In Re Dennis

218 B.R. 52, 1997 Bankr. LEXIS 2222, 1997 WL 860739
CourtUnited States Bankruptcy Court, E.D. Arkansas
DecidedSeptember 8, 1997
DocketBankruptcy 96-20351M
StatusPublished
Cited by2 cases

This text of 218 B.R. 52 (In Re Dennis) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, E.D. Arkansas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In Re Dennis, 218 B.R. 52, 1997 Bankr. LEXIS 2222, 1997 WL 860739 (Ark. 1997).

Opinion

ORDER

JAMES G. MIXON, Bankruptcy Judge.

This matter is before the Court upon the motion of Timothy A. Dennis (“Debtor”) to avoid a judicial lien in the Debtor’s interest in real property that is his residence and that he claims as exempt pursuant to 11 U.S.C. § 522(d)(1). The lien which the Debtor seeks to avoid is in favor of the Estate of Amy Glim Dennis, Deceased. 1

After a hearing on the Debtor’s motion on May 15, 1997, the Court took the matter under advisement.

This is a core proceeding pursuant to 28 U.S.C. § 157(b)(2)(E), and the Court has jurisdiction to enter a final judgment in the case.

I

FACTS

The events relevant to the issues in this case took place before the Debtor filed his voluntary petition in bankruptcy on December 10, 1996. In 1984, the Debtor purchased in his own name as an unmarried person a forty-acre tract of real property where he initially resided in a mobile home. The real property, located in St. Francis County, Arkansas, is described as Lot 19, C.E. Cotton Subdivision, Number 5. The tract includes ten acres of cleared land and a dwelling, with the remaining acreage comprising woods and pasture.

The Debtor married Amy Glim Dennis on November 26,1989, and the couple constructed a permanent dwelling on the real property through their joint efforts. In October, 1992, fire destroyed the dwelling and the couple lived in a camping trailer during reconstruction. On December 24, 1992, they moved back into the rebuilt house.

On or about January 10, 1993, the Debtor forced Amy Dennis to leave the family residence. After the parties’ separation, the Debtor remained in possession of the house and land in question. Amy Dennis filed a complaint for divorce on January 13,1993, in the Chancery Court of St. Francis County, Arkansas.

The Chancellor issued a Memorandum on January 4, 1994, finding that the Debtor, using his own insurance agency, had insured the destroyed home and contents with a policy with his name as the only named insured without consulting his spouse. Further, the Chancellor found that as a result of the fire, the Debtor had received insurance proceeds consisting of $75,000.00 for the dwelling and $37,500.00 for personal property. The Chancellor concluded that the insurance proceeds and the reconstructed dwelling and its contents were marital property. The Chancellor awarded each party one-half interest in the marital property and gave the Debtor the option of buying Amy Dennis’ one-half of the appraised value of the house and contents.

The Chancellor ordered the Debtor to inform Amy Dennis of his intent to exercise this option within 30 days and to commence arrangements to exercise the option within 10 days thereafter. All other sums due to Amy Dennis from the Debtor were also to be paid on the same date she received her half of the marital property. The court ordered that if the Debtor did not exercise his option, the house and contents were to be sold.

*54 On February 8, 1994, the Debtor and Amy Dennis were divorced by Order of the Chancery Court of St. Francis County, Arkansas. The court reserved its ruling on other issues concerning property settlement.

In a Supplemental Decree filed June. 16, 1995, the Chancellor found that the Debtor had not informed Amy Dennis of his intent to exercise his option and that he had declined to have the property appraised or pay Amy Dennis for her half of the property. The Chancellor, therefore, ordered the marital home, curtilage, easement and contents to be sold at public auction with proceeds, less sale expenses, divided equally between the Debt- or and Amy Dennis.

With regard to the insurance proceeds, the Chancellor gave judgment to Amy Dennis against the Debtor for $16,550.00. This sum represented one-half the contents insurance of $18,750.00 less $2,200.00 deducted for monies and assets previously received by Amy Dennis.

The Chancellor addressed the issue of the Debtor’s continued use of the marital home and its contents after the divorce by requiring the Debtor to pay Amy Dennis rent of $137.50 per month beginning January 1994, until the property was sold.

On May 21,1996, Amy Dennis died and by Order entered August 8, 1996, the Judgments against the Defendant previously described were revived in the name of Patricia Chapman, Administratrix of. the Estate of Amy Glim Dennis, Deceased.

On December 10, 1996, the Debtor filed a voluntary petition for relief under the provisions of Chapter 13 of Title 11 of the United States Bankruptcy Code. At the time of filing, the Debtor still occupied the house, which had not been sold despite the Chancellor’s previous orders, and he owed arrearag-es for rent and attorney’s fees to the decedent’s estate.

When he filed his schedules December 27, 1996, the Debtor claimed $6,180.32 of the value of the real estate in question as his exempt homestead pursuant to 11 U.S.C. § 522(d)(1). 2 No objection to the claim of homestead was filed within the time prescribed by Federal Rule of Bankruptcy Procedure 4003(b).

The Debtor’s plan proposes that the Debt- or will retain the real property previously ordered sold and avoid the lien of Patricia Chapman pursuant to 11 U.S.C. § 522(f). The narrative statement of the plan does- not list the Estate of Amy Glim Dennis as a secured creditor and does not acknowledge the Estate’s ownership of one-half interest in the real property. The plan proposes payments of $650.00 per month for 36 months with pro-rata payments to unsecured creditors. The schedules list Patricia Chapman as holder of three secured claims.

The complaint to avoid lien seeks to avoid the lien created by the Judgment entered June 16,1995.

II

DISCUSSION

Subject to certain exceptions not present in this case, a debtor may avoid the fixing of a judicial lien on an interest of the debtor in exempt property to the extent that the lien impairs the exemption. 11 U.S.C. § 522(f)(l)(A)(1994). The Debtor claims an exemption of $6,180.32 of the value of the residence in question.

Although neither party raises the issue, the Court is obliged to consider sua sponte whether permissive abstention pursuant to 28 U.S.C. § 1334(c)(1) is appropriate in this case. Carver v. Carver, 954 F.2d 1573, 1579 (11th Cir.1992).

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Cite This Page — Counsel Stack

Bluebook (online)
218 B.R. 52, 1997 Bankr. LEXIS 2222, 1997 WL 860739, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-dennis-areb-1997.