Case Law Summaries

Lever v. Thomas

• Opinion Date: April 26, 2001
• Real Property Law
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JUDGMENTS—Even though a judgment debtor no longer owns a particular parcel, the debtor has standing to have a judgment lien removed of record more than one year after the debtor’s discharge in bankruptcy.

An individual who was severely injured in an accident obtained a default judgment. Thereafter, a writ of execution was issued. For some unknown reason, the individual did not levy on the judgment debtor’s real property, including a marital residence; however, the judgment still constituted a lien on the property. Thereafter, the defendant and his wife filed a Chapter 7 bankruptcy petition. The marital property was eventually conveyed to the judgment debtor’s daughter. Almost twenty years after the writ of execution was issued, the injured individual obtained an order allowing execution against the property. Thereafter, the judgment debtor obtained an order to show cause why the lien on the property should not be removed pursuant to N.J.S. 2A:16-49.1. The lower court canceled and discharged the judgment of record. The injured individual appealed, arguing that the judgment debtor did not have standing to utilize N.J.S. 2A:16-49.1 because he no longer owned the property, reasoning that he no longer had a financial stake in the property. The Appellate Division recognized that the statute, by its terms, allows an application for such relief with the limitation that it be brought not earlier than one year after a discharge in bankruptcy. The Court also concluded that the judgment debtor had “sufficient interest to vacate the judgment if for no other reason than to preclude the judgment from attaching or appearing to attach as a matter of record, to property acquired after [his] discharge in bankruptcy. Moreover, the judgment appearing as a matter of record, potentially impaired [his] credit rating.” On these bases, the Court reasoned that the judgment debtor “had every right to avail himself of the post-bankruptcy housecleaning provided by N.J.S. 2A:16-49.1.”

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