Maus v. Maus, 85-2389

• Court: United States Courts of Appeals. United States Court of Appeals (10th Circuit)
• Writing for the Court: Before SEYMOUR, MOORE, and ANDERSON; SEYMOUR
• Citation: 17 B.C. D. 338,837 F.2d 935
• Parties: , 18 Collier Bankr.Cas.2d 188, 17 Bankr.Ct.Dec. 338, Bankr. L. Rep. P 72,175 Nikki Dee MAUS, Debtor-Appellee, v. Jesse R. MAUS, Appellant.
• Docket Number: No. 85-2389,85-2389
• Decision Date: 28 January 1988

Page 935

837 F.2d 935 56 USLW 2427, 18 Collier Bankr.Cas.2d 188,
17 Bankr.Ct.Dec. 338,
Bankr. L. Rep. P 72,175 Nikki Dee MAUS, Debtor-Appellee,
v.
Jesse R. MAUS, Appellant. No. 85-2389. United States Court of Appeals,
Tenth Circuit. Jan. 28, 1988.

Page 936

Charles F. Harris of Kaplan, McMillan and Harris, Wichita, Kan., for debtor-appellee.

Donald B. Clark, Wichita, Kan., for appellant.

Before SEYMOUR, MOORE, and ANDERSON, Circuit Judges.

SEYMOUR, Circuit Judge.

Nikki Maus filed a voluntary bankruptcy petition and claimed certain real property exempt as her homestead under 11 U.S.C. Sec. 522(b)(2)(A) (1982) and Kan.Stat.Ann. Sec. 60-2301 (1983). She subsequently filed an application with the bankruptcy court under 11 U.S.C. Sec. 522(f)(1) to avoid the alleged lien of her ex-husband, Jesse R. Maus, on this property. The bankruptcy court denied Nikki's petition. She appealed

Page 937

to the district court, which concluded, contrary to the bankruptcy court, that Jesse's claim against the homestead was an avoidable judicial lien under section 522(f)(1). Jesse appeals, ¹ and we affirm the decision of the district court.

I.

Nikki and Jesse were divorced July 31, 1981. They had entered into a property settlement agreement which was incorporated into the divorce decree. This agreement provides in relevant part:

"D. [Nikki] be, and she is hereby granted as her sole and separate property, free and clear of any and all claims of [Jesse], the following:

* * *

* * *

That real property legally described as follows, to-wit:

The South 660 feet of the East 561 feet of the Southeast Quarter (SE 1/4) of the Southwest Quarter (SW 1/4) of Section 15, Township 27 South, Range 4 West of the 6th P.M., Sedgwick County, Kansas.

....

"F. [Nikki] shall pay to [Jesse] the sum of Twenty-Two Thousand Dollars ($22,000.00) on or before the 1st day of September, 1985, subject to any credit as mentioned in paragraph E hereinabove, [resulting from Jesse's failure to convey marketable title within thirty days], all without interest.

"G. Should [Nikki] sell or convey the real property first hereinabove described prior to July 1, 1984, [Jesse] shall be entitled to receive 40% of the net proceeds of the sale of the same, after deduction and payment of the existing mortgage thereon and all reasonable costs and expenses of sale, including a realtor's commission".

Rec., vol. I, doc. 2, at 2-3 (emphasis added). ²

Nikki subsequently refinanced the mortgage on this property and granted a second mortgage. In February 1984, the holder of the second mortgage began foreclosure proceedings. Nikki filed for bankruptcy several months later, claiming the property as homestead under section 522(b)(2)(A) and listing $22,000 as an unsecured obligation to Jesse. She subsequently applied to avoid any lien Jesse might have on the property.

Nikki contended in the bankruptcy court that Jesse's claim as a result of the $22,000 debt does not constitute a lien. She argued alternatively that if the debt is a lien against the homestead property, at most it is an avoidable judicial lien within the meaning of 11 U.S.C. Sec. 522(f)(1). The bankruptcy court held that the debt constitutes a lien against the homestead, and that the lien was not a judicial lien but a consensual lien in the nature of a security agreement and thus not avoidable within the ambit of Sec. 522(f)(1). The district court agreed, without citing any authority, that Jesse's judgment against Nikki represents a lien on her homestead. Contrary to the bankruptcy court, however, the court further concluded that this lien is an avoidable judicial lien under section 522(f)(1).

II.

Section 522(c)(1) provides that homestead property is not liable for the debtor's debts except for those specified in section 523(a)(5), which excepts from discharge debts "to a spouse, former spouse, or child of the debtor, for alimony to, maintenance for, or support of such spouse or child, in connection with a separation agreement, divorce decree, or property settlement agreement...." 11 U.S.C. Sec. 523(a)(5)

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(1982). ³ Significantly, property settlements are not included in the section 523(a) exceptions to discharge, and courts generally have held that unsecured debts representing property settlements are dischargeable in bankruptcy. See Brody & Brody v. Birdseye (In re Birdseye), 548 F.2d 321, 322 (10th Cir.1977); see also Singer v. Singer (In re Singer), 787 F.2d 1033, 1034 (6th Cir.1986); In re Coil, 680 F.2d 1170, 1171 (7th Cir.1982); Albin v. Albin (In re Albin), 591 F.2d 94, 96-97 (9th Cir.1979).

In addition, section 522(f)(1) states that "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 [homestead], if such lien is--1) a judicial lien...." 11 U.S.C. Sec. 522(f)(1). Section 522(f)(1) thus allows the debtor to avoid a lien if it is 1) a judicial lien, 2) on an interest of the debtor in property. A judicial lien is defined as a "lien obtained by judgment, levy, sequestration, or other legal or equitable process or...