Opinion
BANKRUPTCY NO.: 5-01-01431, ADVERSARY NO.: 5-01-00154A, BANKRUPTCY NO.: 5-01-01162, ADVERSARY NO.: 5-01-00162A
May 8, 2002
{Nature of Proceeding: Trustee's Motion for Summary Judgment (Doc. #6A)}
{Nature of Proceeding: Trustee's Motion for Summary Judgment (Doc. #7A)}
Drafted with the assistance of Keith Hunter, Law Clerk.
The above-captioned cases, although unrelated, present the same legal issue regarding non-joinder of indispensable parties. An individual discussion of the factual background and procedural history of each case is warranted for an understanding of this decision. For reasons set forth hereinafter, the Court is compelled to defer its decision on the primary issue(s) raised by the Trustee in his Complaints.
In addition to the issue of indispensable parties addressed by the Court sua sponte in this opinion, both cases raise the issue whether the recorded copy of a mortgage must bear evidence of the notary's embossment on the original document to be properly recorded. That issue has been resolved against the Trustee in the opinion of this date related to In Re: REIMILLER, Adv. 5-01-00087A, In Re: PASKER, Adv. 5-01-00106A, In Re: GALBRAITH, Adv. 5-01-00085A, In Re: MEHALSHICK, Adv. 5-01-00143A, and In Re: MEROLA, Adv. 5-01-00160A. The present case of In Re: PISKEL, Richard also raises the issue of adequacy of the notary's certificate of acknowledgment, which fails to specify who appeared for the acknowledgment, and that issue is premature absent the joinder of the indispensable party.
Factual Background
The Debtor has an ownership interest in real estate located at 604 North Vine Street, Hazleton, Luzerne County, Pennsylvania. On May 28, 1999, he and his wife, Marla Piskel, obtained a loan from Traveler's Bank and Trust, FSB, and secured that loan by a mortgage on the real estate at 604 North Vine Street. The mortgage was executed by the Debtor and his wife, Marla Piskel, on May 28, 1999, and recorded by the Luzerne County Recorder of Deeds in Mortgage Book Number 2467, Page 662, on June 2, 1999.
The Debtor owns the property jointly with "Marla L. Piskel".
Procedural History
This adversary proceeding was commenced by the Trustee's Complaint to Avoid the [Defendant's] Mortgage Pursuant to 11 U.S.C. § 544(a). The Trustee seeks to avoid the mortgage lien alleging substantive deficiencies in the acknowledgment (1) because the recorded copy of the mortgage does not bear evidence of the notary's embossment on the original document, and (2) because the Notary failed to identify the person(s) appearing for the acknowledgment. The Trustee filed a Motion for Summary Judgment, both parties have filed briefs, but this Court must defer decision on the Motion for reasons set forth hereinafter.
Factual Background
The Debtor has an ownership interest in real estate located at 661 North Branch Court, Hazleton, Luzerne County, Pennsylvania, as joint tenant with right of survivorship. On December 29, 1998, the Debtor and the co-owner, Mark Friendy, obtained a loan from Crusader Bank, FSB, and secured that loan by a mortgage on the real estate at 661 North Branch Court. The mortgage was executed by the Debtor and Mark Friendy on December 29, 1998, and recorded by the Luzerne County Recorder of Deeds in Mortgage Book Number 2408, Page 1080, on December 30, 1998. The mortgage was subsequently assigned to First Union National Bank.
The Debtor owns the property with "Mark Friendy", as joint tenants with right of survivorship.
Procedural History
This adversary proceeding was commenced by the Trustee's Complaint to Avoid the [Defendant's] Mortgage Pursuant to 11 U.S.C. § 544(a). The Trustee seeks to avoid the mortgage lien, alleging a substantive deficiency in the acknowledgment because the recorded copy of the mortgage does not bear evidence of the notary's embossment on the original document. The Trustee filed a Motion for Summary Judgment, both parties have filed briefs, but this Court must defer decision on the Motion for reasons set forth hereinafter.
Opinion
Jointly owned property, including entireties realty, constitutes property of the estate. 11 U.S.C. § 541. Hadley v. Koehler, 6 B.R. 203 (Bkrtcy.M.D.Fla. 1980). "A Trustee may, under certain conditions, sell one hundred percent (100%) of property co-owned by the estate, even though a co-owner is not in bankruptcy. 11 U.S.C. § 363(h). Murray v. Murray, 31 B.R. 499, 502 (Bankr.E.D.Pa. 1983)." In re Hefner, 262 B.R. 61 (Bankr.M.D.Pa. 2001). The Trustee can also sell entireties property, even though only one spouse is in bankruptcy.
In both of these cases, there are individuals with very real interests that are not likely to be adequately represented before this Court. The sole issue raised by the Trustee in one of these cases (MEROLA, Joanne) is addressed in an opinion in other cases on this date. That decision reaffirms the validity of the mortgage lien under the circumstances. However, it may be that the absentee party, Mark Friendy, would have an interest in avoiding the mortgage lien, and he would be able to produce evidence and/or law to this Court that would mandate a decision in his favor. Without his joinder, the Court is faced with the possibility of multiple actions, contradictory decisions, and other unforeseen difficulties that may arise from a decision in the case without the opportunity for Mr. Friendy to participate. The same observations can be made of Marla Piskel.
Because this ruling may have a significant direct impact upon the co-owners of the properties involved, and to avoid the possibility of inconsistent decisions, the Court finds that joinder of these non-debtors is critical to complete relief in these actions. Pursuant to Federal Rule of Civil Procedure 19, made applicable to adversary proceedings by Federal Rule of Bankruptcy Procedure 7019, the Court, in particular circumstances, may order joinder of a party to an adversary proceeding. For the foregoing reasons, the Plaintiff is hereby directed to take necessary action to join the co-owners of the properties in these cases within twenty (20) days of the date of this decision, or file a statement with this Court pursuant to Federal Rule of Civil Procedure 19(c) setting forth the reasons for non-joinder. Upon failure to do either, this Court will enter an Order dismissing the Complaints for failure to join an indispensable party.
Separate Orders will follow.
ORDER
For those reasons indicated in the Opinion filed this date, IT IS HEREBY
ORDERED that the Plaintiff is directed to take necessary action to join the co-owner of the property in this case within twenty (20) days of the date of this Order, or file a statement with this Court pursuant to Federal Rule of Civil Procedure 19(c) setting forth the reasons for non-joinder. Upon failure to do either, this Court will enter an Order dismissing the Complaint for failure to join an indispensable party.