PRECEDENTIAL

        UNITED STATES COURT OF APPEALS
             FOR THE THIRD CIRCUIT
                  ____________

                       No. 13-3469
                      ____________


              In re: KELLY L. MAKOWKA,

                                     Appellant
                      ____________

      On Appeal from the United States District Court
          for the Middle District of Pennsylvania
                 (D.C. No. 3-12-cv-02232)
       District Judge: Honorable Robert D. Mariani
                      ____________

        Submitted Under Third Circuit LAR 34.1(a)
                     May 27, 2014

            Before: HARDIMAN, SLOVITER
               and BARRY, Circuit Judges.

              (Opinion Filed: June 9, 2014)

J. Zac Christman
Newman, Williams, Mishkin, Corveleyn, Wolfe & Fareri
712 Monroe Street
P.O. Box 511
Stroudsburg, PA 18360
      Attorney for Debtor-Appellant

Gino L. Andreuzzi
518 Alter Street
Hazleton, PA 18201
      Attorney for Defendant-Appellee

Charles J. DeHart, III
P.O. Box 410
Hummelstown, PA 17036
      Chapter 13 Trustee
                       ____________

                         OPINION
                       ____________

HARDIMAN, Circuit Judge.

       This appeal requires us to interpret a state statute—the
Pennsylvania Uniform Planned Community Act (UPCA), 68
Pa. Cons. Stat. §§ 5101–414—in the bankruptcy context.
Appellant Kelly Makowka seeks in Chapter 13 proceedings to
avoid a portion of claims made by her homeowners
association, Pocono Mountain Lake Estates Community
Association (the Association). The Bankruptcy Court, in an
order affirmed by the District Court, held that the Association
had a valid statutory lien on Makowka’s residence pursuant to
the UPCA, which the Association had enforced by obtaining
judgments in debt against Makowka in state court. For the
reasons that follow, we will vacate the District Court’s
judgment and remand for further proceedings.




                              2
                              I

       Makowka owns a home in Pocono Mountain Lake
Estates in Pike County, Pennsylvania, a planned community
as defined under the UPCA. In 2005, she fell behind on her
homeowners association dues, which began to accrue late
charges. In April 2008, the Association sued Makowka in the
Pike County Magisterial District Court to collect a portion of
the unpaid dues and obtained a default judgment of
$2,436.70. As additional dues went unpaid, the Association
sued Makowka again in April 2010 and obtained another
default judgment, this time worth $3,599.08. Both judgments
were transferred to the Court of Common Pleas of Pike
County, which issued a writ of execution and attachment.
Pursuant to that writ, a sheriff’s sale of Makowka’s property
was scheduled for September 14, 2011.

       Two days before the sheriff’s sale, Makowka filed a
Chapter 13 petition in the United States Bankruptcy Court for
the Middle District of Pennsylvania. In her proposed
bankruptcy plan, 1 Makowka moved to avoid the
Association’s claims under 11 U.S.C.         § 522(f), which
releases a debtor from obligations imposed by judicial liens

      1
        Makowka proposed two bankruptcy plans that were
rejected by the Bankruptcy Court before submitting her
Second Amended Plan, which is the subject of this appeal.
While this appeal was pending, Makowka proposed two
amended plans. The Fourth Amended Plan is awaiting
approval by the Bankruptcy Court and presumes that
Makowka’s appeal to this Court is successful. The
Bankruptcy Court has stayed proceedings pending the
outcome of this appeal.




                              3
(i.e., money judgments) as well as non-possessory, non-
purchase money security interests. Although Makowka
acknowledged that Section 5315 of the UPCA granted the
Association a self-executing statutory lien on her residence in
the amount of the unpaid dues, she claimed that a portion of
that lien had been extinguished by law because the
Association had failed to foreclose on the lien within the
statutory period of three years. Therefore, to the extent the
Association’s claims represented fees due before September
12, 2008, i.e., three years before the date of her bankruptcy
petition, Makowka contended that the Association had
obtained dischargeable money judgments.

       The Bankruptcy Court denied Makowka’s motion,
ruling that the Association had preserved its statutory lien. In
an oral opinion, the Bankruptcy Court noted that it was
“bound by Pennsylvania [a]ppellate decisions construing” the
UPCA. These included the Pennsylvania Superior Court’s
decision in Forest Highlands Community Association v.
Hammer, 

(Pa. Super. Ct. 2006), which the
Bankruptcy Court read to enable “an association . . . [to]
perfect or enforce the lien for the unpaid assessments in a
variety of manners, . . . [including] an action in debt.” App. at
56 (discussing 

). The Bankruptcy
Court also opined that a foreclosure action would be “odd” in
the UPCA context, as the Association did not hold a mortgage
upon which it could foreclose. It thus “reject[ed] the debtor’s
argument that the mortgage foreclosure action would be the
exclusive remedy.” 

result, the Bankruptcy Court
allowed the Association’s unavoidable claim of $7,835.82,
which represented the value of the money judgments, accrued
unpaid debts, and interest at the time of the order. Makowka
moved for reconsideration. When that motion was denied, she




                               4
timely appealed to the United States District Court for the
Middle District of Pennsylvania.

       The District Court affirmed. Turning first to the text of
Section 5315, the District Court agreed that it supported
Makowka’s position that foreclosure was the exclusive
method to enforce the statutory lien. After noting that the
Pennsylvania Supreme Court had not yet addressed the
question on appeal, the Court considered the relevant state
intermediate      court      decisions—the       Pennsylvania
Commonwealth Court’s decision in London Towne
Homeowners Association v. Karr, 

(Pa.
Commw. Ct. 2004), and the Pennsylvania Superior Court’s
decision in Hammer—for guidance as to how the
Pennsylvania Supreme Court would rule.

       The District Court adopted a narrow interpretation of
Karr, reading the opinion to hold “that while an association
may pursue an action in debt or contract against a tenant
under 5315(f) to recover sums under a lien, ‘[t]he first step to
enforcing an assessment lien is the filing of a foreclosure
complaint.’” App. at 6 (quoting 

)
(emphasis in original). It then found that Hammer
“expand[ed] upon the rationale of Karr” and “clearly held
that by filing an action in debt or contract, an association was
enforcing its lien under the UPCA.” App. at 7 (discussing

). The District Court criticized the
Superior Court’s decision, opining:

       The Hammer court, in holding that the action in
       debt to collect unpaid assessments . . . satisfied
       the [enforcement] requirement in Section
       5315(e) . . . ignored the well-established and
       fundamental distinction between proceedings in



                               5
       rem and those brought in personam. It is
       difficult for this Court to understand how an
       action brought under Section 5315(f) “to
       recover sums for which subsection (a) creates a
       lien” can be considered a “proceeding[] to
       enforce the lien” for those unpaid assessments.

App. at 8. Despite its disapproval, the District Court thought
it bound by Hammer because the decision “presents the latest
and most definitive ruling by the intermediate courts of
Pennsylvania with respect to the interpretation of Section
5315.” 

issue before this Court is
unquestionably a matter of Pennsylvania law, it will give
Hammer the binding effect that it must.” 

For that reason alone, the District Court predicted that
“[b]ecause the Pennsylvania Superior Court was clear in its
holding and there appears to be no authority contrary to
Hammer,” the Pennsylvania Supreme Court would not
overturn Hammer. App. at 8 n.5.

        Following the District Court’s order, Makowka filed
this timely appeal.

                               II

      The Bankruptcy Court had jurisdiction pursuant to 28
U.S.C. § 1334, and the District Court reviewed the
Bankruptcy Court’s order under 28 U.S.C. § 158(a)(1). We
have jurisdiction over this appeal pursuant to 28 U.S.C. §§
158(d) and 1291.

      Because the District Court sat as an appellate court
reviewing the Bankruptcy Court’s order, we exercise plenary
review over its decision. In re Continental Airlines, 

120, 128 (3d Cir. 1997). Like the District Court, we review
the Bankruptcy Court’s legal determinations—such as the
matter of statutory interpretation before us—de novo. See In
re Heritage Highgate, Inc., 

, 139 (3d Cir. 2012).

                              III

       Under the UPCA, an “association has a lien on a unit
for any assessment levied against that unit or fines imposed
against its unit owner from the time the assessment or fine
becomes due. The association’s lien may be foreclosed in a
like manner as a mortgage on real estate.” 68 Pa. Cons. Stat. §
5315(a). The lien does not exist in perpetuity, however,
because the statute provides that “[a] lien for unpaid
assessments is extinguished unless proceedings to enforce the
lien are instituted within three years after the assessments
become payable.” 

Even if the lien is
extinguished, “[n]othing in [Section 5315] shall be construed
to prohibit actions or suits to recover sums for which
subsection (a) creates a lien or to prohibit an association from
taking a deed in lieu of foreclosure.” 

        The question sub judice is whether the Association
enforced its statutory lien against Makowka when it sued her
in debt. The parties agree that Makowka’s unpaid dues gave
rise to a self-executing lien, and that the lien would have been
extinguished by law absent any action by the Association
within three years. But they disagree as to what actions
qualify as “proceedings to enforce the lien” under subsection
(e) of the statute. Makowka contends that there is only one
way to enforce the lien: by filing a foreclosure complaint. If
she is correct, she is subject only to the portion of the
Association’s lien for unpaid dues that has not been
extinguished—namely, for the fees that came due after



                               7
September 12, 2008, three years before her Chapter 13
petition was filed. The Association, in contrast, argues that
the UPCA permits multiple methods of enforcement under
subsection (e). If that is so, its state court actions tolled the
extinguishment period, and it holds a statutory lien for the
total sum of the unpaid dues, plus late fees and interest.

                               A

        We begin by noting that although the issue on appeal
is a matter of state law, it has practical import in bankruptcy.
As the Association correctly notes, an action to enforce the
statutory lien through foreclosure generally has the same
effect as a judgment in debt or contract, insofar as both enable
an association to collect unpaid dues from a delinquent
homeowner. In bankruptcy, however, the debtor may modify
her obligations for certain categories of claims. In this
context, the often inconsequential distinction between
enforcement and alternate remedies under Section 5315
determines whether an association may retain an unavoidable
lien on its resident’s property or has a mere unsecured claim
against her—the difference, as the parties here recognize,
between potential payment and nonpayment. Given the
significance of this state-law question in bankruptcy, we find
it appropriate to resolve it here.

       As the District Court noted, the Pennsylvania Supreme
Court has not yet spoken to the issue presented in this case;
therefore, “we must attempt to predict how that tribunal
would rule.” U.S. Underwriters Ins. Co. v. Liberty Mut. Ins.
Co., 

, 93 (3d Cir. 1996). In doing so, we give due
deference to the decisions of intermediate state courts. See 

v. Transp. Ins. Co., 

, 322 (3d
Cir. 1995)). State appellate decisions, however, are not



                               8
controlling: “while we may not ignore the decision of an
intermediate appellate court, we are free to reach a contrary
result if, by analyzing other persuasive data, we predict that
the State Supreme Court would hold otherwise.” Gruber v.
Owens-Illinois Inc., 

, 1369 (3d Cir. 1990)
(alterations, internal quotation marks, and citation omitted).
Such persuasive data may include, inter alia, “what the
Pennsylvania Supreme Court has said in related areas” and
“the ‘decisional law’ of the Pennsylvania intermediate
courts.” 

        Our precedent, therefore, is clear that a federal court
interpreting state law may discount state appellate decisions it
finds flawed, if it predicts the state supreme court would
reach a contrary result. Here, the District Court properly
considered the relevant decisions from intermediate courts of
equal authority: the Commonwealth Court’s opinion in Karr
and the Superior Court’s opinion in Hammer. But it
improperly concluded that Hammer had “binding effect”
merely because the case “presents the latest and most
definitive ruling by the intermediate courts” on the
interpretation of Section 5315. See App. at 8. Because it was
not, in fact, bound by a decision of the intermediate appellate
court, the District Court gave Hammer too much weight,
particularly in light of its own cogent critique of the Superior
Court’s analysis.

       Consistent with the District Court’s concerns, we
decline to adopt Hammer because it is internally inconsistent,
it conflicts with the text and structure of Section 5315, and it
contravenes a fundamental precept of Pennsylvania law. We
adhere instead to the more persuasive analysis presented by
the Commonwealth Court in Karr. Accordingly, we predict
that the Pennsylvania Supreme Court would hold that an



                               9
action in debt does not constitute a proper method to enforce
a statutory lien under the UPCA, and that Makowka may
avoid the Association’s claims in bankruptcy.

                               B

       In Karr, a homeowners association sought to collect
unpaid dues from a resident by recording a second lien
against his property, and the resident moved to strike this
second 

–50. The Commonwealth Court,
following a close reading of Section 5315, held that the
association’s second lien was invalid. In her opinion for the
Court, Judge Leavitt explained the distinction between
“proceedings to enforce”—namely, a foreclosure action—and
other remedies to collect. 

She wrote that
“[e]nforcement of an association lien is directly addressed in
the Act” by subsection (a): “The association’s lien may be
foreclosed in a like manner as a mortgage on real estate.” 

(emphasis in original removed). This, however, did
not preclude other remedies: “an association may also pursue
payment of unpaid assessments by employing remedies less
drastic than foreclosure. It is free, for example, to bring an
action in debt or in contract to collect an assessment.
Subsection (f) provides for such remedies. . . .” 

(emphasis added).

        Having distinguished methods to enforce the lien,
which are described in subsection (a), and alternative
remedies, which are preserved in subsection (f), the Karr
court held that the association’s second lien “did not advance
[its] enforcement of its [statutory] lien by foreclosure in ‘like
manner as a mortgage on real estate.’” 

Pa.
Cons. Stat. § 5315(a)). Rather, it found that an association
seeking to enforce its lien had to “strictly follow[]” the



                               10
procedural requirements of Pennsylvania Rules of Civil
Procedure 1141–50, which govern mortgage foreclosure
actions. 

rules require a claimant to include
information specific to a mortgage, the Karr court instructed,
the association could substitute the UPCA’s analogues: for
example, the association could point to the deed giving rise to
the UPCA lien (termed the “UPCA declaration”) in lieu of the
mortgage. 2 

first step to enforcing an
assessment lien is the filing of a foreclosure complaint.” 

(quoting Pa. Cons. Stat. § 5315(a)).

       The Superior Court’s decision in Hammer purported to
adhere to Karr’s reasoning, but expanded without explanation
an association’s available methods of enforcement to include
actions in debt and contract. There, the homeowners
association attempted to execute a sheriff’s sale on its
resident’s property to collect unpaid dues; the association
argued that its perfected lien pursuant to the UPCA obviated
the need to file a complaint. 

,
1239. In response, the resident moved to set aside the
association’s writ of execution because she had not received
notice of the lien. 

The Hammer court found for
the resident after phrasing the dispositive question thusly:
“whether instigating a sheriff’s sale perfects an already
perfected assessment lien and substantially complies with the
requirements of [the] UPCA to allow enforcement of [the
association’s] assessment lien.” 

(internal quotation
marks omitted).

       2
        For this reason, irrespective of the validity of the
Bankruptcy Court’s observation that foreclosure would be an
“odd procedural mechanism,” we find it consistent with the
language of the UPCA. See App. at 56.




                               11
        The Superior Court answered in the negative. The
association’s failure to file suit, it held, violated the resident’s
due process rights: “institut[ing] suit by mortgage foreclosure
or fil[ing] an action in debt or contract . . . provide[s] [the
resident] with ‘notice’ of the debt . . . and/or a means to deny
liability.” 

The court also found support in Section
5315, borrowing heavily from the Commonwealth Court’s
analysis in Karr. At first, its reasoning mirrored the prior
decision:

       Enforcement of an association lien is directly
       addressed by [the] UPCA, which states, as
       herein relevant: “The association’s lien may be
       foreclosed in a like manner as a mortgage on
       real estate.” . . . [A]n association is not
       precluded from pursuing other avenues to
       obtain payment of assessments less drastic than
       foreclosure. For example, an association can
       avail itself of an action in debt or in contract to
       collect an assessment. Subsection (f) of the
       UPCA provides support for such alternative
       remedies . . . .

–40 (citations omitted) (emphasis in original).
Accordingly, Hammer concluded that the association’s
judicial sale did not constitute enforcement of its assessment
lien “by foreclosure in ‘like manner as a mortgage on real
estate.’” 

Like Karr, Hammer initially
distinguished the enforcement mechanism provided in
subsection (a)—foreclosure—from the “other avenues to
obtain payment of assessments” in subsection (f). See 

took, in our view, a wrong turn by
conflating the association’s ability to enforce with its



                                12
remedies to collect:

       [E]xpanding upon the rationale of Karr, we
       hold that [the association] seeking a judicial
       sale as the vehicle to secure payment of its
       assessment lien did not equate with the
       approved enforcement mechanism to collect an
       assessment lien by an association’s action in
       mortgage foreclosure, action in debt or contract.

The Superior Court then buttressed this
conclusion with an improper insertion into Karr’s holding:
“[t]he first step to enforcing an assessment is the filing of a
foreclosure complaint[, action in debt or contract].” 

(alteration in original); but cf. 

(“The first step to enforcing an assessment lien is the filing of
a foreclosure complaint.”).

                               C

        In predicting whether the Pennsylvania Supreme Court
would adopt Karr or the later decision in Hammer, we turn
first to the language and structure of Section 5315. Under
Pennsylvania law, statutory liens such as that provided by
Section 5315 are construed strictly because they are an
“extraordinary remedy” “which is more expeditious and
advantageous . . . when compared to a breach of contract
judgment.” Phila. Constr. Servcs., LLC v. Domb, 

, 1267, 1268 (Pa. Super. Ct. 2006); see also Murray v.
Zemon, 

, 255 (Pa. 1960) (mechanics’ liens are
available only on such terms as the legislature sees fit to
provide). Thus, “[t]he character, operation and extent of the
lien must be ascertained from the terms of the statute which
creates and defines it, and the lien will extend . . . only where



                               13
there has been at least a substantial compliance with all the
statutory requirements.” United States v. Beaver Run Coal
Co., 

, 612 (3d Cir. 1938).

        The Commonwealth Court’s analysis in Karr comports
with the text and structure of the statute at issue. Section 5315
draws a clear distinction between subsection (e)’s
“proceedings to enforce” the statutory lien on the one hand
and the pursuit of “[o]ther remedies” in subsection (f) on the
other hand. Subsections (a) and (e) define the creation and
expiration of the statutory lien as follows: “the association has
a lien . . . [when] the assessment or fine becomes due”; this
“lien may be foreclosed in a like manner as a mortgage on
real estate”; and the “lien . . . is extinguished unless
proceedings to enforce the lien are instituted within three
years.” 68 Pa. Cons. Stat. § 5315(a), (e) (emphasis added). As
the Commonwealth Court noted in Karr, the statute explicitly
provides for enforcement by “foreclos[ure] in a like manner
as a mortgage on real estate”; thus, one may enforce the
statutory lien by filing an action in foreclosure. 

(quoting 68 Pa. Cons. Stat. § 5315(a)).

       In contrast to subsections (a) and (e), subsection (f) is
concerned not with the lien itself but with the “sums for
which subsection (a) creates a lien.” 68 Pa. Cons. Stat.       §
5315(f) (emphasis added). This shift in word choice
demonstrates that actions in debt or contract provide an
alternative recourse from the lien created by the provision,
and do not constitute “proceedings to enforce the lien.” In the
words of the statute, they are the “[o]ther remedies” available
at common law explicitly “preserved” by the statute. 

Karr court reasoned, an association need not take drastic
action to collect on its association dues, as remedies exist “in
lieu of foreclosure”: for example, the “actions or suits to



                               14
recover sums” and “taking a deed” described in subsection

(quoting 68 Pa. Cons. Stat. § 5315(f)).
But these methods of collection create only an in personam
judgment against the debtor, and have no bearing on the in
rem lien on the resident’s property. 3

       In response, the Association notes that subsection (a)
provides that the lien “may . . . foreclose[] in a like manner as
a mortgage on real estate,” arguing that this permissive
language gives it multiple methods of enforcement. But this
case does not require us to determine whether foreclosure is
the exclusive means to enforce the lien, as Makowka
contends. Rather, we must decide only whether actions in
debt are a valid way to enforce the statutory lien—and the
language of Section 5315(f), which explicitly defines actions
in debt as an alternative to the lien created by the statute,
suggests not.

       3
          Because Section 5315 provides for enforcement by
foreclosure, it is unsurprising that the preservation of
alternative remedies in Section 5315 has a close analogue in
the mortgage foreclosure context. As the District Court
succinctly noted:
       [I]t appears to this Court that subsection (f)
       permits an action on the debt underlying the lien
       in the same way that a mortgagee may choose
       to proceed upon a promissory note given by a
       mortgagor to obtain a judgment in personam
       rather than initiate in rem mortgage foreclosure
       proceedings.
App. at 8.




                               15
        Nor are we persuaded that other provisions of the
UPCA militate in favor of a broader reading of “proceedings
to enforce.” The Association contends that the term should be
liberally construed to give effect to Section 5114 of the
UPCA, which states: “[t]he remedies provided by [the UPCA]
shall be liberally administered to the end that the aggrieved
party is put in as good a position as if the other party had fully
performed.” 68 Pa. Cons. Stat. § 5114(a). But Section 5114 is
inapplicable to the enforcement of the statutory lien, speaking
only as it does to an association’s remedies for payment.
Indeed, a restrictive interpretation of Section 5315(a), which
creates the lien and defines its enforcement, has no effect on
the availability of other methods of recovery, which have
been explicitly preserved by subsection (f). Of course, we
acknowledge that our reading of “proceedings to enforce”
effectively precludes the Association from payment in this
case. But a claimant’s inability to collect in the special
context of bankruptcy, which sometimes involves the
impairment of creditors’ rights, does not permit us to adopt a
tortured interpretation of the provision giving rise to those
rights.

       We therefore hold that Section 5315, as explained by
the Commonwealth Court’s careful analysis in Karr, supports
Makowka’s argument that the Association’s actions in debt
did not enforce its statutory lien.

                                D

       The Association urges that we follow the Superior
Court’s later decision in Hammer and find that actions in debt
enforce the statutory lien. 

. We predict,
however, that the Pennsylvania Supreme Court would not
follow that approach.



                               16
        As an initial matter, it is difficult to give credence to
Hammer’s conclusion in light of the decision’s sparse
reasoning and internal inconsistency on the issue of
enforcement. As discussed in section 

, Hammer
purported to adopt the Commonwealth Court’s reasoning in
Karr, and like that case, initially distinguished the
“enforcement” of the lien from other avenues to collect. See

departed, relying on an improper insertion into
Karr’s holding and thus tacking on new categories of
potential enforcement methods. See 

to state
“[t]he first step to enforcing an assessment lien is the filing of
a foreclosure complaint[, action in debt or contract]”)
(alterations in original). The decision also elided the
distinction between enforcement methods and remedies to
collect, noting that actions in debt constituted “approved
enforcement mechanism[s] to collect an assessment lien.” 

tacks were made without explanation, and,
as we explained in section 

, run contrary to the
language and structure of Section 5315.

       Furthermore, as the District Court correctly noted,
Hammer “ignore[s] the well-established and fundamental
distinction between proceedings in rem and those brought in
personam.” App. at 8; see also Bank of Pa. v. G/N Enter., 

, 6–7 (Pa. Super. Ct. 1983) (explaining the difference
between in rem and in personam proceedings: a judgment in
rem “creates a lien on the mortgaged premises . . . no matter
who may be the owner at the time the judgment is entered”; a
judgment in personam “does not bind strangers to the bond”).
The Pennsylvania Supreme Court has held firm to this
distinction. See, e.g., Mancine v. Concord-Liberty Sav. &
Loan Ass’n, 

, 748 (Pa. 1982); In re Craig’s
Estate, 

, 195 (Pa. 1954). Moreover, recent




                               17
opinions of the Superior Court itself have adhered to this
traditional precept. See, e.g., U.S. Bank N.A. v. Mallory, 

, 992 n.3 (Pa. Super. Ct. 2009); Levitt v. Patrick, 

, 591 (Pa. Super. Ct. 2009). Contrary to these
numerous authorities, Hammer conflated an association’s
right to proceed in rem to enforce the statutory lien with its
option to file in personam suits to collect judgments against
the resident.

     For these reasons, we find it appropriate to discount
Hammer’s problematic statement about valid enforcement
mechanisms.

                              IV

       For the foregoing reasons, we predict that the
Pennsylvania Supreme Court would follow Karr, not
Hammer. Therefore, the District Court erred when it deemed
itself bound by the latter decision. In our view, the
Association did not enforce its statutory lien on Makowka’s
residence when it pursued actions in debt; therefore, any
portion of the lien representing assessments due before
September 12, 2008, has been extinguished. Accordingly, we
will vacate the judgment of the District Court and remand the
case for further proceedings consistent with this opinion.




                              18