529 B.R. 718
8th Cir. BAP2015Background
- Debtors Matthew and Marilynn Peet filed Chapter 13 on Dec. 5, 2011; certain Missouri real property and a 2005 Ford pickup were held as joint tenancies with Marilynn’s parents.
- Case converted to Chapter 7 on Jan. 23, 2014; J. Kevin Cheekett appointed chapter 7 trustee.
- Marilynn’s parents died in April 2014 (father Apr. 14; mother Apr. 15).
- Trustee proposed sale of the real property and the pickup; the Peets objected, arguing the petition severed the joint tenancies into tenancies in common.
- Bankruptcy court overruled objections and authorized sales; the Peets appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether filing a bankruptcy petition severs a joint tenancy | Filing the petition converted joint tenancies into tenancies in common, so only the debtor’s fractional share enters estate | Filing does not effect a conveyance or sever joint tenancy; the debtor’s undivided estate (with right of survivorship) is property of the estate | Petition filing does not sever joint tenancy; trustee may administer entire undivided estate (subject to exemptions) |
Key Cases Cited
- Pierce v. Collection Assoc., Inc. (In re Pierce), 779 F.3d 814 (8th Cir. 2015) (standard of review — de novo for legal questions)
- N.S. Garrott & Sons v. Union Planters Nat'l Bank (In re N.S. Garrott & Sons), 772 F.2d 462 (8th Cir. 1985) (state law defines nature of interests; federal law defines extent in estate)
- Poetz v. Klamberg, 781 S.W.2d 253 (Mo. Ct. App. 1989) (distinguishes joint tenancy from tenancy in common)
- Remax of Blue Springs v. Vajda & Co., 708 S.W.2d 804 (Mo. Ct. App. 1986) (describes right of survivorship and ways to destroy joint tenancy)
- Whittington v. Gilbralter Sav. & Loan Assoc. (In re Spain), 55 B.R. 849 (Bankr. N.D. Ala. 1985) (holding that filing does not effect conveyance or sever joint tenancy)
- Benner (In re Benner), 253 B.R. 719 (Bankr. W.D. Va. 2000) (same conclusion as Spain)
- Geiger v. Kawaauhau (In re Geiger), 113 F.3d 848 (8th Cir. 1997) (statutory interpretation principles — plain text controls over legislative history)
- Abernathy v. LaBarge (In re Abernathy), 259 B.R. 330 (8th Cir. BAP 2001) (recognizes debtor’s fractional interest enters estate but did not decide survivorship/severance issue)