United States Bankruptcy Appellate Panel of the Eighth Circuit
In re: Tracy John Clement, doing business as Clement Farms, Debtor.
CUSB Bank, formerly known as CUS Bank Defendant - Appellant Phillip L. Kunkel, as Chapter 11 Trustee Plaintiff - Appellee,
Submitted: June 28, 2019 Filed: August 8, 2019
from United States Bankruptcy Court for the District of
Minnesota - St. Paul
SCHERMER, SHODEEN and DOW, Bankruptcy Judges.
SHODEEN, BANKRUPTCY JUDGE
Bank appeals the Bankruptcy Court's entry of summary
judgment in favor of Phillip Kunkel, Trustee. For the reasons
that follow, we affirm.
review a bankruptcy court's grant of summary judgment
de novo. Mwesigwa v. DAP, Inc., 637 F.3d
884, 887 (8th Cir. 2011) (citing Anderson v. Durham D
& M, L.L.C., 606 F.3d 513, 518 (8th Cir. 2010)). We
will affirm if "there is no genuine dispute as to any
material fact and the movant is entitled to judgment as a
matter of law." Fed.R.Civ.P. 56(a). "We may affirm
on any basis supported by the record." Seaver v. New
Buffalo Auto Sales, LLC (In re Hecker), 459 B.R. 6,
10-11 (B.A.P. 8th Cir. 2011); Schoelch v. Mitchell,
625 F.3d 1041, 1046 (8th Cir. 2010) (citing Moyle v.
Anderson, 571 F.3d 814, 817 (8th Cir. 2009)). Here we
review de novo whether the bankruptcy court's
conclusions interpreting the relevant statutes and applying
them to the undisputed facts is correct. Fisette v.
Keller (In re Fisette), 455 B.R. 177, 180 (B.A.P. 8th
Cir. 2011); Checkett v. Sutton (In re Sutton), 365
B.R. 900, 904 (B.A.P. 8th Cir. 2007).
he was married, Tracy Clement purchased real estate with his
father. Each of them acquired a one-half interest as tenants
in common in two parcels that are identified as the
"Miller Property" and the "Nolt Property"
(Real Estate). Tracy's wife Nancy never held title in
and Nancy Clement divorced in 2012. Under Minnesota law all
real or personal property whether title is held individually
or jointly is considered marital property. Minn. Stat. Ann.
§ 518.003. The state court divided Tracy and Nancy's
assets and marital interests in their divorce. The Real
Estate was awarded to Tracy. By statute Minnesota authorizes
the use of a Summary Real Estate
Judgment (Judgment) to convey and transfer real estate that
is the subject of a property settlement in a dissolution
proceeding. Minn Stat. Ann. § 518.191. A Judgment
awarding Nancy's marital interest in the Real Estate to
Tracy was issued by the state court and was filed of record
in the respective counties where the Real Estate is situated
on June 11, 2012.
on July 2, 2012 Nancy executed a trustee's quit claim
deed for the Real Estate from her revocable trust to
Tracy's revocable trust. Following these conveyances,
CUSB Bank entered a mortgage with the Tracy J. Clement
Revocable Trust on the Real Estate. The Mortgage was properly
filed a voluntary chapter 11 bankruptcy petition in 2016.
Kunkel filed an adversary proceeding to avoid the Bank's
mortgage as unenforceable pursuant to 11 USC §544(a)(3).
He filed a motion for summary judgment arguing that Tracy
owns the Real Estate and the Bank holds a mortgage with
Tracy's trust, an entity that has never been in title.
The bankruptcy court concluded that the Judgment served to
convey whatever interest Nancy may have held in the Real
Estate to Tracy and granted summary judgment in favor of
Kunkel avoiding the Bank's mortgage and preserving it for
the estate's benefit under 11 U.S.C. §551. ...