Clabaugh v. Grant (In re Grant)
- Summarized by Steven Mulligan , Coan, Payton & Payne, LLC
- 8 years 11 months ago
- Citation:
- Clabaugh v. Grant (In re Grant), Case No. 15-035 (BAP 10th Cir. February 4, 2016). Unpublished.
- Tag(s):
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- Ruling:
- Even when an underlying debt is nondischargeable, neither the Bankruptcy Code in general, nor § 522(f) in particular, restricts or limits the debtor’s right to avoid a judicial lien emanating from that nondischargeable debt. Additionally, the Bankruptcy Code does not confer a general, equitable power on bankruptcy courts to deny a homestead exemption, even when a debtor has engaged in conduct sufficient to deny a discharge.
- Procedural context:
- Appeal from the Bankruptcy Court for the Western District of Oklahoma avoiding appellant’s judgment lien because it impaired debtor’s homestead exemption. The Bankruptcy Court’s factual finding relating to § 522(f) are reviewed for clear error and whether a judgment lien is avoidable because it impairs debtor’s homestead exemption is a question of law reviewable de novo. The BAP affirmed.
- Facts:
- Appellant placed a large coin collection, jewelry and family heirlooms valued at between $1.0 and $2.0 million in a safety deposit box at a bank. The bank accidently deleted its safety deposit box ownership records and after an investigation, thought that debtor’s deceased uncle was the owner of the box. Debtor’s uncle was not the owner and debtor failed to tell the bank he was no longer his uncle’s personal representative but, rather, provided the bank with letters of administration showing his appointment as personal representative years earlier. The bank released the box’s contents to him. Appellant sued and the jury found in favor of appellant and against debtor in the amount of $1.25 million and appellant recorded the judgment in the real property records. Debtor filed chapter 7 and appellant sued to have the debt declared non-dischargeable and objected to his homestead exemption which objection she withdrew. Debtor filed a motion to avoid her lien as impairing his homestead exemption and the Bankruptcy Court found it had no choice but to avoid the lien.
- Judge(s):
- Karlin, Cornish, Michael (Karlin)
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