Memorandum of Decision Re: Statutory Lien

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Decisions
IN THE UNITED STATES BANKRUPTCY COURT FOR THE NORTHERN DISTRICT OF CALIFORNIA
In re PAUL and JANET HOLMES,                                                                       No. 94-11666                                                                                                                         A.L. #96-191        Debtor. ___________________________/
Memorandum
     Pursuant to federal criminal proceedings, the debtors owe a restitution judgment of $190,712.00. Pursuant to 18 U.S.C. section 3613(a), when a Notice of Lien for Fine is recorded it is treated as a lien for taxes for the purpose of any State or local law providing for the filing of a tax lien. Debtors Paul and Janet Holmes seek to avoid the lien as to their home pursuant to section 522(f) of the Bankruptcy Code. The United States objects.      Section 522(f)(1) allows a debtor to avoid any judgment lien on exempt property. There is no exception for liens arising out of dishonest conduct, and no requirement that the underlying debt be dischargeable. In re Ewiak, 75 B.R. 211 (Bkrtcy.W.D.Pa.1987).      The United States relies heavily on 18 U.S.C. section 3613(f), which provides:        No discharge of debts pursuant to a bankruptcy        proceeding shall render a lien under this section        unenforceable or discharge liability to pay a fine.      However, this section is not relevant because no discharge of debts is involved. The debt is clearly not discharged pursuant to section 1328(a)(3) of the Code. However, as noted above, there is no requirement in section 522(f) that the underlying debt be dischargeable.      The real issue here is whether the lien in question is a statutory lien or a judgment lien. If the former, it is not avoidable; if the latter, it is avoidable to the extent it impairs an exemption. Both terms are defined by statute.      Section 101(36) of the Code provides that the term "judicial lien" means lien obtained by judgment, levy, sequestration, or other legal or equitable process or proceeding. Section 101(53) provides, in pertinent part:        "statutory lien" means lien arising solely by force        of statute on specified circumstances . . . but does         not include security interest or judicial lien whether        or not such interest or lien is provided by or is depen-        dent on a statute and whether or not such interest is        made fully effective by statute[.][emphasis added]      The definition of "statutory lien" by express terms excludes a judgment lien; if a lien is a judgment lien, it cannot be a statutory lien even if a statute makes the lien effective. The lien in this case was the result of a judgment in a criminal case. It is accordingly a judgment lien, and cannot be considered a statutory lien even though 18 U.S.C. section 3613(a) makes it effective.      The court is not swayed by the argument of the United States that 18 U.S.C section 3613(d) has transmuted the lien in question from a judgment lien to a tax lien. That section provides, in pertinent part, that "[a] notice of the lien imposed by subsection (a) shall be considered a notice of lien for taxes payable to the United States for the purposes of any State or local law providing for the filing of a notice of tax lien." This statute merely provides that local governments must record the lien in the same manner as a tax lien, not that the lien is a tax lien. Even if such a transmutation were intended, a statute cannot, by definition, change a judgment lien into something else.      For the foregoing reasons, the debtors' motion will be granted. Counsel for the debtor shall submit an appropriate form of order.
Dated: March 10, 1997                                                                       _______________________                                                                                                            Alan Jaroslovsky                                                                                                            U.S. Bankruptcy