In re Sewell, Bankruptcy No. 81-03997
| Decision Date | 18 July 1983 |
| Docket Number | Bankruptcy No. 81-03997,AP No. 82-0220. |
| Citation | 32 BR 116 |
| Parties | In re William L. SEWELL and Dorothy J. Sewell, Debtors. Ed. W. HARWELL, as Trustee, Plaintiff, v. FIRST NATIONAL BANK OF WETUMPKA, ALABAMA, William L. Sewell and Dorothy J. Sewell, Defendants. |
| Court | U.S. Bankruptcy Court — Northern District of Alabama |
Ed W. Harwell, Anniston, Ala., trustee, In re Sewell.
William H. Broome, Anniston, Ala., for the Sewells.
Alan D. Levine, Birmingham, Ala., for First Nat. Bank.
Myron Allenstein, Gadsden, Ala., for Finance America.
Charles Martin, Gadsden, Ala., for Morgan.
Martha Roper, Albertville, Ala., trustee, In re Morgan.
Robert B. Rubin, Birmingham, Ala., for Citicorp Acceptance Co., Inc.
J. Richard Carr, Gadsden, Ala., for the Hardins.
Introduction —
Each of the first two of the above-styled cases (hereinafter referred to, respectively, as "Sewell" and "Morgan") was commenced by a voluntary petition filed in this Court under title 11, United States Code, chapter 7, and continues to be pending before this Court under said chapter. The third of the above-styled cases (hereinafter referred to as "Hardin") was commenced by a petition filed in this Court under title 11, United States Code, chapter 13, and continues to be pending before this Court under said chapter. The petition in each case was filed after September 30, 1979. Matters and proceedings in the case, therefore, are governed by the provisions of the Bankruptcy Reform Act of 1978, Public Law 95-598.
Each of these cases involves the common question of whether a creditor's purchase-money security interest in a mobile home of the debtor or debtors, created under a duly executed security agreement, is a perfected security interest under the provisions of the Alabama Uniform Commercial Code.1
The Sewell Case—
In the Sewell case, most of the facts may be gleaned from the three sets of alleged facts filed in this case, respectively, by the trustee in bankruptcy (Ed. W. Harwell, Esquire, hereinafter generally referred to as the "trustee"), the First National Bank of Wetumpka, Alabama (hereinafter generally referred to as the "bank"), and the debtors (William L. and Dorothy J. Sewell, hereinafter generally referred to as the "debtors"). A much-earlier motion for summary judgment, filed by the bank, having been overruled, and there not being complete confession of all relevant facts, a trial was held upon the few remaining facts, before the bankruptcy judge, without the intervention of a jury. From the facts assumed by all parties or admitted and from the evidence presented to the Court in the Sewell case, the bankruptcy judge finds the facts to be as follows:
1. On April 6, 1974, the debtors purchased from "Mobilerama" one new 1974 model "Vagabond" mobile home, being 65 feet long and 24 feet wide and having four bedrooms and a central air conditioner. The sale price (including sales taxes) was $11,088.41. The debtors paid a down payment of $1,200.00. The balance of the purchase price, property insurance for 84 months, and recording fees totaled $10,891.70, to which were added finance charges (at an annual percentage rate of 12.78%) of $10,454.86, for a total of $21,346.56. On the date of purchase, the debtors signed a promissory note and security agreement in favor of the seller, which provided for the debtors' payment of said sum of $21,346.56 in 144 consecutive monthly installments of $148.24 each, commencing May 21, 1974, and which granted to the seller a security interest in said mobile home, to secure the payment and performance of the debtors' obligations under this instrument. This contract, shortly, had been successively assigned to Transport Acceptance Corporation and to First National Bank, Wetumpka.
2. In connection with this sale, a financing statement which described said mobile home was filed for record in the office of the Probate Judge of Calhoun County, Alabama, on April 16, 1974. No "continuation statement" was filed for the purpose of extending the term of effectiveness of said financing statement.
3. Said mobile home was a prefabricated dwelling house which was designed to be movable to a semipermanent residence site and successively thus moved, unless affixed by independent means to a particular site in such manner as to render infeasible its being moved. It was not designed to be readily towed by an automobile or other vehicle over the highways from one temporary site to another, as in the fashion of a "travel trailer."
4. Said mobile home was purchased for use as a family dwelling and has been thus used during the time since its purchase and has been moved once (from one dwelling site to another) after being placed at its initial dwelling site. At the time of trial, said mobile home sat on cement blocks and was tied down for protection against wind storms. It had a connecting front porch and back porch but was not attached to either, and the mobile home could still be moved to a different dwelling site.
5. At the time of the filing of the debtors' petition, July 9, 1981, the sum of $8,000.00 was claimed by the bank to be still owed on the purchase contract or note. In Schedule B-4 to their bankruptcy petition, the debtors claim said mobile home to be exempt from their bankrupt estates.
The Morgan Case —
In the Morgan case, the mobile home in question was not claimed by the debtor, J.C. Randall Morgan, Jr. (hereinafter generally referred to as the "debtor"), as exempt from the estate, and the debtor, who evidences no interest in the mobile home, has been dismissed as a party defendant. This leaves the mobile home subject to the conflicting claims of the plaintiff, Finance America Credit Corporation (hereinafter generally referred to as "FinanceAmerica") and the trustee in bankruptcy, Martha T. Roper, Esquire (hereinafter generally referred to as "trustee"). They agree upon the controlling facts in this proceeding, as hereinafter detailed, and they have requested the Court to adjudicate their conflicting interests to the mobile home, as if this proceeding had been submitted upon opposing motions for summary judgment. In accordance with the requests of the parties, the bankruptcy judge finds from the pleadings and statements of counsel that the facts in this proceeding are as follows:
1. The debtor and Jo Ann Morgan entered into a "Credit Sales Agreement" with Walker County Mobile Homes, Inc., dated April 22, 1976, whereby, the latter sold, and the former purchased, one new 1976 model Marion "Jamaica" mobile home, being 65 feet long and 12 feet wide, at a sale price of $8,970.90, on which a down payment of $897.00 was made. After finance charges of $6,951.20 (at an annual percentage rate of 13.11%) and other charges were added, the contract provided for the purchasers to pay to the seller $15,639.60 in 120 successive monthly installments of $130.33 each, commencing June 6, 1976. Under date of April 26, 1976, the seller assigned the contract to FinanceAmerica.
2. On May 17, 1976, a financing statement which described the mobile home and which was executed by the debtor and Jo Ann Morgan and the seller was filed in the office of the Probate Judge of Marion County, Alabama.
3. No "continuation statement", to extend the effective term of the financing statement, had been filed by the time of the commencement of this bankruptcy case, on October 25, 1982.
4. Said mobile home was property of the type described in paragraph No. 3 of the Findings of Fact in the Sewell case.
5. FinanceAmerica claims a purchasemoney security interest in said mobile home as security for the payment of the undisclosed balance remaining unpaid on the "Credit Sales Agreement," which indebtedness was listed in the debtor's schedules as being $6,298.76.
6. What interest, if any, Jo Ann Morgan may have in the mobile home is undisclosed.
The Hardin Case—
In the Hardin case, Citicorp Acceptance Company, Inc. (hereinafter generally referred to as "Citicorp") filed, on March 21, 1983, a "MOTION FOR RE-HEARING" sic, praying that the Court allow Citicorp "to file a claim representing the full balance currently due . . . of $34,340.24, in lieu of the claim in the amount of $13,055.63 filed in this case, and that said substitute claim be allowed as a secured claim and reasonable fixed payments be set by the Court to be paid directly to" Citicorp. After notice given to Citicorp, its attorneys, and other parties in interest, a hearing upon this motion was held before the Court at Gadsden, Alabama, on April 20, 1983. After considering the pertinent facts, which are not in dispute and the applicable law, the bankruptcy judge announced that Citicorp's motion was denied, and these matters are now to be committed to writing. From Citicorp's motion and the attachments to it and from the case file, the bankruptcy judge finds that the undisputed facts in this case are as follows:
1. The debtors, James H. Hardin, Jr., and Vickie A. Hardin (hereinafter generally referred to as the "debtors") filed this "chapter 13 case" on November 18, 1982; whereupon, the United States trustee called a meeting of creditors, and the Court set a hearing upon the matter of confirming the debtors' chapter 13 plan, both to be held on December 8, 1982, and the clerk of the Bankruptcy Court gave written notice of these and other matters pertaining to the case to the listed creditors, including Citicorp, by means of a notice mailed November 29, 1982.
2. After the meeting of creditors, the case came on to be heard before the Court on December 8, 1982, with the debtors, their attorney, the standing chapter 13 trustee, and a representative of another creditor present.
3. On January 7, 1983, the Court entered an order confirming the debtors' plan and providing for the trustee to make payments of $60.00 each month to Avco Financial Services Company on the only allowed secured...
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