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United States of America - Bureau of Indian Affairs v. David J. Hump, Karen L. Hump, and Trustee John S. Lovald (In re Hump)

Bankr. No.: 
Adv. No.: 
Date of Decision: 
June 26, 2007
(1) Whether plaintiff was entitled to summary judgment permitting it to record a mortgage that was not recorded on the date debtors-defendants filed their chapter 12 petition? (2) Whether plaintiff was entitled to summary judgment granting it an equitable lien against the real property described in its unrecorded mortgage?
(1) No. Plaintiff did not request, or demonstrate cause for, relief from the automatic stay. Plaintiff also did not identify a “generally applicable law” within the meaning of 11 U.S.C. § 546(b)(1) and (b)(1)(A), or demonstrate any such generally applicable law would permit perfection of its mortgage to be effective against an intervening creditor. (2) No. There is some question whether a court may recognize, much less grant, an equitable lien when a mortgage holder has not perfected its lien. Even if the Court were to grant plaintiff such a lien, debtors-defendants would be able to avoid it pursuant to 11 U.S.C. § 544. Granting plaintiff such a lien would therefore serve no legitimate purpose.
Full Bankruptcy Court Decision: