Kunkel v. CUSB Bank, No. 18-6026 (8th Cir. 2019)
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The Bankruptcy Appellate Panel affirmed the bankruptcy court's entry of summary judgment in favor of the bankruptcy trustee. The Bank challenged whether the terms of the judgment were fulfilled in transferring debtor's ex-wife's interest to debtor.
The panel held that there was no genuine issue of fact regarding debtor's divorce which resulted in the trustee's ability to rely upon the judgment as a purchaser for value. Even if the bank was successful on this point, it would not serve to repair the defect in its mortgage. In this case, the state court determined that debtor would retain the real estate that was already titled in his name, and the only interest the ex-wife held was her marital interest which vested upon dissolution of the marriage.
Court Description: Shodeen, Author, with Schermer and Dow, Bankruptcy Judges] Bankruptcy Appellate Panel. The bankruptcy court did not err in determining that under these facts the Bank's mortgage was unenforceable since it was with debtor's trust, an entity that had never been in the line of title. [ August 07, 2019
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