In re Sillani, Bankruptcy No. 80-00021-BKC-TCB.

• Decision Date: 18 February 1981
• Docket Number: Bankruptcy No. 80-00021-BKC-TCB.
• Citation: 9 BR 188
• Parties: In re George Paul SILLANI, Debtor.
• Court: U.S. Bankruptcy Court — Southern District of Florida

9 B.R. 188 (1981)

In re George Paul SILLANI, Debtor.

Bankruptcy No. 80-00021-BKC-TCB.

United States Bankruptcy Court, S.D. Florida.

February 18, 1981.

Dale Ross, Fort Lauderdale, Fla., for debtor.

David D. Welch, Pompano Beach, Fla., John A. Friedman, Peter N. Hanna, Fort Lauderdale, Fla., for creditors.

A.W. Beck, trustee.

MEMORANDUM DECISION — APPLICATION TO REOPEN CASE

THOMAS C. BRITTON, Bankruptcy Judge.

This case presents the somewhat confusing question of the effect of the Bankruptcy Code on a pre-bankruptcy judicial lien.

This case has been closed. The debtor is here on a motion to reopen the case under 11 U.S.C. § 350 to seek a determination that a judgment lien is void. The relevant facts are undisputed and the parties agreed before me on February 13 to submit the ultimate issue.

The Southeast Bank of Deerfield Beach obtained a judgment in 1978 against the debtor on a promissory note. A certified copy of that judgment was recorded in Broward County on January 10, 1978. Since 1978, a certified copy of a judgment, whether state or federal, must be recorded in the county to effect a judgment lien against property within that county, whether it be the forum county or not. § 55.10, Florida Statutes; Smith v. Venus Condominium Ass'n, Inc., Fla.1978, 352 So.2d 1169.

At that time, the debtor owned an undivided interest in a home in Broward County.

In August, 1979, during the course of a divorce proceeding, the debtor relinquished his interest in the home to his wife and the transfer of title was approved by the State court. That proceeding interrupted a scheduled execution sale of the debtor's interest in satisfaction of the bank's judgment lien, because the wife claimed the property to be exempt as homestead.

Thereafter, on January 10, 1980, the debtor filed for bankruptcy. At this point, the debtor had no title to nor equitable claim of any interest in the property in question, therefore, the house was not property of the estate under § 541(a)(1). Since he had lost title to the property about five months before bankruptcy, the transfer could have been voided as a preference under § 547(b)(4)(B) if the trustee could establish one of the grounds of that subsection. No such proceeding was ever instituted.

The judgment creditor continued his efforts in the State court to enforce his judgment against the ex-wife's property after bankruptcy and the State court on January 29, 1980 held that the property was not exempt and was, therefore, subject to the bank's judgment lien. Since this was an in rem proceeding in which the debtor was neither a necessary nor proper party because the house was no longer his property and since no relief was sought against the debtor, bankruptcy did not interrupt this proceeding. The debtor promptly filed a suggestion of...