First Federal Bank v. Chevy Chase Bank

concurring:

I agree that the bankruptcy court’s original judgment should be reinstated. However, I write separately because I believe we can affirm the bankruptcy court’s priority determination without addressing whether Mark Tiffany’s conveyance of his interest in the property to his wife, Melo-dye, was a fraudulent transfer.

Under California law, until a judgment lien is satisfied or extinguished, it remains enforceable against the judgment debtor’s real property interests regardless of whether the property is transferred to a third party. Dieden v. Schmidt, 104 Cal. App.4th 645 , 128 Cal.Rptr.2d 365, 369 (Cal.Ct.App.2002); see also CahCode of Civ. P. § 697.390(a) (“[A] subsequent conveyance of an interest in real property subject to a judgment lien does not affect the lien”). Thus, where a judgment debtor transfers his real property interest, and that interest *306 is subject to an unsatisfied judgment lien, the lien may be enforced against the transferred property in the same manner and to the same extent as if there has been no transfer. Weeks v. Pederson (In re Peder-son), 230 B.R. 158, 163 (9th Cir.BAP1999); Cal.Code of Civ. P. § 695.070.

In this case, the bankruptcy…

MEMORANDUM *

First Federal Bank of California (“First Federal”) appeals from a decision of the United States Bankruptcy Appellate Panel of the Ninth Circuit (“BAP”), which affirmed in part and reversed in part a judgment of the bankruptcy court. The bankruptcy court and the BAP established the priority of competing interests in proceeds from the sale of the property at 6372 Gondola Way in San Jose, California (“the property”). First Federal argues that the BAP erred by (1) finding that Sentinel Trust’s deed of trust had priority over First Federal’s judgment lien and (2) concluding that Chevy Chase Bank, F.S.B. (“Chevy Chase”) is entitled to equitable subrogation. With regard to equitable subrogation, First Federal specifically argues that the BAP should have concluded (a) that First American Title Insurance Company (“Fúst American”) (Chevy Chase’s title insurance company) is the real party in interest in this action, (b) that Chevy Chase (through the real party in interest, First American) engaged in inexcusable and culpable neglect, and (c) that injustice would occur by applying equitable subrogation.

The parties are familiar with the facts of this case, and we do not repeat…