Burks v. Deutsche Bank National Trust Co. (In re Goheen)

490 B.R. 730, 2012 WL 7991234, 2012 Bankr. LEXIS 879
CourtUnited States Bankruptcy Court, S.D. Ohio
DecidedMarch 1, 2012
DocketBankruptcy No. 10-17685; Adversary No. 11-1015
StatusPublished
Cited by2 cases

This text of 490 B.R. 730 (Burks v. Deutsche Bank National Trust Co. (In re Goheen)) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, S.D. Ohio primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Burks v. Deutsche Bank National Trust Co. (In re Goheen), 490 B.R. 730, 2012 WL 7991234, 2012 Bankr. LEXIS 879 (Ohio 2012).

Opinion

ORDER: (A) GRANTING TRUSTEE’S MOTION FOR SUMMARY JUDGMENT; AND, (B) DENYING DEUTSCHE BANK’S CROSS-MOTION FOR SUMMARY JUDGMENT

BETH A. BUCHANAN, Bankruptcy Judge.

The chapter 13 trustee seeks to avoid a first mortgage noted on the registered land certificate of title for the debtor’s residence on the grounds that the mortgage, as filed, was not properly executed in that it did not contain a notary clause certifying the debtor’s acknowledgment of his signature on the mortgage as required by Ohio law. The first mortgage holder alleges that this Court necessarily has already determined that the first mortgage is a valid, existing, and enforceable lien based on this Court’s entry of order granting an unopposed motion to avoid a second lien against the debtor’s residence as not attaching to equity after consideration of the value of the property and the amount of the first mortgage. As to the merits of the chapter 13 trustee’s underlying action, the first mortgage holder asserts that the notation of the mortgage on the registered land certificate of title conclusively establishes that the mortgage is properly perfected and enforceable. Alternatively, the first mortgage holder maintains there is genuine issue of material fact as to whether the Mortgage as presented to the county recorder was a properly executed and valid mortgage.

This Court finds that it may consider the question of the validity of the first mortgage on the merits notwithstanding the entry of the order avoiding the second mortgage. As to the merits of the chapter 13 trustee’s underlying action, this Court finds that because the first mortgage, as [733]*733filed, was not properly executed, the county recorder was not entitled to note the mortgage on the registered land certificate of title. Consequently, the notation of the mortgage on the registered land certificate of title is ineffective and does not serve to perfect a lien against the debtor’s residence or serve as notice of such lien. Therefore, the chapter 13 trustee, as a hypothetical lien creditor/bona fide purchaser, is entitled to avoid the first mortgage pursuant to 11 U.S.C. § 544(a).

I. Background

This matter is before this Court on Plaintiff Margaret A. Burks, Trustee’s (the “Trustee ”) Motion for Summary Judgment [Docket Number 17] (the “Motion for Summary Judgment ”), Defendant Deutsche Bank National Trust Company, as Trustee for GSAA Home Equity Trust 2006-11 Asset-Backed Certificate Series 2006-11’s (“Deutsche Bank”) Combined Motion for Summary Judgment and Response [Docket Number 18] (the “Cross-Motion for Summary Judgment”), the Trustee’s Response [Docket Number 19] (the “Response ”), and Deutsche Bank’s Reply [Docket Number 20] (the “Reply ”).

On April 21, 2006, Debtor Kevin Richard Goheen (the “Debtor”) granted a mortgage (the “Mortgage ”) on the property located at 8334 Mayfair Street, Cincinnati, Ohio (the “Property”) to Deutsche Bank. The Property is registered land. The Mortgage was filed with the Hamilton County, Ohio Recorder, however, the last several pages of the Mortgage — including the page with the notary acknowledgment clause, the Fixed/Adjustable Rate Rider and Exhibit “A” containing the legal description of the Property — were not part of the filed version of the Mortgage. Information regarding the Mortgage is noted on the registered land certificate of title for the Property (the “Certificate of Title ”).

The Debtor filed his chapter 13 petition on September 20, 2010. The Debtor’s first proposed plan indicated that the Trustee would initiate an adversary proceeding to avoid Deutsche Bank’s Mortgage on the Property. Deutsche Bank filed an objection to confirmation, asserting that its Mortgage was valid.

On October 25, 2010, the Debtor amended his proposed plan to add a. provision that the Debtor would be filing a motion to avoid an allegedly wholly unsecured second mortgage (the “Second Mortgage ”) on the Property held by BAC Home Loan Servicing, LP1 (the “Second Mortgagee ”) under 11 U.S.C. § 506. On October 28, 2010, the Debtor filed the anticipated Motion to Valúate and Void Lien of BAC Home Loans as Second Mortgage (the “Avoidance Motion ”). The Avoidance Motion, which was unopposed, was routinely granted on November 30, 2010 (the “Avoidance Order ”).

On December 15, 2010, the Debtor, Deutsche Bank and the Trustee entered into an agreed order (the “Agreed Order ”), which resolved Deutsche Bank’s objection to confirmation of the Debtor’s plan by requiring the Trustee to file an adversary proceeding within sixty days of confirmation to address the validity of Deutsche Bank’s Mortgage. The Debtor’s plan was confirmed on December 17, 2010. The Trustee’s complaint was filed on February 1, 2011.

[734]*734II. Jurisdiction

This Court has jurisdiction over this matter pursuant to 28 U.S.C. § 1334 and the general order of reference entered in this district. This is a core proceeding pursuant to 28 U.S.C. § 157(b)(2)(E).

III. Legal Analysis

A. Summary Judgment Standard

The standard for summary judgment is set forth in Rule 56(a) of the Federal Rules of Civil Procedure (the “Civil Rules ”), made applicable to this proceeding by Rule 7056 of the Federal Rules of Bankruptcy Procedure. Civil Rule 56(a) provides that a “court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R.Civ.P. 56(a). “As to materiality, the substantive law will identify which facts are material. Only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). In reviewing a motion for summary judgment, this Court must view all inferences to be drawn from the underlying facts in the light most favorable to the nonmoving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587-88, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986); Anthony v. BTR Auto. Sealing Sys., Inc., 339 F.3d 506, 511 (6th Cir.2003).

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Cite This Page — Counsel Stack

Bluebook (online)
490 B.R. 730, 2012 WL 7991234, 2012 Bankr. LEXIS 879, Counsel Stack Legal Research, https://law.counselstack.com/opinion/burks-v-deutsche-bank-national-trust-co-in-re-goheen-ohsb-2012.