2 ABR 219 
HERBERT A. ROSS
U.S. Bankruptcy Judge

UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF ALASKA
605 West 4th Avenue, Room 138, Anchorage, AK 99501-2296 (Phone 907/271-2655)

In re
JACQUELINE JORDAN, aka Jackie
Jordan, aka J. R. Jordan,
	Case No. F88-00735-HAR
	Chapter 7
Debtor(s).	ORDER DENYING RECONSIDERATION
	OF ORDER DENYING MOTION TO
	REINSTATE DEED OF TRUST

     On September 10, 1991, I denied a motion of Brian and Sue Wilson to reinstate a deed of trust on Lot 5, Block 7, BARTLETT HEIGHTS SUBDIVISION, in the Fairbanks Recording District, Alaska. The Wilsons have moved for reconsideration.

      On August 30, 1988, the debtor gave a deed-in-lieu of foreclosure for the benefit of the Wilsons to Transamerica Title Insurance Company. The Wilsons signed off on that deed the next day, September 1, 1988, acknowledging they were taking the deed-in-     2 ABR 220  lieu of proceeding against Jordan individually. Transamerica, however, neglected to record the deed until October 7, 1988.

     Between September 1, 1988 (the date of the deed-in-lieu) and October 7, 1988 (the date of its recording), a number of judgment liens against debtor apparently attached to the property. The Wilsons indicate the judgment lienors are Gene's, Inc.; Alaska USA Federal Credit Union; Interior Credit Bureau; and Northern Lights Garden Center.

     On October 3, 1988, just prior to the title company's recording the the deed-in-lieu of foreclosure, the debtor filed a Chapter 7 bankruptcy petition.

     I denied the original motion to reinstate the deed of trust because I was not certain who the judgment lien creditors were at that time, or whether the reinstatement would have some kind of adverse tax implications for the trustee. I also suggested that the Wilsons might still be able to foreclose in the event the deed-in-lieu of foreclosure did not merge with the deed of trust with respect to any junior lien creditors. I also felt the title company might be the real motivating force behind the motion.

     In their motion to reconsider, the Wilsons' attorney acknowledged that he is being paid by the title company to represent the interests of the Wilsons, and states that there are no adverse tax implications for the trustee and that the deed in fact merged with the deed of trust barring the debtor's ability to     2 ABR 221  use Harris v. Alaska Title Guaranty Company, 510 P2d 501 (Alaska 1973).

     After reviewing the matter, I determined that the motion to reconsider should be denied for three reasons.

     First, the court probably does not have subject matter jurisdiction. See, In re Fietz, 852 F2d 455 (9th Cir. 1988). The trustee has now indicated there will be no distribution in this estate and has abandoned the property. This is a no asset case. The only dispute now remains between the Wilsons and potential judgment lien creditors. This in no way will effect the estate.

     The second reason is that the Wilsons have cited no authority to me which would allow me to reinstate a deed of trust which they say was merged prior to the bankruptcy. They have cited vague equitable grounds and unjust enrichment, but nothing fact specific to the facts of this matter.

     Third, the notice of the motion to reinstate that was given to the judgment lien creditors is inadequate. A judgment lien creditor in this situation should have specific notice that his or her judgment lien is being attacked, spelling out the date and amount of the judgment lien and the specifics about the deed of trust. As far as I can tell from the certificates of service, the only people who got the motion which spells out how the judgment lienors might be effected was the trustee and debtor and not the judgment lien creditors themselves.

    2 ABR 222       Nonetheless, it seems likely that the Wilsons would prevail on the merits in state court if they choose to quiet title. The recording of the judgment liens before the deed-in-lieu may not be critical. AS 40.17.080 discusses the effect of recordation in Alaska. Only a subsequent bona fide purchaser without notice would be protected by the recording statute. If the Wilsons took their deed-in-lieu before the judgment liens were recorded they will still probably prime judgment lien creditors.

     Also, the Wilsons' concession that their deed-in-lieu merged with the deed of trust is probably too generous with respect to the unanticipated judgment lien creditors. Compare Mid Kansas Fed. Sav. & Loan Assn. of Wichita v. Dynamic Dev. Corp., 787 P2d 132, 136 (Ariz.App. 1989) (doctrine of merger not favored or implied where it unnecessarily impedes a mortgagee's rights), Federal Land Bank of Wichita v. Colorado Nat'l Bank of Denver, 786 P2d 514 (Colo.App. 1989) (intention to keep mortgage alive inferred where it would have been in mortgagee's best interest), and Altabet v. Monroe Methodist Church, 777 P2d 544, 546 (Wash.App. 1989). The Wilsons may still be able to foreclose out these judgment liens.

     The motivating party behind the Wilsons' motion is a title company. The practical solution for the title company is to protect the Wilsons at the present time issuing them owner's title insurance and stand by to see if any of the judgment lien creditors ever attempt to assert a priority over the Wilsons' interest.

    2 ABR 223 
     It is certain to me that this matter does not belong in bankruptcy. Therefore,

     IT IS ORDERED that the Wilsons' motion to reconsider is DENIED.

DATED: December 11, 1991.
	______________________________
	HERBERT A. ROSS
	Bankruptcy Judge

Serve:
Bryan S. Merrell, Esq. for the Wilsons
Kenneth Battley, Trustee
Brett Wood, Esq. for Debtor
Gene's, Inc.
Alaska USA Federal Credit Union
Interior Credit Bureau
Northern Lights Garden Center
U.S. Trustee	H3832