In re Arnold

Full title: In Re CHRISTOPHER ARNOLD SUSAN ARNOLD Debtor(s)

Court: UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF OHIO WESTERN DIVISION

Date published: Dec 5, 2014

Case No. 12-11683 (Bankr. S.D. Ohio Dec. 5, 2014)

Opinion

Case No. 12-11683

12-05-2014

In Re CHRISTOPHER ARNOLD SUSAN ARNOLD Debtor(s)

Judge Buchanan

Chapter 7

MEMORANDUM DECISION REGARDING MOTIONS TO AVOID LIENS

[This opinion is not intended for publication or citation. The availability of this opinion, in electronic or printed form, is not the result of a direct submission by this Court.]

Christopher and Susan Arnold (the "Debtors") filed a joint petition for relief under Chapter 7 of the Bankruptcy Code¹ on March 29, 2012 (the "Petition Date"). The matters before this Court involve five motions (as amended) to avoid nine (9) judicial liens against eighteen (18) parcels of real property (the "Properties")² owned by the Debtors (the "Motions to Avoid").³ By the Motions to Avoid, the Debtors seek to avoid the judicial liens (the "Judicial Liens") held by the following creditors (the "Judicial Lien Creditors"):

1 Unless otherwise indicated, the terms "Bankruptcy Code," "Section" and "§" refer to Title 11 of the United States Code, 11 U.S.C. § 101 et seq. References to the "Bankruptcy Rules" are to the Federal Rules of Bankruptcy Procedure.

2 The Properties that are the subject of the Motions to Avoid are:

331 West 9th Street, Covington, Kentucky
4448 Ammon Avenue, Hamilton County, Cincinnati, Ohio
539 Aspen Glen Drive, Unit 421, Clermont County, Cincinnati, Ohio
4447 Colerain Avenue, Hamilton County, Cincinnati, Ohio
4 Cottage Court (2 parcels), Hamilton County, Cincinnati, Ohio
6107 Desmond Avenue, Hamilton County, Cincinnati, Ohio
5313 Dora Street, Hamilton County, Cincinnati, Ohio
4146 Langland Street, Hamilton County, Cincinnati, Ohio
5788 Lantana Avenue, Hamilton County, Cincinnati, Ohio
2008 Maple Avenue, Hamilton County, Cincinnati, Ohio
5606 Meryton Place, Hamilton County, Cincinnati, Ohio
1347 Myrtle Avenue, Hamilton County, Cincinnati, Ohio
1830 Tilden Avenue, Hamilton County, Cincinnati, Ohio
2401 Vine Street, Hamilton County, Cincinnati, Ohio
2403 Vine Street, Hamilton County, Cincinnati, Ohio
4616 Ward Street, Hamilton County, Cincinnati, Ohio
4741 Woodlawn Avenue, Hamilton County, Cincinnati, Ohio

3 The Motions to Avoid were filed over a time span of one year. The docket entries pertinent to the Motion to Avoid, responses by JPMorgan Chase Bank, N.A. and related orders and proceedings in this Court are: 76-78, 80-82, 86-87, 93-95, 100-150, 152, 154, 159-177, 179.

Judicial Lien Creditor	Judgment Against	Date JudgmentRecorded	Amount of Judgment4
First Financial Bank	Christopher Arnold	11/15/2007	$ 40,150
First Financial Bank	Christopher Arnold	11/12/2008	$ 32,071
U.S. Bank	Christopher Arnold	08/24/2010	$342,496
JPMorgan Chase	Christopher Arnold	09/09/2010	$ 71,850
FIA Card Services	Susan Arnold	11/10/2010	$ 4,358
Portfolio Recovery Assoc. LLC	Susan Arnold	12/03/2010	$ 3,235
Midland Funding LLC	Susan Arnold	06/21/2011	$ 10,645
LVNV Funding LLC	Christopher Arnold	08/19/2011	$ 9,130
City of Cincinnati	Christopher Arnold	06/27/2012	$ 3,900
TOTAL			$517,835

4 Judgment amounts reflected do not include interest and costs, or fees where applicable.

The Debtors assert that the Judicial Liens impair an exemption to which the Debtors are entitled under § 522(b) and, therefore, that the Judicial Liens are avoidable pursuant to § 522(f)(1)(A). The Debtors note that they remain personally liable for on-going maintenance and taxes for the Properties. The Debtors seek to avoid the Judicial Liens so that they may attempt to work with their mortgage lenders to refinance the Properties and return the Properties to a productive state. At least one of the Debtors' mortgage lenders, First National Bank of Germantown, is willing to refinance its mortgages against certain of the Properties if the Judicial Liens are avoided.

JPMorgan Chase Bank, N.A. ("Chase") is the only Judicial Lien Creditor that opposes the Motions to Avoid.

I. Jurisdiction

The Court has jurisdiction over this matter pursuant to 28 U.S.C. § 1334 and the standing General Order entered by the United States District Court for the Southern District of Ohio referring all bankruptcy matters to this Court. This is a core proceeding pursuant to 28 U.S.C. § 157 (b)(2)(B) and (K).

II. Findings of Fact and Conclusions of Law

A. Chase's arguments in opposition to Motions to Avoid

Chase advances the following arguments in opposition to the Motions to Avoid:

1. The Motions to Avoid should be denied because the Debtors failed to claim any exemptions for the Properties on Schedule C.

Chase argues that the Motions to Avoid should be denied because the Debtors did not claim any exemption for the Properties on Schedule C nor did the Debtors amend Schedule C to assert any exemption. As noted by Chase, there is a split of authority regarding whether a debtor may avoid a judicial lien pursuant to § 522(f) if the debtor fails to claim the property as exempt on Schedule C. See In re Scannell, 453 B.R. 36, 40 (Bankr. D. N. H. 2011)(collecting cases). Section 522(f) 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 under subsection (b) of this section, if such lien is . . . a judicial lien." 11 U.S.C. § 522(f)(1)(A) (emphasis added). A plain reading of the statute reflects that the focus of § 522(f) is "not on any actual claim of exemption, but rather on the hypothetical exemption that the debtor would have been entitled to in the absence of the lien." Botkin v. DuPont Cmty. Credit Union, 650 F.3d 396, 400 (4th Cir. 2011). This Court agrees with the line of cases holding that a debtor need not have expressly claimed an exemption on Schedule C as a precondition to avoiding a judicial lien pursuant to § 522(f). 2. The Motions to Avoid should be denied because the Debtors exhausted their "wild card" exemptions with the avoidance of the Judicial Liens against the Lantana Avenue Property.

The first motion to avoid (the "First Motion to Avoid")⁵ filed by the Debtors pertained to certain jointly owned real property located at 5788 Lantana Avenue, Cincinnati, Ohio (the "Lantana Avenue Property"). In the First Motion to Avoid, the Debtors asserted that the Lantana Avenue Property was worth $49,740 and, in addition to the Judicial Liens, was encumbered by a first mortgage in the amount of $88,910.17. The Debtors maintained that the existence of the Judicial Liens impaired the exemptions to which the Debtors were entitled, however, the Debtors did not state the source or the amount of the exemption in the First Motion to Avoid. At the hearing held on the First Motion to Avoid, counsel for the Debtors stated that the exemption claimed to be impaired was the Debtors' respective "wild card" exemption under Ohio Revised Code § 2329.66(A)(18) and that, while it was difficult to quantify, the amount of the exemption each Debtor could claim was worth at least $100. By its terms, Ohio Revised Code § 2329.66(A)(18) applies only in bankruptcy proceedings and allows a debtor to exempt the debtor's "aggregate interest in any property, not to exceed [one thousand one hundred and fifty dollars]."⁶ OHIO REV. CODE § 2329.66(A)(18).

5 The Debtors filed the First Motion to Avoid on September 6, 2012. The First Motion to Avoid was granted on October 30, 2012. The Debtors received a discharge, the Chapter 7 trustee filed a report of no distribution and this case was closed on November 15, 2012. The Debtors subsequently filed a motion to reopen this case, which was granted on February 7, 2013. The Debtors thereafter filed the subsequent Motions to Avoid.

6 A debtor's entitlement to a specific exemption is determined as of the bankruptcy petition filing date. See e.g., In re Kyle, 510 B.R. 804, 809 (Bankr. S.D. Ohio 2014). The Ohio Judicial Conference periodically adjusts the amount of the wild card exemption for inflation. See Ohio Revised Code § 2329.66(B). As of the Petition Date, each Debtor was entitled to a wild card exemption in the amount of $1,150. See Letter from Mark R. Schweikert, Exec. Dir., Ohio Judicial Conf., to Mark Flanders, Dir., Ohio Legis. Serv. Comm'n (Mar. 15, 2013), available at http://www.ohiojudges.org/Document.ashx?DocGuid=c6a5f473-62f4-4466-9e4f-aaf7b59c1b66.

Chase did not question the source or the amount of the Debtors' claimed exemptions in its written objection to the First Motion to Avoid or orally at the hearing. Rather, Chase opposed the First Motion to Avoid solely on the grounds that the Debtors did not claim any exemption in the Lantana Avenue Property on Schedule C and, as such, that the Judicial Liens could not be avoided because they did not impair an exemption. Based on the reasoning discussed above, this Court orally overruled Chase's objection at the hearing and granted the First Motion to Avoid.

In its response to the subsequently filed Motions to Avoid, Chase maintains that these later Motions to Avoid should be denied because the Debtors exhausted their wild card exemptions with the avoidance of the Judicial Liens against the Lantana Avenue Property.⁷ This Court disagrees. This Court did not make a specific finding of fact regarding the exact amount of the exemption asserted by each Debtor with respect to the Lantana Avenue Property given that the first mortgage alone exceeded the value of the Debtors' interest in the Lantana Avenue Property making the Judicial Liens fully avoidable under the mathematical formula set forth in § 522(f)(2) even if the amount of the claimed wild card exemption was only $1.00. A specific finding is now necessary, however, in light of the subsequently filed Motions to Avoid, which rely on the same wild card exemption as the basis for avoiding the Judicial Liens as to the Debtors' additional properties.⁸ Accordingly, based on the representations made at the hearing on the First Motion to Avoid, this Court finds that each Debtor claimed $100 of their respective wild card exemption in connection with avoiding the Judicial Liens against the Lantana Avenue Property. 3. The Motions to Avoid should be denied in part with respect to the 2401 Vine Street , Ammon Avenue, Cottage Court, Desmond Avenue and Ward Street Properties because the Debtors' claimed exemption is not fully impaired by the Judicial Liens .

7 The Debtors did not identify the source and amount of the exemption that the Debtors claimed to be impaired by the Judicial Liens in their subsequently filed Motions to Avoid. Chase argued that without this information it was impossible to calculate the extent to which the Judicial Liens impair the Properties pursuant to the formula set forth in § 522(f)(2). This Court agreed that a properly pled motion to avoid lien pursuant to § 522(f) must state the source and amount of the exemption that a debtor claims to be impaired by a judicial lien. As such, this Court sustained Chase's objection on this ground and the Debtors subsequently amended the applicable Motions to Avoid identifying the source and amount of the claimed exemptions.

8 Chase does not dispute that the Debtors may allocate their respective wild card exemption among their multiple Properties provided that the total claimed wild card exemption does not exceed $1,150 per debtor. Docket Number 114 at ¶11; see also In re Pees, 2013 Bankr. LEXIS 2958, at *14, 2013 WL 3808153, at *5-6 (Bankr. N.D. Ohio July 22, 2013)(concluding that a debtor may "allocate the wildcard exemption among multiple items of property, and in any denomination (even $1.00), so long as the total amount claimed as exempt in all property does not exceed [the maximum wild card exemption authorized by Ohio Revised Code § 2329.66(A)(18)]").

Chase argues that there is non-exempt equity in the 2401 Vine Street, Ammon Avenue, Cottage Court, Desmond Avenue and Ward Street Properties to which some portion of the Judicial Liens attach, thereby rendering the Judicial Liens unavoidable to the extent of the non-exempt equity. Analyzing each property individually, Chase employed the following formula to determine the non-exempt equity in these properties:

	Value of the property
Less:	Consensual mortgage
Less:	Debtors' claimed exemptions
	Non-exempt equity9

9 In Chase's filings and arguments to this Court, Chase contends that the Debtors' non-exempt equity in the Properties should be calculated collectively—rather than individually for each Debtor—because this is a joint case, making it distinguishable from § 522(f) cases involving an individual debtor who owns property jointly with rights of survivorship with a non-debtor party. Docket Number 163. In the latter instance, courts are split on whether to apply a strict or a modified computation of impairment under § 522(f)(2)(A). Compare In re Kindall, 508 B.R. 43, 46-48 (Bankr. S.D. Ohio 2014)(holding that the Sixth Circuit's opinion in Brinley v. LLP Mortgage, Ltd. (In re Brinley), 403 F.3d 415 (6th Cir. 2005) requires a strict application of § 522(f)(2)(A) whereby one hundred percent of the aggregate liens against the property plus the debtor's claimed exemption are weighed against the debtor's fractional interest in the real property), with In re Lavine, 2012 Bankr. LEXIS 4333, at *10-11, 2012 WL 4106749, at *4 (Bankr. N.D. Ohio Sept. 18, 2012)(holding that a literal application of § 522(f)(2)(A) where a debtor holds only a fractional interest in the property would produce an illogical result contrary to Congressional intent and therefore adopting a modified computation of impairment whereby only a proportional percentage of the secured debt owed by all co-owners is weighed against the debtor's fractional interest in the real property).
To illustrate the differences between the two approaches, assume that a debtor holds a one-half interest in real property worth $110,000 that is subject to a consensual mortgage owed by two co-owners with a balance of $70,000. The debtor claimed an exemption in the amount of $1,000 and seeks to avoid a judicial lien in the amount of $5,000. Under the strict application approach found in In re Brinley as interpreted by In re Kindall, the judicial lien would be fully avoidable because the full amount of the mortgage balance ($70,000) plus the debtor's claimed exemption ($1,000) would be weighed against the debtor's one-half interest in the property ($55,000), leaving no non-exempt equity to which the judicial lien could attach. Under the modified impairment approach found in In re Lavine, the judicial lien would not be avoidable at all because the debtor's proportional percentage of the mortgage balance ($70,000 x 50% = $35,000) plus the debtor's claimed exemption ($1,000) is less than the debtor's fractional interest in the property ($55,000) leaving $19,000 of non-exempt equity to which the judicial lien would attach.
The Debtors did not explicitly respond to Chase's argument regarding the methodology for calculating impairment under § 522(f)(2)(A) in a joint debtor case and implicitly appear to employ a similar approach as suggested by Chase (i.e., weighing all liens and exemptions against the full value of the respective Properties) albeit with a differing proposed outcome. Consequently, this Court expresses no opinion on this matter since the issue was neither fully briefed nor opposed by the Debtors. See Star Transp., Inc. v. CSIR Enters., 409 F. Supp. 2d 939, 951 (M.D. Tenn. 2006)(granting summary judgment to defendants based on plaintiff's failure to support claims asserted in plaintiff's complaint noting that "[i]n the Sixth Circuit, issues that are not fully developed and argued are considered waived.")(citing Brindley v. McCullen, 61 F.3d 507, 509 (6th Cir. 1995) and McPherson v. Kelsey, 125 F.3d 989, 995-96 (6th Cir. 1997)("[I]ssues adverted to in a perfunctory manner, unaccompanied by some effort at developed argumentation, are deemed waived. It is not sufficient for a party to mention a possible argument in the most skeletal way, leaving the court . . . to put flesh on its bones.")(quotations and citations omitted)); see also Ag Venture Fin. Servs. v. Montagne (In re Montagne), 425 B.R. 111, 130 (Bankr. D. Vt. 2009)(declining to address arguments that are not sufficiently briefed).

The Debtors acknowledge that the Judicial Liens are not fully avoidable as to the Ammon Avenue Property because this property is not encumbered by a consensual mortgage. With respect to the 2401 Vine Street, Cottage Court, Desmond Avenue and Ward Street Properties, however, the Debtors argue that:

The existence of the [Judicial Liens] impair the exemptions that Debtors are entitled under 11 U.S.C. §522 under Ohio Revised Code Section 2329.66A(18), (wildcard) in the amount of Twenty Eight Dollars and fifty cents ($28.50) each. There is no equity in [the Properties]. . . .¹⁰

The amount of the judicial liens and the indebtedness secured by the mortgages exceeds the value of the real property, the judicial liens impair an exemption of the debtors ; therefore, the judicial liens are avoidable pursuant to Section 522 pursuant to Ohio Revised Code Section 2329.66A (18) utilizing Twenty Eight Dollars and fifty cents per address . . . for each Debtor.

Docket Number 166; see also Docket Number 143 (arguing that the Judicial Liens are avoidable because "the amount of all of the liens is far in excess of the value of the [property]"). It would therefore appear that the Debtors are advocating for the use of the following formula to determine whether the Judicial Liens are avoidable:

	Value of the property
Less:	Consensual mortgage
Less:	Judicial Liens
Less:	Debtors' claimed exemptions
	No equity/full avoidance of all Judicial Liens

10 The Debtors state that "[t]he value of the exemption is the ability of the Debtors to transfer the property out of their name to prevent the County of Hamilton from filing criminal complaints against the Debtors for failing to maintain their property. The cost of the transfer is Fifty Cents ($.50) to the County Auditor and Twenty Eight Dollars ($28.00) to the County Recorder to record the deed."

The Debtors' approach to determining lien avoidance under § 522(f) has been expressly rejected by the Sixth Circuit Court of Appeals in Brinley v. LPP Mortg., Ltd. (In re Brinley), 403 F.3d 415 (6th Cir. 2005). In In re Brinley, the Sixth Circuit held that it was not sufficient to show that the value of all of the liens on a debtor's property plus the value of the exemption sought exceeds the value of the property. Id. at 421. Rather, § 522(f) expressly states that a judicial lien may be avoided only "to the extent that" such lien impairs an exemption. Id. (citing 11 U.S.C. § 522(f)(1) and (2)(A)). Accordingly, a court must calculate the amount of the impairment based strictly on the formula prescribed by § 522(f)(2)(A) and then avoid the judicial lien to the extent of the amount of the impairment. Id.

Applying § 522(f) as instructed by In re Brinley to the facts of this case, the Judicial Liens are considered to impair the Debtors' exemption on the 2401 Vine Street, Ammon Avenue, Cottage Court, Desmond Avenue and Ward Street Properties as follows:

	2401 VineStreet	AmmonAvenue	Cottage Court	DesmondAvenue	Ward Street
Mortgage	$ 61,854	$ -0-	$ 65,765	$ 85,000	$ 92,000
Judicial Liens	$517,835	$517,835.00	$517,835	$517,835	$517,835
Exemption	$ 57	$ 28.5011	$ 57	$ 57	$ 57
Sum of themortgage, theJudicial Liens,and theDebtors'exemption	$579,746	$517,863.50	$583,657	$602,892	$609,892
Value ofProperty	($ 63,300)	($ 5,570.00)	($ 69,090)12	($ 92,130)	($ 100,700)
Amountexemption isimpaired by theJudicial Liens	$516,446	$512,293.50	$514,567	$510,762	$509,192

11 The Ammon Avenue Property is owned solely by Christopher Arnold. While there was some discussion in the court proceedings with counsel regarding Susan Arnold's dower interest, in later filings with this Court the Debtors have not asserted an exemption on behalf of Susan Arnold for other properties owned solely by Christopher Arnold nor have the Debtors briefed what impact, if any, Susan Arnold's dower interest may have on the impairment calculation. Accordingly, this Court deems any arguments relating to Susan Arnold's dower interest to be waived. See Star Transp., Inc., 409 F. Supp. 2d at 951.

12 The Cottage Court Property consists of two parcels. The parties stipulated that values for the respective parcels as of the Petition Date were $47,560 (parcel number ending in 0418-00) and $21,530 (parcel number ending in 0408-00).

As such, the Judicial Liens are avoidable to the extent set forth above. The balance of the Judicial Liens, however, remains attached to the 2401 Vine Street, Ammon Avenue, Cottage Court, Desmond Avenue and Ward Street Properties, as set forth below, because the Judicial Liens do not fully impair the Debtors' exemptions:

	2401 VineStreet	AmmonAvenue	Cottage Court	DesmondAvenue	Ward Street
Judicial Liens tobe avoided	$517,835	$517,835	$517,835	$517,835	$517,835
Amountexemption isimpaired	($516,446)	($512,293.50)	($514,567)	($510,762)	($509,192)
Amount ofJudicial Liensthat are notavoided	$ 1,389	$ 5,541.50	$ 3,268	$ 7,073	$ 8,643

Having determined that the Judicial Liens against the 2401 Vine Street, Ammon Avenue, Cottage Court, Desmond Avenue and Ward Street Properties are not fully avoidable, this Court turns to the question of which Judicial Lien Creditor is entitled to retain its lien, in part, against these properties. 4. The Judicial Liens of the non-responding Judicial Lien Creditors should be deemed avoided and the unimpaired value of the 2401 Vine Street , Ammon Avenue, Cottage Court, Desmond Avenue and Ward Street Properties should be allocated to Chase's Judicial Lien .

Chase argues that it is entitled to retain its judicial lien, in part, against the 2401 Vine Street, Ammon Avenue, Cottage Court, Desmond Avenue and Ward Street Properties based on the failure by the other Judicial Lien Creditors to object to the Motions to Avoid, appear at hearings or otherwise contest the relief requested. Chase suggests that these non-responding Judicial Lien Creditors have implicitly consented to the avoidance of their liens and that this Court should enter an order to such effect. Once the non-responding Judicial Lien Creditors' liens are avoided, Chase notes that § 522(f)(2)(B) provides that avoided liens are not included in the impairment calculation under § 522(f)(2)(A) and that Chase, therefore, would be the only remaining judicial lienholder of record. The Debtors maintain that First Financial Bank's judicial lien should be the last lien to be avoided since its lien was filed first and therefore has priority as amongst the Judicial Lienholders.

In support of its position, Chase cites In re Lavine, 2012 Bankr. LEXIS 4333, 2012 WL 4106749 (Bankr. N.D. Ohio Sept. 18, 2012) and the dissent in All Points Capital Corp. v. Meyer (In re Meyer), 373 B.R. 84 (9th Cir. B.A.P. 2007). In In re Lavine, the bankruptcy court notes in its opinion that a previous order was entered avoiding the liens of two judicial lien creditors, leaving a third objecting creditor as the only remaining judicial lienholder. See In re Lavine, 2012 Bankr. LEXIS 4333, at *2, 2012 WL 4106749, at *1. In its filings with this Court, Chase includes excerpts from the bankruptcy court docket, a copy of the motion to avoid and a copy of the order avoiding the judicial liens of the non-responding judicial lien creditors in the In re Lavine case. While these documents demonstrate that the In re Lavine court did exactly what Chase asks this Court to do, it does not appear from the record before this Court that the debtor in In re Lavine opposed the relief sought by the objecting creditor as to the non-responding judicial lien creditors. As such, the question of the order in which judicial liens are to be avoided was not properly before the In re Lavine court.

In contrast, the Bankruptcy Appellate Panel in All Points directly considered the issue of whether an order should be entered avoiding the liens of non-responding judicial lienholders on a default basis before making the impairment determination as to the lien of an objecting judicial lien creditor. All Points, 373 B.R. at 87. The majority in All Points concluded that it was appropriate to consider the question of the order in which judicial liens are avoided on the merits rather than on a default basis. Id. In doing so, the majority adopted the reverse priority approach whereby judicial liens are avoided one at a time from the most junior to the most senior until the statutory formula of § 522(f)(2)(A) indicates that there is no further impairment. Id. The majority in All Points concluded that the reverse priority approach was appropriate because it:

is a corollary to the requirement in the § 522(f)(2)(A) statutory formula that liens be assessed for avoidance on a lien-by-lien basis[,] . . . has the consequence of giving effect to the priority rules of applicable nonbankruptcy law . . . [and] introduces an element of order to the provision of § 522(f)(2)(B) that liens already avoided are excluded from the exemption-impairment calculation with respect to other liens.

Id.

Chase urges this Court to follow the dissent in All Points Capital Corp, which viewed the majority's opinion to be "judicial activism" that rewarded an "absentee litigant" with an "undeserved partial victory." Id. at 95. This Court is more persuaded by the reasoning of the majority in All Points Capital Corp. given courts' general preference to decide cases on the merits whenever reasonably possible and because the majority's approach best preserves the non-bankruptcy law priority scheme without running afoul of the dictates of the Bankruptcy Code. See In re Morrow, 2009 Bankr. LEXIS 1505, at *12, 2009 WL 1607582, at *4 (Bankr. N.D. Ohio Feb. 12, 2009)(holding that "judgment liens are stripped off a property [under § 522(f)] one at a time from the most junior to the most senior")(citations omitted); In re Heaney, 453 B.R. 42, 48-49 (Bankr. E.D.N.Y. 2011)(same)(collecting cases).

Applying the reverse priority approach in this case, all of the Judicial Liens against the 2401 Vine Street, Ammon Avenue, Cottage Court, Desmond Avenue and Ward Street Properties are avoided except for First Financial Bank's Judicial Lien dated November 15, 2007 (the "2007 First Financial Judicial Lien"), which is not avoided to the extent of the non-exempt equity in such properties.¹³

13 Chase stated during argument that the 2007 First Financial Bank Judicial Lien is now expired by operation of law because First Financial Bank did not file a lien continuation. No evidence was introduced in support of this assertion. Regardless, the petition date is the operative date for determining the value of the debtor's property and the value of the liens against it—not the date the motion to avoid lien is filed. See Wilding v. CitiFinancial Consumer Fin. Servs., Inc. (In re Wilding), 475 F.3d 428, 432 (1st Cir. 2007)(concluding that "the lien itself need not exist at the moment the debtor files a motion to avoid for § 522(f) to apply"); In re Brooks, 2014 Bankr. LEXIS 1334, at *9, 2014 WL 1304621, at *3 (Bankr. N.D. Ohio Mar. 31, 2014)("The operative date for all § 522(f) determinations, including determinations regarding the value, and thus the existence, of liens, is the petition filing date.")(citations omitted); In re Young, 471 B.R. 715, 719 (Bankr. E.D. Tenn. 2012)(same); In re Hettinger, 463 B.R. 835, 837 (Bankr. W.D. Ky. 2011)(same). This Court expresses no opinion regarding the present enforceability of the 2007 First Financial Bank Judicial Lien under state law as a lien against the Debtors' Properties.

5. The Motions to Avoid should be denied with respect to the Meryton Place Property because this property is not owned by the Debtors.

The Debtors seek to avoid the Judicial Liens against real property located at 5606 Meryton Place (the "Meryton Place Property"). Chase notes that the Debtors transferred the Meryton Place Property on January 15, 2010 to Ultra Marketing Group, LLC (the "LLC"). Therefore, Chase asserts that because the Debtors did not own the Meryton Place Property on the Petition Date it is not property of the estate and that the Debtors are not entitled to claim an exemption in the Meryton Place Property or seek avoidance of liens against the Meryton Place Property. The Debtors argue that the Meryton Place Property is property of the estate and, as such, that they may claim an exemption in the property and seek avoidance of the Judicial Liens because Debtor Christopher Arnold is the sole member of the LLC.

The position put forth by Chase is correct. As of the Petition Date, the Meryton Place Property was owned by the LLC. Debtor Christopher Arnold has no legal or equitable interest in the Meryton Place Property by virtue of his 100% ownership of the LLC. Under Ohio law, a person's membership interest in a limited liability company is personal property. OHIO REV. CODE § 1705.17. "A 'membership interest' in a limited liability company, however, does not confer upon the 'member' any specific interest in company property, whether personal property or real property. Such property is, instead, held and [owned] solely by the company." In re Breece, 2013 Bankr. LEXIS 203, at *9, 2013 WL 197399, at *3 (6th Cir. B.A.P. Jan. 18, 2013)(citations and quotations marks omitted). While Debtor Christopher Arnold may claim a wild card exemption for his membership interest in the LLC, he cannot claim an exemption in the Meryton Place Property itself because he holds no legal or equitable interest in the real property. Id. 2013 Bankr. LEXIS 203, at *29-30, 2013 WL 197399, at *9 (holding that a debtor may not claim a homestead exemption in real property owned by a limited liability company because the real property does not constitute property of the bankruptcy estate). To the extent that the Debtors are making a "reverse piercing" of the corporate veil argument, the Debtors have provided no evidence to support such theory and general principles of equity suggest that this Court should reject any such claim. See In re Stewart, 2010 Bankr. LEXIS 6517, at *26-28 (Bankr. N.D. Ohio Oct. 1, 2010)(denying § 522(f) motion to avoid liens on residence owned by debtors' wholly-owned limited liability company because justice requires debtors may not seek the benefits of corporate formalities when it suits their purpose and disavow them when it does not). Accordingly, Chase's objection is sustained and the Motion to Avoid the Judicial Liens as against the Meryton Place Property is denied. 6. The Motions to Avoid should be denied with respect to the Aspen Glen Drive and West 9^th Street Properties because these properties are not located in Hamilton County , Ohio where the Judicial Liens are filed.

The Debtors seek to avoid the Judicial Liens against real properties located at 539 Aspen Glen Drive, Cincinnati, Ohio (the "Aspen Glen Drive Property") and 331 West 9^th Street, Covington, Kentucky (the "West 9^th Street Property"). Noting that the Aspen Glen Drive Property is located in Clermont County, Ohio and the West 9^th Street Property is located in Kenton County, Kentucky, Chase argues that the Judicial Liens cannot be avoided against these properties because the Judicial Liens referenced in the Motions to Avoid were filed in Hamilton County, Ohio. The Debtors assert that avoidance is necessary because the Judicial Lien Creditors could file their certified judgments as liens against the Aspen Glen Drive and West 9^th Street Properties at a future date. Accordingly, the Debtors argue that it is appropriate to avoid the Judicial Liens now to prevent the Debtors from having to file a motion to avoid in the future in the event the Judicial Lien Creditors file their liens against these properties at a later time.

A "judicial lien" is defined by the Bankruptcy Code as a "lien obtained by judgment, levy, sequestration, or other legal or equitable process or proceeding." 11 U.S.C. § 101(36). Under Ohio law, a judicial lien arises and attaches to a debtor's interest in real property when a certificate of judgment is filed with the clerk of the court of common pleas in the county in which the real estate is located. In re Jerew, 415 B.R. 303, 306 (Bankr. N.D. Ohio 2009)(citing OHIO REV. CODE § 2329.02). Similarly, under Kentucky law, a judicial lien creditor must file a notice of judgment lien in the county in which a debtor owns real estate (among other requirements) to obtain a judicial lien against real property. KY. REV. STAT. ANN. § 426.720(1)(a). It is undisputed that, as of the Petition Date, the Judicial Lien Creditors had not filed a certificate or notice of judgment lien in Clermont County, Ohio or Kenton County, Kentucky where the Aspen Glen Drive and West 9^th Street Properties are located. As such, the Judicial Lien Creditors do not hold judicial liens against the Aspen Glen Drive and West 9^th Street Properties.

Section 522(f)(1) authorizes the avoidance of a judicial lien on a debtor's property to the extent that it impairs an exemption to which a debtor would have been entitled. 11 U.S.C. § 522(f)(1). Since no judicial liens existed against the Aspen Glen Drive and West 9^th Street Properties as of the Petition Date, there are no liens for this Court to avoid pursuant to § 522(f). See In re Thames, 349 B.R. 659, 665 (Bankr. D. Idaho 2005)(denying debtor's § 522(f) motion to avoid as moot because creditor held no enforceable lien against the debtor's property due to creditor's failure to follow state law procedures to create a judicial lien for a foreign judgment); cf. In re Johnson, Case No. 13-13777 (Bankr. S.D. Ohio Jan. 24, 2014)(denying § 522(f) motion to avoid where debtor did not own any real estate as of the petition date in the county where the certificate of judgment was filed).

With respect to the Debtors' concern that the Judicial Lien Creditors may file their certified judgments as liens against the Aspen Glen Drive and West 9^th Street Properties at some time in the future, that is not a matter properly before this Court. This Court notes that the Debtors received a discharge under § 727 on August 2, 2012. With certain exceptions, a discharge under § 727 voids any judgments that were the personal liability of the debtor and operates as an injunction against the commencement or continuation of an action or the employment of process to collect or recover a debt as a personal liability of the debtor. 11 U.S.C. § 524(a). As such, the Judicial Lien Creditors are enjoined from pursuing any in personam liability for these debts against the Debtors pursuant to § 524(a). Similarly, for the reasons stated above, the Judicial Lien Creditors have no present in rem claims against the Aspen Glen Drive and West 9^th Street Properties to enforce post-discharge since they do not currently hold judicial liens against these properties. Accordingly, there is no present issue for this Court to adjudicate.

[T]o be cognizable in a federal court, a suit "must be definite and concrete, touching the legal relations of parties having adverse legal interests. * * * It must be a real and substantial controversy admitting of specific relief through a decree of a conclusive character, as distinguished from an opinion advising what the law would be upon a hypothetical state of facts."

Trans. & Transit Assoc. v. Columbus Steel Castings Co. (In re Buckeye Steel Castings Co.), 306 B.R. 186, 188 (6th Cir. B.A.P. 2004)(quoting Aetna Life Ins. Co. of Hartford, Conn. v. Haworth, 300 U.S. 227, 240-241 (1937)); see also Adcock v. Firestone Tire & Rubber Co., 822 F.2d 623, 627 (6th Cir. 1987)("The jurisdiction of federal courts is limited by Article III of the United States Constitution to consideration of actual cases and controversies . . . ."). While this Court appreciates the Debtors' desire to bring finality to this bankruptcy proceeding, "[a movant's] desire, no matter how compelling, to know in advance of an actual controversy how a court may rule is not the equivalent of a concrete controversy between adverse parties." Sunflower Compress v. Julien Co. (In re Julien Co.), 136 B.R. 784, 790 (Bankr. W.D. Tenn. 1992)(citing Railway Mail Ass'n. v. Corsi, 326 U.S. 88, 93 (1945)); Hensen v. United States (In re Hensen), 2011 Bankr. LEXIS 3349, at *2 (Bankr. N.D. Ohio July 1, 2011)(noting that "while Plaintiff would understandably prefer the comfort of [a determination] by the court now, such comfort orders are not actual cases or controversies within the judicial power of the court"). Accordingly, Chase's objection is sustained and the Motions to Avoid with respect to the Aspen Glen Drive and West 9^th Street Properties are denied without prejudice. B. Properties where there is an undisputed lack of non-exempt equity to which the Judicial Liens may attach.

The parties stipulated to (or did not oppose) the values for the following properties and the amount of total liens against such properties: Colerain Avenue, Dora Street, Langland Street, Myrtle Avenue, Tilden Avenue and Woodlawn Avenue. No other Judicial Lien Creditors opposed the relief requested with respect to these Properties. Applying the § 522(f)(2) calculation of impairment as set forth below, the Judicial Liens are considered to impair the Debtors' exemption on the Colerain Avenue, Dora Street, Langland Street, Myrtle Avenue, Tilden Avenue and Woodlawn Avenue Properties as follows:

	ColerainAvenue	Dora Street	LanglandStreet	MyrtleAvenue	TildenAvenue	WoodlawnAvenue
Mortgage	$ 52,647.00	$ 66,684	$ 57,703	$125,000	$108,421.00	$116,875.00
Judicial Liens	$517,835.00	$517,835	$517,835	$517,835	$517,835.00	$517,835.00
Exemption	$ 28.5014	$ 57	$ 57	$ 57	$ 28.5014	$ 28.5014
Sum of themortgage, theJudicialLiens, andthe Debtors'exemption	$570,510.50	$584,576	$575,595	$642,892	$626,284.50	$634,738.50
Value ofProperty	($ 31,000.00)	($ 65,220)	($34,000)	($61,370)	($ 99,170.00)	($ 96,480.00)
Amountexemption isimpaired	$539,510.50	$519,356	$541,595	$581,522	$527,114.50	$538,258.50

14 Debtor Christopher Arnold only. See supra note 11. --------

As such, the Debtors' respective wild card exemptions (as applicable) are fully impaired, as set forth below, by the Judicial Liens and, therefore, the Judicial Liens are avoided in their entirety pursuant to § 522(f)(1) as to these Properties.

	ColerainAvenue	Dora Street	LanglandStreet	MyrtleAvenue	TildenAvenue	WoodlawnAvenue
Judicial Liensto be avoided	$517,835	$517,835	$517,835	$517,835	$517,835	$517,835
Amountexemption isimpaired	($539,510.50)	($519,356)	($541,595)	($581,522)	($527,114.50)	($538,258.50)
Amount ofJudicialLiens thatare avoided	Avoided infull	Avoided infull	Avoided infull	Avoided infull	Avoided infull	Avoided infull

C. Tabulation of the Debtors' respective remaining wild card exemptions.

The following is this Court's finding regarding the uses and remaining balance of the Debtors' respective wild card exemptions:

	ChristopherArnold	SusanArnold
Wild Card Exemption (O.R.C. § 2329.66(A)(18))	$1,150.00	$1,150.00
Less:
331 West 9th Street, Covington, Kentucky	Denied without prejudice	Denied without prejudice
4448 Ammon Avenue, Hamilton County, Cincinnati, Ohio	($ 28.50)	($ -0- )
539 Aspen Glen Drive, Unit 421, Clermont County, Cincinnati, Ohio	Denied without prejudice	Denied without prejudice
4447 Colerain Avenue, Hamilton County, Cincinnati, Ohio	($ 28.50)	($ -0- )
4 Cottage Court (2 parcels), Hamilton County, Cincinnati, Ohio	($ 28.50)	($ 28.50)
6107 Desmond Avenue, Hamilton County, Cincinnati, Ohio	($ 28.50)	($ 28.50)
5313 Dora Street, Hamilton County, Cincinnati, Ohio	($ 28.50)	($ 28.50)
4146 Langland Street, Hamilton County, Cincinnati, Ohio	($ 28.50)	($ 28.50)
5788 Lantana Avenue, Hamilton County, Cincinnati, Ohio	($ 100.00)	($ 100.00)
2008 Maple Avenue, Hamilton County, Cincinnati, Ohio	Withdrawn	Withdrawn
5606 Meryton Place, Hamilton County, Cincinnati, Ohio	Denied	Denied
1347 Myrtle Avenue, Hamilton County, Cincinnati, Ohio	($ 28.50)	($ 28.50)
1830 Tilden Avenue, Hamilton County, Cincinnati, Ohio	($ 28.50)	($ -0- )
2401 Vine Street, Hamilton County, Cincinnati, Ohio	($ 28.50)	($ 28.50)
2403 Vine Street, Hamilton County, Cincinnati, Ohio	Withdrawn	Withdrawn
4616 Ward Street, Hamilton County, Cincinnati, Ohio	($ 28.50)	($ 28.50)
4741 Woodlawn Avenue, Hamilton County, Cincinnati, Ohio	($ 28.50)	($ -0- )
Unallocated Balance of Wild Card Exemption	$ 736.50	$ 850.50

III. Conclusion

For foregoing reasons:

1. The Motions to Avoid with respect to the 2401 Vine Street, Ammon Avenue, Cottage Court, Desmond Avenue and Ward Street Properties are GRANTED IN PART and DENIED IN PART. The Judicial Liens held by U.S. Bank, Chase, FIA Card Services, Portfolio Recovery Assoc. LLC, Midland Funding LLC, LVNV Funding LLC, the City of Cincinnati and the First Financial Bank Judicial lien dated November 12, 2008 are avoided in total with respect to these Properties. The First Financial Bank Judicial Lien dated November 15, 2007 is avoided in part with respect to these Properties. This Court will enter a separate order for each Property consistent with this Memorandum Decision.

2. The Motion to Avoid with respect to the Meryton Place Property is hereby DENIED.

3. The Motions to Avoid with respect to the Aspen Glen Drive and West 9^th Street Properties are hereby DENIED without prejudice.

4. The Motions to Avoid with respect to the Colerain Avenue, Dora Street, Langland Street, Myrtle Avenue, Tilden Avenue and Woodlawn Avenue Properties are GRANTED and the Judicial Liens held by First Financial Bank, U.S. Bank, Chase, FIA Card Services, Portfolio Recovery Assoc. LLC, Midland Funding LLC, LVNV Funding LLC and the City of Cincinnati are all avoided in total. This Court will enter a separate order for each Property consistent with this Memorandum Decision.

IT IS SO ORDERED.

This document has been electronically entered in the records of the United States Bankruptcy Court for the Southern District of Ohio.

IT IS SO ORDERED.

Dated: December 5, 2014

/s/_________

Beth A. Buchanan

United States Bankruptcy Judge Distribution list: Default List Plus:

Beth M. Miller, Esq.

Thomas R. Merry, Esq.

Jason Forbes, Esq.

Forest S. Heis, Esq.

City of Cincinnati

Room 202

801 Plum Street

Cincinnati, Ohio 45202

Midland Funding LLC

c/o Javitch & Block

602 Main Street

Cincinnati, Ohio 45202

LVNV Funding LLC

c/o Javitch & Block

602 Main Street

Cincinnati, Ohio 45202

JPMorgan Chase

c/o Beth Miller

110 Polaris Parkway Suite 302

Westerville, Ohio 43082

FIA CARD SERVICES

c/o Mason Shilling

5181 Natorp Blvd. Suite 202

Mason, Ohio 45040

Portfolio Recovery Assoc. LLC

c/o Javitch & Block

602 Main Street

Cincinnati, Ohio 45202

U.S. Bank

c/o Dennis Williams

40 West Pike Street

Covington, KY 41012

First Financial Bank

c/o Sara C. Hirka

300 High Street

Hamilton, Ohio 45011

First Financial Bank

c/o Jonathan A. Mason

5181 Natorp Blvd. Suite 202

Mason, Ohio 45040

# # #

This Memorandum Decision clarifies this Court's prior order granting the Debtor's First Motion to Avoid as pertains to the Lantana Avenue Property. See infra II.A.2. During the course of this litigation, the Debtors withdrew the Motions to Avoid with respect to the Properties located at 2008 Maple Avenue (property sold at Sheriff sale) and 2403 Vine Street (Debtors later determined this property was not titled in their names).