Boyd v. Robinson, 83-1976

• Court: United States Courts of Appeals. United States Court of Appeals (8th Circuit)
• Citation: 741 F.2d 1112
• Docket Number: No. 83-1976,83-1976
• Parties: Bankr. L. Rep. P 70,001 Jeanine M. BOYD, f/k/a Jeanine Boyd Robinson, Appellant, v. Bruce G. ROBINSON, Appellee.
• Decision Date: 29 August 1984

Page 1112

741 F.2d 1112 Bankr. L. Rep. P 70,001 Jeanine M. BOYD, f/k/a Jeanine Boyd Robinson, Appellant,
v.
Bruce G. ROBINSON, Appellee. No. 83-1976. United States Court of Appeals,
Eighth Circuit. Submitted April 11, 1984.
Decided Aug. 29, 1984.

Peterson, Gray & Sheahan, Ltd. by Michael P. Wagner, St. Paul, Minn., for appellant.

Phillip D. Nelson, St. Paul, Minn., for appellee.

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Robins, Zelle, Larson & Kaplan by Raymond G. Lallier, Minneapolis, Minn., for amicus curiae Minnesota State Bar Ass'n.

Before ROSS, ARNOLD and FAGG, Circuit Judges.

ARNOLD, Circuit Judge.

By order of a state court in a marriage-dissolution proceeding, Bruce Robinson acquired a $7,000 lien on the homestead he shared with his former wife, Jeanine Boyd. This appeal raises the question whether this lien is avoidable under 11 U.S.C. Sec. 522(f)(1) of the Bankruptcy Code. We affirm the District Court's ¹ holding that the lien was not avoidable under this section of the code, 31 B.R. 591. We hold that the lien did not attach to any "interest of the debtor in property," as that phrase is used in Section 522(f).

I.

Prior to her marriage to Robinson in 1970, Boyd was the sole owner of her house located in White Bear Lake, Minnesota. During the marriage Boyd and Robinson lived together in the house. In 1979, following commencement of a divorce proceeding, Robinson moved out. On June 30, 1981, the state court granted the petition for marriage dissolution and determined that:

The homestead, which was purchased by the wife prior to marriage and retained in her name after marriage, with all of the mortgage payments and other improvements coming out of the marital assets should be awarded to her subject to a lien for one-half of the equity [acquired] by the parties together after marriage.

Designated Record (D.R.) 27.

The court set the amount of Robinson's lien at $7,000. It reached this figure by first determining the amount that Boyd would have to transfer to Robinson to split the marital assets evenly (about $5,200) and then added to this the amount of non-marital funds that Robinson had spent to add a garage and driveway to the house (about $1,800).

After the divorce decree, Boyd filed a chapter 7 petition for bankruptcy, claiming her entire homestead as exempt under Minnesota law. She later instituted an adversary bankruptcy proceeding seeking to avoid Robinson's lien on the homestead. The Bankruptcy Court, 26 B.R. 772, concluded that this lien is a "judicial lien" under the Bankruptcy Code, Sec. 522(f)(1), and allowed Boyd to avoid the lien. The District Court reversed, holding that the lien is neither a judicial lien nor an impairment of an interest of Boyd's. Specifically, it found that Robinson's property interest in the homestead arose by virtue of Minn.Stat.Ann. Sec. 518.58 (West Supp.1984), which charges the family court to make a "just and equitable division of the marital property." ²

II.

Section 522(f)(1) of the Bankruptcy Code, 11 U.S.C. Sec. 522(f)(1) (1982), provides:

Notwithstanding any waiver of exemptions, 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, if such lien is--

(1) a judicial lien ....

Section 101(27) defines "judicial lien" as a

lien obtained by judgment, levy, sequestration, or other legal or equitable process or proceeding.

For present purposes, section 522(f)(1) establishes two requirements for avoiding a lien: (1) the lien must attach to an interest of the debtor in exempt property; (2) the lien must be a judicial lien. In applying the first requirement to this case, we hold

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that the lien imposed by the state court does not attach to an interest of Boyd's, but rather protects a pre-existing interest of Robinson's in the homestead that was created under Minnesota law prior to the marriage dissolution. Therefore, we hold that the lien is not avoidable under Sec. 522(f)(1).

Under Minnesota law Robinson had a pre-existing interest in the homestead in several respects. First, under Minn.Stat.Ann. Sec. 507.02 (West Supp.1984), a married owner may not convey a homestead without the signatures of both husband and wife. Thus, by virtue of his marriage to Boyd, Robinson acquired an interest in the homestead by which he could either approve or reject the conveyance of the homestead by Boyd. Further, under Minn.Stat.Ann. Sec. 525.145 (West Supp.1984), Robinson had an inchoate property interest in the homestead (like what we used to call curtesy) which would have vested upon Boyd's death during the marriage.

Second, Robinson's contributions to the house during the marriage also served to create an interest in the homestead. Robinson used non-marital funds to construct a driveway and a garage. The state court set the value of these contributions at $1,756. While Boyd and Robinson did not have an express agreement that Robinson would acquire an interest in the homestead as a result of his contributions, such an agreement is not necessary in the marital setting. When two people marry and become a corporate community, they need not make express contracts as to joint purchases.

Third, Robinson used part of his salary to make the mortgage payments and contributed his labor to constructing the garage and driveway. While these are contributions of marital property, under Minnesota law it is assumed that marital property is shared property. Under Minn.Stat.Ann. Sec. 518.58 (West...