In re McLauchlanAnnotate this Case
The Supreme Court held that a recorded judgment lien attaches to homestead property where the judgment debtor has equity in excess of the amount exempt under Arizona law.
Pacific Western Bank (PWB) obtained a California judgment against Todd McLauchlan that was domesticated and recorded in Arizona. McLauchlan later filed a Chapter 7 bankruptcy petition identifying an ownership interest in a residence and claiming the statutory homestead exemption in the residence. PWB filed a proof of claim, $552,497 of which was secured by the recorded judgment lien. The remaining $115,985 was unsecured. After McLauchlan received his discharge he sold the residence and realized $56,852 in excess of the $150,000 homestead exemption. PWB filed a motion seeking a determination that McLauchlan's bankruptcy discharge did not affect its interest secured by its recorded judgment. At issue was whether, under Ariz. Rev. Stat. 33-964(B), judgment liens attach to homestead property. The Supreme Court answered in the affirmative.