Goddard v. Heldt (In re A. Heldt)

Summarized by Lars Fuller , BakerHostetler
12 years 8 months ago

Citation:

Goddard v. Heldt, Gill, & Gill (In re Heldt), Case No. 12-6027 (10th Cir. May, 14, 2013)

Tag(s):

Ruling:

The 10th Cir. affirmed the U.S. District Court and U.S. Bankruptcy Court (W.D. Okla.) in dismissing Ch. 7 trustee's claim to avoid as fraudulent debtor's transfer of title to sister in mother's residence. Tenth Circuit affirmed lower court findings that debtor's quit claim to sister of title had incidental value to estate and thus was not avoidable as fraudulent transfer. Tenth Circuit further ruled that mother's equitable interest was not property of estate, and trustee could not avoid mother's equitable interest as BFP under 11 USC 544, because under Oklahoma law, mother's continual residence in property provided constructive notice to BFPs, including trustee.

Procedural context:

Tenth Circuit (J. Lucero, J. Anderson, J. Baldock) affirmed U.S. District Court (W.D. Okla.), following appeal from decision of U.S. Bankruptcy Court (W.D. Okla.).

Facts:

Ch. 7 trustee sought to avoid debtor's quit claim of title in year prior to bankruptcy in residence occupied by debtor's mother and sister. Debtor's mother had transferred title to debtor as an estate planning device in 1992, approximately 17 years prior to debtor's bankruptcy, when debtor was 13. Mother paid purchase price and all expenses related to house continually, and resided continually at property, for over 20 years. Debtor ceased to reside at property 9 years prior to bankruptcy. At time debtor quit claimed title to sister, only mother and sister resided in house. Debtor failed to schedule title, or disclose quit claim, in her Statement of Financial Affairs or Schedules, but amended to disclose following her 341 meeting. After Ch. 7 trustee sued debtor and sister to avoid transfer, mother sought to intervene. trustee opposed. Sister quit claimed title to mother, and mother subsequently joined action as defendant.

Judge(s):

Justices Lucero, Anderson, and Baldock.

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