In Re Elna Kay Brooks, Debtor. Nancy James, Trustee v. Washington Mutual Savings Bank
Opinion
Opinion
Wright, J.
We must determine whether the trustee of a wife’s subsequent bankruptcy may avoid a deed of trust rerecorded in violation of the automatic stay of her husband’s earlier bankruptcy.
I
On October 1, 1984, Washington Mutual Savings Bank loaned $59,923 to Wiley and Elna Brooks. The Bank secured the loan by a deed of trust on the Brooks’ property. The deed was executed, signed by the Brooks, and recorded on October 3, 1984. The Bank discovered later that the property description was incorrect, changed it, and rerecorded the deed on June 5, 1985.
On June 3, 1985, two days before the Bank’s correction, Wiley Brooks had filed a petition in bankruptcy. His trustee did not challenge the deed. The bankruptcy court discharged him and closed his case on September 18, 1985.
Elna Brooks filed a bankruptcy petition four months later on January 6, 1986. The Brooks were divorced after she filed. The trustee of her bankruptcy estate challenged the Bank’s deed of trust, asserting that it was void because the Bank recorded it in violation of 11 U.S.C. § 362 (1982 & Supp. IV 1986). The bankruptcy court voided the deed. The Bankruptcy Appellate Panel reversed. 79 B.R. 479 .