501 B.R. 223
Bankr. S.D.N.Y.2013Background
- Debtor filed Chapter 7 on Feb. 15, 2013, listing real property at 5 Club Way, Poughkeepsie (the Property), and claiming a homestead exemption under N.Y. C.P.L.R. § 5206.
- Creditor Brian D. Perskin (Debtor’s former divorce attorney) holds a judgment and judicial lien against the Property and objected to the claimed homestead exemption; Debtor moved under 11 U.S.C. § 522(f) to avoid the lien as impairing the exemption.
- The Property had not been inhabited as Debtor’s residence since about 2006; Debtor was living with family and admitted she did not sleep at the Property on the petition date, though she kept furniture, clothes, and received mail there.
- Evidence at trial showed no meaningful repairs or expenditures to make the Property habitable before the petition date; repair estimates and activity occurred only during litigation in mid-2013.
- The New York Supreme Court (Dutchess County) previously found the Property uninhabited since 2006 and that Debtor failed to maintain it; the marital-exception to occupancy did not apply because final resolution occurred more than one year before filing.
Issues
| Issue | Debtor's Argument | Perskin's Argument | Held |
|---|---|---|---|
| Entitlement to New York homestead exemption under CPLR § 5206 | Debtor claims absence was involuntary (mold, roof, heat) and she intended to return; constructive occupancy preserved exemption | Debtor hasn’t lived there >7 years, made no repairs, does not reside or intend to reside there; exemption ceases when not occupied >1 year | Exemption denied — Debtor lacked actual or constructive occupancy and lacked bona fide intent to reside on petition date |
| Avoidance of Perskin’s judicial lien under 11 U.S.C. § 522(f) as impairing homestead exemption | Lien impairs claimed homestead exemption and should be stripped | Lien is valid because homestead exemption is not available | Motion to avoid lien denied because exemption disallowed |
Key Cases Cited
- In re Magee, 444 B.R. 254 (Bankr. S.D.N.Y.) (exemptions construed to effectuate debtor’s fresh start)
- In re Moulterie, 398 B.R. 501 (Bankr. E.D.N.Y.) (marital exception to occupancy rule when spouse vacates pending resolution)
- In re Bace, 364 B.R. 166 (Bankr. S.D.N.Y.) (intent to reside must exist on the petition date for homestead protection)
- In re Bellafiore, 492 B.R. 109 (Bankr. E.D.N.Y.) (actual physical occupancy on a regular basis and intent to reside required)
- Town of Skaneateles v. Scott (In re Scott), 233 B.R. 32 (Bankr. N.D.N.Y.) (lack of utilities and failure to repair support inference of no intent to reside)
- Fontana v. Fontana, 89 A.D.2d 843 (N.Y. App. Div.) (when occupancy ceases, homestead protection ceases)