Rogan v. Fifth Third Mortgage Co. (In re Rowe)

Summarized by Michael Coury , Glankler Brown, PLLC
14 years 8 months ago

Citation:

__B.R.__, 2011 FED App. 0007P(6th Cir. June 24, 2011)

Tag(s):

6th Circuit

Ruling:

Bankruptcy court erred in granting summary judgment in favor of Ch. 7 Trustee and in denying summary judgment in favor of lender. The B.A.P. held that language in Second Home Rider to lender's mortgage sufficiently identified the debtor wife as a borrower/mortgagor under the mortgage so as to render the mortgage enforceable against the wife's interest in the property and against the rights of the Chapter 7 trustee. The B.A.P. found that the bankruptcy court erred in finding that the mortgagor's identity cannot be incorporated from a rider into a mortgage. The B.A.P. reversed the bankruptcy court and granted summary judgment in favor of the lender.

Procedural context:

On cross motions for summary judgment, the bankruptcy court granted summary judgment in favor of the Chapter 7 trustee and denied the lender's motion for summary judgment. The trial court found that the mortgage did not sufficiently identify the debtor wife as a borrower under Kentucky law and therefore the mortgage would not have priority over the trustee's rights as a hypothetical judgment creditor or bona fide purchaser under sec. 544. The B.A.P. reversed and granted summary judgment in favor of the lender.

Facts:

The debtors, husband and wife, filed a joint Chapter 7 petition. The Debtors jointly owned a second home residence. Husband obtained pre-petition loan from lender. The promissory note was signed only by Husband, who was listed as the "Borrower". Contemporaneously, husband executed a mortgage on the second home property. The mortgage defined the Note as the promissory note signed by "Borrower". Debtor wife also signed the mortgage below Husband's signature and below her signature appeared her hand printed name and the preprinted word "Borrower" but was not otherwise identified as a Borrower in the body of the mortgage. The mortgage defined Borrower as the Husband, "a married man" and provided that Borrower was the mortgagor under the instrument. The term "Security Instrument' was defined in the body of the mortgage as the subject mortgage document and all riders thereto. A Second Home Rider was executed by both debtors and provided that it was incorporated into, amended and supplemented the original mortgage "given by the undersigned(the"Borrower" whether there are one or more persons undersigned)." The Chapter 7 trustee sought to avoid the mortgage as to the debtor wife's interest under 11 U.S.C. sec. 544, contending that the mortgage was ineffective as to her interest because she was not sufficiently identified in the body of the mortgage as a borrower as required under Kentucky law. The lender contended that the Second Home Rider specifically and sufficiently identified the wife as a borrower.

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