In re Anderson, No. 10-31252, 2014 Bankr. LEXIS 172 (Bankr. D. Utah Jan. 14, 2014)

(in an adversary proceeding in a Chapter 7 bankruptcy case, a question arose as to whether water shares belonged to the debtor’s bankruptcy estate or whether a creditor trust that had loaned money to the debtor’s family trust had a security interest in the water shares that superseded the Chapter 7 trustee’s interest; the trustee argued that the debtor had never transferred the water shares to his family trust and that, therefore, he could not have pledged them as security for a loan by the creditor trust to the family trust; the court found that because the shares had not been transferred to the family trust, they could not be considered part of the family trust; however, the court found that a genuine issue of material fact existed as to whether the water shares were appurtenant to the property that was transferred to the family trust and, therefore, transferred with the property to the family trust; the court also ruled that under Utah water law, the water shares remained real property and a security interest in them could be perfected by the shares’ inclusion in a recorded deed of trust; because a question remained as to whether the water shares were properly conveyed to the family trust and offered as collateral, the court could not make a finding as to whether the creditor trust had properly perfected its security interest in the water shares that had been included in a recorded deed of trust).