In re Miller, No. 14-16854 (9th Cir. 2017)
Annotate this CaseLarry and Kari Miller, both Arizona domiciliaries, owned a cooperative apartment held in each of their names, as husband and wife. First Community Bank, a judgment creditor of Larry Miller, obtained a lien against the couple's co-op. Under Arizona law, the co-op would be treated as community property. Under California law, the co-op would not constitute community property because it was not acquired by the couple while they were domiciled in California. The court held that while the co-op owned by the couple did not come within the definition of community property in California, as that term is defined in Section 760 of the California Family Code, it does come within the definition of a tenancy-in-common. The court explained that the interests of a co-tenant in such tenancies, which are presumed to be held in equal shares, are subject to the enforcement of a judgment lien. In this case, applying California's choice-of-law rules, the court held that California law governs, and that the co-op would be treated as a tenancy-in-common, as defined in Section 685 of the California Civil Code, making Larry Miller's interest in the co-op subject to enforcement of the judgment lien. Accordingly, the court reversed the district court's reversal of the bankruptcy court's summary judgment for the creditor, remanding for further proceedings.
Court Description: Bankruptcy. The panel reversed the district court’s reversal of the bankruptcy court’s summary judgment in favor of a creditor that brought an adversary proceeding against a chapter 7 trustee, seeking a declaration that the creditor had an enforceable judgment lien on real property, thereby granting it priority over the proceeds of the trustee’s sale of the property. The judgment on which the lien was based arose from a guaranty signed by the debtor but not by his wife. The couple were Arizona domiciles. The panel held that while the real property, a San Francisco co-op apartment owned by both spouses, was not community property under California law, it was a tenancy-in-common. Under California law, the interests of a co-tenant-in-common are subject to the enforcement of a judgment lien. Applying California’s choice-of-law rules, the panel held that California law, rather than Arizona law, governed. Therefore, the debtor’s interest in the co-op was subject to enforcement of the judgment lien. The panel rejected the argument that the creditor’s registration of the judgment in the Northern District of California was sufficient, by itself, to create an enforceable lien against the co-op. IN RE MILLER 3
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