442 B.R. 831
Bankr. M.D. Fla.2010Background
- Debtor Billie Lynn Murray filed a bankruptcy case in the M.D. Florida with a homestead at 17806 St. Lucia Isle Drive, Tampa, FL, claimed exempt.
- Foster Law Group holds a charging lien attached to Debtor's real property, based on a State Court order in dissolution proceedings.
- Debtor moved to avoid the judgment lien under 11 U.S.C. § 522(f); the court granted the motion without a hearing due to negative notice.
- At hearing, Debtor acknowledged misservice on Foster due to an address error; court granted rehearing and vacated the lien-avoidance order to consider merits.
- Court held the charging lien is not a judicial lien under § 101(36) and relies on Florida-law principles; thus it is not avoidable under § 522(f)(1)(A).
- Debtor sold the homestead; sale proceeds are escrowed by Sunbelt Title Agency, and the court ordered payment of $42,765.33 to Foster from the proceeds.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the charging lien is a judicial lien under § 101(36). | Murray: lien is a judicial lien, subject to § 522(f). | Foster: under Florida law, charging liens arise by operation of law and are not obtained by judgment. | Charging lien is not a judicial lien; not avoidable under § 522(f). |
| Whether the State Court's charging lien order has preclusive effect. | Murray: preclusion should bar review of underlying merits. | Foster: State Court order should be given preclusive effect under res judicata and Rooker-Feldman via § 1738. | Court accords full faith and credit to State Court order; accepts validity of charging lien. |
| Whether the charging lien attaches to and is enforceable against the sale proceeds. | Murray: lien should not encumber exempt assets or sale proceeds. | Foster: lien attaches to sale proceeds as a valid charging lien. | Charging lien attaches to and is enforceable against the sale proceeds; ordered payment to Foster. |
Key Cases Cited
- In re Washington, 242 F.3d 1320 (11th Cir. 2001) (valid attorney's charging lien under Florida law is not a judicial lien)
- In re Zoernack, 289 B.R. 220 (Bankr. M.D. Fla. 2003) (discusses preclusion and Rooker-Feldman considerations for state court orders)