Peet v. Checkett (In re Peet)

Citation:
Peet v. Checkett (In re Peet), No. 14-6033 (BAP 8th Cir. Apr. 22, 2015)
Tag(s):
Ruling:
The BAP for the 8th Circuit affirmed the ruling of the bankruptcy court overruling debtors' objection to chapter 7 trustee's motion to sell real estate and a pickup. BAP agreed that notwithstanding nondebtor co-owners of the sale property as of the petition date, the estate's non-exempt joint tenancy interests in the property were not severed by the bankruptcy filing. Consequently, the postpetition death of the nondebtor co-owners gave the estate sole title to the property. Trustee sought to sell pickup and real property and claimed all non-exempt proceeds for estate. Debtors objected that estate was only entitled to a one half interest in both the pickup and the real property. Debtors argued that prepetition joint tenancies were severed by their bankruptcy filing, because filing bankruptcy constituted a "conveyance" of the properties to the estate. Under Missouri law, conveyance of the properties under joint tenancy by one joint tenant severed joint tenancy. BAP agreed with bankruptcy court that filing bankruptcy did not "convey" property to bankruptcy estate. Instead, the estate obtained debtors' interest. Consequently, joint tenancies were not severed by filing bankruptcy, and following postpetition death of nondebtor joint tenants, the estate was entitled to all non-exempt proceeds from sales of property.
Procedural context:
Chapter 7 trustee moved to sell certain assets, and joint debtors objected. Bankruptcy court (W.D. Mo.- Springfield) overruled objection, and granted trustee's motion to sell. Debtors appealed to BAP for 8th Circuit.
Facts:
Debtors, husband and wife, filed bankruptcy under Chapter 13 in 2011. As of petition date, wife co-owned in joint tenancy pickup truck with her father. Debtors co-owned in joint tenancy certain real property with wife's parents. Case converted to chapter 13 in 2014. About two months later, debtor wife's parents died. Trustee sought to sell pickup and real property and claimed all non-exempt proceeds for estate. Debtors objected that estate was only entitled to a one half interest in both the pickup and the real property.
Judge(s):
Kressel, Schermer, Nail

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