McCarthy v. Brevik Law (In re McCarthy)

Citation:
8th Cir. BAP (October 28, 2013) - Case No. 13-6042
Tag(s):
Ruling:
REMAND by the BAP to the bankruptcy court for dismissal of the adversary proceeding for further proceedings consistent with the BAP opinion.
Procedural context:
After filing a voluntary petition for Chapter 13 relief, debtor filed an adversary proceeding against a creditor with a statutory lien against property claimed exempt under 11 U.S.C. 522(d)(1). Debtor filed an adversary to avoid the lien, however, the bankruptcy court entered an order and a judgment dismissing debtor's adversary proceeding and denying confirmation of the Chapter 13 plan. Debtor appealed the bankruptcy court's decision with a brief and oral argument. Creditor did not participate in the appeal.
Facts:
On April 16, 2012, the debtor, Michael Stephen McCarthy, filed for relief under Chapter 13 of the Bankruptcy Code. Creditor, Brevik Law, filed an objection to the Chapter 13 plan and thereafter, the debtor commenced an adversary proceeding to avoid the fixing of an attorney's lien against debtor's homestead. The fees stemmed from a marital dissolution action where the debtor had hired Brevik to represent as counsel. After debtor failed to pay Brevik its fees, Brevik commenced a state court action and the state court entered a judgment against the debtor for attorney fees. The judgment was thereafter record as a lien against debtor's property. Debtor listed his ownership in the property and claimed an exemption under Section 522(d)(1) for the full value. Brevik did not object to debtor's claim of exemptions. Parties stipulated that the lien was a statutory lien per Minn. Stat. Section 481.13 and defined by 11 USC Section 101(53).
Judge(s):
Federman, Schermer and Saladino.

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