Case Summary:
The chapter 7 Debtor purchased real property from one of five heirs of the claimant’s Estate. The Estate filed a proof of claim in the bankruptcy case asserting that the debtor was liable for civil theft and sought the value of the property, plus punitive damages and attorney’s fees and costs. The Estate contended that the heir’s transfer of the property to herself through a Transfer by Affidavit was invalid, as was the heir’s transfer of the property from herself to the Debtor. The Debtor’s objection to the claim presented the legal issues whether a single heir can use the Transfer by Affidavit procedure outlined in section 867.03 of the Wisconsin Statutes to take legal title to real property and whether that heir can transfer the real property to a third party. The Court concluded that the Transfer by Affidavit was valid under section 867.03, and that the heir had the ability to transfer the property at issue to the Debtor. Therefore, because the Debtor was not liable for civil theft under the theory presented by the Estate, and the Estate’s claim was disallowed.

Statute/Rule References:
11 U.S.C. § 502
Fed. R. Bankr. P. 3001(f)
Wis. Stat. § 857.01
Wis. Stat. § 867.03

Key Terms:
Motion to Dismiss
Property of Estate