In re Smith

• Decision Date: 21 July 2003
• Docket Number: Adversary No. 02-8029-WRS.,Bankruptcy No. 02-81180-WRS.
• Court: United States Bankruptcy Courts. Eleventh Circuit. U.S. Bankruptcy Court — Middle District of Alabama
• Parties: In re Barbara SMITH, Debtor. Barbara Smith, Plaintiff, v. Homes Today, Inc., Steve Stutts, Royal Park Estates, and Richard Dale Massey, Defendants.

296 B.R. 46

In re Barbara SMITH, Debtor.

Barbara Smith, Plaintiff, v. Homes Today, Inc., Steve Stutts, Royal Park Estates, and Richard Dale Massey, Defendants.

Bankruptcy No. 02-81180-WRS.

Adversary No. 02-8029-WRS.

United States Bankruptcy Court, M.D. Alabama.

July 21, 2003.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Charles M. Ingrum Jr., Attorney at Law, Opelika, AL, for Plaintiff/Debtor.

Daniel W. Lee, Attorney at Law, LaGrange, GA, for Defendants Homes Today Inc. and Steve Stutts.

MEMORANDUM DECISION

WILLIAM R. SAWYER, Chief Judge.

This Adversary Proceeding was tried before the Court, without a jury, on May 28, 2003. Plaintiff Barbara Smith ("Smith") was present in person and by counsel Charles M. Ingrum. Defendants Homes Today, Inc. ("Homes Today"), and Steve Stutts ("Stutts") were present by counsel Daniel W. Lee. At the time the case was called, the Plaintiff announced that a settlement had been reached with Defendants Royal Park Estates and Richard Dale Massey. The Court will, by separate order, dismiss those defendants. The Court heard evidence on the claims against the remaining defendants and took the matter under submission. The Court requested briefs from the parties on the legal issues. (Docs.24, 28). In accordance with Bankruptcy Rule 7052, the Court makes its findings of fact and conclusions of law. For the reasons set forth below, judgment is entered in favor of Plaintiff Barbara Smith and against Homes Today in the amount of $58,183.91, plus costs.

I. FINDINGS OF FACT

Smith purchased her mobile home from Defendant Homes Today on September 24, 2001. (Plaintiff's Exhibit C). Defendant Stutts represented Homes Today and signed a Purchase Agreement on behalf of the corporation. (Plaintiff's Exhibit C). The contract appears to be on a preprinted form supplied by Homes Today. The contract calls for a sale price of $21,500.00. In addition, Homes Today charged sales taxes in the amount of $753.00, and a title application fee of $15.00. Smith paid $1,400.00 down, leaving an unpaid balance of $20,868.00. The contract called for payments of $300.00 per month for 180 months. In addition to the down payment, it appears that Smith paid at least an additional $1,050.00 towards the purchase price subsequent to the purchase. (Plaintiff's Exhibit D).

The Court notes that there is an inconsistency in the language of the contract as to whether or not the contract came into existence. The following preprinted language appears below the signature line for Homes Today: "approved, subject to acceptance of financing by bank or finance company." In typewritten language in the Remarks section of the contract, the following is stated: "Payments $300.00 per month for 180 months at 15.22% interest payment date starting on Nov. 15, 2001." As typewritten language applies over preprinted language, the Court finds that it was the intention of the parties that the balance of the purchase price was to be financed by Homes Today. See e.g., McKinney Drilling Co. v. Collins Co., Inc., 517 F.Supp. 320, 324 (N.D.Ala.1981) (typewritten language takes priority over boilerplate provisions). The parties did not contemplate that Smith would borrow the purchase price from a bank or finance company. Therefore, the rights of the respective parties came into being as of the time the contract was executed.

The contract further provides that:

title to said equipment shall remain in the Seller until the agreed purchase price therefore is paid in full in cash or by the execution of a Retail Installment Contract or a Security Agreement and its acceptance by a financing agency; thereupon title to the within described unit passes to the buyer as of the date of either full cash payment or the signing of said credit instruments even though the actual physical delivery may not be made until a later date. (Plaintiff's Exhibit C).

The language of this provision is vague for a number of reasons. First, Homes Today describes itself as a "dealer" in the contract. The most logical construction of this provision is to infer that Homes Today is the seller as well as the dealer. This language implies that Homes Today holds title to the mobile home. Indeed, it would not be logical to assume that Smith would have agreed to pay Homes Today $21,500, unless Homes Today actually owned the mobile home and had the capability of transferring good title to her. The most logical construction of this contract is to find that Smith purchased the mobile home, financing the purchase price pursuant to the terms of the contract and that Homes Today, the seller, held title as security for payment of the balance of the purchase price.

A second problem is that in an earlier portion of the contract, the mobile home is referred to as "property," while in the language quoted above, it is referred to as "equipment." As the provision uses a word different than property, one might infer that something other than the mobile home is intended. Having heard the testimony of the Plaintiff and having considered the transaction as a whole, the Court finds that the terms "property" and "equipment" for purposes of the construction of this contract are synonymous. This construction further supports the Court's finding that Smith purchased the property and was its true owner, while Homes Today retained title as security for the purchase price.

The contract provided that the mobile home was to be delivered "ASAP." The exact date of delivery is not in the evidence, however, the Court infers from the testimony and other evidence that delivery took place a reasonably short time after execution of the contract. The mobile home was delivered to a lot rented by Smith in Royal Park Estates. (Plaintiff's Exhibit B); see also Transcript 5/28/2003, p. 18. On August 21, 2002, six days prior to the date the petition in bankruptcy was filed, Royal Park Estates served notice that Smith was in arrears on her rental payments for the lot in the amount of $1,100 and that if that amount was not paid by August 28, 2002, further legal action would be taken. The written notice contained the following provision: "Steve Stutts has our permission to move the house. He has notified us he plans to move the house next Wednesday August 28, 2002." (Plaintiff's Exhibit B).

Stutts argues that he was acting as an agent for Royal Park Estates at the time he repossessed the mobile home, pointing to the language of the August 21, 2002 notice. The Court rejects that contention. Rather, the Court finds that Smith purchased a mobile home from Homes Today, who retained title as security for the payment of the balance of the contract price. Smith rented a lot from Royal Park Estates and the mobile home was delivered by Homes Today to the lot. Apparently there was some communication between Homes Today and Royal Park Estates and the point of the handwritten language on the notice was to evidence the fact that Homes Today had permission to enter on to the land of Royal Park Estates to effect the repossession. Given the context of this Adversary Proceeding, Royal Park Estates was giving permission to Homes Today to enter onto its land. Royal Park Estates did not claim any interest in the mobile home.

On August 27, 2002, Smith filed a petition in bankruptcy, pursuant to Chapter 13 of the Bankruptcy Code. Under Chapter 13 of the Bankruptcy Code, a wage earner may file a plan which proposes to pay her debts over a period of time. See 11 U.S.C. § 1301, et. seq. The Debtor's Plan in this case proposes to maintain current payments on her mobile home and pay $50.00 per month on the delinquent amount owed. In addition, the Plan provides that Royal Park Estates is to be paid its usual lot rental in the amount of $100.00 per month, with the payments to be made directly by Smith to Royal Park Estates. The Plan also provides for payment of an additional $40.00 per month to satisfy back rent which was to be paid by the Chapter 13 Trustee from plan payments made by the Debtor. (Doc.2 — main case).¹

On August 28, 2002, Defendant Stutts and two unidentified men went to Smith's residence with a truck for the purpose of taking possession of it. Smith recognized Stutts and told him of her bankruptcy filing and showed him the bankruptcy papers. Stutts told Smith that it did not matter what was on the paper. See Transcript 5/28/2003, p. 24. Smith went into her residence in an effort to retrieve some belongings. Smith testified as follows:

I continued, you know, to get my belongings out of the home and, while I was trying to get just clothes and whatever of value that I could get, the guy that actually drove the home came to the door and he said get out of the home, get out of the home now. We have orders to pull it now. I came to the front door, the steps were missing. The home was actually moving. I jumped out of a moving home.

Transcript, 5/28/2003, p. 25. The Court finds that Homes Today and Steve Stutts repossessed the mobile home with actual knowledge of Smith's bankruptcy filing and in willful disregard of the automatic stay. 11 U.S.C. § 362.

Stutts later returned the mobile home to the lot on which it had been sitting. However, the mobile home was not secured, steps were not put in place, plumbing and electricity were not reconnected and the front door was broken. As a result the residence was not habitable. The interior of the mobile home was a shambles. While Smith did not own any personal property of extraordinary monetary value, irreplaceable personal effects were lost. Most notably, photographs and home movies of her deceased son were lost as a result of the forcible and unlawful taking of the mobile home. As a result of the callous, if not brutal, taking of the residence, Smith became homeless, lost her job, suffered from stress and depression and ultimately sought psychiatric treatment. Smith was treated with therapy and medication for her psychological condition.

Stutts and Homes Today violated the automatic...