Snyder v. Rockland Trust Co. ( 2001 )

[NOT FOR PUBLICATION–NOT TO BE CITED AS PRECEDENT]
United States Court of Appeals
For the First Circuit
No. 00-9009
IN RE: STEVEN SNYDER,
Debtor.
STEVEN SNYDER,
Debtor, Appellant,
v.
ROCKLAND TRUST COMPANY,
Appellee.
APPEAL FROM THE BANKRUPTCY APPELLATE PANEL
FOR THE FIRST CIRCUIT
Before
Bownes, Senior Circuit Judge,
Mazzone and Saris,* District Judges.
Richard L. Blumenthal, with whom Peter L. Zimmerman and
Silverman & Kudisch, P.C., were on brief, for appellant.
Jeffrey D. Ganz, with whom Riemer & Braunstein LLP was on
brief for Rockland Trust Company, appellee.
______________________
*Of the District of Massachusetts, sitting by designation.
March 2, 2001
BOWNES, Senior Circuit Judge. Bankruptcy debtor Steven
Snyder appeals from a decision of the Bankruptcy Appellate Panel
(BAP). The BAP held that Snyder could not completely avoid a
lien on his residence, which he owned with his spouse as a
tenancy by the entirety, because his interest in that property
was equal to its full market value. We affirm.
I. Background
Snyder and his spouse own their residence as tenants
by the entirety pursuant to a tenancy created after February 11,
1980. See Mass. Gen. Laws ch. 209, § 1. Snyder is three years
older than his spouse. On September 16, 1997, Snyder's spouse
filed a declaration of homestead with the Norfolk Registry of
Deeds.
The parties have stipulated that the fair market value
of the residential property is $239,000.00. The property is
subject to a lien in favor of the Collector of Taxes of Randolph
in the amount of $764.99; a first mortgage to Randolph Savings
Bank in the amount of $160,413.28; a second mortgage to Randolph
Savings Bank in the amount of $5,385.55; and a lien in favor of
Rockland Trust Company ("Rockland") in the amount of $65,000.00.
-2-
On March 2, 1998, Snyder filed for relief in the
Bankruptcy Court pursuant to Chapter 7 of the Bankruptcy Code.
On May 8, 1998, he filed a Motion to Avoid Lien pursuant to 11
U.S.C. § 522(f)(1)(A), in which he asserted that the Rockland
lien impaired his exemption in his residence.
On March 18, 1999, the Bankruptcy Court ruled that
Snyder had an "unitary" interest in his residence, as did his
spouse. In re Snyder, 231 B.R. 437, 442 (Bankr. D. Mass. 1999).
The court rejected Snyder's contention that his interest is no
more than half the value of the property. Id. at 443-44.
Noting that Snyder's interest in the property is "indeterminate"
until the tenancy is terminated, it entered a provisional order
premised on Snyder's interest being equal to the full value of
the property, allowing Snyder to avoid only a small portion of
the lien ($8,286.82). The court permitted the parties to
petition for reconsideration in the event that Snyder's tenancy
by the entirety is terminated. Id. at 445. Snyder filed a
motion to amend or alter the judgment, which the Bankruptcy
Court denied.
Next, Snyder appealed from the decision to the BAP.
The BAP held that Snyder's interest in the property, as a
tenancy by the entirety, was equal to its full market value. In
re Snyder, 249 B.R. 40, 46 (B.A.P. 1st Cir. 1999). It rejected
-3-
the provisional aspects of the Bankruptcy Court's decision,
ruling that the relevant analysis required a "summary proceeding
susceptible to a quick and binding resolution." The BAP also
ruled that the non-debtor spouse's homestead should not be taken
into account when determining whether a lien should be avoided
under 11 U.S.C. § 522(f).
II. Discussion
In In re Healthco Int'l, Inc., 132 F.3d 104 (1st Cir.
1997), we set forth the standard of review for appeals that come
to us by way of the BAP:
[W]e focus on the bankruptcy court's
decision, scrutinize that court's findings
of fact for clear error, and afford de novo
review to its conclusions of law. . . Since
this is exactly the same regimen that the
intermediate appellate tribunal must use, we
exhibit no particular deference to the
conclusions of that tribunal (be it the
district court or the BAP).
Id. at 107 (internal citation omitted). On appeal, Snyder
asserts that the courts below erred in concluding that his
interest in his residence was one hundred percent as of the
petition date, and that the BAP erred in disregarding his
spouse's homestead. We disagree.
First, we address Snyder's contention that his interest
in the property was fifty percent or less. The bankruptcy code
permits a debtor to avoid the fixing of a lien on a debtor's
-4-
interest in property only to the extent that the lien impairs an
exemption to which, but for the lien, the debtor would have been
entitled. 11 U.S.C. § 522(f). The code provides in relevant
part:
For the purposes of this subsection, a lien
shall be considered to impair an exemption
to the extent that the sum of--
(i) the lien,
(ii) all other liens on the property; and
(iii) the amount of the exemption that the
debtor could claim if there were no liens on
the property;
exceeds the value that the debtor's interest
in the property would have in the absence of
any liens.
11 U.S.C. § 522(f)(2)(A).
The sole dispute in this case involves the final
variable in the equation: the value of Snyder's interest in his
residence in the absence of any liens. The bankruptcy court, as
affirmed by the BAP, based the lien avoidance calculation on a
valuation of Snyder's interest in the property at one hundred
percent. It calculated as follows: the sum of Rockland's lien
($65,000.00), all other liens on the property ($166,536.82), and
the amount of the exemption ($15,750.00) is $247,286.82, which
exceeds the agreed value of the property ($239,000.00) by
$8,286.82. Snyder, 231 B.R. at 441 n.1. Hence, it permitted
Snyder to avoid the lien only to the extent of $8,286.82.
-5-
Snyder contends that if his interest is determined to
be fifty percent or less, he may avoid either the entirety of
the lien or at least a greater portion of the lien than was
permitted by the courts below.* He premises his argument on the
facts that he is male and older than his spouse, and hence will
likely predecease her. He urges us to adopt an "actuarial
approach" in which expert evidence of life expectancy should be
admitted and analyzed to determine his precise interest in his
residence.
Snyder waived this argument, however. At the hearing
on his Motion to Avoid Lien, the Bankruptcy Court asked him if
he wished to submit actuarial evidence; he declined, citing the
cost of expert testimony. We need not consider an issue so
explicitly abandoned below. Cf. Sheehan v. Marr, 207 F.3d 35,
42 (1st Cir. 2000).
Snyder contends that at the time of the hearing, a
recent Bankruptcy Court case indicated that even if his interest
was valued at fifty percent, he would be able to fully avoid the
lien. See In re Pascucci, 225 B.R. 25 (Bankr. D. Mass. 1998),
abrogated by Nelson v. Scala, 192 F.3d 32, 35 n. 3 (1st Cir.
1999) (pointing out the sparse and divided case law on point).
*These calculations do not include the effect of Snyder's
wife's homestead, which we address infra.
-6-
Therefore, he now argues, there was no need at that time to
introduce actuarial evidence that would have proved that his
interest was less than fifty percent. Given the then-unsettled
state of the case law and its uncertain applicability to this
matter, however, we are not convinced that Snyder should be
excused from deliberately forgoing his opportunity to present
that evidence. Moreover, Snyder has consistently advocated
using an actuarial analysis to determine that he had a fifty
percent (as opposed to a less-than-fifty-percent) interest in
the property, and makes no developed argument on appeal that his
interest should be calculated at fifty percent in the absence of
an actuarial approach.**
The second issue Snyder raises on appeal concerns the
impact of his spouse's homestead exemption on the lien
avoidance. On September 16, 1997, Snyder's spouse filed a
declaration of homestead with the Norfolk Registry of Deeds,
whereby an owner may obtain a $100,000.00 exemption for the
benefit of his or her family. Mass. Gen. Laws ch. 188, § 1.
Snyder now contends that this homestead exemption should be
**At oral argument, Snyder also challenged the decision of
the BAP to modify the Bankruptcy Court's provisional order and
to fix the debtor's interest at one hundred percent. However,
as this issue was not well briefed, it is waived. Further,
while the Bankruptcy Court's approach was thoughtful and
creative, we agree with the BAP's decision to reject the
provisional aspect of the order.
-7-
factored into the valuation of his interest in the property
under 11 U.S.C. § 522(f).
It appears that Snyder did not make this argument to
the Bankruptcy Court until his motion to amend or alter the
judgment, although he had appended schedules referencing his
spouse's declaration of homestead to his Motion to Avoid Lien.
Accordingly, the Bankruptcy Court did not address the homestead
issue in its opinion. It is well-established that a party
cannot raise an issue for the first time on a motion to amend a
judgment. See F.D.I.C. v. World Univ. Inc., 978 F.2d 10, 16
(1st Cir. 1992).
In any event, we agree with the BAP's conclusion that
"[o]n the facts of this case, the spouse's homestead election is
not part of the equation under section 522(f)." Snyder, 249
B.R. at 47. Section 522(b) of the bankruptcy code requires the
debtor to elect either the federal exemptions or the state
exemptions. Here, Snyder elected the federal exemptions, which,
for purposes of this appeal, constituted a fixed amount of
$15,750.00. 11 U.S.C. § 522(d)(1). The section on which Snyder
relies, § 522(f)(2)(A), pertains here only to liens and federal
exemptions; we have found no authority suggesting that a
spouse's homestead election falls into either of these
categories.
-8-
Affirmed.
-9-