In Re Dickson
655 F.3d 585
6th Cir.2011Background
- Dickson executed a $79,000 loan secured by a mortgage on real property and a manufactured home placed on that property in 1998.
- The mortgage language covered the real estate and all improvements on the property; the home was not clearly personal property secured by the mortgage.
- Dickson filed Chapter 7 in 1999; trustee abandoned the home and real property; Dickson received a discharge and did not reaffirm with Countrywide.
- Countrywide foreclosed in Kentucky state court (2006) and sought to treat the manufactured home as real estate via an in rem judgment (2007).
- State court converted the home to real estate and deemed it subject to the mortgage, with an order to record an affidavit of conversion or issue a new title.
- Dickson filed Chapter 13 in 2007; Trustee did not pursue an adversary proceeding; Dickson later sought to avoid Countrywide’s lien under 11 U.S.C. §§ 544, 547, 550, 551.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing to avoid lien under §522(h) | Dickson has standing via §522(h) for trustee-avoided transfers. | Countrywide argues Dickson lacks standing because the lien is consensual. | Dickson has direct standing under §522(h). |
| Perfection of lien prior to conversion | Countrywide did not properly perfect its lien on the manufactured home before conversion. | Lien was perfected by mortgage and lis pendens; conversion is not required for perfection. | No perfected lien existed before conversion; lis pendens cannot perfect a lien on personal property. |
| Effect of state-court conversion on lien status | State-court judgment did not convert the home in a way that binds this federal proceeding. | State-court judgment converted the home to real property, triggering a perfected lien. | State-court conversion bound Dickson; it rendered the lien perfected. |
| Avoidance of lien under §547 (preferences) | Lien was avoidable as a 90-day preference from the bankruptcy filing. | Lien timing and perfection occurred outside the 90-day window or were not avoidable as a preference. | Countrywide’s lien was properly avoided under §547. |
Key Cases Cited
- Cobbins v. Tenn. Dep't of Transp., 566 F.3d 582 (6th Cir. 2009) (four-element test for issue preclusion)
- Citizens Nat'l Bank of Jessamine Cnty. v. Washington Mut. Bank, 309 S.W.3d 792 (Ky. Ct. App. 2010) (reliance on title-based perfection for manufactured homes)
- Strong v. First Nationwide Mortg. Corp., 959 S.W.2d 785 (Ky. Ct. App. 1998) (lis pendens does not perfect security interest in个人 property)