By Daniel Edstrom
DTC Systems, Inc.
In this Chapter 7 bankruptcy the trustee was able to avoid the lien from a World Savings Bank loan because the mortgage acknowledgement was missing a date. As such the lien was never perfected.
Trustee Carl B. Davis seeks summary judgment on his complaint against debtor Mark Androes and World Savings Bank (“World Bank”).1 Trustee’s complaint seeks (1) to avoid World Bank’s mortgage on Androes’ homestead as unperfected because the acknowledgment of the debtor’s signature is undated and (2) to avoid as preferential World Bank’s lis pendens to the extent it attached to the home. World Bank filed a response to the Trustee’s motion and a counter motion for summary judgment.2 The Trustee filed a reply to World Bank’s response, which also served as his response to World Bank’s motion for summary judgment.3 World Bank filed a reply to the Trustee’s response to its motion for summary judgment.4 Debtor filed no response.
The Court finds that the failure of the certificate of notarial act to recite the date of the notarial act as required by KAN. STAT. ANN. § 53-508 renders it defective. The filed mortgage therefore does not impart constructive notice to a subsequent purchaser. The Addendum does not correct this defect. The Trustee is entitled to judgment as a matter of law avoiding World Bank’s mortgage under § 544 and preserving it for the benefit of the estate under § 550. The Court need not reach the Trustee’s preference claim.
The Clerk will schedule a one-hour evidentiary hearing in the bankruptcy case on the Trustee’s motion to show cause why World Bank should not be held in contempt for its alleged violation of the automatic stay by filing the Addendum.31 Should the Court determine that a stay violation occurred, appropriate sanctions, if any, will also be considered at that time.
IT IS THEREFORE ORDERED that the Trustee’s motion for summary judgment is GRANTED. World Bank’s motion for summary judgment is DENIED. JUDGMENT shall be entered accordingly.
View Ruling: in_RE_Androes_07-5088