United States District Court, D. Connecticut
RULING ON APPEAL FROM THE UNITED STATES BANKRUPTCY
R. Underhill, United States District Judge
Terry Donovan (“Donovan”), appeals the June 28,
2018 order of the United States Bankruptcy Court for the
District of Connecticut, granting the Appellee-Debtor Melissa
A. Maresca's (“Maresca”) motion to void liens
that were placed against residential property where
Maresca's dependent child (“Child”) resides.
reasons set forth below, the Bankruptcy Court's order is
filed a Chapter 7 petition on May 12, 2016. See
Bankruptcy Court's Mem. of Decision (Doc. No. 9-2) at 1.
On November 4, 2017, Maresca filed a motion to void the
judicial liens of Donovan, Maresca's former attorney, and
another creditor arguing that she was entitled to the federal
homestead exemption to real property located at 33 Laurel
Road in Essex, Connecticut (“the Property”)
pursuant to 11 U.S.C. § 522(f). Id. Although
Maresca does not reside at the Property, her Child stays
there when he visits his father. Id. Maresca and
her-ex-husband have joint custody of the Child. Id.
and her ex-husband jointly purchased the Property in 2005.
Id. Maresca's ex-husband was the original
borrower on the mortgage loan, and he and Maresca both
executed the mortgage. Id. At a later date, a second
mortgage was recorded against the Property. Id. As
of the Petition Date, the total mortgage debt recorded was
approximately $525, 899.26, with Maresca owning at least a
half interest in the Property. Id. at 3, 10 n.6.
2011, Maresca and her ex-husband initiated a divorce action
and Maresca retained Donovan as her attorney. Id. at
3. The action resulted in a divorce decree in 2013.
Id. As of the Petition Date, the Child was a minor
and a dependent of Maresca. Id. The divorce decree
awarded “joint legal custody” to Maresca and to
her ex-husband, with the Child's “primary
residence” to be with Maresca. Id. at 3-4. The
divorce decree noted that the Property would be sold after
final entry of the divorce decree, but the parties agreed to
modify the decree to delay the sale of the Property.
Id. at 4.
to the Petition Date, Donovan obtained a state court judgment
against Maresca for unpaid legal fees in relation to her
representation in the divorce action in the amount of $70,
943.00. Id. As a result, a judgment lien was placed
on the Property. See Donovan's Mem. in Supp. of
Mot. to Reverse (Doc. No. 9-1) at 4. As of the Petition Date,
the ex-husband resided at the Property and Maresca resided in
a rental apartment in another town. Bankruptcy Court's
Mem. of Decision at 4. In addition, the Child spends time
with both parents and attends school in the town where the
Property is located. Id.
28, 2018, the Bankruptcy Court granted Maresca's motion
to claim an exemption on the Property pursuant to 11 U.S.C.
§ 522 (f). Id. at 9. Donovan filed a notice of
appeal in this court on July 11, 2018. See Doc. No.
1. On August 2, 2018, Donovan filed a motion for leave to
appeal (doc. no. 6), which was granted on March 18, 2019.
See Doc. No. 10.
Standard of Review
28 U.S.C. § 158(a)(1), federal district courts enjoy
jurisdiction to hear appeals of final judgments, orders, and
decrees of bankruptcy judges, including orders approving
bankruptcy settlement agreements. Debenedictis v.
Truesdell (In re Global Vision Products, Inc.) 2009 WL
2170253, at *2 (S.D.N.Y. July 14, 2009). On appeal, a
district court will review a bankruptcy court's
conclusions of law de novo and its findings of fact
for clear error. In re Flanagan, 415 B.R. 29, 38 (D.
question presented on appeal is whether the Bankruptcy Court
erred in holding that, under 11 U.S.C. § 522 (d)(1),
Maresca may utilize the federal homestead exemption to void
liens placed against real property where her dependent child
the Bankruptcy Code, 11 U.S.C. § 522(b), a debtor is
permitted to choose between the scheme of federal exemptions
prescribed in section 522(d) of the Code or the exemptions
available under other nonbankruptcy federal law and the law
of the state in which the debtor is domiciled.”
Gernat v. Belford, 192 B.R. 601, 602 n.1 (D. Conn.),
aff'd sub nom. In re Gernat, 98 F.3d 729 (2d
Cir. 1996). “While a majority of states have enacted
legislation prohibiting debtors from electing section 522(d)
exemptions, Connecticut has not. Thus, in ...