HS - In re Vaughan (7/7/2004)

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HS - In re Vaughan (7/7/2004)

Postby Riser Adkisson LLP » Thu Jan 29, 2009 12:47 pm

In re Vaughan,
No. WO-03-094 (10th Cir. 07/07/2004)
U.S. Bankruptcy Appellate Panel of the Tenth Circuit

BAP No. WO-03-094

July 7, 2004


Appeal from the United States Bankruptcy Court for the Western District of Oklahoma Bankr.
No. 99-17361-NLJ Chapter 7

Michael Paul Kirschner and Larry D. Patton of the Kirschner Law Firm, Oklahoma City, Oklahoma
(g. Michael Solomon with them on the brief), for Appellant.

Bret D. Davis of Lamun Mock Cunnyngham & Davis, Oklahoma City, Oklahoma, for Appellees.

Before McFEELEY, Chief Judge, Brown, and CAMPBELL*fn1, Bankruptcy Judges.

The opinion of the court was delivered by: Brown, Bankruptcy Judge



The Appellant in this case obtained a partial summary judgment against the Debtors, determining
that its debt was non-dischargeable under Section 523(a)(2) of the Bankruptcy Code.*fn2 It then
obtained relief from stay to collect on the judgment and recorded a lien on the Debtors'
homestead. The Debtors in turn filed a Section 522(f) motion to avoid the Appellant's lien, which
the bankruptcy court granted. The Appellant contends that the bankruptcy court erred when it
allowed the Debtors to utilize Section 522(f) to avoid its lien and, among other things, has
asked this Court to consider (1) whether Section 522(f) may be used to set aside a lien that
arises post-petition in connection with a nondischargeability judgment; (2) whether attorneys'
fees earned post-petition in connection with the nondischargeability proceeding constitute a pre-
petition debt; and (3) whether the parties' stipulated agreement as to the amount of the judgment
rendered the lien recorded after the judgment a "consensual lien."

I. Background

Prior to the bankruptcy filing, Appellees (the "Debtors") executed guaranty agreements in favor
of Appellant Bank of Cushing (the "Bank"), to guarantee the indebtedness of Americare U.S.A.
Limited ("Americare"). When Americare defaulted on its loan obligations, the Bank made a demand
on the Debtors. In the course of negotiating a repayment arrangement, the Debtors provided the
Bank with a personal financial statement. Eventually the Bank and the Debtors entered into a
settlement agreement, which allowed the Debtors to repay their guaranty obligations over time, on
a secured basis. They did not complete their repayment plan, but instead filed bankruptcy.

The Bank filed an adversary proceeding against the Debtors, objecting to both the
dischargeability of its debt under 11 U.S.C. § 523(a)(2)(A) & (B) and to the general discharge of
the Debtors under Section 727.*fn3 The Bank asserted, among other things, that the Debtors had
omitted numerous assets from their personal financial statement and that the Bank had been
defrauded into entering into the settlement agreement with the Debtors. The Debtors' Chapter 7
trustee filed a separate proceeding, also objecting to the Debtors' general discharge. The two
actions were consolidated "for purposes of administration and trial only."*fn4 The bankruptcy
court later granted partial summary judgment on the Bank's Section 523(a)(2) claims in its
January 10, 2002 Order. It reserved any ruling on the Bank's attorneys fees incurred in
connection with the adversary proceeding. In its August 21, 2002 Order, the bankruptcy court
awarded substantial fees to the Bank.

The Bank and the Debtors alike proceeded as if the August 21, 2002 Order represented a final
judgment. The Debtors appealed the Order, but missed the filing deadline for the appeal by
fourteen days. The Bank requested relief from the automatic stay for purposes of collection on
the non-dischargeable debt set forth in the August 21, 2002 Order. In a sur-reply to the Bank's
stay motion, the Debtors requested, as an alternative form of relief, that the bankruptcy court
certify the August 21, 2002 Order as a final judgment, pursuant to Bankruptcy Rule 7054. "This
was the bankruptcy court's first indication that the Debtors did not consider the August 21 Order
to constitute a final and immediately appealable judgment." The bankruptcy court declined to
certify its August 21, 2002 Order as final. It then granted the Bank's request to lift the
automatic stay (the "Stay Order") for purposes of allowing it to collect on its debt.

The Debtors appealed the Stay Order to the district court. The District Court vacated the Stay
Order on the basis that it had been premised on the erroneous legal conclusion that the August
21, 2002 Order was a final order (the "District Court Stay Order"). Because the bankruptcy court
had not yet certified the order under Bankruptcy Rule 7054, the district court found that there
was no final judgment on which the Bank could execute.

Prior to the district court ruling, the Bank recorded a judgment lien against the Debtors'
primary residence.*fn5 The Debtors filed a motion to avoid this lien under Section 522(f). The
bankruptcy court granted this motion (the "Section 522(f) Order"), setting aside the Bank's
judgment lien, finding that even though the attorney fees awarded to the Bank in the August 21,
2002 Order represented fees earned post-petition, the obligation to pay the fees was incurred pre-
petition and, therefore, was a pre-petition debt that gave rise to a judicial lien that was
avoidable under Section 522(f) because it impaired the Debtors' homestead exemption.*fn6 In the
present appeal, the Bank seeks to overturn this Section 522(f) Order.

Subsequent to the oral arguments on this appeal, the bankruptcy court certified the August 21,
2002 Order as final for purposes of appeal.*fn7 The Debtors have appealed the underlying
judgment. In oral arguments, the parties informed this Court that the Trustee's Section 727
discharge claims remain pending, but that the bankruptcy court has taken under advisement summary
judgment motions on the Trustee's Section 727 claims.

II. Appellate Jurisdiction

The Debtors filed a timely notice of appeal under Fed. R. Bankr. P. 8002.

The Bankruptcy Court's Order of November 21, 2003, granting the Debtors' Motion to avoid the
judicial lien of the Bank, is a final, appealable order for purposes of this Court's
jurisdiction.*fn8 With the consent of the parties, this Court has jurisdiction to hear appeals
from "final judgments, orders, and decrees" of bankruptcy courts within the Tenth Circuit.*fn9
Neither party has opted to have this appeal heard by the United States District Court for the
Western District of Oklahoma and, therefore, they are deemed to have consented to the
jurisdiction of this Court.*fn10

III. Standard of Review

Where, as here, the salient facts are undisputed, we conduct a de novo review of the lower
court's conclusions of law.*fn11 When conducting a de novo review, the appellate court is not
constrained by the trial court's conclusions, and may affirm the trial court on any legal ground
supported by the record.*fn12

IV. Discussion

A. Debtors May Use Section 522(f) to Set Aside Liens on Certain Non-dischargeable Judgments

The Bank asserts that the bankruptcy court erred in setting aside its lien on the Debtors'
homestead for several reasons. First, it claims that Section 522(f) cannot be utilized by a
debtor to avoid a lien that arose post-petition. Section 522(f)(1) provides that a "debtor may
avoid the fixing of a 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... if such lien is a judicial
lien...."*fn13 By its plain language, this statute contains no qualifications as to when the lien
must attach. To understand the purpose and intention of this subsection, we must consider Section
522 as a whole. Other provisions of Section 522 set forth limitations as to when exemptions may
or may not trump a creditor's claim or lien rights, but they focus on the nature and timing of
the claim, rather than the time when the lien affixed.

Section 522(c) sets forth a general rule that exempt property will not be liable for pre-petition
debts, but then it lists four exceptions to this general rule. It provides:

(c) property exempted under this section is not liable during or after the case for any debt of
the debtor that arose... before the commencement of the case, except-

(1) a debt of a kind specified in section 523(a)(1) or 523(a)(5) of this title;

(2) a debt secured by a lien that is(A) (i) not avoided under subsection (f) or (g) of this
section or under section 544, 545, 547, 548, 549, or 724(a) of this title; and (ii) not void
under section 506(d) of this title; or

(B) a tax lien, notice of which is properly filed;

(3) a debt of a kind specified in section 523(a)(4) or 523(a)(6)... owed by an institution-
affiliated party of an insured depository institution to a Federal depository institutions
regulatory agency acting in its capacity as conservator, receiver, or liquidating agent for such
institution; or

(4) a debt in connection with fraud in the obtaining or providing of any scholarship, grant,
loan, tuition, discount, award, or other financial assistance for purposes of financing an
education at an institution of higher education (as that term is defined in section 101 of the
Higher Education Act of 1965 (20 U.S.C. 1001)).*fn14

We note several basic premises at work in this statute. First, Section 522(c) seeks to insulate
exempt property, but only against pre-petition debts. Second, it does not protect against all pre-
petition debts because it expressly excludes certain pre-petition tax debts, family support
obligations, fraudulent student loan debts, and certain obligations owed to banking regulators.
Third, exempt property is generally not insulated from pre-petition debts that are secured by
liens, unless the liens have been avoided under one of the specified statutes. Fourth, there is
no exclusion mentioned for debts that arise under Section 523(a)(2).

The fact that Section 522(c) expressly excepts a few debts that are non-dischargeable under
Section 523, but makes no mention of the others, evidences Congressional intent to insulate
exempt property from most non-dischargeable debts. The maxim expressio unius est exclusio
alterius is a canon of statutory construction holding that to express or include one thing
implies the exclusion of the other or of the alternative.*fn15 This general rule may be overcome
by a strong indication of contrary legislative intent or policy.*fn16 In this case, the
legislative history of Section 522(c) not only does not evidence a contrary intent, but it
acknowledges the limited number of non-dischargeable debts excepted from subsection (c)'s general
protection of exempt property.*fn17 "Thus, § 522(c) performs both a protective function, by
preserving the exemption if non-dischargeable claims other than those specifically excepted by §
522 (c) are sought to be enforced against exempt property, and a limiting function, by denying
the exemption protections for certain kinds of non-dischargeable claims and unavoided
liens."*fn18 Moreover, "[t]he bank has referred us to no legislative history, nor have we found
any, suggesting that section 523 was intended, generally, to trump section 522. Indeed, had that
been the intention the exceptions in section 522(c) would have been redundant."*fn19

The Bank asserts that Farrey v. Sanderfoot *fn20 supports its position that Section 522(f) does
not apply to post-petition liens. Farrey analyzed lien avoidance in connection with a divorce
decree that simultaneously created the debtor's property interest and the ex-spouse's lien.
Farrey held that Section 522(f) only avoids judicial liens that have attached "at some point
after the debtor obtained the interest."*fn21 Thus, if a debtor had no property interest before
the lien attached, then the lien cannot be avoided under Section 522(f). Farrey did not address
whether the lien must exist at the time of the petition.

In Farrey, the Supreme Court made general observations on the history and purpose of Section 522
(f), including the intent of this statute to undo the liens that creditors often obtain in the
months preceding the bankruptcy filing. It referred to Congress' intent to thwart the
creditor's "rush to the courthouse." It referred to the predecessor of Section 522(f), which
invalidated liens, but only those obtained in the four months prior to the petition. Clearly, all
of these references were to pre-petition liens. It made these observations, however, in the
context of explaining that Section 522(f) was intended to protect the debtor's exemptions. But it
distinguished the case before it, where the debtor was using the statute as a sword, not a
shield, to defeat his ex-spouse's interest in the home, i.e. her lien rights. She obtained her
lien as part of a divorce decree that simultaneously eliminated her ownership interest, giving it
to her husband, in exchange for her lien interest. Because he had no ownership interest separate
from her interest, until the lien interest arose, there was no interest in property of the debtor
to which the lien could "affix." It found that otherwise a judgment lien debtor could cleanse
title to an asset by transferring it to a third party, and then the third party could file
bankruptcy and avoid the lien under this statute.

None of the Supreme Court's concerns in Farrey are at play in the present case.*fn22 More
importantly, Farrey did not address the issue of whether the lien must be a pre-petition lien in
order for the debtor to avail himself of Section 522(f)'s protection of his exemptions. Thus, we
find no deterrent to avoiding a lien arising from a nondischargeability judgment, even though the
lien does not arise until after a petition in bankruptcy is filed. There is nothing in either
Section 522(c) or (f) that would prevent this result. "Moreover, it would be against basic
bankruptcy principles of equitable distribution to treat a pre-petition lien creditor worse than
a pre-petition unsecured creditor who later obtains a lien on the debtor's property."*fn23 Nor
does this result rob the Bank of any benefit in having obtained a nondischargeability judgment.
Assuming no violation of the stay, the Bank may pursue collection against nonexempt assets of the
Debtors, including their post-petition income.

B. The Debt Liquidated in the August 21, 2002 Order Is a Prepetition Debt

The Bank further asserts that the bankruptcy court erred in entering the Section 522(f) Order
because the legal fees reduced to judgment in the August 21, 2002 Order did not represent a pre-
petition debt. It argues that, because the fees were earned post-petition in pursuit of the
nondischargeability judgment, the Bank had no right to payment of this claim on the petition
date. It therefore concludes that the Bank's fees constitute a post-petition debt, which is
outside the scope of Section 522(f).

The Tenth Circuit has acknowledged that a split of authority exists as to when a right of payment
arises for bankruptcy purposes on a claim that is unmatured on the petition date. Twice the Tenth
Circuit has been presented with this question and twice it has avoided a definitive holding on
this issue, resolving each appeal on other grounds. In Grynberg v. Danzig Claimants (In re
Grynberg), *fn24 creditors had obtained a class action judgment against the debtors.

In response, the debtors filed for Chapter 11 relief. The debtors sought and obtained bankruptcy
court approval to proceed with their appeal of the prepetition judgment. The state appellate
court affirmed the judgment and awarded costs associated with the post-petition appeal to the
class action plaintiffs. When the plaintiffs attempted to assert their claim for costs in the
bankruptcy proceeding, the debtors argued that the costs had been awarded in violation of the
stay. Both the bankruptcy court and district court analyzed whether the costs represented a pre-
petition debt, subject to the automatic stay, or a post-petition debt, which was not stayed. Both
courts found that the debt was a post-petition debt.

The Tenth Circuit found that the stay had not been violated, regardless of whether the costs were
a pre- or post-petition debt, because the bankruptcy court had allowed the appeal to proceed post-
petition, after dismissing the debtors' adversary complaint to determine the validity of the
plaintiffs' lien rights. It found that, by these actions, the bankruptcy court had abstained in
favor of the jurisdiction of the state court. The appeal was tantamount to an adversary
proceeding to determine the lien rights of plaintiffs and the nondischargeability of the
plaintiffs' debt. Because prosecuting an adversary proceeding does not violate the stay, neither
did the actions taken before the state appellate court.

In Franklin Savings Ass'n v. Office of Thrift Supervision,*fn25 the parties had engaged in
protracted pre-petition litigation, concerning whether Franklin, a troubled savings and loan
association, should be placed under a conservatorship. When Franklin lost this litigation, it
filed for Chapter 11 relief. The debtor, however, continued to challenge the conservatorship
ruling post-petition, by filing a motion for rehearing. Following the dismissal of the request
for rehearing, the Director of the O.T.S. filed a claim for litigation costs in the district
court. The costs were denied by the district court on the ground that the assertion of the claim
for costs was made in violation of the automatic stay. On appeal, the parties argued as to
whether the costs constituted a pre- or post-petition debt. The Tenth Circuit acknowledged:

the current split of authority regarding when a right of payment to an unmatured claim arises for
bankruptcy purposes. See In re Grynberg, 966 F.2d 570 (10th Cir. 1992) (although analysis based
on post-petition and prepetition categories is superficially appealing, district court award of
appellate costs affirmed on other grounds). While the Third Circuit, in Matter of M. Frenville
Co., 744 F.2d 332, 336 (3d Cir. 1984), cert. denied, 469 U.S. 1160, 105 S.Ct. 911, 83 L.Ed.2d 925
(1985), holds an unmatured claim cannot arise until the legal cause of action accrues, regardless
of whether predicate acts occurred prepetition, other federal circuits disagree, see, e.g., Grady
v. A.H. Robins Co., 839 F.2d 198, 202 (4th Cir.), cert. dism'd, 487 U.S. 1260, 109 S.Ct. 201, 101
L.Ed.2d 972 (1988); In re Jensen, 127 B.R. 27, 30-31 (9th Cir. BAP 1991).*fn26

It declined to resolve the issue for this circuit because it found that, even under the Frenville
standard, the Director's costs clearly constituted a pre-petition debt. While the court had not
awarded costs prior to the petition date, they had been incurred pre-petition. "With our judgment
in favor of the Director [prebankruptcy], the Director had sufficient grounds to claim its bill
of costs, regardless that the right was tolled by and contingent on the denial of
rehearing...."*fn27 Because it found that the costs were a pre-petition debt, it held that the
Director's request for these costs had been made in violation of the stay.

In the absence of a controlling Tenth Circuit precedent, we begin our analysis with the
Bankruptcy Code's broad definition of "claim."

(5) "claim" means -

(A) Right to payment, whether or not such right is reduced to judgment, liquidated, unliquidated,
fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, or

By way of contrast, the Bankruptcy Act of 1898 (the "Act") contained no definition of a "claim."
It relied instead on the concepts of "provability" and "allowability." Section 57(d) of the Act
disallowed an unliquidated or contingent claim, unless it could be liquidated or estimated in a
manner and time period specified by the bankruptcy court. On the other hand, the legislative
history of the Bankruptcy Code evidences Congressional intent to remove the uncertainty regarding
contingent claims and treat them as the Act treated them in the reorganization chapters.*fn29

By this broadest possible definition, and by the use of the term throughout title 11,... the bill
contemplates that all legal obligations of the debtor, no matter how remote or contingent, will
be able to be dealt with in the bankruptcy case. It permits the broadest possible relief in the
bankruptcy court.*fn30

In one of the leading cases that has adopted a more narrow definition of "claim," Avellino &
Bienes v. M. Frenville Co. (In re M. Frenville Co.),*fn31 the Third Circuit focused primarily on
the "right to payment" aspect of the Bankruptcy Code's definition of "claim." Because an
indemnitee had no right to sue for contribution or indemnification until it had been sued or made
a payment, the Frenville court found it had no "right to payment" and, therefore, no "claim." The
court centered its analysis on whether a right to sue on the claim existed under state law. It
failed to give proper meaning to other aspects of the Code's definition, which
include "unmatured," "unliquidated," and "contingent" claims. We agree with the Court in In re
Black *fn32 that Frenville is not consistent with the Supreme Court decisions applying a broad
definition of claim.*fn33

Based on the foregoing, we conclude that the Bank's claim for fees attributable to the
prosecution of the dischargeability proceeding constitutes a contingent or unmatured claim, which
may not have been cognizable under state law on the petition date, but which nevertheless
constitutes a pre-petition claim for purposes of Section 522(f). In this case, both the guaranty
agreement and the subsequent settlement agreement, entered into between the Debtors and the Bank,
provided that, in the event of default, the defaulting party would pay the costs of collection,
including attorneys' fees.*fn34 Because the underlying judgment is the subject of a separate
appeal, we express no opinion on the propriety of the fees awarded by the bankruptcy court in the
August 21, 2002 Order. We conclude only that, to the extent fees were properly awarded, they
constitute a pre-petition debt within the scope of Section 522(f).

C. The Bank's Lien Is a Judicial Lien, Not a Consensual Lien

The Bank argues that the bankruptcy court erred in determining that the Bank's lien against
Debtors' property constituted a judicial lien for purposes of Section 522(f). The Bank contends
that the lien is the result of an agreement between the parties, memorialized in their
Stipulation regarding attorney's fees and costs.*fn35 The Bank argues that because the Debtors
agreed not to contest the compromised amount of its fees and costs, and the lien flows from this
Stipulation, it represents a consensual lien. Because Section 522(f) does not apply to consensual
liens, it cannot be used to avoid such a lien.

For definitional purposes in the Bankruptcy Code, "[t]here are three categories of liens, which
are mutually exclusive: (1) security interests; (2) judicial liens; and (3) statutory
liens."*fn36 The Bankruptcy Code defines a judicial lien as a "lien obtained by judgment, levy,
sequestration, or other legal or equitable process or proceeding."*fn37 A security interest, or
consensual lien, is a "lien created by an agreement."*fn38 This Court has previously addressed
the distinctions between a judicial lien and a consensual security interest.

"It is the origin of the creditor's interest rather than the means of enforcement that determines
the nature of the lien." Just because a creditor resorts to the judicial process to enforce the
lien, it does not mean the lien is a judicial lien. Congress intended for consensual liens or
liens by agreement to be defined as security interests. Courts have determined that liens created
by settlement agreements which are incorporated into divorce decrees are consensual liens.*fn39
In this case, the record evidences no agreement, by settlement or otherwise, that the Bank would
obtain a lien.

The cases relied on by the Bank are factually distinguishable. In each case, the settlement
agreement itself contained a specific provision granting the creditor a lien against the debtor's
property. In Cowan v. Cowan (In re Scott),*fn40 the settlement agreement, incorporated into the
divorce decree, specifically provided that the husband would obtain a judgment lien against the
wife's residential real property to secure his judgment.*fn41 In Thompson v. Unruh (In re
Thompson), the parties entered into an antenuptial agreement that granted the wife a lien against
any real property purchased by the parties in the amount of her contribution of separate
funds.*fn42 In Naqvi v. Fisher (In re Fisher),*fn43 the parties' written stipulation granted the
wife a lien against the husband's assets to secure his debt to her.*fn44 In contrast, the
Stipulation executed by the parties in this case contained no language granting a lien. The lien
in question was obtained, not by the parties' agreement, but by the recording of the judgment.
Accordingly, it is a judicial lien within the meaning employed by Section 522(f).

D. The Bank's Remaining Arguments Will Not Be Considered by this Court

The Bank asserts that Debtors either waived their right to seek avoidance of the Bank's lien, or
should be equitably estopped from seeking its avoidance, because the Stipulation executed by the
parties represented a final settlement and resolution of the attorney's fees and costs. The Bank
contends that, because Debtors agreed to a final judgment for attorney's fees and costs, they
should not now be allowed to seek avoidance of the very lien that resulted from imposition of the
final judgment in favor of the Bank. The Bank states, "Call the Vaughans' conduct waiver or
equitable estoppel, one of those principles was applicable and should have been applied by the
Bankruptcy Court."*fn45

The Bank does not provide any citation to the record below that would demonstrate that the Bank
raised its waiver and equitable estoppel arguments before the bankruptcy court. The Section 522
(f) Order does not address, nor does it contain a ruling on, waiver or equitable estoppel issues.
Similarly, a review of the transcript from the hearing held on September 11, 2003*fn46 does not
contain any testimony or argument in regard to the Bank's waiver and estoppel theories.

"'[I]t is counsel's responsibility to see that the record excerpts are sufficient for
consideration and determination of the issues on appeal and the court is under no obligation to
remedy any failure of counsel to fulfill that responsibility.'"*fn47 Thus, based on the record,
it appears that the Bank is raising the waiver and estoppel arguments for the first time on
appeal. "Issues not raised before the trial court will not ordinarily be considered when raised
for the first time on appeal."*fn48 Accordingly, this Court will not consider the Bank's waiver
and estoppel issues in this appeal.

Finally, the Bank argues that its lien does not impair the Debtors' homestead exemption as
required by Section 522(f), urging this Court to reconsider its prior ruling in Coats v. Ogg (In
re Coats).*fn49 The Court declines to do so. This panel is bound by the decisions of other BAP
panels.*fn50 Also, this argument, like the last one, appears to be raised for the first time on

V. Conclusion

For the foregoing reasons, the Order of November 21, 2003, in favor of Debtors, avoiding the
judicial lien of the Bank under Section 522(f), is AFFIRMED.

Opinion Footnotes

*fn1 Honorable A. Bruce Campbell, United States Bankruptcy Judge, United States Bankruptcy Court
for the District of Colorado, sitting by designation.

*fn2 All references to "Section" shall refer to Title 11, United States Code, unless otherwise

*fn3 The Bank also objected to dischargeability under Section 523(a)(6), but it subsequently
dismissed this claim. District Court Order, entered Dec. 17, 2003, at 3, in Appellee's App. at 3.

*fn4 District Court Order at 2, in Appellee's App. at 2.

*fn5 Motion to Avoid Judgment Lien and Brief in Support, filed June 26, 2003, at 2, in
Appellant's App. at 205.

*fn6 Order on Debtor's Motion to Avoid Judgment Lien, entered Nov. 21, 2003, at 1, in Appellant's
App. at 237.

*fn7 Order Certifying August 21, 2002 Order as a Final Judgment Pursuant to Fed. R. Civ. P. 54(b)
and Notice of Hearing on Defendant's Stay Motion, entered March 26, 2004, in Appellant's Supp.

*fn8 28 U.S.C. § 158; Tedeschi v. Falvo (In re Falvo), 227 B.R. 662, 663 (6th Cir. BAP 1998).

*fn9 28 U.S.C. § 158(a)(1), (b)(1), (c)(1); Gregory v. Zubrod (In re Gregory), 245 B.R. 171, 172
(10th Cir. BAP), aff'd without published opinion, 246 F.3d 681 (10th Cir. 2000).

*fn10 28 U.S.C. § 158(c); Fed. R. Bankr. P. 8001(e); 10th Cir. BAP L.R. 8001-1.

*fn11 Andersen v. UNIPAC-NEBHELP (In re Andersen), 179 F.3d 1253, 1255 (10th Cir. 1999).

*fn12 See Wolfgang v. Mid-America Motorsports, Inc., 111 F.3d 1515, 1524 (10th Cir. 1997).

*fn13 11 U.S.C. § 522(f)(1)(A).

*fn14 11 U.S.C. § 522(c).

*fn15 Singer, Statutes and Statutory Construction § 47:23 (6th ed. 2000); Black's Law Dictionary
602 (7th ed. 1999).

*fn16 In re Hong, No. 01-JAB35072, 2002 WL 1465737, at *5 (Bankr. D. Utah June 4, 2002) (citing
Singer, supra n.22).

*fn17 S. Rep. No. 95-989, at 76, reprinted in 1978 U.S.C.C.A.N. 5787, 5862 ("Subsection (c)
insulates exempt property from prepetition claims other than tax claims (whether or not
dischargeable), and other than alimony, maintenance, or support claims that are excepted from

*fn18 S & C Home Loans v. Farr (In re Farr), 278 B.R. 171, 177 (9th Cir BAP 2002).

*fn19 Walters v. United States National Bank (In re Walters), 879 F.2d 95, 97 (3rd Cir. 1989).

*fn20 500 U.S. 291 (1991).

*fn21 Id. at 296 (emphasis added).

*fn22 The Bank also asserts that Nichols v. B.J. Fox Enterprises, Inc. (In re Nichols), 265 B.R.
831 (10th Cir. BAP 2001), supports its position because it cites favorably the same legislative
history mentioned by the Supreme Court in Farrey. For the reasons set forth above, we conclude
that the legislative history of Section 522(f) included in Farrey favors the Debtors' position
and it does not deal directly with the issue of whether Section 522(f) is applicable to liens
that affix post-petition.

*fn23 Sumy v. Schlossberg (In re Sumy), 777 F.2d 921, 930 & n.22 (4th Cir. 1985).

*fn24 966 F.2d 570 (10th Cir. 1992).

*fn25 31 F.3d 1020 (10th Cir. 1994).

*fn26 Id. at 1022

*fn27 Id.

*fn28 11 U.S.C. § 101(5)(A).

*fn29 Bankruptcy Act, 11 U.S.C. § 106(1)(Chapter X); § 307(2)(Chapter XI); § 406(2)(Chapter XII);
and § 606(1)(Chapter XIII) (repealed 1978).

*fn30 S. Rep. No. 95-989, at 22, reprinted in 1978 U.S.C.C.A.N. 5787, 5808; H.R. Rep. No. 95-595,
at 309, reprinted in 1978 U.S.C.C.A.N. 5963, 6266. (emphasis added).

*fn31 744 F.2d 332, 336 (3d Cir. 1984).

*fn32 70 B.R. 645 (Bankr. D. Utah 1986).

*fn33 Id. at 650 (citing Ohio v. Kovacs, 469 U.S. 274 (1985)). See also Cohen v. de la Cruz, 523
U.S. 213, 218 (1998) ("Those definitions 'reflec[t] Congress' broad... view of the class of
obligations that qualify as a 'claim' giving rise to a 'debt.'").

*fn34 Guaranty Agreement, in Appellant's App. at 107; Settlement Agreement at 5, in Appellant's
App. at 113.

*fn35 The Stipulation is set forth in Appellant's App. at 191-97.

*fn36 Thompson v. Unruh (In re Thompson), 240 B.R. 776, 781 (10th Cir. BAP 1999) (citing In re
Saunders, 61 B.R. 381, 383 (Bankr. D. Kan. 1986)).

*fn37 11 U.S.C. § 101(36).

*fn38 11 U.S.C. § 101(51).

*fn39 Thompson, 240 B.R. at 781 (citations omitted).

*fn40 12 B.R. 613 (Bankr. W.D. Okla. 1981).

*fn41 Id. at 614.

*fn42 Thompson, 240 B.R. at 778.

*fn43 192 B.R. 591 (D. N.H. 1995).

*fn44 Id. at 593.

*fn45 Appellant's Opening Brief at 26, l. 16-17.

*fn46 Appellant's App. at 210-236. We need not rule on the propriety of the late submission of
the full transcript of this hearing on May 17, 2004, because neither the prior excerpts nor the
full transcript contain any evidence or arguments regarding the Bank's waiver and estoppel

*fn47 Rubner & Kutner, P.C. v. United States Trustee (In re Lederman Enters., Inc.), 997 F.2d
1321, 1323 (10th Cir. 1993) (quoting Deines v. Vermeer Mfg. Co., 969 F.2d 977, 979 (10th Cir.
1992) (further citation omitted)); Armstrong v. Rushton (In re Armstrong), 294 B.R. 344, 362
(10th Cir. BAP 2003), aff'd without published opinion, No. 03-4177, 2004 WL 1173434 (10th Cir.
May 27, 2004).

*fn48 Diviney v. Nationsbank (In re Diviney), 225 B.R. 762, 771 (10th Cir. BAP 1998); Blagg v.
Miller (In re Blagg), 223 B.R. 795, 804 (10th Cir. BAP 1998). See also Novell, Inc. v. Federal
Ins. Co., 141 F.3d 983, 990 (10th Cir. 1998).

*fn49 232 B.R. 209 (10th Cir. BAP 1999).

*fn50 Blagg, 223 B.R. at 804.
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