Petition for Writ of Certiorari — Owen v. Owen, 113 S. Ct. 659 (1992) (No. 92-671)

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Text

Supreme Court. S.

92-67] 2 2 ae

| OCT 16 i992

OFFICE OF THE CLERK

Stata

IN THE —J

SUPREME COURT OF THE UNITED STATES

October Term 1992

H. OWEN

Petitioner

Vv.

HELEN OWEN

Respondent

PETITION FOR WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT

Roger L. Fishell

1900 Main Street#214

Sarasota, Florida 34236

(813) 351-2883

Attorney for Petitioner

&ryTeecT rane IDC Ff Tren

OUBSLLONS BOoENLED

Whether the Sunreme Court decision

;, . Rores ws 7 heh a ee

in Farrey v Sanderfoot, IS > Eke

Paticy aaiaeinads

oC 7c > & 7 7 T ~ = 7

S ct 1825, 114 L Ed 2d 337 (1991), which

as to lien. created by a state divorce

judgment in order to protect a pre-exis-

protect the distribution under the decree)

controls the decision in Owen where, in

Owen, no joint or pre-existing ownership

interest in specific property was ever

where the lien was not created by the

specific terms of any judgment and where

avoidance of the lien would, in no way,

result in a deprivation of any ownership

interest of the creditor or otherwise

defeat any property distribution in favor

)

of that creditor under Such judgment.

2. Whether the Court of Appeals, in

Owen, misapplied Parrey when it concluded

that there was no "fixing of a lien on an

interest of the debtor...as the debtor had

no property interest prior to the fixing

of the lien" where, in Owen, the debtor's

Ownership of Property is an indispensable

prerequisite to the acquisition of any lien

by his creditor under Florida law.

3. Whether the apparent rule of Farrey

Should be limited or narrowed to the extent

that it not be applied to the broader cate-

gory of general judgment liens, such as

the one involved in Qwen, which arise by

random operation of law, and where no owner-

Ship-to-lienholder continuum exists in the

Creditor and where avoidance of such lien

Will not result in any deprivation of any

pre-existing ownership interest held by the

Creditor in the property.

STATEMENT PURSUANT TO RULE 14.1(b)

Dwight H. Owen is an individual Petitioner

Helen Owen is an individual Respondent

iii

Questions

Statement Pu

Presented

able of Contents

rsuant to

Index to Appendix ...

Table of Aut

horities

Opinions Below ......

Jurisdiction

*e wp eee @ @

Statutes Involved ...

Constitution

Statement of

Introduct

Fact Summary

Argument

Reasons for Granting the

Conclusion

te oe a oe oe ee oe a

Certificate

al Provisi

the Case

ion

22 82 2 2.6 &

of Service

Rule 14.1 nee

-) :

INDEX TO APPENDIX

Opinion of the United States Court of

Appeals on Remand from the United

States Supreme Court, Owen v Owen,

Gated 14 May LSS?) .cdcvcc dceeks ender wees. Al

Order of United States Court of Appeals

on Motion for Prehearing Conference,

For Supplemental Briefing and for

Oral Arguement, Owen v Owen, dated

14 May 1992

Opinion of the United States Supreme

Court, Owen v Owen, dated 23 May 1991.Al2

Judgment of United States Court of

Appeals, Qwen v Qwen, dated

11 July 1989

TrTtrtTcrtneteteeeeReRESa ERA R ER SRE EY eR DS E.

Order of United States Court of

Appeals on Petition for Rehearing

and Suggestion for Rehearing En

Banc, Owen v Owen, dated

32 ROGUE TURE Uae rink econo Aa]

Opinion of United States Court of

Appeals, Owen v Owen, dated

LA. Deke TORO Wii co Gb cees oer dei eeu. A49

Judgment of United States District

Court, Owen v Owen, dated

? Summ 190RiLa o ieieteie AG]

Opinion of United States District

Court, Qwen v Owen, dated

> Same. TNR ara eaeaaeeeeecks A62

Order of United States Bankruptcy

Court on Motion to Amend or Make

Additional Findings of Fact Pursuant

to Rule 7052(b) and to Alter or

Amend the Order on Motion to Avoid

Judgment Lien Pursuant to Rule

9023, In Re Owen, dated

A73

Opinion of United States Supreme

Court, Farrey v Sanderfoot, dated

Order of United States Court of

Appeals on Petition for Rehearing

and Suggestion for Rehearing En

Banc, Owen v Owen, dated

Judgment of United States Court of

Appeals on Remand from the United

States Supreme Court, Owen v Owen,

dated 14 May 1992 ...-ceeeeeeeeeccceeeees

Vil

Art XI,

Vv °

ERM Chae CO ee lice Guy Al12

POW PIA Yer ee un psoas, ce A110

PME PRR LRM weet ye Pe tie oe All2

wi ok Misia AEE EE Oe ALis

POR MONG. Ghee sk ihe wa cadcds All3

sec 4, Fla. Const...\........... All4

sec 5, Fla. Const.............. A116

viii

TABLE OF AUTHORITIES

Cases

Accent Realty of Jacksonville Inc. v

Crudele, 496 So 2d 158

(Fla 3d DCA 1986) ..... ae ee a ee ae 23

Aetna Insurance Company v LaGasse,

23 SO 44 727 (Pim 1969), ...ncccreceen 9

et al. v Donovan, 452 US 490,

101 S Ct 2478, 69 L Ed 2d 185 (1981).34

Arizona v Fulminante,

_. G8 2, , 111 S$ Ct 12466, 113 L 8a

ae SD Ee roe 33

Arkansas v Sanders,

442 US 753, 99 S Ct 2586, 61 L Ed

DE ee. ROOT? 6646 tn be ecbakewe veeews a3

Associates Discount Corporation v

Gomes, 338 So 2d 552

[PEG Fe I SPO vow ce oc kin hee inane. 26

4 ’

, _

ad J

= x

4 4

C al

oF ee

b2y

ont

r 4 x

x :

> ‘

(Tt

* ©)

877 F 2d 44 (llth Cir 1989)....vi,1,5

US » 111 S Ct 1833, 114 L Ed 2d

rr)

oF,

“

ue)

07)

49)

47)

0 ESOL). we ica vie bake

mbe's Case,

42 ERG ROP FCG (2909) 60 vk ccwuus eee

Porter-Mallard Company et al. v

Dugger, 117 Fla 137, 157 So 429

(PER SOIR) .eenenhusee hock se ee cee

Sarmiento v Stockton, Whatley, Davin &

Company, 399 So 2d 1057

(Pia 36 DOOR: 2901). ive esau euees eae

Schilling, et al. v Bank of Sulphur

Springs, 147 So 218 (Fla 1933),.....26

xii

Schlude v Commissioner of Internal

Revenue, 372 US 128, 83 S Ct 601,

re 35

Securities and Exchange Commission

United Benefit Life Insurance

Company, 387 US 202, 87 S Ct 1557,

Oe ey 2 re 35

Smith v Pattishall,

127 Fla 474, 176 So 568 (Fla 1937).18

United States v Doe,

465 US 605, 104 S Ct 1237, 79 L Ed 2d

United States v Donovan,

429 US 413, 97 S Ct 658, 50 L Ed 2d

DPT CCC ER GG eee cccccce ccc ce 32

United States v Martinez-Fuerta, et al.,

429 US 543, 96 S ct 3074, 49 L Ed 2d

TET cate cece ccc ccc ese 34

Wilkinson v United States,

365 US 399, 81 S Ct 567, 5 L Ed 2d

633 (1961)

11 USC

ll USC

222.20,

aAPt« Ri

Art XI,

40 164 (Pim 2950) cic ok wksckux 18

Statutes

POS walk hn boas eA Ga ee ae ek 27

SRSLMS ea Naw Ask ee Od eee 4

ike Pe ee ee rer eee passim

PERS eK ORAL Ee TE OOS Od hae COLL 10

PEDO EP hte bad hes Rae eee 3

Fla Peek wa eee 0k ks Ge ee ee 4,16

Fans wees Uxt<e’ ch vetcctwecu. 4,10

Constitutions

SOC 4, Pha Comet. «is ccvccccce 4,8

"ec 3, Fla Conet. «...ccccccee 4,8

xXiv

Rules

th Circuit Rule 35-2 ceeececeseeeeeee 3

Rule /O052, Bankruptcy RULES ..cccccccecs vi

m 199 Se

Rule 9023, Bankruptcy Rules ........... v1

Other Authorities

Scott & Scott, Selected Cases and

Other Authorities on the Law of Trusts,

ti Ae. Peery eet eee Cee eee 24

C. Robert Morris, Bankruptcy Fantasy:

The Site of Missing Words and the

Order of Illusory Events, Arkansas

Law Review, Vol. 45, Number 2, 1992

OPINIONS BELOW

The 14 May 1992 decision of the United

States Court of Appeals for the Eleventh

Circuit is reported at 961 F 2d 170 and is

reprinted in the Appendix to this petition

at (Al). That decision was rendered upon

remand from the United States Supreme Court

following the decision in Owen v Owen,

US » lll S Ct 1833, 114 L Ed 2d 350

(1991). See reprint of that decision at

(A 12). The prior decision of the United

States Court of Appeals is reported at 877

F 2d 44 and is reprinted at (A 49). The

decision of the United States District

Court, Middle District of Florida, is re-

ported at 86 BR 691 and is reprinted at

(A 62). The decision of the United States

Bankruptcy Court, Middle District of Flori-

da was not reported but is reprinted at

(A 73).

In addition to the foregoing opinions,

the opinion of the United States Supreme

Court in Farrey v Sanderfoot, US ,

lll S Ct 1825, 114 L Ed 2d 337 (1991) pub-

lished the same day as the decision in

Owen v Owen, above, is also reprinted at

(A 77).

JURISDICTION

The decision of the United States

Court of Appeals for the Eleventh Circuit

was entered, after remand from the United

States Supreme Court, on the 14th day of

May 1992. (Al). That decision affirmed

the prior decision of the United States

District Court, Middle District of Florida,

which had been entered on the 7th day of

June 1988. (A62). Petitioner timely filed

a Petition for Rehearing and Suggestion

for Rehearing En Banc, pursuant to 1lth

Circuit Rule 35-2. These were denied by

| the Court of Appeals on the 2lst day of

July 1992. (A106).

This Court has jurisdiction pursuant

to 28 USC 1254(1).

STATUTES INVOLVED

Title 11, United States Code,

Section 522(b) and Section 522(f) are

reprinted at (A110).

Section 222.20, Florida Statutes is

reprinted at (A113).

Section 55.10, Florida statutes is

reprinted at (A113).

CONSTITUTIONAL PROVISIONS INVOLVED

Article X, Section 4, Florida Cons-

titution is reprinted at (A114 ).

Article XI, Section 5, Florida Cons-

titution is reprinted at (A116).

STATEMENT OF THE CASE

INTRODUCTION

This case was previously before this

Court. Owen v Owen, US » B41 8 Ct

1833, 114 L Ed 2d 350 (1991). (A 12).

The foregoing decision reversed the prior

decision of the United States Court of

Appeals for the Eleventh Circuit, 877 F 24d

44, (A 49), and remanded the case for con-:

Sideration in light of this Court's deci-

sion in Farrey v Sanderfoot, US

lll S Ct 1825, 114 L Ed 2d 337 (1991).

(A777). Following consideration on remand,

the Court of Appeals again affirmed the

decision of the United States District

Court, Middle District of Florida. (A 1 ),

The District Court had affirmed the deci-

Sion of the United States Bankruptcy Court,

Middle District of Florida, which had

denied Petitioner's Motion to Avoid Res-

pondent's judgment lien, pursuant to 11

USC 522(f)(1), upon Petitioner's homestead.

The decision of the Court of Appeals

on remand construed and applied this Court's

holding in Farrey v Sanderfoot, above. The

Court of Appeals concluded that the holding

in Farrey applied in Owen and that the Peti-

tioner could not avoid Respondent's lien

because Petitioner did not own the property

interest to which the lien attached "at

some point before" the lien attached to

that interest. See 961 F 2d at 172. (A5-6).

The issue determined by the Court of Appeals

was one which this Court specifically left

undecided in the Owen opinion. See 111 S§S

Ct at 1836 and 1838. (A 19 )(A 29-30). At

lil S Ct 1836, the opinion states

"The lien in the present case is

a judicial lien, and we assume

without deciding that it fixed

‘on an interest of the debtor

in property.'"

ea iia i

At 111 S Ct 1838, the Court states

"It could be argued that the lien

did not fix 'on an interest of

the debtor' (cite)...We express

no opinion on these points..."

The Court of Appeals concluded that

there was no fixing of a lien on Petitioner's

interest in the Property. 961 F 2d 172.

oe oe

Il. THE FACTS

The facts are not disputed. The Res-

pondent obtained a money judgment against

the Petitioner in Circuit Court, Manatee

County, Florida in Decembe 1975. A certi-

fied copy of that judgment was recorded in

the public records of Sarasota County, Flo-

rida on 29 July 1976. At that time Peti-

tioner owned no property in Sarasota County.

On 27 November 1984, Petitioner acgquire-

ed record fee Ownership of the real proper-

ty at issue herein, Unit 304 of Embassy

iinet eatin italia

House, a condominium, located in Sarasota

County. At that time, Petitioner was a

Single man and not "the head of a family"

as was then required for entitlement to

the Florida constitutional homestead

exemption. Article X, Section 4, Fla.

Const. (A114).

On 6 November 1984, the citizens of

Florida approved an amendment to the cons-

titutional homestead provision which sub-

stituted "a natural person" for the previ-

ous "head of a family" requirement. That

amendment became effective on 8 January

1985. Article XI, Section 5, Fla. Const.

(A116).

Under Florida law, no judgment is a

lien upon any property until property is

owned by the judgment debtor. First

National Bank of Chipley v Peel, 145 So

177 (Fla 1933); Bowers v Mozingo, 399 So

492 (Fla 3d DCA 1981). A duly recorded

+ + + r ' c y > 1] p y art t t >

+ ] al: + é ~ + r ) » = . > = ~ ~—:

real propert 1 the county i ynhich that

l1agment is recorded B \ tt ae. ©

Padgett, 14 So 2d 667 (Fla 1943). Thus, the

Respondent's Judgment attached as a lien

it the time the above property was acquired

by petitioner on 27 November 1984. In addi-

tion, a judgment which attaches as a lien

upon the debtor's property at a time when

the debtor is not eligible to claim the

homestead exemption will remain enforceable

despite the fact that the debtor later

qualifies for the exemption. Aetna Insur-

ance Company v LaGasse, 223 So 2d 727 (Fla

1969). Although the attachment of such a

lien does not prevent Subsequent acquisi-

tion of the homestead right, see Lamb v

Ralston Purina Company, 21 So 2d 127 (Fla

1945), such a lien will remain enforceable

”~ T "reve - ~ > >

pees Bmw Bhan

) he + = + + + _

i . 4

~ Tr y ™ ~ ~ = ro; ~ ~

A i

or, + +} -y ~ + £ + }, ah + —_—

SD1lte le 2 A © 4 P ; L e u

= = ae a tho >> a= “ran

assert LIE exemption.

On 13 January 1986, the Petitioner

filed his Chapter 7 bankruptcy petition

and claimed the above property as exempt

as his homestead on his B-4 schedule, in

accordance with Chapter 222.20, Florida

Statutes (A113), the provision which

limits Florida debtors to state, rather

than federal,exemptions in bankruptcy.

The bankruptcy court allowed the exemption

for purposes of general administration of

the estate. The exemption was allowed

because exemption entitlements are deter-

mined by reference to the exemption provi-

Sions in effect on the date of the Filing

of the petition. 11 USC 541, In Re Zahn

605 F 2d 323 (7th Cir 1979) cert den 444

US 1075, 100 S Ct 1072, 62 L Ed 2a 757

(1980); Lewis v Manufacturer's National

Bank, 364 US 603, 81 S Ct 347, 5 L Ea 2d

In due course, the Petitioner received

his bankruptcy discharge. Thereafter, the

court permitted the case to be re-opened,

at Petitioner's request, for the purpose of

filing a motion to avoid Respondent's lien

pursuant to ll USC 522(f). The order of

February 8, 1988 (A73 ), in which the bank-

ruptcy court held the lien to be unavoidable,

is the order appealed to the District Court

and to the Court of Appeals. The District

Court (A 62) and Court of Apeals (A 49)

both affirmed the bankruptcy court.

The United States Supreme Court

granted certiorari and reversed the deci-

sion of the Court of Appeals, Owen v Owen,

above, holding that state defined exclu-

sions from exemptions did not preclude

lien avoidance under 11 USC Beate )()).

However, this Court remanded the case to

the Court of Appeals for consideration in

accordance with the holding in Farrey v

sanderfoot, above. (A30).

The Owen decision, at 111 S Ct 1838,

(A 29), states

"Section 522(f) permits the avoid-

ance of the 'fixing of a lien on an

interest of the debtor'. Some

court's have held it inapplicable to

a lien that was already attached to

property when the debtor acquired it,

Since in such a case there never was

a 'fixing of a lien' on the debtor's

interest. (cites omitted). Under

Florida law, the lien may have

attached simultaneously with the ac-

quisition of the property interest.

If so, it could be argued that the

lien did not fix ‘on an interest of

the debtor'. Farrey v Sanderfoot,

US poaee @ Ge 1625, 114 L Ed

2d 337 (1991)."

This latter issue was left for consideration

On remand.

In again affirming the District Court,

the Court of Appeals stated at 961 F 2a 172

(A4-6) that

"...there was no fixing of a lien

on an interest of the debtor..

(and) there was never a fixing of

a lien on an interest of the deb-

tor, as the debtor had no property

interest prior to the fixing of the

lien."

The Court of Appeals, in relying on Farrey,

apparently took the position that the

Petitioner failed to meet the requirement

that he own an interest in the property to

which the lien attached "at some point

before" the lien attached to the property.

See Farrey, at 111 S Ct 1831. It was on

this basis that the Court of Appeals held

the lien to be unavoidable. See 961 F 2d

at 172. (A 4-6).

ARGUMENT

In concluding that Respondent's lien

was unavoidable, pursuant to 11 USC 522(f),

the Court of Appeals misapplied this Court's

holding in Farrey. The holding in Farrey

is not as broad as the Court of Appeals has

interpeted it to be.

Farrey involved the limited situation

wherein ownership interests in specific

real property were at risk had this Court

Sustained lien avoidance under 11 USC 522.

Farrey involved the lien created by a

divorce decree where that decree was engi-

neered to protect a pre-existing ownership

interest. The non-debtor spouse received

a judicially declared lien upon the proper-

ty which was transferred by that decree to

secure to her the division of property

ordered by the divorce court. This Court

held that the lien created by that judgment

in favor of the non-debtor spouse could

not be avoided.

The boundaries of the Farrey ruling

are stated at 111 S Ct 1827, {A 77).

"In this case we consider whether

§522(£) of the Bankruptcy Code

allows a debtor to avoid the fix-

ing of a lien on a homestead,

where the lien is granted to the

debtor's former spouse under a

divorce decree that extinguishes

all previous interests the par-

ties had in the property, and in

no event secures more than the

value of the non-debtor spouse's

former interest. We hold that it

does not."(emphasis added).

This Court's concern for Farrey's pre-exis-

ting ownership interest is again noted at

1. Two conditions are noted here, i.e. (1) a decree

which extinguishes a pre-existing Ownership interest

and (2) a lien which secures no more than the value

of the non-debtor spouse's former interest. Thus, in

the non-debtor spouse, a ownership-to-lienholder

continuum exists.

Since the Respondent here, Mrs Owen, never had

an ownership interest in the property which became

the subject of her lien when Petitioner acquired the

property, she does not fall within the protection of

Farrey. She can fulfill neither of the above (2)

conditions. Further, her lien did not arise by way

of any divorce decree.

111 S Ct 1831 (A 97)

"Farrey obtained the lien not to

defeat Sanderfoot's pre-existing

interest in the homestead but to

protect her own pre-existing in-

terest in the homestead that was

fully equal to that of her spouse.

The divorce court awarded the lien

to secure an obligation the court

imposed on the homestead in exchange

for the court's simultaneous award

of the wife's homestead interest to

the husband."(emphasis added).

Viewed in its entirety, the transfer under

the Farrey divorce decree is more akin to

a partition judgment or a purchase money

mortgage than to the more commonplace lien

of an unrelated judgment such as the lien

held by the Respondent in Owen. Mrs Owen's

lien arose by operation of law and attached

to property indiscriminately. See §55.10,

Florida Statutes. Respondent Owen never

held a pre-existing ownership interest in

Petitioner's property. Mrs Owen's lien,

unlike Farrey's, never provided her with

a specific interest in Petitioner's pro-

perty. Farrey's lien was specifically

created by the terms of the decree. Mrs

Owen's lien was not of that character,

Origin or magnitude. * It should not be

accorded the same magnitude of protection

that was accorded Farrey's.

Also, as the Court noted at 111 S Ct

1828, (A 82), the Farrey decision evolved

from a series of dissolution of marriage

2. No interest in specific property is created by

virtue of the attachment of a judgment as a lien.

In Conard v The Atlantic Insurance Company of New

York, Inc., 26 US(1 pet) 386, 442-443 (1828), the

Supreme Court, in construing Pennsylvania lien law,

stated

",..1t is not understood that a general

lien by judgment on land, constitutes, per

se, a property or right in the land itself.

It only confers a right to levy on the same

to the exclusion of other adverse interests,

subsequent to the judgment...But subject to

this the debtor has full power to sell or

otherwise dispose of the land. His title

to it is not devested or transferred by the

judgment to the judgment creditor...In short,

a judgment creditor has not jus in re, but

a mere power to make his general lien effec-

tual by following up the steps of the law,

and consummating his judgment by an execu-

tion and levy on the land."

Florida has adopted the rule set forth above. In

Massey v Pineapple Orange Company, 87 Fla 374, 100

So 170 (Fla 1924) the court states

"A general lien by judgment on land only

confers a right to levy on the same...A

cases which present equities not to be

found in Owen. It appears, in Farrey and

in other similar cases noted, that an under-

lying factor was the desire of the courts

to protect pre-existing interests (in Farrey,

an ownership interest) of a non-debtor

3 .

spouse. Mrs Owen was never at such a risk

2. (cont.) judgment creditor has no jus in re, but

a mere power to make his general lien effec-

tual by following up the steps of the law and

consummating his judgment by an execution and

levy upon the land."

See also Gilpen v Bower, 12 So 2d 884 (Fla 1943),

wherein the Court distinguishes mortgages and judg-

ment liens and concludes that a jucgment lien was

not a claim upon specific property. See also Nassau

Realty Company Inc. v City of Jacksonville, et al.,

198 So 581 (Fla 1940)(distinguishing judgment liens

and liens on specific property); Young v McKenzie,

46 So 2d 184 (Fla 1950)(following Massey, above);

Smith v Pattishall, 127 Fla 474, 176 So 568 (Fla

1937) (same).

3. Note at 111 S Ct 1828 (A 85)

"The sole question presented in this case is

whether §522(f)(1) permits Sanderfoot to

avoid the fixing of Farrey's lien on the pro-

perty interest that he obtained in the divorce

decree."

Without the relief provided by this Court, Farrey

would have parted with her ownership interest in

return for the security of the lien given by the

divorce decree, only to have the security of the

lien stripped from her when the former spouse, who

acquired her prior interest in the property, later

sought bankruptcy relief. Without relief in this

Court she would have suffered a two-fold deprivation

which, in the end, would have taken from her the

entirety of the property she once owned.

because her lien was never a Substitute

for a prior ownership interest in any vro-

perty.

In restating its desire to protect

Farrey's pre-existing Ownership interest,

and the lien given to secure that interest,

the Court notes at 111 S Ct 1831, (A 97),

"++.toO permit a debtor in these

Circumstances to use the code to

deprive a spouse of this protec-

tion would neither follow the lan-

guage of the statute nor serve the

main goal it was designed to address."

(emphasis added)

The Petitioner concedes that a lien arising

under the circumstances of Farrey would not

likely have been the evil which Congress

sought to remedy when §522(f£) was enacted.*

However, those peculiar circumstances are

not present in Owen. Avoiding Mrs Owen's

lien would not deprive her of something she

once owned, it would merely deprive her of

4. The Court, in Farrey, assumed, but did not deter-

mine, that the lien involved in that case was a judi-

clal lien. See 111 S Ct 1828, (A 85). However, in

Owen, the Court specifically stated that, "The lien

in the present Gase is a judicial lien..." (A 19).

rule as interpreted by the Court of Appeals

in its recent decision.

The issue which this Court directed

the Court of Appeals to consider on Hedend.

is stated at 111 S Ct 1838, (A 29), as |

follows

“Under Florida law, the lien may

have attached simultaneously with

the acquisition of the property

interest. If so, it could be ar-

gued that the lien did not fix

‘On an interest of the debtor'.

See Farrey v Sanderfoot, US

» a84, 3. CO i825; L Ed 2d

(1991)."

The actual language of the holding in Far-

rey, at 111 S Ct 1829, (A 87),

“++.unless the debtor had the pro-

perty interest to which the lien

attached at some point before the

lien attached to that interest, he

Or she can not avoid the Fixing of

the lien under the terms of 11 USC

522(f)(1)." (emphasis added)

Quite obviously, this Court did not con-

Clude in its Owen opinion that the above

rule required that lien avoidance be denied

to Petitioner Owen.> However, the Court of

Appeals, at 961 F 2d 172, held (A4-6)

"...there was no fixing of a lien

On an interest of the debtor...

(and) there was never a fixing of

a lien on an interest of the deb-

tor, as the debtor had no proper-

ty interest prior to the fixing

of the lien."

This holding can not be sustained, so as

deny Petitioner the avoidance of the lien,

under the facts of this case.

Florida law clearly provides that a

judgment can be no lien upon any property

9. Note at 111 S Ct 1838, (A 29), wherein the

Court states with reference to the issues remanded

that

"It could be argued that the lien did not

fix 'on an interest of the debtor'. (cite)

- We express no opinion on these

points..."

a Oe NL D-

MSc tar

Te ae eet Re ae He RS LET LERTEL NOR he

Se ee

unless and until property is owned by

the judgment debtor.° A judgment attaches

as a lien to the judgment debtor's property

6. The conclusion, i.e that there "...was no

fixing of a lien on an interest of the debtor..."

could only be true in a situation like that presented

in In Re McCormick, 18 BR 911 (Bankr WD Pa 1982) aff'd

22 BR 997 (DC WD Pa 1982), noted by this Court in

Owen, 111 S Ct 1838. In McCormick, the lien attached

to a joint interest prior to the time that the debtor

acquired sole interest in the property. Because the

lien attached prior to acquisition of his sole in-

terest, the debtor did acquire the property with the

lien already attached. Under those facts, it can be

observed that there was no fixing of a lien on an

interest of the debtor because the lien became fixed

while owned by the prior titleholders, i.e. the joint

judgment had attached during the prior joint owner-

ship and therefor the lien was already attached to

the property when it became solely owned by the deb-

tor.

This is plainly not what occurred in Owen, be-

cause Mrs Owen's judgment was against Owen himself

and not against Owen's predecessor in title. For

Mrs Owen to have had a lien on the property prior

to Owen's acquisition of his interest, Mrs Owen's

judgment would have had to have derived from Owen's

predecessor in title, rather than through Owen him-

self.

The opinion of the Court of Appeals reads as

though McCormick applies. Quite clearly, it does

not. See In Re Sprick, 78 BR 292 (Bankr D Kan

1987) for an analysis of McCormick and an explana-

tion of when it does not apply.

ind to none other. In Owen, there was

no lien in favor of the creditor until

Petitioner acquired title in November

1984. The judgment attached as a lien

upon the Petitioner's interest in the pro-

perty because, by definition, it could not

attach to anything else.

Because the lien was "dependent" upon

Petitioner's ownership, it is clear that

"ownership" was the condition "precedent"

to the very existence of the lien. Farrey,

at lll S Ct 1829, (A 87), requires that

the debtor have the property interest to

which the lien attached "at some point

before" the lien attached to the interest.

7. See Cheves et al. v First National Bank of

Gainesville, 79 Fla 34, 83 So 870 (Fla 1920)(a judg-

ment is no lien upon land before acquisition of

title); First National Bank of Chipley v Peel, 107

Fla 413, 145 So 177 (Fla 1933)(judgment lien could

not attach to property until it was owned by the

judgment debtor); Baron v Aiello, 319 So 2d 198

(Fla 3d DCA 1975); Bowers v Mozingo, 399 So 2d 492

(Fla 3d DCA 1981); Accent Realty of Jacksonville,

iInc., v Crudele, 496 So 2d 158 (Fla 3d DCA 1986)

(creditor may not acquire judgment lien on property

to which judgment debtor does not hold legal title).

The phrase "at some point before" is not

further defined in Farrey. The Court of

Appeals, in Owen, concluded that there was

no fixing of a lien on an interest of the

Petitioner because the Petitioner had no

property interest "at some point before"

the lien attached. See 961 F 2d 172,

(A 4-6). However, this conclusion is not

sound because the creditor had no lien

until acquisition of the property by the

Petitioner. Thus, a sequence of events

exists in which "ownership" must first

8 , 9 : '

occur. Pimbe's case provides an 1llus-

tration of how the "at some point before"

rule should apply in Owen. Pimbe's case

involved the operation of the Statute of

Uses. In that case, land was transferred

to one Throckmorton for the use of his

transferor. Throckmorton was then convic-

8. The reverse could never be true. A lien is

entirely dependent upon the existence of ownership

for its existence. See note #7 and cases cited.

9. 72 Eng Rep 528 (1585). See Scott & Scott,

Selected Cases and Other Authorities on the Law

of Trusts 286 (5th Ed. 1966).

ted of treason which had been committed

prior to the transfer. As a result, the

land was forfeited to the crown at the

moment of its transfer to Throckmorton.

The use could not be enforced against the

crown and was therefore not executed by

the Statute. Because Throckmorton was

seised of the land, for an "instant", at

the time of his treason, the forfeiture

occurred. /9

Even though events appear to occur

with no separation of time, i.e. acquisi-

tion of title and attachment of the lien,

a sequence exists which has legal signi-

ficance. It is the existence of this

"sequence", rather than the quantity of

time separating the components of that

sequence, which is the key factor. A

true sequence is operative in Owen and

10. See C. Robert Morris, Bankruptcy Fantasy:

The Site of Missing Words and the Order of I1llu-

sory Events, Arkansas Law Review, Vol. 45, No. 2,

(1992), p. 304, ("...the jurists found that the

Statute uses a two-step sequence...Although, this

waS a temporal sequence, no time interval separated

its parts...").

LITE LER LER, AB ROS Sih alo! AE ER OE Lt

Lhasa

see

;

under this analysis, Owen satisfies the

"before" element stated in Farrey.!! As

a result, Farrey should not operate to

preclude lien avoidance under 11 USC

S22(£)(1).

11. The foregoing concept could be illustrated

in a slightly different manner. In Cheves, et al.

v First National Bank of Gainesville, above, a

debtor, who had suffered a judgment against him,

acquired ownership of prc“: ty and contemporane-

ously gave a purchase money mortgage to the seller.

The court held, in that case, that the purchase

money mortgage had acquired some "priority" over

the previously existing udgment.

Whether interpreted as a "temporal event" or

merely as a "legal priority" otherwise contempo-

raneous events have been given a legal "order".

Where interests are favored in the law, i.e. a

purchase money mortgage vs. a judgment lien, courts

have had no difficulty in finding this "order" or

"priority" where competing events would appear to

arise at the same time. See Schilling, et al., v

Bank of Sulphur Springs, 147 So 218 (Fla 1933);

Associates Discount Corporation v Gomes, 338 So 2d

552 (Fla 3d DCA 1976); Sarmiento v Stockton, What--

ley, Davin & Company, 399 So 2d 1057 (Fla 3d DCA

1981).

The concept of "ownership" must prevail over

the concept of the "lien" whether analyzed in terms

of legal priorities or temporal events because the

lien is wholly dependent upon "ownership" for its

existence. That is not the case where a mortgage

competes with the lien because, in that instance,

neither interest is dependent upon the other. For

these reasons Owen satisfies the “before” condition

stated in Farrey and therefore should not be denied

avoidance of the lien.

Assuming, without conceding, that

the Farrey rule otherwise precludes the

Petitioner from obtaining avoidance of the

lien, the holding in Farrey should be nar-

rowed, or otherwise qualified, because the

holding is broader than was necessary to

achieve the result in that case. Although

the result in Farrey was reasonable given

the circumstances of those parties, its

holding should not control the outcome of

cases, such as Owen, where the true nature

of the lien, and the respective property

interests of the parties, are fundament-

ally different.

Although liens of the type found in

both Farrey and Owen fall within the code

definition of "judicial lien", see 11 USC

101(36), the lien involved in Farrey was,

in truth, of a special character. Although

declared by judgment, the lien more closely

Pie Ae ORR ALSAGER A LA ARLE a AT OOS pt

resembles a purchase money mortgage

because it was created as "security" for

the payment of the "purchase price" of a

pre-existing ownership interest which was

being transferred from one party to the

other. !4 Security devices of this nature

are not avoidable under §522(f), perhaps

in part, because such security oftens pro-

tects a prior ownership interest which is

being transferred. Ownership interests,

such as the one in Farrey, are vastly dif-

ferent, and more worthy of protection, than

interests acquired by the random operation

of judgment lien statutes such as the one

involved in Qwen.

It is submitted that Respondent's lien

and the manner of its creation, is more

12. This Court observed this feature in Farrey.

At 111 S Ct 1827, (A77-8), the opinion states

",..where the lien is granted to the debtor's

former spouse under a divorce decree that

extinguishes all previous interests the parties

had in the property, and in no event secures

more than the value of the non-debtor spouse's

former interest..." (emphasis added).

typical of the liens which arise in the

Ordinary course of debtor/creditor rela-

tions. For this reason, it appears far

more probable that Congress intended to

provide relief from the Owen-type lien,

rather than the Farrey-type lien, when it

fashioned §522(f).

To permit a rule derived for the pro-

tection of ownership interests transferred

in divorce cases to be applied to the

broader category of general judgment liens

would, to some degree, defeat the purpose

of §522(f). Further, such a rule would

grant a dignity or immunity to non-speci-

fic liens of general creditors which such

liens never previously achieved. This is

13. Farrey parted with her entire ownership interest

in exchange for her lien, whereas Mrs Owen did not.

Though Farrey's interest was fundamentally superior

to Mrs Owen's, each interest would receive identical

immunity from §522(f) under the holding of the Court

of Appeals in Owen. 961 F 2d 172 (A4-6). Asa,

result, the Farrey rule, as applied by the Court of

Appeals, reaches beyond its purpose to the point of

restricting operation of §522(f) to a greater extent

than the code language suggests. No language in §522

Supports denial of lien avoidance in Owen. See In Re

Latulippe, 13 BR 528 (Bankr D Vt 1981) (noting that

§522 contained no "time of attachment" limitation).

A AR a

in Fg Waele a eee

not warranted in Owen because there is

nothing in the circumstances of the Owen

lien which would entitle it to the "speci-

alized" treatment accorded to the Farrey

lien.

There are sufficient material distinc-

tions between the Farrey-type lien and the

Owen-type lien which would permit a princi-

pled narrowing of the Farrey rule. Farrey

should be applied to divorce situations or

other similar situations where a lien is

created for the protection of an ownership

interest. The Farrey rule should not be

applied to protect general or random lien

acquisitions which are common to the ofdi-

nary debtor/creditor relation. The Farrey

and Owen liens differ in every material

respect and they should receive differing

treatment under §522 for that reason.

This Court should focus on the inter-

ests protected by those liens rather than

the "time of attachment" of those liens.

REASONS FOR GRANTING THE WRIT

This Court previously granted certio-

rari in both Owen and Farrey because of the

Significance of the lien avoidance provi-

Sion of the Code. Farrey produced a limita-

tion on the scope of §522(f). The Court of

Appeals, in Owen, on remand, further limited

the reach of that section by applying Far-

rey to a dissimilar set of conditions and

equities. The Court of Appeals concluded

that the Petitioner was disqualified from

lien avoidance because he did not own the

property "at some point before" the lien

attached to the property. This conclusion

Can not be sustained.

A literal, if technical, application

of the phrase "at some point before" would

Support, rather than deny, lien avoidance

to Petitioner for all of the reasons stated

in Part II, above. Petitioner asserts that

a ee Sah a eae cnr

2 SE AGB RAGS AE Lt itt atu

such an application of the Farrey rule

would avoid further limitation or restric-

tion of §522(f). The appropriate focus

Should be upon the nature of the interests

protected by the lien rather than upon the

"time of attachment" of that lien.+4

The Court of Appeals has, in Owen,

taken the Farrey rule, a rule generated

under special circumstances, and applied

that rule to a case where all material

features are distinguishable. This has

produced a questionable limitation upon

the operation or application of §522(f)

and it is a limitation or condition which

Congress did not impose by the language of

that section. !>

14. See United States v Donovan, 429 US 413, 97

S Ct 658, 50 L Ed 2d 652 (1977) wherein this Court

deemed it proper to grant certiorari where the pro-

per construction to be placed upon a major federal

statute was at issue.

15. See Williams v Lee, 358 US 217, 79 S Ct 269,

3 L Ed 2d 251 (1959) wherein this Court granted

certiorari where it perceived that the lower court

had rendered a doubtful interpretation on an im-

portant question. See Note #13, In Re Latulippe,

above.

The issue now presented by this peti-

tion was left undecided by this Court in

its prior opinion. See 111 S Ct 1838,

(A 29 ) where the following appears

"Under Florida law, the lien may

have attached Simultaneously with

the acqusition of the property

interest. If so, it could be

argued that the lien did not fix

‘On an interest of the debtor'

(citing Farrey)....We express _no

Opinion on these points.

Thus, this Court left open the very issue

about which review is now sought, i.e. the

proper application of Farrey to the cate-

gory of liens typified by Owen. This Court

has deemed it appropriate to grant certio-

rarl in order to resolve questions left

16. It is reasonable to argue that this Court did

not envision Farrey being applied so as to defeat

lien avoidance in Owen. The facts in Owen were

fully before the Court and the Court had the benefit

of the district court opinion wherein the 'fixing'

issue was addressed. See 86 BR 691. Furthermore,

nothing would have prevented this Court from render-

ing a 'dual' holding in Qwen. This Court did pre-

cisely that in Arizona v Fulminante, US pibsa

S Ct 1246, 113 L Ed 2d 302 (1991), wherein there

appears a holding in an opinion by Justice White and

a distinct holding in an opinion by the Chief Justice.

“Tae er ali At hla

open by prior Supreme Court decision.

For the reasons stated in Parts I and III,

above, this Court should examine the appli-

cation of the Farrey rule to non-Farrey

type Liens. °°

For all of the foregoing reasons, a

Clarification or limitation of Farrey is

in order. The material features of the

liens involved in Farrey and Owen differ

markedly from one another. The manner of

the creation of the respective lien, its

true nature and the magnitude of the inter-

est the lien secures or protects differ in

each case. The two liens, consequently,

should not receive the same treatment or

protection, insofar as §522(f) is applied.

17. See United States v Martinez-Fuerta, et al.,

429 US 543, 96 S Ct 3074, 49 L Ed 2d 1116 (1976);

American Textile Manufacturers Inc., et al., v

Donovan, 452 US 490, 101 S Ct 2478, 69 L Ed 2d 185

(1981); Parratt v Taylor, 451 US 527, 101 S Ct 1908,

69 L Ed 2d 420 (1981).

18. As noted in footnote #4, above, this Court did

not specifically determine the Farrey lien to be a

“judicial lien". Some distinction must be made

between the liens involved in these cases insofar

as §522 is concerned.

In the absence of clarification or limita-

tion of the rule stated in Farrey, the

two categories of liens represented in

Farrey and Owen are likely to receive

equivalent treatment by the lower courts.

The distinction between the two Categories

of liens is too great to permit such a

result to exist Or continue. Certiorari

is appropriate where there exists a need

for clarification of a prior Supreme Court

opinion.??

Valid and significant reasons for the

granting of the writ are present here.

19. See Securities and Exchange Commission v United

Benefit Life Insurance Company, 387 US 202, 87 S Ct

1557, 18 L Ed 2d 673 (1967); McDaniel, et al., v

Sanchez, 452 US 130, 101 S Ct 2224, 68 L Ed 2d 624

(1981)(certiorari granted because of importance of

question presented and because prior Opinion not free

from ambiguity); Wilkinson v United States, 365 US

399, 81 S Ct 567, 5 L Ed 2d 633 (1961)(writ granted

where it was argued that Court of Appeals had mis-

conceived meaning of prior Supreme Court opinicn) ;

Schlude v Commissioner of Internal Revenue, 372 US

128, 83 S Ct 601, 9 L Ed 2d 633 (1963) (certiorari

granted a second time to consider whether lower court

misapprehended the scope of prior Supreme Court opi-

nion); Arkansas v Sanders, 442 US 753, 99 S Ct 2586,

61 L Ed 2d 235 (1979)(certiorari granted to resolve

apparent misunjerstanding); United States Vv Doe,

465 US 605, 104 S Ct 1237, 79 L Ed 2d 552 (1984).

CONCLUSION

Certiorari should be granted and the

decision of the United States Court of

Appeals for the Eleventh Circuit should

be reversed.

In the alternative, the Petitioner

requests the Court to grant summary rever-

sal in this cause.

Respectfully submitted

Roger L. Fishell

1900 Main Street

Suite 214

Sarasota, Florida 34236

(813) 351-2883

Attorney for Petitioner

I HEREBY CERTIFY that a true and cor-

rect copy of the foregoing Petition for

Writ of Certiorari was furnished by US

Mail to David A. Townsend, 200 E. Madison

Street, Tampa, Florida 33602 and to John

R. Shuman, 2555 Enterprise Rd., Clearwater,

Florida 34623, Attorneys for Respondent,

this day of October 1992.

ROGER L. FISHELL

1900 Main Street

Suite 214

Sarasota, Florida

34236

(813) 351-2883

Attorney for the

Petitioner

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