First Community Bank v. Gaughan (In re Miller)

Case Type:
Consumer
Case Status:
Reversed and Remanded
Citation:
No. 14-16854 (9th Circuit, Mar 31,2017) Published
Tag(s):
Ruling:
9th Circuit reversed ruling of district court (D. Ariz.), after district court reversed bankruptcy court's summary judgment in favor of judgment lien creditor, who brought adversary against chapter 7 trustee, seeking declaration that lien creditor had priority in sale proceeds. Panel applied California law to Arizona debtor to conclude that creditor's lien attached to debtor's co-tenancy, notwithstanding co-ownership with non-debtor wife. In rem nature of dispute, plus debtor's consent, compelled application of California law to California real property in choice-of-law analysis.
Procedural context:
Judgment lien creditor sued chapter 7 trustee in declaratory relief adversary, asserting priority in sale proceeds. Bankruptcy court granted summary judgment in favor of creditor; trustee appealed to district court. District court reversed. Creditor appealed to 9th Circuit.
Facts:
Arizona debtor signed a guaranty; his wife did not. Debtor defaulted; creditor obtained judgment against debtor in Arizona, and sought to enforce judgment lien against debtor's property in California. San Francisco co-op apartment owned by both husband and wife was tenancy-in-common, not community property under California law. Under California law, interest of co-tenant was subject to judgment lien. Under Arizona law, co-op would be treated as community property, and creditor's judgment lien would not attach to debtor's interest in community property.
Judge(s):
Tashima, Smith, Korman

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