Case Summary:
Trustee sought to avoid a mortgage because it did not have legal descriptions of the property attached to it. The lender had filed an “affidavit of correction” in which it attempted to add two parcels to the mortgage. The trustee contended that the mortgage was void against a subsequent purchaser for value and that the affidavit of correction was likewise invalid because it was not executed by the owners of the property. The court found that the original mortgage was defective insofar as the failure to attach the legal descriptions meant that the mortgage did not appear in the relevant tract index. The affidavit of correction was invalid because it was not properly executed, and could not provide constructive notice of another defective instrument. The lender was also not entitled to an equitable lien or equitable subordination. The lender’s motion for summary judgment was denied.

Statute/Rule References:
11 U.S.C. § 544 -- Trustee as Lien Creditor
Wis. Stat. § 706.05 -- Formal Requisites for Record
Wis. Stat. § 706.085 -- Correction Instruments
Wis. Stat. § 706.09 -- Notice of Conveyance from the Record

Key Terms:
Lien Avoidance
“Strong Arm” Power