In re Bowers (Ch. 7 Case No. 18-70224, Adv. No. 18-07006)

In this case, the Chapter 7 trustee sought summary judgment on an action to determine the secured status of a claim on the Debtor’s real estate.  The claim was secured by a recorded security deed.  Subsequently, two instruments were recorded canceling the security deed; the instruments, however, were signed and recorded by a party without a recorded interest in the property.  The record indicated the instruments were recorded in error.  The holder of the claim argued that, because the party signing the instruments was a stranger in title, a hypothetical purchaser would have had inquiry notice of the error.  The Court disagreed.  It held that, because the instruments stated the claim was assigned  to the signors of the instruments and otherwise complied with Georgia law, the instruments were neither inconsistent nor facially deficient.  Thus, a bona fide purchaser—such as the trustee—could rely on the statements within the instruments.

Wednesday, December 26, 2018