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