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4 5 UNITED STATES DISTRICT COURT 6 WESTERN DISTRICT OF WASHINGTON AT SEATTLE 7 In re: CASE NO. C25-1317-KKE 8
JULIE L. JEFFERSON, Bankruptcy No. 25-10188-CMA 9
Debtor(s). ORDER ON MOTION TO DISMISS 10 BANKRUPTCY APPEAL
11 GUY JEFFERSON,
12 Defendant(s)/Appellant(s), v. 13 JULIE L. JEFFERSON, 14 Plaintiff(s)/Appellee(s). 15 16 This case arises from an appeal of a bankruptcy order declining to strip Appellant’s lien on 17 Appellee’s real property, but holding that the parties’ divorce order entered by Kitsap County 18 Court did not create a judgment lien on Appellee’s homestead property. Appellee subsequently 19 filed an adversary proceeding to determine the value of Appellant’s lien on her property, and 20 Appellant filed the instant appeal. Appellee moved to dismiss the appeal for lack of jurisdiction. 21 Having reviewed the parties’ briefing and the record, and having heard oral argument, the Court 22 denies Appellee’s motion for the reasons below. 23 24 1 I. BACKGROUND 2 On January 24, 2025, Appellee Julie L. Jefferson voluntarily filed for Chapter 13 3 bankruptcy, and listed her ex-husband, Appellant Guy Jefferson, as a creditor in the action. In re
4 Julie Jefferson, No. 25-bk-10188-CMA, ECF No. 1 at 1, 23, 51 (Bankr. W.D. Wash. 2025). 5 Appellant’s creditor status stems from an April 26, 2024 Kitsap County Court “amended final 6 divorce order (dissolution decree)” that awarded him $378,209.00. Id.; id., ECF No. 22 ¶¶ 4–7; 7 id., ECF No. 22-3 (Kitsap County Judgment). In her amended bankruptcy schedule, Appellee 8 listed assets including a $1,025,000.00 home located at 1620 Harley Lane (“Homestead 9 Property”), and another home, valued at $450,000.00, and located at 1649 Harley Lane (“1649 10 Property”). Id., ECF No. 33 at 2–3. 11 On March 28, 2025, Appellee filed a “motion to strip [the] judgment lien” created by the 12 amended final divorce order, requesting the bankruptcy court enter “an order valuing the judgment
13 lien of Appellant at $149,991.00 and requiring Appellant release his judgment lien against [her] 14 real property.” Id., ECF No. 21 at 11; id., ECF No. 22. In that motion, Appellee asserted that due 15 to superior liens on the two properties, as well as homestead exemptions claimed under Wash. 16 Rev. Code § 6.13.030 as to the Homestead Property, the judgment lien should be valued at 17 $149,991.00. Id., ECF No. 22 at 3. The issues the bankruptcy court considered were whether 18 Appellant had a lien on Appellee’s real property, the value of such lien, and whether to strip 19 Appellant’s lien to the value proposed by Appellee. On July 2, 2025, the bankruptcy court denied 20 Appellee’s motion, and made 21 findings of fact and conclusions of law … including without limitation that entry of the AMENDED Final Divorce Order (Dissolution Decree) by the Kitsap County 22 Superior Court on April 26, 2024, did not create a lien in favor of [Appellant] on the [Homestead Property]. 23 24 1 Id., ECF No. 87. At oral argument, the bankruptcy judge held that to create a judgment lien against 2 a homestead property under Washington state law, Appellant needed to record the judgment. Id., 3 ECF No. 103 at 16–17. Because Appellant did not record the judgment, the bankruptcy court
4 found that the divorce order did not create a judgment lien on the Homestead Property. Id. The 5 bankruptcy court left open Appellant’s interest in the 1649 Property, which is not a homestead 6 property. The bankruptcy court also denied Appellee’s general request to strip Appellant’s lien, 7 explaining that Appellee would need to initiate an adversary proceeding owing to due process 8 concerns and Federal Rule of Bankruptcy Procedure 7001(b). Id.; Fed. R. Bankr. P. 7001(b) (an 9 adversary proceeding is used “to determine the validity, priority, or extent of a lien or other interest 10 in property”). 11 On the same day the bankruptcy court issued its order denying Appellee’s motion, Appellee 12 initiated an adversary proceeding against Appellant “to determine the extent of [Appellant’s] lien
13 against certain real property of the Debtor[.]” Id., ECF No. 88 at 1. The adversary proceeding on 14 that issue is ongoing, and currently set for a one-day trial on June 30, 2026. 15 On July 8, 2025, Appellant timely appealed the bankruptcy court’s July 2, 2025 order, and 16 elected to have his appeal heard by a United States District Court under 28 U.S.C. § 158(c)(1). 17 Dkt. No. 1 at 1–2. Appellee moved to dismiss the appeal, asserting that this Court lacks 18 jurisdiction. Dkt. No. 6. Ten days after Appellee filed her reply on the motion to dismiss, the 19 bankruptcy court confirmed her Chapter 13 bankruptcy plan. Dkt. No. 19. Though the motion to 20 dismiss was fully briefed prior to confirmation of the plan, the Court held oral argument afterward. 21 See Dkt. No. 21. For the reasons detailed below, the Court denies the motion to dismiss. 22
23 24 1 II. ANALYSIS 2 A. Jurisdiction over Bankruptcy Appeals 3 District courts have jurisdiction to hear appeals “from final judgments, orders, and decrees”
4 issued by bankruptcy judges “in cases and proceedings.” 28 U.S.C. § 158(a). Interlocutory orders 5 are not appealable as of right, but may be reviewed “with leave of the court.” Id. Thus, the 6 threshold issue is whether the appealed order is final or interlocutory. 7 In non-bankruptcy civil litigation, a final, appealable decision is one “by which a district 8 court disassociates itself from a case[.]” Swint v. Chambers Cnty. Comm’n, 514 U.S. 35, 42 (1995). 9 “This rule reflects the conclusion that permitting piecemeal, prejudgment appeals … undermines 10 efficient judicial administration and encroaches upon the prerogatives of district court judges, who 11 play a special role in managing ongoing litigation.” Bullard v. Blue Hills Bank, 575 U.S. 496, 502 12 (2015) (citation modified). However, “orders in bankruptcy cases may be immediately appealed
13 if they finally dispose of discrete disputes within the larger case.” Id. at 501 (citation omitted). 14 Under the Ninth Circuit’s pragmatic approach, a bankruptcy order is “final” if it: (1) “resolves and 15 seriously affects substantive rights,” and (2) “finally determines the discrete issue to which it is 16 addressed.” In re Gugliuzza, 852 F.3d 884, 894 (9th Cir. 2017). “Orders that determine and affect 17 substantive rights and have the potential to cause irreparable harm to the losing party are 18 immediately appealable so long as they finally determine the discrete issue to which they are 19 addressed.” In re Martech USA, Inc., 188 B.R. 847, 849 (B.A.P. 9th Cir. 1995), aff’d, 90 F.3d 408 20 (9th Cir. 1996). 21 B. The Appealed Order is Final. 22 Appellant argues that, under the Ninth Circuit’s pragmatic approach to finality, the
23 bankruptcy court’s order is a final order because it precludes him from asserting any interest in the 24 Homestead Property. Dkt. No. 10 at 7–9 (citing Bonham v. Compton, 229 F.3d 750, 761 (9th Cir. 1 2000)). Appellee counters that the appealed order is interlocutory because, in general, orders 2 stripping liens are not final orders (Dkt. No. 11 at 2–3 (citing In re Pack, BAP NV-14-1375- 3 KUDJU, 2015 WL 2343512 (B.A.P. 9th Cir.
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4 5 UNITED STATES DISTRICT COURT 6 WESTERN DISTRICT OF WASHINGTON AT SEATTLE 7 In re: CASE NO. C25-1317-KKE 8
JULIE L. JEFFERSON, Bankruptcy No. 25-10188-CMA 9
Debtor(s). ORDER ON MOTION TO DISMISS 10 BANKRUPTCY APPEAL
11 GUY JEFFERSON,
12 Defendant(s)/Appellant(s), v. 13 JULIE L. JEFFERSON, 14 Plaintiff(s)/Appellee(s). 15 16 This case arises from an appeal of a bankruptcy order declining to strip Appellant’s lien on 17 Appellee’s real property, but holding that the parties’ divorce order entered by Kitsap County 18 Court did not create a judgment lien on Appellee’s homestead property. Appellee subsequently 19 filed an adversary proceeding to determine the value of Appellant’s lien on her property, and 20 Appellant filed the instant appeal. Appellee moved to dismiss the appeal for lack of jurisdiction. 21 Having reviewed the parties’ briefing and the record, and having heard oral argument, the Court 22 denies Appellee’s motion for the reasons below. 23 24 1 I. BACKGROUND 2 On January 24, 2025, Appellee Julie L. Jefferson voluntarily filed for Chapter 13 3 bankruptcy, and listed her ex-husband, Appellant Guy Jefferson, as a creditor in the action. In re
4 Julie Jefferson, No. 25-bk-10188-CMA, ECF No. 1 at 1, 23, 51 (Bankr. W.D. Wash. 2025). 5 Appellant’s creditor status stems from an April 26, 2024 Kitsap County Court “amended final 6 divorce order (dissolution decree)” that awarded him $378,209.00. Id.; id., ECF No. 22 ¶¶ 4–7; 7 id., ECF No. 22-3 (Kitsap County Judgment). In her amended bankruptcy schedule, Appellee 8 listed assets including a $1,025,000.00 home located at 1620 Harley Lane (“Homestead 9 Property”), and another home, valued at $450,000.00, and located at 1649 Harley Lane (“1649 10 Property”). Id., ECF No. 33 at 2–3. 11 On March 28, 2025, Appellee filed a “motion to strip [the] judgment lien” created by the 12 amended final divorce order, requesting the bankruptcy court enter “an order valuing the judgment
13 lien of Appellant at $149,991.00 and requiring Appellant release his judgment lien against [her] 14 real property.” Id., ECF No. 21 at 11; id., ECF No. 22. In that motion, Appellee asserted that due 15 to superior liens on the two properties, as well as homestead exemptions claimed under Wash. 16 Rev. Code § 6.13.030 as to the Homestead Property, the judgment lien should be valued at 17 $149,991.00. Id., ECF No. 22 at 3. The issues the bankruptcy court considered were whether 18 Appellant had a lien on Appellee’s real property, the value of such lien, and whether to strip 19 Appellant’s lien to the value proposed by Appellee. On July 2, 2025, the bankruptcy court denied 20 Appellee’s motion, and made 21 findings of fact and conclusions of law … including without limitation that entry of the AMENDED Final Divorce Order (Dissolution Decree) by the Kitsap County 22 Superior Court on April 26, 2024, did not create a lien in favor of [Appellant] on the [Homestead Property]. 23 24 1 Id., ECF No. 87. At oral argument, the bankruptcy judge held that to create a judgment lien against 2 a homestead property under Washington state law, Appellant needed to record the judgment. Id., 3 ECF No. 103 at 16–17. Because Appellant did not record the judgment, the bankruptcy court
4 found that the divorce order did not create a judgment lien on the Homestead Property. Id. The 5 bankruptcy court left open Appellant’s interest in the 1649 Property, which is not a homestead 6 property. The bankruptcy court also denied Appellee’s general request to strip Appellant’s lien, 7 explaining that Appellee would need to initiate an adversary proceeding owing to due process 8 concerns and Federal Rule of Bankruptcy Procedure 7001(b). Id.; Fed. R. Bankr. P. 7001(b) (an 9 adversary proceeding is used “to determine the validity, priority, or extent of a lien or other interest 10 in property”). 11 On the same day the bankruptcy court issued its order denying Appellee’s motion, Appellee 12 initiated an adversary proceeding against Appellant “to determine the extent of [Appellant’s] lien
13 against certain real property of the Debtor[.]” Id., ECF No. 88 at 1. The adversary proceeding on 14 that issue is ongoing, and currently set for a one-day trial on June 30, 2026. 15 On July 8, 2025, Appellant timely appealed the bankruptcy court’s July 2, 2025 order, and 16 elected to have his appeal heard by a United States District Court under 28 U.S.C. § 158(c)(1). 17 Dkt. No. 1 at 1–2. Appellee moved to dismiss the appeal, asserting that this Court lacks 18 jurisdiction. Dkt. No. 6. Ten days after Appellee filed her reply on the motion to dismiss, the 19 bankruptcy court confirmed her Chapter 13 bankruptcy plan. Dkt. No. 19. Though the motion to 20 dismiss was fully briefed prior to confirmation of the plan, the Court held oral argument afterward. 21 See Dkt. No. 21. For the reasons detailed below, the Court denies the motion to dismiss. 22
23 24 1 II. ANALYSIS 2 A. Jurisdiction over Bankruptcy Appeals 3 District courts have jurisdiction to hear appeals “from final judgments, orders, and decrees”
4 issued by bankruptcy judges “in cases and proceedings.” 28 U.S.C. § 158(a). Interlocutory orders 5 are not appealable as of right, but may be reviewed “with leave of the court.” Id. Thus, the 6 threshold issue is whether the appealed order is final or interlocutory. 7 In non-bankruptcy civil litigation, a final, appealable decision is one “by which a district 8 court disassociates itself from a case[.]” Swint v. Chambers Cnty. Comm’n, 514 U.S. 35, 42 (1995). 9 “This rule reflects the conclusion that permitting piecemeal, prejudgment appeals … undermines 10 efficient judicial administration and encroaches upon the prerogatives of district court judges, who 11 play a special role in managing ongoing litigation.” Bullard v. Blue Hills Bank, 575 U.S. 496, 502 12 (2015) (citation modified). However, “orders in bankruptcy cases may be immediately appealed
13 if they finally dispose of discrete disputes within the larger case.” Id. at 501 (citation omitted). 14 Under the Ninth Circuit’s pragmatic approach, a bankruptcy order is “final” if it: (1) “resolves and 15 seriously affects substantive rights,” and (2) “finally determines the discrete issue to which it is 16 addressed.” In re Gugliuzza, 852 F.3d 884, 894 (9th Cir. 2017). “Orders that determine and affect 17 substantive rights and have the potential to cause irreparable harm to the losing party are 18 immediately appealable so long as they finally determine the discrete issue to which they are 19 addressed.” In re Martech USA, Inc., 188 B.R. 847, 849 (B.A.P. 9th Cir. 1995), aff’d, 90 F.3d 408 20 (9th Cir. 1996). 21 B. The Appealed Order is Final. 22 Appellant argues that, under the Ninth Circuit’s pragmatic approach to finality, the
23 bankruptcy court’s order is a final order because it precludes him from asserting any interest in the 24 Homestead Property. Dkt. No. 10 at 7–9 (citing Bonham v. Compton, 229 F.3d 750, 761 (9th Cir. 1 2000)). Appellee counters that the appealed order is interlocutory because, in general, orders 2 stripping liens are not final orders (Dkt. No. 11 at 2–3 (citing In re Pack, BAP NV-14-1375- 3 KUDJU, 2015 WL 2343512 (B.A.P. 9th Cir. May 18, 20151)), and because the issue of Appellant’s 4 interests in the 1649 Property continues to be litigated through the pending adversary proceeding. 5 Id. at 3. The Court agrees with Appellant. 6 Apart from this appeal, there appears not to be any other opportunity for Appellant to be 7 heard on claims as to the Homestead Property now that the Chapter 13 plan has been confirmed, 8 and the time period in which to appeal confirmation of the plan has run. Although the adversary 9 proceeding provides an avenue for Appellant to pursue his substantive rights as to the 1649 10 Property, the equity available in the 1649 Property is less than the total he seeks under the divorce 11 decree. And in holding Appellant has no lien as to the Homestead Property, the appealed order 12 precludes Appellant from seeking the full amount of the divorce decree award through secured
13 claims on Appellee’s real property. Dkt. No. 10 at 7; see Dkt. No. 19-1 at 3, 5 (confirmed Chapter 14 13 plan providing for payment of $149,991.00 with 8.5% interest to be secured only by the 1649 15 Property). Appellee neither contests that the equity available in the 1649 Property is less than the 16 total amount awarded to Appellant under the divorce decree, nor that the adversary proceeding 17 will determine Appellee’s rights solely as to that property. See Dkt. No. 11 at 1–4. On its face, 18 the appealed order therefore finally determines and affects Appellant’s substantive rights by 19 limiting his secured claims to a sum of $149,991.00 based on the equity available in the 1649 20
21 1 Appellee cites only one in-circuit case, In re Pack (9th Cir. B.A.P. May 18, 2015), to support the proposition that bankruptcy courts as a matter of course consider orders on lien stripping motions via appeals from confirmation of a bankruptcy plan. This argument fails for multiple reasons. First, this Court is not bound by the decision of a 22 bankruptcy appellate court panel. Bank of Maui v. Estate Analysis, Inc., 904 F.2d 470, 472 (9th Cir. 1990) (“BAP decisions cannot bind the district courts themselves.”). Appellee’s reliance on In re Pack is also misplaced because 23 the bankruptcy appellate panel in fact considered both an order on a motion to lien strip and an order confirming the bankruptcy plan. See In re Pack, 2015 WL 2343512, at *1 (Appellant “appeals from the bankruptcy court’s order on [Appellee’s] motion to ‘strip off’” and its “order confirming [Appellee’s] chapter 11 plan.”). Finally, Appellee’s 24 argument fails for the additional reason that Appellant cannot now appeal the confirmation order. 1 Property. Dkt. No. 19-1 at 3, 5. Although Appellant could file an appeal from the outcome of the 2 adversary proceeding, such an appeal would not reach the substantive rights Appellant asserts 3 through this appeal: namely, whether he may seek the full value of the judgment entered as a result
4 of the divorce decree through payment secured by the Homestead Property. In sum, the appealed 5 order has the potential to cause Appellant irreparable harm and finally determines the discrete issue 6 of whether he can pursue a secured claim in the Homestead Property. Thus, the appealed order is 7 final, and the Court has jurisdiction to hear the appeal. 8 III. CONCLUSION 9 Because the appealed order is final, not interlocutory, the Court DENIES Appellee’s 10 motion to dismiss. Dkt. No. 6. In line with the Court’s prior order continuing the briefing schedule 11 (Dkt. No. 14), Appellee shall file her brief by January 27, 2026; Appellant shall file his reply brief 12 by February 10, 2026. The Clerk is directed to re-note the appeal for February 10, 2026.
13 Dated this 13th day of January, 2026. 14 A 15 Kymberly K. Evanson 16 United States District Judge
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