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§ 544(a)(3)

In re Motta

Ruling
First mortgage cold not be avoided absent evidence that second unrecorded mortgage was intended to discharge the first mortgage.
Procedural posture

In this adversary proceeding, plaintiff chapter 7 trustee sought a ruling that a creditor's purported security interest in the debtors' real property could be avoided pursuant to 11 U.S.C.S. § 544(a)(3). The trustee filed a motion for summary judgment.

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Consumer opinion summary, case decided on January 15, 2010 , LexisNexis #0310-128

Williams v. JPMorgan Chase Bank (In re Stewart)

Ruling
Mortgage lien that was defective and unperfected under state law could be avoided.
Procedural posture

Plaintiff trustee filed an adversary proceeding against defendant creditor to avoid a mortgage lien and for turnover under 11 U.S.C.S. §§ 544(a) and 550(a). The trustee also sought reasonable attorney fees pursuant to Ark. Code Ann. § 16-22-308.

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Consumer opinion summary, case decided on December 21, 2009 , LexisNexis #0210-016

Gordon v. Wells Fargo Bank (In re Hughes)

Ruling
Second lien identified as such did not provide sufficient notice of improperly attested first lien to prevent avoidance.
Procedural posture

Plaintiff bankruptcy trustee brought an adversary proceeding against defendant bank seeking to avoid the bank's lien against a bankruptcy debtor's real property, which was evidenced by a recorded security deed from the debtor, on the ground that the deed lacked attestation by a witness and was thus improperly recorded. The trustee and the bank cross-moved for summary judgment.

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Consumer opinion summary, case decided on December 10, 2009 , LexisNexis #0210-059

Gordon v. Wells Fargo Bank (In re Codrington)

Ruling
Improperly attested mortgage could be avoided.
Procedural posture

Plaintiff bankruptcy trustee brought an adversary proceeding against defendant lender seeking to avoid the lender's lien against a bankruptcy debtor's real property, which was evidenced by a recorded security deed to the lender from the debtor, on the ground that the deed lacked attestation by a witness and was thus improperly recorded. The lender moved for summary judgment.

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Consumer opinion summary, case decided on December 10, 2009 , LexisNexis #0210-058

Hill v. Taylor (In re Taylor)

Ruling
Trustee could not use strong-arm powers to avoid deed of trust with error in legal description.
Procedural posture

Plaintiff chapter 7 trustee brought a proceeding against defendants debtor and a creditor, seeking (1) to avoid a Deed of Trust, sell a Property free and clear of liens, and obtain related relief based upon the potential avoidance of the Deed of Trust, and (2) to obtain a declaration that the re-recording of the Deed of Trust was in violation of the automatic stay and therefore a nullity. The trustee and the creditor each sought summary judgment.

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Consumer opinion summary, case decided on December 03, 2009 , LexisNexis #0210-060

In re Hugh

Ruling
Conversion to chapter 7 denied where chapter 7 trustee would be unable to avoid first-in-right security interest to free up funds for distribution.
Procedural posture

Before the court was a motion to convert debtor's case from chapter 13 to chapter 7, filed by the trustee. Debtor opposed the motion.

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Consumer opinion summary, case decided on November 25, 2009 , LexisNexis #0310-018

Twentieth Century Land Corp. v. Landmark North Freeway Ltd. (In re Bill Heard Enters. Inc.)

Ruling
Transfer of interest in real property from partnership to bank and LLC avoided where warranty deed from debtor to partnership was never recorded.
Procedural posture

Chapter 11 debtor filed an adversary proceeding against defendants, a Texas limited partnership and others, seeking an order avoiding a pre-petition transfer of an interest in real property pursuant to 11 U.S.C.S. § 544(a)(3). The debtor amended its complaint to add a bank as a defendant, and the bank filed counterclaims against the debtor. The debtor and the bank filed cross- motions for summary judgment.

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Commercial opinion summary, case decided on September 11, 2009 , LexisNexis #1109-023

Rieser v. Fifth Third Mortg. Co. (In re Wahl)

Ruling
Improper acknowledgement resulted in avoidance of mortgage on debtor's one-half interest in real property.
Procedural posture

Under 11 U.S.C.S. §§ 544(a) and 547, chapter 7 trustee sought to avoid the granting by debtor spouse of a mortgage to a lender on an undivided one-half interest in real property. The trustee filed a motion for summary judgment.

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Consumer opinion summary, case decided on June 30, 2009 , LexisNexis #0809-050

Arnold v. Bank of N.Y. Trust Co. (In re Badagliacca)

Ruling
Refinanced first mortgage in which debtor's name was misspelled was avoidable.
Procedural posture

In an adversary proceeding filed against various claimants, including putative mortgagees, to avoid a refinanced first mortgage pursuant to 11 U.S.C.S. § 544(a)(3), trustee filed a motion for summary judgment on the avoidance claim. He also sought summary judgment against the two purported mortgagees who had failed to answer.

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Consumer opinion summary, case decided on February 23, 2009 , LexisNexis #0409-053

Terlecky v. Countrywide Home Loans Inc. (In re Baruch)

Ruling
Trustee could avoid mortgage that was not validly recorded.
Procedural posture

Chapter 7 trustee moved for summary judgment on his claims against creditor, which sought, in his capacity as a bona fide purchaser under 11 U.S.C.S. § 544(a)(3), to avoid a mortgage the debtor granted the creditor on her home, sought to preserve the mortgage for benefit of the debtor's estate pursuant to 11 U.S.C.S. § 551, requested the court to disallow any and all claims held by the creditor arising under the mortgage.

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Consumer opinion summary, case decided on February 23, 2009 , LexisNexis #0509-049