Greenfield v. Sheley (In re Greenfield)

NOT FOR PUBLICATION

Appeal from the United States Bankruptcy Court for the District of Idaho Noah G. Hillen, Bankruptcy Judge, Presiding

Before: SPRAKER, FARIS, and BRAND, Bankruptcy Judges.

MEMORANDUM ^[*]

INTRODUCTION

Debtor Christina Greenfield and creditors Eric and Rosalynd Wurmlinger are former neighbors who have been fighting with each other

for over a decade. The dispute escalated into a state court lawsuit that resulted in a judgment in favor of the Wurmlingers. That judgment has been amended from time to time as the state court awarded the Wurmlingers their costs and attorney's fees incurred in the trial court and on appeal. The Wurmlingers have recorded each version of their judgment in the county where Greenfield resided, thereby giving them a judgment lien against her residence.

In her bankruptcy case, Greenfield objected to the Wurmlingers' claim, primarily arguing that the Wurmlingers had not timely or properly renewed their judgment. But the bankruptcy court overruled her objection on the merits. It ruled in the alternative that Greenfield lacked standing to object to any claims because the estate was insolvent. Though Greenfield contends that her estate is solvent, the record does not support her contention. To the contrary, the amount of estate expenses and creditors' claims exceeds the amount of funds available for distribution to such an extent that Greenfield has not established that she has been injured by the order appealed. Accordingly, we DISMISS for lack of standing.

FACTS^[1]

In December 2019, Greenfield commenced her chapter 7^[2] case. In her initial schedules, she listed her residence as an asset, and disclosed a

mortgage. Greenfield claimed a homestead exemption in the amount of $100, 000 in her residence.

The Wurmlingers timely filed a proof of claim for $261, 083.21, including interest. They identified $170, 000.00 of that amount as secured and the remaining $91, 083.21 as unsecured based on a valuation of Greenfield's residence at $400, 000.00 They also attached to their claim an itemization, describing the judgments entered in their favor against Greenfield beginning with a $103, 000.00 judgment dated March 26, 2013, which accrued interest at 5.250% per annum. ("Original Judgment"). The Wurmlingers calculated the accrued interest through the petition date, on the principal amount of the judgment, to be $36, 326.55. The state court entered a first amended judgment ("First Amended Judgment") dated July 8, 2013, adding $65, 755.37 in costs and attorney's fees to the Original Judgment. According to the proof of claim itemization, the Wurmlingers calculated that the trial costs and fees accrued $22, 207.30 in prepetition interest at the statutory rate of 5.250% from the date of the First Amended Judgment to the bankruptcy filing. After Greenfield lost her appeal from the Original Judgment, the state court entered a separate judgment for appellate fees and costs dated July 22, 2015, adding $27, 582.00 in costs and attorney's fees. The Wurmlingers stated that the appellate fees and costs accrued $6, 212.00 in prepetition interest at the statutory rate of 5.125% from the date of this judgment to the date of the bankruptcy filing ("Appellate

Fees and Costs Judgment"). Finally, on September 20, 2015, the state court entered its Second Amended Judgment to incorporate the monetary awards from the Original Judgment, the First Amended Judgment, and the Appellate Fees and Costs Judgment ("Second Amended Judgment").

The Wurmlingers recorded each of the judgments in Kootenai County, where Greenfield resided.

In November 2017, the Wurmlingers moved to renew their judgment against Greenfield. Shortly thereafter, the state court entered its "Order Renewing Judgment," which stated that "the Judgment entered in this case on March 26, 2013 [the Original Judgment] is renewed" ("Renewal Order"). The Wurmlingers eventually recorded the Renewal Order with the Kootenai County Recorder on September 4, 2018.

In May 2020, the bankruptcy court...