Opinion ID: 218998
Heading Depth: 2
Heading Rank: 3

Heading: facts

Text: On January 27, 2006, Donna S. Brockman1 (“Debtor”) and her former husband, David Hogston, granted a mortgage in favor of American General Home Equity, Inc. (“American General”) to secure indebtedness of $132,897.86. The mortgage was duly recorded on January 30, 2006, in the Fayette County Clerk’s Office in Mortgage Book 5610, pages 141-146. In the space provided for a property description, the mortgage reads: see EXHIBIT “A.” Following the page containing the Debtor’s signature is a page marked “EXHIBIT A LEGAL DESCRIPTION.” That page is attached to and recorded with the mortgage at page 146 of the county mortgage book and provides, in pertinent part: Being all of Lot No. 6, Block “F”, Unit 1-E of the Fairhaven Subdivision, to the City of Lexington, Fayette County, Kentucky, as shown by plat of record in Plat Cabinet F, Slide 498, in the Fayette County Clerk’s Office, to which reference is made for a more particular description of the property. BEING THE PROPERTY CONVEYED IN Deed from First Kentucky Homes, Inc. to David Hogston and Donna R. Hogston, Husband and Wife, dated 6/14/1988, recorded 06/15/1988, in Deed Book 1479, Page 575, in the County Clerk’s Office for Fayette County, Kentucky. (Exhibit 1 to Appellant’s Br. at 5.) On January 29, 2010, the Debtor and her current husband, Steven W. Brockman, filed a voluntary petition for relief under chapter 7 of the Bankruptcy Code. On February 1, 2010, J. James Rogan was appointed chapter 7 trustee (“Trustee”). On May 20, 2010, the Trustee filed an adversary complaint seeking to avoid the mortgage granted in favor of American General by the Debtor and her former husband, David Hogston.2 The Trustee’s adversary complaint sought to avoid American General’s mortgage pursuant to the Trustee’s powers as a hypothetical bona fide purchaser under 11 U.S.C. § 544. The Trustee argues that the mortgage is avoidable because the property encumbered was not described prior to 1 Formerly known as Donna R. Hogston. 2 The Debtor was the sole owner of the mortgaged property when the chapter 7 petition for relief was filed. -3- the signature page of the mortgage. The Trustee asserts that the language, “see EXHIBIT A,” does not satisfy the statutory requirement found in Ky. Rev. Stat. Ann. § 440.060(1). On June 11, 2010, American General filed a motion to dismiss the Trustee’s adversary complaint. American General argued that the mortgage was valid based on the incorporation by reference doctrine. On July 19, 2010, the Trustee filed a response to American General’s motion to dismiss. After fully briefing the issues and arguing the matter before the bankruptcy court, the parties agreed to have American General’s motion to dismiss, and the Trustee’s response thereto, deemed cross-motions for summary judgment. The motions were submitted to the bankruptcy court for decision on the record. On August 6, 2010, the bankruptcy court issued an order granting American General’s motion for summary judgment and overruling the Trustee’s cross-motion for summary judgment. The Trustee’s timely appeal followed.