498 B.R. 401
1st Cir. BAP2013Background
- Ortiz Negron recorded a $105,502.17 judgment lien against Rosado Ramos in Puerto Rico; lien was annulled then released, and later restored in 2011.
- Rosado filed a voluntary Chapter 7 in January 2012, listing residence value of $280,000 with a mortgage of $425,180.50 and an exemption of $21,625; Ortiz Negron listed an unsecured claim of $105,502.17.
- Trustee abandoned the residence as having no value to the estate.
- Ortiz Negron sought relief from stay to rerecord the restored lien; Rosado opposed and sought to avoid the lien under § 522(f).
- Bankruptcy court ruled it lacked jurisdiction over the residence because it was no longer property of the estate, and deemed the stay-relief and lien-avoidance issues moot.
- Rosado later filed a second §522(f) motion; the bankruptcy court denied for lack of jurisdiction and denied her Rule 59(e) reconsideration; she appeals both orders.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether abandonment of the residence deprives the bankruptcy court of jurisdiction over §522(f) lien avoidance. | Rosado contends jurisdiction remains to determine the lien-avoidance motion despite abandonment. | Ortiz Negron argues the property is outside the estate and thus outside bankruptcy jurisdiction. | Abandonment did not strip bankruptcy jurisdiction to decide §522(f) relief; orders vacated and remanded. |
Key Cases Cited
- Wilding v. CitiFinancial Consumer Fin. Servs., Inc. (In re Wilding), 475 F.3d 428 (1st Cir. 2007) (three-factor test for avoiding judicial lien (lien, impairment of exemption, judicial lien))
- In re Sills, 126 B.R. 974 (Bankr.S.D. Oh. 1991) (bankruptcy court’s jurisdiction over lien avoidance under §522(f))
- In re Lafoon, 278 B.R. 767 (Bankr.E.D. Tenn. 2002) (abandonment and jurisdictionomy in lien-avoidance context)
- In re Bennett, 13 B.R. 643 (Bankr.D. Mich. 1981) (jurisdictional principles in bankruptcy proceedings)