-914 (Bkrtcy.Ct. WD Pa.1982). reasons, attached. supra; Stephens, 485 NC 1981); Scott, 613 Okla.1981). before, critical inquiry remains ever fixed, not, 19 turn application case. 20 Whether law. prior judgment, husband held possessing She further interests. At transaction, concludes, old: ownership house estate; various debt $29,208.44 Both briefs oral argument, agreed point. (Brief Respondent 7-8; Tr. Oral Arg. 39). 21 assumption characterize correctly, lose. view, it. encumbers wholly stated, "free clear" claim "except [decree]." 58a). together, purchased third party. Since "fixed", void 22 extinguish them. parties' position notwithstanding, augmented adding exchange sought encumbrance surviving part case, purport encumber deem survived. transferred and, again simultaneously, equal minus small retained. thus still unable fixed.4 23 either theory, purpose. noted, occurs this. spouse. obligation imposed court's simultaneous wife's circumstances goal designed address. IV 24 Accordingly, remanded proceedings consistent opinion. 25 ordered. 26 whom SOUTER joins, concurring. I Court's conceded know describing effect Family question, stated brief Court: 28 "Prior divorce, issued determination, put place." Brief 7-8. concession fatal argument prevail here, upon With posture, though, possibility arises later cases, jurisdiction, yield different result. depend laws defining owned who governing awards settling rights. ordering division, vested, present, statutes, State adopted substantial parts Uniform Marital Property "[a]ll spouses presumed property," 766.31(2) (1989-1990), "[e]ach has present item 766.31(3). Absent respondent's concession, seem "Findings Fact, Conclusions Law, Judgment Divorce" declare predecree extinguished. declared effective date vested wife owed settlement. Finally, divested "any right, other." App. 58a. read provisions, home, always retaining well. Because wife, 31 interpretation conforms mandated marriage terminates division. "[a]fter owns tenant common." 766.75 So too, voluntary transfer spouse, should think said transferee's transferee retain merged single Thauer Smith, 213 Wis. 91, 95, 250 N.W. 842, 844 (1933). state-law scheme pattern distinguished, course, regime tenancy entirety recognized deemed entity, dissolves does. McCormick Mid-State Trust Co., 997 (WD Pa.1982) (applying Pennsylvania law). clear matter husband's so, least 32 reaches consists fairness common sense. power strip altogether, condition terminate whole. problem however, there indication record consented sort contrary nonwaiver 522(f). 33 Following analysis, believe obligations Though adept drafting decrees orders directing conveyances sequence might problem, appears congressional necessary future perhaps unjust today avoids fortuity litigant's concession. observations, concur "Homestead definition. An defined s. 990.01(14) selected resident owner occupied execution, every debts $40,000, except mortgages, laborers', mechanics' purchase taxes provided. therein tenants common, thereon consent cotenants, less fee." valuation $82,750 filings. dispute merits. Other provisions likewise term refer 545(1), example, provides: trustee lien— becomes debtor— "(A) concerning commenced; "(B) "(C) custodian appointed authorized take possession; "(D) insolvent; "(E) financial fails meet specified standard; "(F) execution levied instance entity holder lien." 545(1) (emphasis added). SCALIA join paragraph.

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