Bulan v. Calloway

U.S. COURT OF APPEALS FOR THE SECOND CIRCUIT August Term, 2013, Docket No. 12‐1603‐bk
Affirmed District Court affirming Bankruptcy Court's determination that New York State's increased homestead exemption, from $10,000 to $50,000, applied to judgment liens existing before the statute increasing exemption was enacted.
Procedural context:
Appeal from District Court order affirming Bankruptcy Court order holding that the 2005 amendment to N.Y. C.P.L.R. 5206, 2005, which increased New York’s homestead exemption from $10,000 to $50,000, applied to a judgment lien obtained prior to the amendment’s effective date where debtor sought to avoid lien as impairing their exemption.
The Second Circuit held that the: a.) 2005 Amendment to New York Civil Practice Law and Rules § 5206 increasing the homestead exemption from $10,00 to $50,000, applies to all creditors and all obligations, regardless of whether the debt or judgment lien occurred prior to the statute’s enactment; and b.) retroactive application of the exemption was not an uncompensated taking of pre-enactment judgment liens, in violation of the U.S. Constitution’s “Takings Clause.” The 2005 amendment applied to prior judgments because the legislation provided for its immediate effect. The Court found judgment liens being property interests benefitting from Constitutional, However, no property was taken for government use and the judgment creditor’s right to enforce its lien was always subject to New York State modifying its homestead exemption. So, no violation of the “Takings Clause” occurred.
Circuit Judges: Richard C. Wesley and Christopher F. Droney, and District Court Judge Vincent L. Briccetti (SDNY) sitting by designation.

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