Opinion
Case No. 09-10876 Adversary Case No. 10-1183
05-26-2011
In Re BOBBY J. THOMPSON Debtor RICHARD D. NELSON, TRUSTEE Plaintiff v. U.S. BANK NATIONAL ASSOCIATION, ET AL. Defendants
This document has been electronically entered in the records of the United States Bankruptcy Court for the Southern District of Ohio.
IT IS SO ORDERED.
_______________
Jeffery F. Hopkins
United States Bankruptcy Judge
Judge Hopkins
ORDER DENYING MOTION FOR SUMMARY JUDGMENT
Before the Court is a summary judgment motion ("Motion") (Doc. 12) filed by the Plaintiff, chapter 7 trustee Richard D. Nelson ("Trustee"), and the briefs related to the Motion. See Docs. 12, 14, 15, 16 & 17.
The Trustee wants to liquidate the Debtor's interest in certain real property. One of the Defendants, U.S. Bank National Association ("USB"), claims to hold a lien on the property that is superior to the rights of the Trustee. This action seeks to resolve the dispute.
The property is jointly owned by the Debtor and Samantha Tino. USB's mortgage does not include the Debtor as a grantor, nor did the Debtor sign the mortgage. USB filed a prepetition foreclosure action against the Debtor and Ms. Tino. Lis pendens attached on June 13, 2008. On December 18, 2008, USB obtained a decree of foreclosure. The decree also reformed the mortgage to include the Debtor. The Debtor filed a chapter 7 petition on February 23, 2009.
Doc. 12 at Ex. A.
Doc. 12 at Ex. B; Doc. 14 at Ex. 1.
Doc. 14 at Ex. 1.
Doc. 14 at Ex. 2.
Doc. 14 at Ex. 2.
Doc. 14 at Ex. 2.
Case No. 09-10876 at Doc. 1.
The parties have spilled much ink over the issue of whether the Trustee's complaint (Doc. 1) seeks relief under 11 U.S.C. § 544(a)(3) or declaratory judgment that the property is unencumbered. Currently, the Trustee cannot prevail under either theory. At present, the Debtor's interest is not unencumbered due to the reformation of the mortgage. Neither can the trustee avoid the lien under § 544(a)(3). See Strang v. Beach, 11 Ohio St. 283, 287 (1860) (purchaser with notice of reformed mortgage is bound by same).
The Trustee suggests that the reformation of the mortgage is a transfer that may be avoided under 11 U.S.C. § 547(b) "if necessary." See Doc. 15 at 4. But this issue is not currently before the Court because the complaint does not assert a claim under § 547(b).
In a subsequent brief, the Trustee states that he "is contemplating its necessity." See Doc. 17 at 4.
Accordingly, the Motion is DENIED. The Trustee shall have until July 15, 2011, to file an amended complaint. USB shall file an answer to the amended complaint no later than August 19, 2011. The deadline for filing summary judgment motions is extended to September 30, 2011. The trial date is rescheduled for January 4, 2012, at 10:00 a.m.
The new scheduling dates set forth in this paragraph were established at the May 26, 2011 status conference held in lieu of the original trial date. See Doc. 21.
Copies to:
Cayce A. Stoneburner
Amelia A. Bower