Green Tree Acceptance, Inc. v. Wyoming Nat. Bank

• Decision Date: 29 November 1993
• Citation: Green Tree Acceptance, Inc. v. Wyoming Nat. Bank, 1 F.3d 1249 (10th Cir. 1993)
• Parties: NOTICE: Although citation of unpublished opinions remains unfavored, unpublished opinions may now be cited if the opinion has persuasive value on a material issue, and a copy is attached to the citing document or, if cited in oral argument, copies are furnished to the Court and all parties. See General Order of
• Court: U.S. Court of Appeals — Tenth Circuit

Page 1249

1 F.3d 1249 NOTICE: Although citation of unpublished opinions remains unfavored, unpublished opinions may now be cited if the opinion has persuasive value on a material issue, and a copy is attached to the citing document or, if cited in oral argument, copies are furnished to the Court and all parties. See General Order of November 29, 1993, suspending 10th Cir. Rule 36.3 until December 31, 1995, or further order.

GREEN TREE ACCEPTANCE, INC., Plaintiff-Appellant, v.WYOMING NATIONAL BANK, and James T. Dinneen, Trustee in Bankruptcy, Defendants-Appellees.

No. 91-8040.

United States Court of Appeals, Tenth Circuit.

Aug. 2, 1993.

Before EBEL and MCWILLIAMS, Circuit Judges, and HUNTER, District Judge.^*

ORDER AND JUDGMENT^**

ELMO B. HUNTER, Senior District Judge.

This case comes to the Court on appeal from a decision of the United States District Court for the District of Wyoming, ¹ affirming the United States Bankruptcy Court for the District of Wyoming.²The district court decided that, on the date that protection under Chapter 7 of the Bankruptcy Code was invoked, the financing statement previously filed by AppellantGreen Tree Acceptance, Inc., (Green Tree) to secure its interest in a mobile home trailer, had lapsed as a matter of law.Since Green Tree failed to file a continuation statement, the district court further concluded that its security interest was unperfected and inferior to the lien of the bankruptcy trustee.

Subsumed in the district court's decision is the principle that, under Wyoming law, lien notation on the title of a mobile home, in conformity with the Wyoming's Motor Vehicles Statutes, is inadequate to perfect a security interest and has no effect on the duration of a perfected security interest.Rather, it would require the filing of a financing statement to perfect the security interest.Further, such perfection, once attained, will lapse and become unperfected, unless a continuation statement is filed within five years, as provided for by Wyo.Stat. Sec. 34.1-9-403(b).

This case requires us to decide what actions a secured creditor must take, under Wyoming law, to perfect a security interest in a mobile home and to maintain such perfection for a period of time after five years.Appellant asserts that it is enough for the secured creditor to file either a security agreement or financing statement with the appropriate county clerk and have the relevant security interest officially noted on the certificate of title.Such security interest would remain perfected so long as the mobile home in question was owned or possessed by the person to whom the certificate of title was issued.No further action would be required.

Conversely, appellees argue that to perfect a security interest in a mobile home a financing statement must be filed.In line with procedures for the perfection of security interests in other forms of personal property governed by Wyoming's version of Article 9 of the Uniform Commercial Code, appellees further urge that a continuation statement must be filed if a security interest is to remain perfected after five years.

This is a matter of Wyoming state law which the State's highest court has not squarely addressed.As such, it is our job to decide this case as we believe the state's high court would.See generallyCommissioner of Internal Revenue Service v. Bosch's Estate, 387 U.S. 456, 465(1967);see alsoERWIN CHEMERINSKY, FEDERAL JURISDICTION Sec. 5.3 at 274.

I.BACKGROUND

On June 6, 1983, Lesley Roy Curtis(Debtor) purchased a 1983, twenty-eight foot by sixty-four foot Champion Mobile Home Trailer (mobile home) for $34,320.00.It was financed by means of a retail installment contract from Mobile World, Inc.(Mobile World).On June 21, 1983, Appellant Green Tree purchased the retail installment contract from Mobile World, taking by assignment all of Mobile World's rights under the contract.

On July 1, 1983, Green Tree presented to the County Clerk a financing statement which stated that Green Tree held a security interest in the mobile home.The County Clerk filed the financing statement and, on July 5, 1983, issued a certificate of title for the mobile home.The certificate of title, issued pursuant to the above-referenced filing, listed the Debtor and his wife as owners of the mobile home and further noted that Green Tree was the first lienholder.

On January 24, 1990, the Debtor filed a petition seeking relief under Chapter 7 of the Bankruptcy Code with the United States Bankruptcy Court for the Western District of Wyoming.On July 9, 1990, Green Tree sought to modify the bankruptcy court's automatic stay in order to repossess the mobile home.Wyoming National Bank, a listed creditor with a lien on the land on which the mobile home was located, opposed modification of the stay on grounds that Green Tree had failed to file a continuation statement.As such, the bank argued that the original financing statement had lapsed, leaving Green Tree with an unperfected security interest.

The bankruptcy court, apparently relying on Wyo.Stat. Sec. 34.1-9-403(b), held that, since Green Tree had failed to file a continuation statement, its original financing statement had lapsed on the date that the Debtor filed for bankruptcy, leaving it with an unperfected security interest, which was subordinate to the lien held by the Bankruptcy Trustee.On appeal, the district court affirmed the decision of the bankruptcy court.

Significantly, neither the bankruptcy court nor the district court discussed the impact, if any, of Green Tree being noted on the title as a first lienholder.Similarly, there was no mention or discussion of any possible effect of Wyoming's Motor Vehicles Statutes(Title 31 Wyoming Statutes).³

II.STATUTORY BACKGROUND

In 1961, Wyoming enacted its version of the Uniform Commercial Code.Article 9 of this Code and its Wyoming analogue govern secured transactions in personal property.In 1972, amendments were proposed to fine tune and revise Article 9 of the uniform law, in light of certain problems experienced in its application.SeeJack Van Baalen, Wyoming Adopts the "1972 Amendments" to the Uniform Commercial Code Article 9--The Revisions and Some Continuing Problems, XIX LAND & WATERL.REV. 581, 582(1984).Wyoming adopted the proposed amendments, largely unchanged, in 1983.Id. at 582 n. 3.;Wyo.Stat. Secs. 34-21-901 to 34-21-966(1977& Supp.1983).

Article 9 of the Uniform Commercial Code, and its Wyoming analogue, subject the perfection of security interests in many items of personal property to perfection by filing.SeeU.C.C. Secs. 9-401 & 9-403;Wyo.Stat. 34.1-9-401 & 34.1-9-403;see also discussion in2 JAMES J. WHITE & ROBERTS. SUMMERS, UNIFORM COMMERCIAL CODE Secs. 24-13 to 24-19 (3d ed. 1988).In this context, filing is understood to mean the presentation of a bona fide financing statement, along with the proper filing fee, to the appropriate filing officer at the proper place.Id.⁴A security interest perfected by this type of filing remains effective for a period of five years from the date of filing.U.C.C. Sec. 9-403(b);Wyo.Stat. Sec. 34.1-9-403(b).Upon the expiration of the five years, the security interest lapses unless a continuation statement is filed prior to the lapse.Id.

Perfection of security interests in motor vehicles ⁵ presents distinctive problems.These problems relate primarily to the fact that many types of motor vehicles can readily be moved from one location to another, making it particularly difficult for a buyer or second secured party to know where to search for a filed financing statement.To counteract these types of problems, states routinely require the issuance of a certificate of title as evidence of ownership of certain motor vehicles.⁶Indeed, "[t]oday, all states [including Wyoming] require the issuance of a 'certificate of title' for certain motor vehicles the instant they cease to be inventory held for sale."2 JAMES J. WHITE & ROBERT S. SUMMERS, supra, Sec. 24-22at 398.Such certificate of title carries a notation of any security interest in the motor vehicle.Theoretically, the certificate of title sets out all ownership and security interests, thus serving as a "kind of omnibus financing statement."Id.

As noted above, Wyoming has adopted its own certificate of title statute.SeeTitle 31(Motor Vehicles)Wyoming Statutes.Article 5 of Title 31 includes mobile homes in its coverage.Wyo.Stat. Secs. 31-2-501 to Sec. 31-2-508.

Due to the pervasiveness of certificate of title statutes, the Uniform Code and the Uniform Amendments contain alternative perfection provisions for motor vehicles.These alternative provisions provide for compliance with the certificate of title statutes for the perfection of security interest in motor vehicles.Nevertheless, when Wyoming originally enacted the Code, it did not enact uniform provisions for alternative perfection of motor vehicles.CompareWyo.Stat. Sec. 34-931(d)--(g)(1977) and the correlative U.C.C. provisions;see alsoJ. Van Baalen, supra at 605.The Wyoming legislature, instead, enacted its own provisions for the perfection and termination of security interests in vehicles and motor vehicles.Wyo.Stat. Sec. 34-21-931(d)--(g)(1977);see alsoJ. Van Baalen, supra at 605 nn. 148-51 and accompanying text.Subsequently, however, the Wyoming legislature adopted the proposed uniform amendments.These amendments included language providing for uniform alternative perfection provisions for motor vehicles, such as those the Wyoming legislature had previously decided not to enact.SeeWyo.Stat. Sec. 34.1-9-302(1991);see alsoJ. Van Baalen, supra at 605.

The Wyoming law which this Court must apply includes these enacted amendments.We must presume the Wyoming legislature, in enacting these amendments, intended some change to the existing law.State ex rel. Albany County Weed and Pest Dist. v. Board of County Comm'rs, 592 P.2d 1154(Wyo.1979);...