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- Subject: FARREY v. SANDERFOOT, Syllabus
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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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- FARREY, fka SANDERFOOT v. SANDERFOOT
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- certiorari to the united states court of appeals for the seventh circuit
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- No. 90-350. Argued March 25, 1991 -- Decided May 23, 1991
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- When petitioner Farrey and respondent Sanderfoot divorced, a Wisconsin
- court awarded each one-half of their marital estate. Among other things,
- the decree awarded Farrey's interest in the family home and real estate to
- Sanderfoot and ordered him to make payments to Farrey to equalize their net
- marital assets. To secure the award, the court granted Farrey a lien
- against Sanderfoot's real property. Sanderfoot did not pay Farrey and
- subsequently filed for bankruptcy, listing the marital home and real estate
- as exempt homestead property. The Bankruptcy Court denied his motion to
- avoid Farrey's lien under 11 U. S. C. MDRV 522(f)(1) -- which provides,
- inter alia, that a debtor "may avoid the fixing of a [judicial] lien on an
- interest of the debtor in property" -- finding that the lien could not be
- avoided because it protected Farrey's pre-existing interest in the marital
- property. The District Court reversed, and the Court of Appeals affirmed.
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- Held:
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- 1. Section 522(f)(1) requires a debtor to have possessed an interest to
- which a lien attached, before it attached, to avoid the fixing of a lien on
- that interest. The statute does not permit avoidance of any lien on a
- property, but instead expressly permits avoidance of "the fixing of a lien
- on an interest of the debtor." A fixing that takes place before the debtor
- acquires an interest, by definition, is not on the debtor's interest. This
- reading fully comports with MDRV 522(f)'s purpose, which is to protect the
- debtor's exempt property, and its legislative history, which suggests that
- Congress primarily intended MDRV 522(f)(1) as a device to thwart creditors
- who, sensing an impending bankruptcy, rush to court to obtain a judgment to
- defeat the debtor's exemptions. To permit lien avoidance where the debtor
- at no point possessed the interest without the judicial lien would allow
- judicial lienholders to be defrauded through the conveyance of an
- encumbered interest to a prospective debtor. Pp. 4-7.
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- 2. Farrey's lien cannot be avoided under MDRV 522(f)(1). The parties
- agree that, under state law, the divorce decree extinguished their joint
- tenancy, in which each had an undivided one-half interest, and created new
- interests in place of the old. Thus, her lien fixed not on Sander foot's
- pre-existing interest, but rather on the fee simple interest that he was
- awarded in the decree that simultaneously granted Farrey her lien. The
- result is the same even if the decree merely reordered the couple's
- pre-existing interests, since the lien would have fastened only to what had
- been Farrey's pre-existing interest, an interest that Sanderfoot would
- never have possessed without the lien already having fixed. To permit
- Sanderfoot to use the Bankruptcy Code to deprive Farrey of protection for
- her own pre-existing homestead interest would neither follow the statute's
- language nor serve its main goal. Pp. 7-9.
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- 899 F. 2d 598, reversed and remanded.
-
- White, J., delivered the opinion of the Court, in which Rehnquist, C. J.,
- and Marshall, Blackmun, Stevens, O'Connor, Kennedy, and Souter, JJ.,
- joined, and in all but the penultimate paragraph of Part III of which
- Scalia, J., joined. Kennedy, J., filed a concurring opinion, in which
- Souter, J., joined.
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