Gary R. Masser

1
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE NORTHERN DISTRICT OF WEST VIRGINIA
In re: )
)
GARY R. MASSER, ) Case No. 09-bk-2916
)
Debtor. ) Chapter 7
___________________________________ )
MEMORANDUM OPINION
Pending before the court is the Debtor’s motion to avoid a judicial lien held by PACCAR
Financial Corporation. According to the Debtor, PACCAR’s judgment lien upon his residence is
wholly avoidable under §522(f) of the Bankruptcy Code. PACCAR opposes the Debtor’s motion
based upon its assertion that the Debtor’s residence is of a value sufficient to secure its judgment
lien and its reliance upon the doctrine of laches.
For the reasons stated herein, the court will grant the Debtor’s motion.
I. BACKGROUND
On December 23, 2009, the Debtor filed a voluntary petition for relief under Chapter 7 of
the Bankruptcy Code. As of the petition date, the Debtor’s principal residence had a fair market
value of $195,000 and was encumbered by three deeds of trust and PACCAR’s judgment lien.
The amount secured by the three deeds of trust totaled $272,605.79—two deeds of trust in first
and second priority securing the repayment of $200,000 and $50,000, respectively, to Elizabeth
W.C. Randall and one deed of trust securing the repayment of $22,605.79 to Branch Banking and
Trust Company. PACCAR’s judicial lien secured its judgment of at least $50,777.35.1
On February 8, 2010, the Chapter 7 trustee completed the meeting of creditors convened
in this case under § 341(a) of the Bankruptcy Code. On April 7, 2010, the Debtor received his
1 The preceding facts are undisputed based upon the stipulation filed by the parties on September
28, 2018. In fact, the parties agreed to the court’s disposition of the motion without an evidentiary
hearing based upon their agreement regarding relevant facts.
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Chapter 7 discharge, and the trustee subsequently declared the case to be one without assets for
liquidation and distribution to unsecured creditors. The court closed the case on May 4, 2010, and
it remained closed until February 12, 2018, when the court reopened it upon the Debtor’s motion.
II. ANALYSIS
The Debtor seeks to avoid PACCAR’s judicial lien under § 522(f) of the Bankruptcy Code.
He asserts that the lien is wholly avoidable based upon the formulaic operation of the statute.
Specifically, the Debtor contends he may completely avoid PACCAR’s judicial lien of $52,657.22
because the sum of all the liens upon his residence and the bankruptcy exemption he could have
claimed therein is $350,263.01, which exceeds the value of his residence by $155,263.01.
PACCAR opposes the Debtor’s motion on two bases. First, it asserts that consideration of
the Randall deeds of trust is inappropriate under the circumstances based upon the Debtor’s
assertion in his Statement of Financial Affairs filed with his petition in 2009 that nothing was still
owed to Ms. Randall. Additionally, PACCAR contends that the doctrine of laches precludes relief
to the Debtor. In support of its argument in that regard, it cites two cases for support—In re Lovell,
Case No. 08-11204, 2016 WL 2865359 (Bankr. D. Me. May 11, 2016) and Fretwell v. Weeks (In
re Fretwell), Adv. No. 10-80072, 2010 WL 4259831 (Bankr. N.D. Ala. Oct. 21, 2010).
Section 522(f) of the Bankruptcy Code allows a debtor to avoid a judicial lien like that held
by PACCAR “to the extent that such lien impairs an exemption to which the debtor would have
been entitled under [11 U.S.C. § 522(b)] . . . .” 11 U.S.C. § 522(f)(1)(A). For purposes of § 522(f),
a lien shall be considered to impair an exemption to the extent that the sum of— (i)
the lien; (ii) all other liens on the property; and (iii) the amount of the exemption
that the debtor could claim if there were no liens on the property; exceeds the value
that the debtor’s interest in the property would have in the absence of any liens.
11 U.S.C. § 522(f)(2)(A). The burden is on the Debtor to provide preponderant evidence as to
every statutory element. Ross v. Garcia (In re Garcia), 532 B.R. 173, 183 (B.A.P. 1st Cir. 2015)
(citation omitted). Notably, the petition date is the relevant date for determinations under § 522(f).
See In re Nestor, Case No. 05-6772, 2007 WL 3405108, at *2 (Bankr. N.D.W. Va. Nov. 8, 2007)
(citation omitted).
Here, there is no doubt that the Debtor is entitled to relief. Despite PACCAR’s argument
to the contrary, the facts are simple and lead inexorably to wholly avoiding PACCAR’s judicial
lien. Specifically, there is no dispute regarding the sum of all liens upon the Debtor’s property.
The parties stipulated to their existence and amount, and PACCAR’s argument that the court
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should ignore the Randall deeds of trust is unpersuasive. Despite the Debtor’s statement on his
SOFA that he no longer owed anything on the claims secured by the deeds of trust, his statement
in that regard does not act to release or void the deeds of trust. For instance, a principal tenet of
bankruptcy is that a debtor’s discharge of personal liability does not affect a lienor’s in rem rights
in the debtor’s property. See Cen-Pen Corp. v. Hanson, 58 F.3d 89, 94 (4th Cir. 1995). There is
therefore no basis to disregard the Randall deeds of trust, particularly when the parties presented
the Debtor’s motion to the court on a stipulated record in which they are recognized.
Regarding PACCAR’s contention that the doctrine of laches bars relief, the court is
similarly unpersuaded. Notably, PACCAR has not asserted any prejudice to it based upon the
passage of time, and the court perceives none. For instance, it seems that the parties are now
postured just as they would have been if the Debtor brought his motion upon filing his Chapter 7
case at the end of 2009. PACCAR has not alleged any specific action or forbearance that it took
in the interim because of the Debtor’s delay. If anything, PACCAR fortuitously possessed its
judicial lien for several years beyond what it otherwise should have. Moreover, both Lovell and
Fretwell are distinguishable because the courts in those cases recognized prejudice to the
respective lienors in opposing the debtors’ motions. The prejudice noted by both courts revolved
around valuing the subject properties in the respective cases. Here, no such prejudice exists
because the parties do not contest any relevant facts. The court therefore finds that laches does
not preclude relief here to the Debtor.
III. CONCLUSION
Based upon the foregoing analysis, the court finds that the Debtor is entitled to avoid
PACCAR’s judicial lien under § 522(f). The court will therefore enter a separate order granting
the Debtor’s motion and avoiding PACCAR’s lien in toto.
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