Tibble v. Wells Fargo Bank, N.A. (In Re Hudson), 455 B.R. 648

Debtor Terri Hudson owns Lot 5 in Watson Estates; Bank’s mortgage is on Lot 6 due to a misdescribed legal description.
Lot 4, Lot 5, and Lot 6 are platted parcels with distinct permanent parcel numbers and street addresses; Lot 5 was previously mortgaged to Wells Fargo Home Mortgage, Inc. and later discharged.
Mortgage on Lot 5 was released in 2004; divorce judgment later awarded Lot 5 to Debtor; name changes appear in records.
Bank’s mortgage describes property as Lot 6 in Exhibit A, but includes some Lot 5 identifiers in addresses and indices.
Trustee, as a hypothetical BFP under 11 U.S.C. § 544(a)(3), seeks to avoid any Bank interest in Lot 5 because the lien attaches to the wrong parcel.
Court evaluates whether Lot 6 mortgage can provide constructive notice regarding Lot 5 and whether the Bank’s lien is valid or avoidable.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Bank’s Lot 6 mortgage is void as to Lot 5 due to misdescription	Tibble argues Lot 5 is misdescribed; mortgage should be invalid against Lot 5.	Wells Fargo contends mortgage on Lot 6 may still be valid under LDA and recording laws.	Lot 5 mortgage avoidable; misdescription defeats validity against Lot 5.
Whether Trustee may avoid Bank’s lien on Lot 5 under § 544(a)(3)	Trustee as BFP may avoid voidable transfers; constructively notice does not defeat BFP status.	Bank argues constructive notice from Lot 6 description could bind a BFP to Lot 5.	Bank’s interest in Lot 5 is avoidable; lien preserved for estate under § 551.
Whether a final order by the Article I bankruptcy judge is constitutionally authorized	Court should decide since proceeding involves core lien avoidance under § 544(a)(3).	Stern v. Marshall raises concerns about finality for certain core proceedings by Article I judges.	Final order entered; core lien-avoidance proceeding may be decided by bankruptcy judge.

In re Brandt, 434 B.R. 493 (W.D. Mich. 2010) (plat-based description required for notices; legality of recording Lot 6 mortgage)
Moyer v. Edlund (In re Vandenbosch), 405 B.R. 253 (Bankr. W.D. Mich. 2009) (mortgage on wrong parcel not notice to BFP)
Simon v. Chase Manhattan Bank (In re Zaptocky), 250 F.3d 1020 (6th Cir. 2001) (BFP status determined for avoidance under § 544(a)(3))
Rogan v. American General Home Equity, Inc. (In re Brockman), 451 B.R. 421 (6th Cir. BAP 2011) (BFP status and notice considerations in lien avoidance)
In re Cook, 457 F.3d 561 (6th Cir. 2006) (constructive notice and chain of title concepts for BFPs)
First of America Bank v. Alt, 848 F. Supp. 1343 (W.D. Mich. 1993) (statutory interpretation of Michigan recording acts and notice)
Stern v. Marshall, 131 S. Ct. 2594 (2011) (constitutional limitation on Article I bankruptcy judges for certain core matters)
Richardson v. Wells Fargo Home Mortg. Co. (In re Brandt), 434 B.R. 493 (W.D. Mich. 2010) (recording act requires plat/lot references for valid notice)
Richardson v. Wells Fargo Home Mortg. Co. (In re Brandt), 421 B.R. 426 (Bankr. W.D. Mich. 2009) (addressed LDA and plat descriptive requirements)
American Cedar & Lumber Co. v. Gustin, 236 Mich. 351 (Mich. 1926) (notice standards for real property conveyances)