AFB & T v. Sullivan (In Re Sullivan)

ORDER

MARGARET H. MURPHY, Bankruptcy Judge.

Plaintiff filed this adversary proceeding seeking a declaratory judgment that it has a valid, perfected security interest in Defendant’s residence or, in the alternative, the reformation of a deed. Defendant filed a motion to dismiss plaintiffs complaint pursuant to FRCP 12(b)(6), incorporated in Bankruptcy Rule 7012. Plaintiff answered that a successful motion to dismiss should not be grounded on an affirmative defense, specifically that a debtor in possession who has actual knowledge cannot use the strong arm powers of § 544(a)(3) and the Defendant…