In re Carroll, 95-60644.
| Decision Date | 02 February 2001 |
| Docket Number | No. 95-60644.,95-60644. |
| Parties | In re Billy CARROLL, Debtor. Billy Carroll, Movant, v. Memorial Medical Center, Inc., Respondent. |
| Court | United States Bankruptcy Courts. Eleventh Circuit. U.S. Bankruptcy Court — Southern District of Georgia |
R. Kenny Stone, Attorney at Law, Statesboro, GA, Thomas M. Odom, Attorney at Law, Millen, GA, for debtor/movant.
James B. Johnson, Jr., Attorney at Law, Lawrenceville, GA, Mark Cleary, Attorney at Law, Augusta, GA, for respondent.
After reopening his case, Billy Carroll ("Debtor") filed a motion to avoid the judgment lien of Memorial Medical Center, Inc. ("Memorial") pursuant to 11 U.S.C. § 522(f)(1). The issue presented is whether Debtor has standing to avoid Memorial's lien on real property after he has transferred ownership of the property to a third party. The issue of standing turns on the Debtor's "interest" in the property as required in 11 U.S.C. § 522(f)(1). I conclude that since Debtor owned the subject property at the filing of the petition, Debtor has an interest in the property for the purposes of § 522(f) and therefore the lien may be avoided.
The facts are as follows. Debtor filed a Chapter 7 petition for relief on November 8, 1995. At the time of the filing Debtor owned and listed a 2.5 acre parcel of real property and mobile home located in Screven County, Georgia. Prior to the bankruptcy filing, Memorial obtained a default judgment against Debtor on March 3, 1995. The writ of fieri facias was issued on March 9, 1995. The judgment lien thereupon attached to Debtor's "goods and chattels, lands and tenements." Memorial was listed on the Debtor's schedules as an unsecured creditor. During the bankruptcy case, all value in the real property was claimed as exempt by the Debtor. No party in interest objected to the Debtor's claim of exemption. Debtor failed to file a motion to avoid the judgment lien of Memorial during the pendency of the bankruptcy case. Debtor received a discharge on February 28, 1996.
On May 20, 1996, Debtor conveyed title to the real property to a third party by warranty deed. The lien of Memorial was not cancelled as of the date of the conveyance. Upon motion of the Debtor, I reopened the bankruptcy case to allow the filing of the motion to avoid the judgment lien.
Section 522(f)(1) states in pertinent part:
11 U.S.C. § 522(f)(1) (emphasis added). The parties do not dispute the fact that a motion to avoid a judicial lien can be entertained by the bankruptcy court after a discharge has been issued if the debtor still owned the property. Nor do the parties dispute the fact that the avoidance would have been granted if requested during the pendency of the case. The parties dispute whether debtor now has an interest in the property for § 522 lien avoidance purposes after the conveyance of title.
Memorial argues that due to the conveyance of the subject property, the Debtor now lacks standing to seek avoidance of the lien. Memorial relies upon In re Carilli, 65 B.R. 280 (Bankr.E.D.N.Y.1986). On facts similar to this case, the Carilli court held that the debtor who had sold her residence five weeks previously lacked standing to move to avoid a judgment lien on the residence on grounds that the lien must impair an exemption of the debtor. Carilli, 65 B.R. at 283. The court interpreted the phrase in § 522(f) "an interest of the debtor in property" as requiring the debtor to have a "present cognizable interest in the property." Id. at 282; accord In re Vitullo, 60 B.R. 822 (D.N.J.1986); In re Presti, 1996 WL 788505 (Bankr.E.D.N.Y. 1996); In re Sizemore, 177 B.R. 530 (Bankr.E.D.Ky.1995).
I recognize that the weight of persuasive case law supports Memorial's position. However, I disagree with the reasoning and analysis of these cases. In the above cases, the courts looked to the time of the filing of the motion to determine whether the Debtor had an interest in the property for § 522(f) purposes. I conclude that the proper time to determine whether Debtor has an interest in the property is the time of the filing of the bankruptcy case. As the district court in Johnson v. GMAC, 165 B.R. 524, 528 (S.D.Ga.1994) states:
The date on which the bankruptcy petition is filed and the order for relief is entered is the watershed date of bankruptcy proceeding. As of this date, creditor\'s rights are fixed (as much as possible), the bankruptcy estate is created, and the value of the debtor\'s exemptions is determined.
165 B.R. at 528. The point to ascertain property interests is at the...
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