Appeal from the United States Bankruptcy Court for the Eastern District of Kentucky. Case No. 07-51364, Adversary Proceeding No. 07-05073.
The opinion of the court was delivered by: Thomas H. Fulton, Chief Bankruptcy Appellate Panel Judge.
ELECTRONIC CITATION: 2010 FED App. 0002P (6th Cir.)
Before: FULTON, McIVOR, SHEA-STONUM, Bankruptcy Appellate Panel Judges.
Countrywide Home Loans, Inc. d/b/a America's Wholesale Lender ("Countrywide") appeals a judgment in favor of Nancy Dickson (the "Debtor") finding that the Debtor had standing to seek to avoid Countrywide's lien on the Debtor's manufactured home, and avoiding Countrywide's lien. Countrywide also appeals the bankruptcy court's subsequent order that largely overruled Countrywide's Motion to Amend Findings of Fact and Conclusions of Law and to Alter, Amend, or Vacate the Judgment, and sustained the Debtor's motion nunc pro tunc for derivative standing.
For the reasons stated below, the Panel affirms the bankruptcy court's judgment in favor of the Appellee.
Countrywide raises two issues in this appeal: (1) whether the Debtor had standing to bring an adversary proceeding to avoid Countrywide's lien on her manufactured home; and (2) whether Countrywide's lien was properly avoided.
II. JURISDICTION AND STANDARD OF REVIEW
The Bankruptcy Appellate Panel has jurisdiction to decide this appeal, as authorized by the United States District Court for the Eastern District of Kentucky. 28 U.S.C. §§ 158(b)(6), (c)(1). A final order of the bankruptcy court may be appealed as of right. 28 U.S.C. § 158(a)(1). For the purpose of an appeal, a final order is one that "ends the litigation on the merits and leaves nothing for the court to do but execute the judgment." Midland Asphalt Corp. v. U.S., 489 U.S. 794, 798; 109 S.Ct. 1494, 1497 (1989) (internal quotation & citation omitted).
Countrywide challenges certain of the bankruptcy court's conclusions of law. A bankruptcy court's conclusions of law are reviewed de novo. Moran v. LTV Steel Co. (In re LTV Steel Co., Inc.), 560 F.3d 449 (6th Cir. 2009). "Under a de novo standard of review, the reviewing court decides an issue independently of, and without deference to, the trial court's determination." Buckeye Check Cashing, Inc. v. Meadows (In re Meadows), 396 B.R. 485, 488 (B.A.P. 6th Cir. 2008) (internal quotation & citation omitted).
On September 19, 1998, Debtor executed a promissory note and mortgage on her real property, which she had purchased in 1997, in consideration for a $79,000 loan from Countrywide. At the time the promissory note and mortgage were executed there were no improvements on the mortgaged real property. The mortgage in favor of Countrywide stated that Countrywide was granted a lien against the real property and "all improvements now or hereafter erected on the property, and all easements, appurtenances, and fixtures now or hereafter a part of that property." The mortgage was duly and properly recorded with the Harrison County Clerk on September 22, 1998. The Debtor then used the proceeds of the loan to purchase a manufactured home which she placed on the mortgaged real property.
On March 22, 1999, the Debtor filed a petition for relief under Chapter 7 of the Bankruptcy Code. On May 13, 1999, the Chapter 7 trustee filed a notice of intent to abandon both the manufactured home and the real property. The Debtor was granted a Chapter 7 discharge on September 8, 1999, and the bankruptcy court entered its Final ...