Michael L Church and Allison H Church

UNITED STATES BANKRUPTCY COURT
FOR THE
DISTRICT OF MASSACHUSETTS
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
In re
MICHAEL L. CHURCH and
ALISON H. CHURCH, 	Chapter 7
Debtor 	Case No. 08-16202-JNF
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
MEMORANDUM
Upon consideration of the “Debtors’ Motion for Reconsideration of Order Denying
Motion to Avoid Judicial Liens,” [sic] and the decisions cited by the Debtors in their
Motion, the Court hereby denies the Motion for Reconsideration without prejudice to the
renewal of the lien avoidance motions following the filing by the Debtors of an Amended
Schedule C. 	On September 21, 2009, this Court denied the Debtors’ motions to avoid1
judicial liens held by Dilisio Brothers, LLC and Rent-All, Inc. 	Although the Debtors
averred that the liens impaired an exemption in real property, the Court determined that
The Court notes that the Debtors are seeking reconsideration of two orders1
denying two lien avoidance motions. The Court also notes that the Motion for
Reconsideration is untimely. The Court’s orders were entered on September 21, 2009
and the Motion for Reconsideration was filed on October 5, 2009, more than 10 days
after the entry of the Court’s order. See Fed. R. Bankr. P. 9023.
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the motions lacked merit because the Debtors had failed to claim an exemption in the real
property located at 15 Lindsey Street, Marblehead, MA under the federal exemption
scheme which they had elected. See 11 U.S.C. § 522(b).
The Debtors move this Court to reconsider its ruling, citing, inter alia, a decision
issued by Judge Joel B. Rosenthal, namely In re Morais, 09-42079-JBR , 2009 WL 3054059
(Bankr. D. Mass. September 18, 2009), in which the primary issue was whether the lien the
debtors sought to avoid was an equitable lien or a judicial lien. Nevertheless, the court in
Morais, referencing the statutory language of 11 U.S.C. § 522(f), stated: “The statute does
not require that the Debtors actually claim an exemption in the Property any more than it
requires that the Property actually have equity to be impaired. The statute only requires
that the lien impair an exemption to which the Debtors “would have been entitled under
subsection (b) . . . .” 2009 WL 3054059 at *4.
This Court respectfully disagrees with the conclusion reached in Morais. In In re
Goswami, 304 B.R. 386 (B.A.P. 9th Cir. 2003), the Bankruptcy Appellate Panel observed
that there are four basic elements of an avoidable lien under section 522(f)(1)(A):
First, there must be an exemption to which the debtor “would have been
entitled under subsection (b) of this section.” 11 U.S.C. § 522(f). Second, the
property must be listed on the debtor’s schedules and claimed as exempt.
Third, the lien must impair that exemption. Fourth, the lien must be . . . a
judicial lien. 11 U.S.C. § 522(f)(1).
Id. at 390-91 (citing In re Mohring, 142 B.R. 389, 392 (Bankr. E.D. Cal. 1992), aff’d, 24 F.3d
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247 (9th Cir.1994)). 	With reference to the second element, the weight of authority is that2
“[w]here a debtor has not claimed an exemption in the property subject to a judicial lien,
there is nothing for § 522(f) to protect.” See In re Kiproff, No. 05-13008, 2006 WL 2381717
at *1 (Bankr. N.D. Ind. Aug. 16, 2006) (“Where a debtor has not claimed an exemption in
the property subject to a judicial lien, there is nothing for § 522(f) to protect.”). See also
Swaim v. Kleven, 1:04-CV-33, 2004 WL 3550144 at *2 (N.D. Ind. Aug. 27, 2004) (“[D]ebtors
may not avoid judicial liens upon property without actually claiming an exemption in that
property.”); In re Coverstone, No. 05-12160, 2006 WL 2136032 at *1 (Bankr. N.D. Ind. July
27, 2006) (“Where a debtor has not claimed an exemption in the property subject to a
judicial lien, there is nothing for § 522(f) to protect.”); 	In re Bartlett, 326 B.R. 436, 438
(Bankr. N.D. Ill. 2005) (“[D]ebtors need to amend their claimed exemptions before they can
seek to avoid the judicial lien.”); In re Berryhill, 254 B.R. 242, 243 (Bankr. N.D. Ind. 2000)
(“If the property has not been claimed as exempt, a lien against it is not avoidable.”); In re
Mukhi, 246 B.R. 859, 862 (Bankr. N.D. Ill. 2000)(one requirement for lien avoidance under
522(f) is that debtor claim an exemption); In re Rushdi, 174 B.R. 126, 127 (Bankr. D. Idaho
1994)(debtor has burden of showing that property is listed on debtor’s schedules as claimed
exemption); In re Wall, 127 B.R. 353, 356 (Bankr. E.D. Va. 1991)(“[I]t does not make sense
The Court recognizes that the First Circuit omitted the second requirement in2
Wilding v. CitiFinancial Consumer Fin. Servs., Inc. (In re Wilding), 475 F.3d 428, 431 (1st
Cir. 2007), but the issue of whether the Debtor had properly claimed his homestead as
exempt was not before the court. Moreover, the First Circuit cited Culver, LLC v. Chiu
(In re Chiu), which in turn cited Estate of Catli v. Catli (In re Catli), 999 F.2d 1405, 1406
(9th Cir.1993), for the list of required elements. Notably, the Ninth Circuit affirmed In re
Mohring after the decision in Catli.
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to allow a lien to be avoided on property that has not been claimed exempt.”); In re Rosol,
114 B.R. 560, 562 (Bankr. N.D. Ill. 1989) (debtor must properly claim exemption to obtain
relief under section 522(f)(1)); In re Johnson, 53 B.R. 919, 922 (Bankr. N.D. Ill. 1985) (same).
Accordingly, absent a properly claimed exemption, there is no lien that impairs an
exemption. 	This holding is consistent with the requirement of section 522(l) which
provides that “[t]he debtor shall file a list of property that the debtor claims as exempt
under subsection (b) of this section.”
Although the statutory language refers to an exemption “to which the debtor would
have been entitled,” the Court concludes that this phrase refers to the total amount of an
exemption available to the debtor, not the existence of an exemption available to the debtor
which is unclaimed on Schedule C. That conclusion also is consistent with the example
provided by the Supreme Court in Owen v. Owen, 500 U.S. 305 (1991), in which the Court
held that the proper question to ask is “whether it impairs an exemption to which [the
debtor] would have been entitled but for the lien itself.” Id. at 310-11 (emphasis supplied).
The Court explained:
The federal homestead exemption, for example, allows the debtor to exempt
from the property of the estate “[t]he debtor’s aggregate interest, not to
exceed $7,500 in value, in . . . a residence.” § 522(d)(1). If respondent’s
interpretation of § 522(f) were applied to this exemption, a debtor who
owned a house worth $10,000 that was subject to a judicial lien for $9,000
would not be entitled to the full homestead exemption of $7,500. The judicial
lien would not be avoidable under § 522(f), since it does not “impair” the
exemption, which is limited to the debtor’s “aggregate interest” of $1,000.
Id. at 310.
As noted, the Debtors were required to list their claimed exemptions on Schedule
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C. See 11 U.S.C. §§ 521(a), 522(l). The requirement is not onerous, and, as the cases cited
above correctly hold, it is a precondition to the allowance of a lien avoidance motion.
Therefore, the Court shall enter an order denying the Debtors’ Motion for Reconsideration.
By the Court,
Joan N. Feeney
United States Bankruptcy Judge
Dated: November 2, 2009
cc: David G. Baker, Esq., John O. Desmond, Esq.
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