642 F.2d 1193 (10th Cir. 1981), 80-1549, Rodrock v. Security Indus. Bank

Docket Nº:80-1549 to 80-1553, 80-2267 and 80-2268.
Citation:642 F.2d 1193
Party Name:Donald Lee RODROCK and Janet Carol Rodrock, Plaintiffs-Appellants, v. SECURITY INDUSTRIAL BANK, Defendant-Appellee, United States of America, Intervenor-Appellant. Pamela Sue KNEZEL, Plaintiff-Appellant, v. SECURITY INDUSTRIAL BANK, Defendant-Appellee, United States of America, Intervenor-Appellant. Rosemary Louise HOOPS, Plaintiff-Appellant, v. FR
Case Date:March 02, 1981
Court:United States Courts of Appeals, Court of Appeals for the Tenth Circuit
 
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Page 1193

642 F.2d 1193 (10th Cir. 1981)

Donald Lee RODROCK and Janet Carol Rodrock, Plaintiffs-Appellants,

v.

SECURITY INDUSTRIAL BANK, Defendant-Appellee,

United States of America, Intervenor-Appellant.

Pamela Sue KNEZEL, Plaintiff-Appellant,

v.

SECURITY INDUSTRIAL BANK, Defendant-Appellee,

United States of America, Intervenor-Appellant.

Rosemary Louise HOOPS, Plaintiff-Appellant,

v.

FREEDOM FINANCE AND SECURITY INDUSTRIAL BANK, Defendants-Appellees,

United States of America, Intervenor-Appellant.

Noval James JACKSON and Jerrie (NMN) Jackson, Plaintiffs-Appellants,

v.

SECURITY INDUSTRIAL BANK, Defendant-Appellee,

United States of America, Intervenor-Appellant.

Paul Leroy STEVENS and Sara Ann Stevens, Plaintiffs-Appellants,

v.

LIBERTY LOAN CORPORATION, Defendant-Appellee,

United States of America, Intervenor-Appellant.

In re Randall Dean SCHULTE and Ollie Denise Schulte, a/k/a

Ollie Denise Dehne, Plaintiffs-Appellants,

v.

BENEFICIAL FINANCE OF KANSAS, INC., Defendant-Appellee,

United States of America, Intervenor-Appellant.

In re Richard Glen HUNTER and Sharon Kay Hunter, Plaintiffs-Appellants,

v.

BENEFICIAL FINANCE OF KANSAS, INC., Defendant-Appellee,

United States of America, Intervenor-Appellant.

National Consumer Finance Association, Amicus Curiae.

Nos. 80-1549 to 80-1553, 80-2267 and 80-2268.

United States Court of Appeals, Tenth Circuit

March 2, 1981

Argued Dec. 16, 1980.

Page 1194

No appearance for plaintiffs-appellants.

Michael E. Katch, Denver, Colo. (Charles T. Trowbridge, Denver, Colo., with him on brief), for Security Industrial Bank and Liberty Loan Corporation, defendants-appellees.

Richard L. Levine, Director and Counsel, Executive Office for U. S. Trustees, Dept. of Justice, Washington, D. C. (Barbara G. O'Connor, Staff Atty., Executive Office for U. S. Trustees, Dept. of Justice, Washington, D. C. and Dolores B. Kopel, U. S. Trustee, District of Colo. and Kansas, Denver, Colo., with him on brief), for United States of America, intervenor-appellant, and on behalf of plaintiffs-appellants.

Page 1195

Henry F. Field, Chicago, Ill. (Donald M. Bernstein, Chicago, Ill., with him on brief), for Beneficial Finance of Kansas, Inc., defendant-appellee; Phil C. Neal and Russ M. Strobel of Friedman & Koven, Chicago, Ill., and Malcolm C. Black, Wichita, Kan., of counsel.

Robert B. Evans and Vernon L. Evans, Washington, D. C., for National Consumer Finance Association, amicus curiae.

Before SETH, Chief Judge, and McWILLIAMS and DOYLE, Circuit Judges.

McWILLIAMS, Circuit Judge.

Each of these seven cases is a direct appeal to this Court from a judgment of a United States Bankruptcy Court, pursuant to the Bankruptcy Reform Act of 1978, Pub.L.No. 95-598, § 405(c)(1)(B), 92 Stat. 2685 (West Supp.1979), concerning the lien avoidance provisions of the Reform Act. The Reform Act of 1978 was enacted by Congress on October 6, 1978, and signed into law by the President on November 6, 1978. The effective date of the Reform Act is October 1, 1979. Five of the seven cases, Nos. 80-1549, 80-1550, 80-1551, 80-1552 and 80-1553, are direct appeals from judgments entered in the United States Bankruptcy Court for the District of Colorado. 1 The remaining two, Nos. 80-2267 and 80-2268, are direct appeals from judgments entered in the United States Bankruptcy Court for the District of Kansas. 2 These seven direct appeals were consolidated for hearing in this Court, as each appeal involves consideration of the same provision of the Reform Act, namely 11 U.S.C. § 522(f)(2) (Supp. III 1979). That particular statute is set forth in its entirety as an appendix to this opinion.

In each of these seven cases, creditors acquired non-possessory, non-purchase money security interests in personal property (household furnishings and appliances) from the debtors before the Reform Act was signed into law by the President on November 6, 1978, and also before the Act was passed by Congress on October 6, 1978. In each case the debtor instituted bankruptcy proceedings after the October 1, 1979, effective date of the Reform Act. In each case the debtor, pursuant to Section 522(f)(2), claimed exemptions for the various items which served as collateral in security agreements previously entered into. The secured creditors objected to such claims for exemption. Accordingly, the debtor in each instance filed a complaint in the Bankruptcy Court against his secured creditor, seeking to avoid the creditor's non-possessory, non-purchase money security interest in accordance with the provisions of Section 522(f) (2). In each case, the creditor moved to dismiss the debtor's complaint for lien avoidance.

In the two Kansas cases, the bankruptcy judge held that Congress did not intend for Section 522(f)(2) to apply to security interests which came into being before the November 6, 1978, enactment date of the Reform Act and dismissed the debtors'...

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