Rogan v. American General Home Equity, Inc. (In Re Brockman)
451 B.R. 421
6th Cir. BAP2011Background
- Debtor Donna Brockman and her former husband granted a mortgage to American General Home Equity, Inc. for $132,897.86, recorded January 30, 2006.
- The mortgage describes the encumbered property by referencing Exhibit A with an Exhibit A legal description attached to and recorded with the mortgage.
- Exhibit A describes the property as Lot No. 6, Block F, Unit 1-E of the Fairhaven Subdivision, and references a deed from First Kentucky Homes, Inc. to Hogston and Donna Hogston (1988).
- The Chapter 7 Trustee sought to avoid the mortgage under 11 U.S.C. § 544 on the theory the description was insufficient under Kentucky law because Exhibit A appeared after signature and “see EXHIBIT A” was insufficient to incorporate by reference.
- Bankruptcy court granted summary judgment for American General; Trustee appealed seeking to set aside the mortgage as not properly described.
- Kentucky law allows incorporation by reference and requires sufficient description to enable locating the land; Exhibit A attached and referenced before the signature supports a valid description.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether 'see EXHIBIT A' satisfies Kentucky description requirements | Rogan argues the description is precluded by placement and lack of explicit 'attached' language. | American General contends Exhibit A attached and incorporated by reference provides sufficient description. | Yes; incorporating language and Exhibit A provide a valid description under Kentucky law. |
Key Cases Cited
- Thacker v. United Cos. Lending Corp. (In re Thacker), 229 B.R. 139 (Bankr. W.D. Ky. 1998) (recognizes incorporation by reference of attached descriptions)
- Kendrick v. Rothacre, 326 B.R. 398 (Bankr. E.D. Ky. 2005) (recognizes description may be satisfied with extrinsic evidence)
- Bartelt Aviation, Inc. v. Dry Lake Coal Co., Inc., 682 S.W.2d 796 (Ky. Ct. App. 1985) (incorporation by reference valid when terms appear above signature)
- Consol. Aluminum Corp. v. Krieger, 710 S.W.2d 869 (Ky. Ct. App. 1986) (incorporation by reference doctrine applies to separate documents)
- Louisville Joint Stock Land Bank v. McNeely, 102 S.W.2d 389 (Ky. 1937) (confirms sufficiency of description enabling location of land)
- American National Bank v. John Van Range Co., 278 S.W.2d 133 (Ky. 1925) (description may be sufficient with extrinsic evidence)
- Gentry's Guardian v. Gentry, 293 S.W.2d 1094 (Ky. 1927) (signature placement and incorporation considerations)