Bankruptcy Law

James Cole, Esquire

Missouri life insurance statutes do not provide exemptions for a non-qualified deferred variable annuity. In re Bryan, No. 11-6068 (BAP 8th Cir. 3/22/12).

The Bankruptcy Appellate Panel holds that several sections of Missouri law (§§  513.430.1 (7), 377.090, 377.330) that arguably provide exemptions for life insurance policies do not exempt an annuity. It is irrelevant that the annuity was issued by a life insurance company. The panel further notes that the precedential effect of Benn v. Cole (In re Benn), 491 F.3d 811 (8th Cir. 2007), “was not affected” by the opinion of the Missouri Court of Appeals in Russell v. Healthmont of Missouri, LLC, 348 S.W.3d 784 (Mo. App. 2011).

Lost, unrecorded mortgage may be avoided by trustee as unperfected lien under “strong arm” power of § 544(a)(1), notwithstanding recording of affidavit with copy of mortgage attached. Olsen v. Chase Bank USA, N.A. (In re Gilmore), Nos. 11-2011 & 11-2012 (Bankruptcy W.D. Mo. 3/7/12).

Four years after borrowers provided a deed of trust to lender, someone realized that it had not been recorded. The original could not be found. An agent of the title company recorded an affidavit in the Recorder’s Office with a copy of the deed of trust attached. Borrowers thereafter filed separate Chapter 7 cases, and the trustees sued to avoid the lien of the deed of trust. The bankruptcy court held that under Missouri law, a deed of trust  is not recorded unless the document with original signatures is delivered to the Recorder. If a deed is lost before it can be recorded, § 527.190, RSMo., provides the remedy. Recording an affidavit with a copy of the deed of trust attached does not suffice. The mortgage being unrecorded, it was unperfected and the trustees were entitled to avoidance. (The lender filed but later dismissed an appeal.)