Second District, Division 6 Applies This Principle to Resolve Appeal.
The Second District, Division 6, in the elegantly short opinion of Somogyi v. Adley, Case No. B217525 (2d Dist., Div. 6 Sept. 21, 2010) (unpublished), reminds us of an important principle that many might think would not apply to post-discharge, pre-petition perfected judgment liens.
Somogyi involved an attorney who won an arbitration award for fees owed to him for representing appellant in a dissolution proceeding, with the award of $62,881.49 later being confirmed into a judgment. Winning lawyer then obtained a writ of execution and sought to sell appellant’s dwelling. An order for sale issued, but appellant then filed for bankruptcy. Lawyer obtained relief from the automatic stay, with the state court trial judge denying appellant’s multiple requests for a stay of the sheriff’s sale.
Although making various challenges to the trial judge’s refusal to stay, the appellate court affirmed due to one simple principle: a discharge does not affect a judgment to the extent that it supports a lien perfected prior to bankruptcy. (In re Kanakaris, 341 B.R. 33, 35 (S.D.Cal. 2006).)
The opinion was authored by Justice Perren, and is a good one for litigants and litigators to use when faced with a judgment debtor attempting to shield judgment liens when there is property remaining in the bankruptcy estate subject to relief from the automatic stay.
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