UNITED STATES BANKRUPTCY COURT

EASTERN DISTRICT OF KENTUCKY

PIKEVILLE DIVISION

 

 

 

IN RE:

DAN WICKER

DEBTOR CASE NO. 89-00026

 

 

SUSAN MULLINS JOHNSON, TRUSTEE

and CONSOLIDATION COAL COMPANY

OF KENTUCKY PLAINTIFFS

 

VS. ADV. NO. 89-0070

 

DAN WICKER, et al. DEFENDANTS

 

OPINION AND ORDER

This matter is before the Court for determination of the priority of the various claimants to funds in the hands of the Trustee herein. This Court has jurisdiction of this matter pursuant to 28 U.S.C. '1334(b); it is a core proceeding pursuant to 28 U.S.C. '157(b)(2)(K).

Pursuant to this Court's Order entered May 22, 1990, the Trustee submitted to the defendants a proposed Stipulation of Facts regarding the liens of record in the Knott County Clerk's Office against the premises described in the plaintiffs' Complaint. The Stipulation, which was not contested by any party herein, set out the following liens of record against Dan Wicker:

a) A certain Notice of State Tax Lien against Dan Wicker, d/b/a W & B Coal Company, dated December 17, 1985 and recorded on December 30, 1985, in Office of the Knott County Clerk in Lis Pendens Book 6, at Page 234, Lien Number 185108.

b) A certain Notice of State Tax Lien against Dan Wicker, dated November 22, 1988, and recorded on December 6, 1988, in the Office of the Knott County Clerk in Lis Pendens Book 8, at Page 59, Lien Number 361039.

c) A certain Notice of Lien of defendant Commonwealth of Kentucky, Cabinet for Human Resources, Division of Unemployment Insurance, against Dan Wicker, dated December 9, 1988, and recorded in the Office of the Knott County Clerk in Lis Pendens Book 8, at Page 141, Lien Number 880595.

d) A certain federal tax lien of record in the Office of the Knott County Clerk for taxes owed by the debtor, filed on October 18, 1988, in the amount of $226,576.71, Tax Lien Number 6101-1278, Taxpayer I.D. No. XXX-XX-6702, in Lis Pendens Book 7, at Page 706.

e) A certain federal tax lien of record in the Office of the Knott County Clerk for taxes owed by the debtor, filed on October 18, 1988, in the amount of $226,576.71, Tax Lien Number 6101-1278, Taxpayer I.D. No. XXX-XX-1623, in Lis Pendens Book 7, at Page 707.

f) A certain Notice of Judgment Lien arising out of Civil Action No. 82-73, United States District Court, Eastern District of Kentucky, at Pikeville, in the principal amount of $66,456.04, together with interest, costs and attorneys' fees as specified therein, of the defendants Harrison Combs, John J. O'Connell and Paul R. Dean as Trustees of the United Mine Workers of America Health and Retirement Fund, recorded in Lis Pendens Book 7, at Page 695, in the Office of the Knott County Clerk.

g) A certain Notice of Judgment Lien arising out of Civil Action No. 88-CI-026, Knott Circuit Court, in the principal amount of $84,002.69, together with interest, costs, and attorneys' fees as specified therein, of the defendant Sandy Valley Explosives Co., Inc., recorded on December 12, 1988, in Lis Pendens Book 8, at Page 131, in the Office of the Knott County Clerk.

h) 1980 Tax Bill No. 8892 against Dan Wicker and Thelma Wicker;

1986 Tax Bill No. 7152 against Dan Wicker and Thelma Wicker;

1987 Tax Bill No. 7355 against Dan Wicker and Thelma Wicker;

1988 Tax Bill No. 7533 against Dan Wicker and Thelma Wicker;

1988 Tax Bill No. 7562 against Thelma Wicker;

1980 Tax Bill No. 8891 against Curtis Wicker;

1981 Tax Bill No. 6713 against Curtis Wicker;

1982 Tax Bill No. 7166 against Curtis Wicker;

1983 Tax Bill No. 6871 against Curtis Wicker;

1984 Tax Bill No. 5923 against Curtis Wicker;

1985 Tax Bill No. 6675 against Curtis Wicker;

1986 Tax Bill No. 7151 against Curtis Wicker;

1987 Tax Bill No. 7354 against Curtis Wicker;

1988 Tax Bill No. 7532 against Curtis Wicker

Priority of liens such as those asserted in this matter is determined according to the principle of "first in time, first in right". In re Terwilliger's Catering Plus, Inc., 911 F.2d 1168 (6th Cir. 1990) In re Darnell, 834 F.2d 1263 (6th Cir. 1987). This case also states that the debtor's assets in the hands of the trustee are subject to all liens and encumbrances existing at the date of bankruptcy and which are not otherwise invalidated by law. Id, at 1265. KRS 134.420(1) provides in part that "[t]he state and each county shall have a lien on the property assessed for taxes due them respectively for five (5) years following the date when the taxes become delinquent, and also on any real property owned by a delinquent taxpayer at the date when the sheriff offers the tax claims for sale as provided in KRS 134.430 and 134.440." Therefore, before determining the priority of liens herein, this Court must first determine if certain liens for state and county taxes have aged to the point where they no longer exist.

KRS 134.020(1) provides that all state, county and district taxes become due and payable on September 15 following the assessment; KRS 134.020(3) provides that these taxes become delinquent on January 1 following their due date. The debtor filed his bankruptcy petition in this Court on January 18, 1989. In order for a lien for any state or county tax to exist at the date of bankruptcy the relevant tax would have had to become delinquent no earlier than January 1, 1985. Therefore Knott County no longer has liens for Tax Bill No. 8892 (1980) against Dan and Thelma Wicker, or Tax Bills No. 8891 (1980), No. 6713 (1981), No. 7166 (1982), or No. 5923 (1983) against Curtis Wicker.

It is therefore the opinion of this Court that the priority of the remaining liens may be set out as follows:

1. Lien for 1984 Tax Bill No. 5923 against Curtis Wicker

2. State Tax Lien Number 185108 recorded December 30, 1985, in Lis Pendens Book 6, at Page 234.

3. Lien for 1985 Tax Bill No. 6675 against Curtis Wicker.

4. Liens for 1986 Tax Bill No. 7152 against Dan and Thelma Wicker and 1986 Tax Bill No. 7151 against Curtis Wicker.

5. Liens for 1987 Tax Bill No. 7355 against Dan and Thelma Wicker and 1987 Tax Bill No. 7354 against Curtis Wicker.

6. Judgment Lien of UMWA arising out of Civil Action No. 82-73, recorded on October 6, 1988, in Lis Pendens Book 7, at Page 695.

7. Federal Tax Liens filed on October 18, 1988, in Lis Pendens Book 7, at Page 706 and at Page 707.

8. State Tax Lien Number 361039 recorded on December 6, 1988, in Lis Pendens Book 8, at Page 59.

9. Commonwealth of Kentucky, Cabinet for Human Resources, Division of Unemployment Insurance Lien Number 880595, dated December 9, 1988, and recorded in Lis Pendens Book 8, at Page 141.

10. Judgment Lien of Sandy Valley Explosives Co., Inc., arising out of Civil Action No. 88-CI-026, recorded on December 12, 1988, in Lis Pendens Book 8, at Page 131.

11. Liens for 1988 Tax Bill No. 7533 against Dan and Thelma Wicker, 1988 Tax Bill No. 7562 against Thelma Wicker, and 1988 Tax Bill No. 7532 against Curtis Wicker.

In consideration of the foregoing, it is hereby ORDERED that the trustee distribute the property of the estate in her hands to the various claimants in accordance with the priority of their liens.

Dated:

 

By the Court -

 

_______________________________

Judge

 

Copies to:

Susan Mullins Johnson, Esq., Trustee

Bruce E. Cryder, Esq.

Dan Wicker

Thelma Wicker

Hon. Homer Sawyer, Knott County Judge-Executive

Hon. Frederic J. Cowan, Jr., Attorney General

Hon. Louis DeFalaise, United States Attorney

United States Attorney General

Ben Cassidy

Harrison Combs

John J. O'Connell

Paul R. Dean

mwicker.opi