Can Creditors Put a Lien on Joint Tenancy Property
Posted on : August 8, 2016, By: Christopher Hildebrand
Can Creditors Put a Lien on Joint Tenancy Property?
In Arizona, property acquired by spouses during marriage is usually presumed to be community property. But, is this the case when a married couple holds property as joint tenants with the right of survivorship? In re MURIN, Debtor, 283 B.R. 588 (2002), the Bankruptcy Court addressed this question.
Facts of the Case
Can a Creditor Put a Lien on Joint Tenancy Property?
Mr. Murin embezzled funds from Mr. Monahan. He agreed to pay back the money. Mr. Murin also gave Monahan a note secured by a deed of trust on his marital residence.
Mr. Murin and his wife, Mrs. Murin, owned the residence as joint tenants with right of survivorship. Mrs. Murin refused to sign the deed of trust. At some point after that, wife filed for divorce and husband got full ownership of the house.
Mr. Murin defaulted on the note. Monahan filed for a trustee’s sale. Mr. Murin declared Chapter 13 bankruptcy and asked for court confirmation of his bankruptcy plan. Monahan asked the Court to deny confirmation of Mr. Murin’s plan since he did not treat Monahan’s debt as secured.
Husband argues that Monahan’s claim is unsecured. He claims that the lien did not attach to his home because his wife did not sign the deed of trust.
Arizona law specifies that a trust deed on community property is not valid unless both spouses execute and acknowledge it.
Monahan responds that any defect was cured when Mr. Murin took title to the whole property in the divorce. Murin cites the Arizona Supreme Court opinion in Rundle v. Winters, 298 P. 933 (1931). It holds that when a spouse tries to encumber community property acquired during the marriage, the contract is void and not merely suspended.
Mr. Murin claims that Rundle applies to void Monahan’s deed of trust. Monahan responds that Rundle applies only to community property, not to property held in joint tenancy. Husband replies that spouses hold joint tenancy property as community property.
Is Joint Tenancy Property the Same as Community Property?
Husband admits that the spouses held title under a joint tenancy deed. He claims that this does not prevent the house from being community property. However, Arizona laws make clear that these are two different ways of holding property.
Evidence that spouses agreed to hold the property as joint tenants show that they did not take it as community property. Here, the Court found that the house was held in joint tenancy, not as community property.
Does Rundle Apply to Joint Tenancy Property?
Murin relies solely on Rundle to support his argument that the deed of trust he gave Monahan was void. Rundle applies to community property. The Bankruptcy Court considered whether Arizona courts would extend that holding to joint tenancy property.
Joint Tenancy Property: Can a Creditor Put a Lien?
The Rundle court did not explain the policies behind its holding. It did not explain why a contract made by one spouse that encumbers community real property is forever void. It did not discuss why the contract was not merely suspended should the contracting spouse later acquire valid separate title. In fact, courts have ignored the Rundle holding for decades.
Rundle served only one interest, according to the Bankruptcy Court. That was to protect the non-contracting spouse’s share of the community real property. But even that policy doesn’t apply after a divorce.
The better view is to regard the conveyance as a contract to convey. Courts will enforce this contract to convey once the couple is no longer married.
Moreover, no policy reasons exist to extend Rundle to a spouses’ non-community property. A court has no reason to protect a spouse’s interest in property that is not shared by the community after a divorce.
Mr. Murin intended to give Monahan a lien against the entire house, not just against his interest. Absent the overriding protection of community property law, a court should give effect to that intent.
The Court found that Monahan had a valid lien against Murin’s house. The Court agreed with Monahan’s objection to Murin’s plan. It did not approve Murin’s plan since the plan did not treat Monahan’s claim as secured.
Jennifer, thank you for being my attorney. I could not have been more pleased with the outcome of my family court hearing. Everything you have done for me throughout this case reflects in the final ruling of the judge. You helped me keep my head together and taught me a lot about myself as a person. I learned so much about my life from observing and listening to you. I will take all the advice you gave me to continue taking responsibility for my choices, continue to put the kids' needs first, and always stay truthful. Your diligence, dedication, and persistence in my case made what seemed impossible, possible. You are a wonderful person and an amazing attorney and I am stronger and more confident because of you.
I just want to again thank the Firm for working with me all that it has. I could not have done anything without everyone's assistance. You, Chris and Stacey have been and continue to provide me with compassion and hard work towards my case. Also a very special thanks to Kip for taking my case in the beginning. Also continued support from him and his dedication to providing me with his expertise in this matter.
After interviewing several law firms, I came across Jennifer Shick, and her firm, who I hired to represent me for my Family Court case. Jennifer has extensive knowledge of the law and is determined to bring the truth to every issue involved within the case. Throughout my case, Jennifer was prepared meticulously as well as went above and beyond all of my expectations. Even when the other party tried to differ from the truth, lie to the Judge, and turn situations around, Jennifer remained attentive and provided substantial evidence to show the judge the facts as well as the proof to support what was the best interests of my children. Additionally, Jennifer helped me endure many difficult experiences, situations and inspired me to remain positive throughout the entirety of my case. Her kindness, compassion, and professionalism helped me through very difficult times and made the process feel a thousand times lighter on my shoulders. She truly has my children and my best interest at heart and I trust her perspective as well as her honesty on each and every aspect of my case. She lessened the burden on my shoulders and even when I felt like the case was not going to go in my favor, Jennifer was open-minded and reassured me that the Judge would, in fact, see the truth, which he did and the case went in my favor. After nine months of court, everything finally came together. I cannot declare how much Jennifer has been an outstanding attorney. She addressed each and every issue with diligence, she cares about her clients and their families. Jennifer genuinely cares about her clients and her dedication to the details of the case was remarkable. Overall, I am extremely pleased with Jennifer’s services and I am truly thankful that I was so blessed to have her represent my children and me. I highly recommend Jennifer as one of the best attorneys in Arizona and if the situation ever arises, I will definitely have her represent my children and me again.
Dear Stacey and Kip, How can I ever thank you enough for helping me through the most difficult time in my life? I couldn't put into words my heartfelt gratefulness. You both were so compassionate and professional at every given moment throughout this process with me. I thank you from the bottom of my heart. You helped me to regain my freedom.
I was a client of Attorney Kevin Park for the dissolution of a divorce in 2016. And since I had never had the need to hire an attorney before for any purpose, I was somewhat apprehensive of the process. But the very calm and professional demeanor of Mr. Park eased my fears. He adeptly answered all my questions and I clearly knew the process and what to expect. And the skilled manner he communicated with opposing counsel was perfect. When it came down to negotiating with my spouse’s counsel, I knew I had selected the best attorney for my situation. What I noticed and appreciated was that he was using just the right amount of pressure with opposing counsel as was necessary. If you find yourself in this situation, you will want a seasoned professional like Mr. Park on your side. I'm very grateful that he was my attorney and not the opposition!
Chris is a smart and aggressive attorney for his clients. Chris always tries to reach a fair settlement of his cases. I’ve represented clients when Chris was the opposing counsel and while he is professional and amicable to work with, he does not back off on what he needs to do for his client
Kevin Park of Arizona Estate Planning Attorneys was just what I needed for my divorce. He was very approachable and personable. He was quick to recognize what I needed and provided it quickly and efficiently. I hope to never need a divorce lawyer again, but if I know anyone else who does, I will definitely recommend Kevin.
I feel that Tracey Van Wickler is certainly one of the best family lawyers around. She is logical, intelligent, and truly cares. Tracey always does what is in the clients best interest, does it well, timely and with integrity. She is good at keeping her clients informed as to what is going on and clear in her communication both written and verbally. I have recommended Tracey to other people and will continue to recommend her. I recommended Tracey to someone who was having issues with their ex-wife and his response was, “I know how good she is because I went up against her and she ate me for lunch”. This same person was so impressed with her, he even recommended her to someone else, WOW, that is impressive! I am exceptionally happy with her attention to detail, her ability to explain things in ways that are easy to understand, as well as her ability to keep everyone focused on the most important things. I would recommend Tracey to anyone who may be in need of her services.
I retained Hildebrand Law after interview a number of firms in the valley. Working with Michael C. was incredibly easy and informative. My case progressed in such a organized and thought out way to ensure that my needs were met. Michael was incredibly proactive and was able to see far ahead into my case to steer clear of some roadblocks. I would not hesitate to recommend Michael Clancy, and Hildebrand Law in general, to anyone.
I have worked with Hildebrand law for about 8 years. They are always ready to serve, provide guidance and give you a few options. When they provide you options they also take the time to walk you through the pros and cons of each and give you a recommendation of what is best, but will listen to you and support whatever course you choose after making and educated choice. I’d recommend them to my closest friends and feel Chris Hildebrand is now a friend to me.
Despite the unfortunate situation I found myself in, Chris Hildebrand @ Hildebrand Law helped me maneuver every step with professionalism, expertise, and even a sensitivity that was an added bonus.Chris and his staff helped me even when I didn't know I needed the help. In other words. . . they made sure we did not leave anything undone. And in the rare instance we needed the expertise of another professional, Chris knew exactly who to recommend.Chris also knew, because of his experience, what to anticipate down the road of litigation. That meant we were better prepared to meet the challenges head on, which lead to a more equitable and fair outcome. I appreciated that Chris did his best to meet my every need in a timely fashion, even if I had a simple question that required only a phone call or e-mail or if we needed to talk face-to-face.I highly recommend Chris Hildebrand @ Hildebrand Law, PC.