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- Subject: OWEN v. OWEN, Syllabus
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-
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-
- NOTE: Where it is feasible, a syllabus (headnote) will be released, as
- is being done in connection with this case, at the time the opinion is
- issued. The syllabus constitutes no part of the opinion of the Court but
- has been prepared by the Reporter of Decisions for the convenience of the
- reader. See United States v. Detroit Lumber Co., 200 U. S. 321, 337.
- SUPREME COURT OF THE UNITED STATES
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-
- Syllabus
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- OWEN v. OWEN
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- certiorari to the united states court of appeals for the eleventh circuit
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- No. 89-1008. Argued November 5, 1990 -- Decided May 23, 1991
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- The Bankruptcy Code allows States to define what property is exempt from
- the estate that will be distributed among the debtor's creditors. The
- Florida Constitution provides a homestead exemption, which the state courts
- have held inapplicable to liens that attach before the property in question
- acquires its homestead status. Petitioner purchased his Florida
- condominium in 1984 subject to respondent's pre-existing judgment lien, and
- the property first qualified as a homestead under a 1985 amendment to the
- State's homestead law. After petitioner filed a chapter 7 petition for
- bankruptcy in 1986, the Bankruptcy Court, inter alia, sustained his claimed
- homestead exemption in the condominium, but subsequently denied his
- postdischarge motion to avoid respondent's lien pursuant to Code MDRV
- 522(f). The District Court and the Court of Appeals affirmed, finding that
- since the lien had attached before the condominium qualified for the
- homestead exemption, the property was not exempt under state law.
-
- Held:
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- 1. Judicial liens can be eliminated under MDRV 522(f) even though the
- State has defined the exempt property in such a way as specifically to
- exclude property encumbered by such liens. The section provides, inter
- alia, that "the debtor may avoid the fixing of a [judicial] lien on an
- interest of the debtor in property to the extent that such lien impairs an
- exemption to which the debtor would have been entitled under," in effect,
- MDRV 522(d), which lists federal exemptions, or under state law. At first
- blush, respondent's argument seems entirely reasonable that her lien does
- not "impair" petitioner's Florida homestead exemption within the meaning of
- MDRV 522(f) because the exemption is not assertable against pre-existing
- judicial liens, and that permitting avoidance of the lien would not
- preserve the exemption but expand it. However, this result has been widely
- and uniformly rejected by federal bankruptcy courts with respect to federal
- exemptions under MDRV 522(d). To determine the application of MDRV 522(f),
- those courts ask not whether the lien impairs an exemption to which the
- debtor is in fact entitled, but whether it impairs an exemption to which he
- would have been entitled but for the lien itself. This approach, which
- gives meaning to the phrase "would have been entitled" in the applicable
- text, is correct. A different approach cannot be adopted for state
- exemptions, in light of the equivalency of treatment accorded to federal
- and state exemptions by MDRV 522(f). Pp. 2-8.
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- 2. This Court expresses no opinion on, and leaves for the Court of
- Appeals to resolve in the first instance, the questions whether
- respondent's lien can be said to have "impair[ed] an exemption to which
- [petitioner] would have been entitled" at the time the lien was fixed, in
- light of the fact that petitioner did not yet have a homestead interest;
- whether the lien in fact fixed "on an interest of the debtor" if, under
- state law, it attached simultaneously with petitioner's acquisition of his
- property interest; and whether the Florida statute extending the homestead
- exemption was retroactive. Pp. 8-9.
-
- 877 F. 2d 44, reversed and remanded.
-
- Scalia, J., delivered the opinion of the Court, in which Rehnquist, C. J.,
- and White, Marshall, Blackmun, O'Connor, Kennedy, and Souter, JJ., joined.
- Stevens, J., filed a dissenting opinion.
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