29 N.E.3d 823
Mass.2015Background
- Plaintiff Pagona Christakis owned real property in Billerica affected by three creditor judgments.
- Judgments were obtained by Jeanne D'Arc Credit Union, Harvest Credit Management VII, LLC, and Citibank (South Dakota), N.A. with executions and liens recorded.
- Plaintiff filed bankruptcy under Chapter 13, converted to Chapter 7, and received discharge on August 19, 2011.
- All liens were perfected prior to the bankruptcy filing (pre-petition) and the Bank did not avoid them.
- Judgments and liens were prosecuted in the Land Court; the trial judge denied summary judgment for plaintiff and entered judgment for all defendants.
- Plaintiff appealed; the Supreme Judicial Court transferred the case sua sponte.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Do judicial liens survive discharge in Chapter 7? | Plaintiff argues liens survive, subject to impairment review. | Defendants contend liens survive as in rem obligations and not extinguished. | Yes; liens survive discharge under Federal law and Massachusetts law. |
| Should Massachusetts law differ from Federal law on lien survival after discharge? | Mass. law should align with Federal law preserving liens after discharge. | Massachusetts should preserve lien validity post-discharge as a matter of state law. | Massachusetts law preserves pre-petition liens after discharge, consistent with federal framework. |
| Are defaulting defendants entitled to judgment despite default? | If facts state a claim, default should not foreclose liability. | Default does not admit conclusions of law; liens survive as a matter of law. | Yes; defaulting defendants' liens survive and they are entitled to judgment. |
Key Cases Cited
- Casavant v. Boreka, 298 Mass. 528 (Mass. 1937) (valid lien may be enforced after discharge if it attached before filing)
- Davenport v. Tilton, 10 Met. 320 (Mass. 1845) (special judgment to levy on attached property despite discharge)
- First Colonial Bank for Sav. v. Bergeron, 38 Mass. App. Ct. 136 (Mass. App. Ct. 1995) (exists a balance between debtor relief and creditor rights; lien survival timeless)
- In re Garran, 338 F.3d 1 (1st Cir. 2003) (judicial lien on property survives bankruptcy as in rem)
- Johnson v. Home State Bank, 501 U.S. 78 (U.S. 1991) (discharge extinguishes only personal liability, not in rem liens)
- Farrey v. Sanderfoot, 500 U.S. 291 (U.S. 1991) (liens ordinarily survive bankruptcy; §522(f) avoids only certain liens)
- One to One Interactive, LLC v. Landrith, 76 Mass. App. Ct. 142 (Mass. App. Ct. 2010) (distinguishes in rem vs in personam actions post-discharge)