Jones
Jones v. Heskett (In re Jones)
Opinion
Lead Opinion
Fletcher, J.
Virginia H. Jones appeals a decision of the Bankruptcy Appellate Panel (“BAP”) holding that a recorded abstract of judgment became a hen on her property subordinate, however, to prior hens and to a recorded declaration of homestead. The BAP concluded that because surplus equity existed in the property on the date Ms. Jones petitioned for bankruptcy, the hen could attach under California Code of Civil Procedure (“CCCP”) § 704.950. The BAP erred in its construction of the California law. We therefore reverse the decision of the BAP.
I.
Virginia Jones and her former husband, Brian Jones, bought a home in Berkeley, California in 1976. It was encumbered by a purchase money first deed of trust, recorded in December 1976. Four more deeds of trust were subsequently recorded. In November 1986, Mr. and Mrs. Jones recorded a declaration of homestead for the home pursuant to CCCP § 704.730 which, at that time, provided the Joneses with a $45,000 exemption.
In January 1987, Kelleher Lumber Company, Inc. (“Kelleher”) recorded a writ of attachment incident to a state court action against Brian Jones. In May 1987, Kelleher obtained a judgment in the amount of $29,-882.50 against Mr. Jones.…
Dissenting Opinion
Ferguson, J.
dissenting.
Virginia Jones and her former husband, Brian Jones, bought a home in California in 1976. The home was encumbered by several deeds of trust. In November 1986, the Joneses recorded a declaration of homestead for the residence. This declaration entitled them to a $45,000 homestead exemption under CCCP § 704.730.
Before January 1987, Kelleher Lumber Company, Inc. (“Kelleher”) filed an action in state court against Brian Jones for a community obligation. Kelleher obtained a $29,-882.50 judgement against Brian Jones and recorded a judgment lien in that amount against the residence.
The Joneses divorced in 1989 and Brian Jones quitclaimed his community property interest in the residence to Virginia Jones. In January and June of 1987, the value of the residence was $250,000. In April 1988, the residence had appreciated to $275,000. In November 1990, its value was $325,000, senior consensual hens and the homestead exemption totaled $293,000 leaving an equity surplus of $32,000.
In November 1990, Ms. Jones filed a Chapter 7 voluntary petition for bankruptcy. The petition was later converted to a petition under Chapter 13 of the Bankruptcy Code. Ms. Jones filed a complaint…