In re: Jerrold Bruce Carrington

United States Court of Appeals
For the Seventh Circuit
Chicago, Illinois 60604
Submitted October 30, 2024*
Decided October 31, 2024
Before
ILANA DIAMOND ROVNER, Circuit Judge
MICHAEL Y. SCUDDER, Circuit Judge
JOSHUA P. KOLAR, Circuit Judge
No. 24-1400
In re JERROLD BRUCE CARRINGTON,
Debtor-Appellee,
Appeal of ALBERT DAVIS and A. F.
DAVIS LAW,
Creditors-Appellants.
Appeal from the United States District
Court for the Northern District of
Indiana, Hammond Division.
No. 2:23cv129-PPS
Philip P. Simon,
Judge.
O R D E R
A bankruptcy court ruled that a creditor could not enforce its judgment lien
against the debtor, Jerrold Carrington, on a home that Carrington owned with his
spouse as tenants by the entirety. It reasoned that Indiana law exempts from the
bankruptcy estate any interest held as a tenant by the entirety, unless—as is not the case
* Debtor-appellee Jerrold Bruce Carrington has notified us that he is not filing a
brief in this appeal. After examining the creditors’-appellants’ brief and the record, we
have concluded that the case is appropriate for summary disposition. F ED. R. A PP .
P. 34(a)(2)(C).
NONPRECEDENTIAL DISPOSITION
To be cited only in accordance with F ED. R. APP . P. 32.1

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No. 24-1400 Page 2
here—the spouses are jointly liable for the debt. The district court affirmed. Because the
creditor (the appellant here) cannot reach Carrington’s exempted interest, we affirm.
This dispute arose after two creditors (Albert Davis and his law firm; together we
call them Davis) obtained a judgment against Carrington in California. Carrington
failed to pay that judgment, and Davis recorded it in Lake County, Indiana, against
Carrington’s interest in his marital home. Four years later, in 2017, Carrington filed for
bankruptcy. Davis filed a creditor’s claim in the bankruptcy court, listing the claim as
secured by the judgment lien recorded in Indiana against the marital home.
Carrington objected to the claim with two arguments. First, he asserted that the
lien was unsecured because the property was held in a tenancy by the entirety, and
Davis had recorded the lien against only Carrington. Under common law, “the
marriage” held title to that property, and one spouse cannot individually encumber
such property. See, e.g., United States v. Craft, 535 U.S. 274, 279–281 (2002). Without
recording the lien against both spouses, Carrington continued, Davis could not
encumber the property based on Carrington’s debt alone. (Carrington did not say
whether Davis even could have recorded the lien against both spouses, given that Davis
sued Carrington alone.) Moreover, Carrington added, he had only a contingent future
interest in the home that vested only if his wife died or divorced him, and a creditor
cannot secure a lien on a future interest. Second, he argued that, even if the lien were
secured against his interest in the home, he could avoid it under Indiana’s bankruptcy
exemption law, which exempts “any interest” held as a tenant by the entirety.
These two arguments have been contested vigorously. The bankruptcy court
accepted Carrington’s first argument that the claim was unsecured because the lien had
not been recorded against both spouses and a creditor cannot enforce a lien on a future
contingent interest. Davis appealed, 28 U.S.C. § 158(a)(1), and District Judge Brady
reversed. She reasoned that by recording the lien, Davis secured it against Carrington’s
future interest; thus, the bankruptcy court had to address Carrington’s second
argument about Indiana’s exemption statute. On remand, Carrington moved to avoid
the lien under Indiana Code § 34-55-10-2(c)(5). This provision exempts from the
bankruptcy estate “any interest” a debtor has in real estate held as a tenant by the
entirety, except debts for which the debtor and the debtor’s spouse are jointly liable.
(Many states provide such exemptions to protect both spouses, debtor and non-debtor,
from losing their home during bankruptcy proceedings, except when both spouses are
jointly liable for the debt. See, e.g., Matter of Hunter, 122 B.R. 349, 352–54
(Bankr. N.D. Ind. 1990).) The bankruptcy court granted Carrington’s motion. Davis

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No. 24-1400 Page 3
again appealed to the district court, and this time District Judge Simon affirmed. He
disagreed with Judge Brady’s rejection of Carrington’s first argument that the lien was
unsecured. Regardless, he agreed with the bankruptcy court’s ruling that even if
secured, Carrington could avoid the lien based on the exemption under
§ 34-55-10-2(c)(5).
On appeal, Davis maintains that, first, he secured a judicial lien on Carrington’s
contingent future interest in the marital property and, second, the lien is not exempt
from the bankruptcy estate. On the first point, Davis insists that Judge Simon abused his
discretion under the law-of-the-case doctrine by deciding, in reviewing Judge Brady’s
ruling, that the lien was unsecured.
We need not decide whether Judge Simon abused his discretion because, under
Indiana’s exemption statute, Davis cannot prevail. Relying on In re Marino, 27 B.R. 282
(Bankr. N.D. Ind. 1983), Davis contends that Carrington’s interest is not exempt from
the bankruptcy estate. Marino rejected the argument that a bankruptcy debtor may
avoid a judicial lien against a tenancy by the entirety when, as here, the debtor’s spouse
has not jointly filed for bankruptcy. See id. at 283. But courts have largely disregarded
this viewpoint ever since we decided Matter of Paeplow, 972 F.2d 730, 736–37 (7th Cir.
1992). In Paeplow, we clarified that the Indiana exemption statute provides “a blanket
exemption for entirety property in the bankruptcy context,” id. at 737, protecting such
property from creditors (like Davis) who hold debts against just one spouse as well as
creditors to whom both spouses are jointly indebted. Thus, even if the lien is secured
and regardless of the absence of Carrington’s spouse from bankruptcy, the bankruptcy
court properly avoided the lien under § 34-55-10-2(c)(5).
Davis replies that he is pursuing only Carrington’s individual future interest in
the property, not the “whole of that property itself.” But Paeplow rejects the notion that
Indiana’s exemption law does not reach a spouse’s individual interest in entirety
property: “Under current Indiana law, a debtor in bankruptcy has a sufficient
individual interest in entirety property to bring that property into the bankruptcy
estate.” Paeplow, 972 F.2d at 736–37. With the “entirety property” in the bankruptcy
estate, Carrington’s individual interest in it is also exempt from the estate. Id. at 737;
I ND. C ODE § 34-55-10-2(c)(5) (2021).
AFFIRMED

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