In re Pearlstein
In re Pearlstein
Opinion of the Court
ORDER DENYING MOTION TO AVOID LIEN OF CAROCH PROPERTIES IMPAIRING DEBTOR’S EXEMPTION
THIS CAUSE came on to be heard on July 18, 2006 upon the debtor’s Motion to Avoid Lien Impairing Debtor’s Exemption (“Motion to Avoid Lien” — C. P. 15). Upon review by the Court of the Motion to Avoid Lien, and upon review of the debtor’s bankruptcy schedules (C.P. 1), and the record of this case, the Court entered its July 3, 2006 Order Deeming Property as Homestead and Determining that Recorded Judgment does not Create Lien (“Order Deeming Property as Homestead” — C. P. 16). On July 10, 2006, Caroeh Properties, Inc. filed its Motion to Vacate Order Deeming Property as Homestead and Determining that Recorded Judgment does not Create Lien (“Motion to Vacate” — C. P. 18), on the basis that Caroeh Properties, Inc. (“Caroeh”) had not been afforded due process, as the July 3, 2006 Order Deeming Property as Homestead was entered without notice or hearing. Upon review of the Motion to Vacate, the Court entered its July 13, 2006 Order Vacating July 3, 2006 Order Deeming Property as Homestead and Determining that Recorded Judgment does not Create Lien (“Order Vacating July 3 Order” — C. P. 21), by which order the Court scheduled the July 18, 2006 hearing to consider the Motion to Avoid Lien. Having now considered the merits of the debtor’s Motion to Avoid Lien, together with argument of counsel, the debtor’s Motion to Avoid Lien is denied, for the reasons set forth below.
By way of the filing of her Motion to Avoid Lien, the debtor seeks to “avoid” the lien ostensibly created by the recording of a certified copy of the “Final Judgment on Count II against Tension Fabric Structures and Count III against Kenneth and Marilyn Pearlstein”, entered in the state court action styled Caroch Properties v. Tension Fabric Structures, Inc., Kenneth Pearlstein, and Marilyn Pearlstein, Case No. 01-21241(07) in the Circuit Court of the 17th Judicial Circuit, in and for Bro-ward County, Florida. In her Motion to Avoid Lien, the debtor contends that the recording of the referenced Final Judgment “... has the effect of creating a judicial lien that impairs an exemption to which the Debtor is entitled under 11 U.S.C. § 522(b) in that the Debtor is attempting to refinance her homestead but the cloud upon the title will prevent her from doing so” (paragraph 5. of Motion to Avoid Lien).
As noted in Prieto v. Eastern Nat’l Bank, 719 So.2d 1264, 1266 (Fla. 3rd DCA 1998), “... the law has long since recognized the right of judgment debtors to bring a declaratory or other equitable actions for a judicial determination that would remove any appearances that a judgment lien is valid and/or effectual” (citations omitted). It would seem that such an action for declaratory relief or equitable relief could be initiated in this Court pursuant to Bankruptcy Rule 7001. Alternatively, a debtor could obtain relief as to a judgment of record by the filing of a petition with the state court in which the judgment was entered “... to cancel or discharge such judgment.” Fla. Stats. § 55.145. However, the filing in this Court of a motion to avoid or remove a “judgment lien”, pursuant to 11 U.S.C. § 522(f)(1)(A), against a homestead as to which the recording of a certified copy of such judgment could not, as a matter of law, create a lien, cannot be employed in an attempt to remove any appearance that a so-called “judgment lien” is “valid or effectual.” Accordingly, the debtor’s Motion to Avoid Lien Impairing Debtor’s Exemption is denied.
Reference
- Full Case Name
- In re Marilyn PEARLSTEIN, Debtor
- Status
- Published