Murray v. Zerbel

• Decision Date: 29 November 1988
• Docket Number: CA-CV,No. 2,2
• Citation: 764 P.2d 1158,159 Ariz. 99
• Parties: John MURRAY, a married man, Plaintiff/Appellant, v. Delvin ZERBEL and Jane Zerbel, husband and wife; Jane O'Mara, a single woman; and C.O.G., Inc., d/b/a Century 21 Clarke Realty, an Arizona corporation, Defendants/Appellees. 88-0179.
• Court: Arizona Court of Appeals

Page 1158

764 P.2d 1158

159 Ariz. 99

John MURRAY, a married man, Plaintiff/Appellant, v. Delvin ZERBEL and Jane Zerbel, husband and wife; Jane O'Mara, a single woman; and C.O.G., Inc., d/b/a Century 21 Clarke Realty, an Arizona corporation, Defendants/Appellees.

No. 2 CA-CV 88-0179.

Court of Appeals of Arizona Division 2, Department B.

Nov. 29, 1988.

[159 Ariz. 100] Parrish & Vingelli by Denise A. Kuestner and Kyle Bryson, Tucson, for plaintiff/appellant.

Jones, Edwards, Smith & Kofron, P.C. by Lyle D. Aldridge, Tucson, for defendants/appellees Delvin and Jane Zerbel.

Monroe & Egbert by Ellen K. Wheeler, Tucson, for defendants/appellees O'Mara and C.O.G., Inc.

OPINION

FERNANDEZ, Judge.

Appellant John Murray challenges the trial court's granting of summary judgment in favor of appellees Delvin and Jane Zerbel, Jane O'Mara and C.O.G., Inc., doing business as Century 21 Clarke Realty, contending that fact issues exist which require the summary judgment to be vacated. We affirm. The issue we must resolve is whether the mobile home in this case is a fixture or personal property.

In December 1986, the Zerbels entered into an agreement to purchase from Richard and Walcie Van Winkle certain real property and a mobile home located on the property. On December 22, 1986, the property was seized by the Internal Revenue Service because of tax liens against the Van Winkles. Murray and his wife purchased the property for $25,000 at a public auction on January 14, 1987. ¹ On March 11, 1987, a process server tendered to Murray a check in the amount of $25,847.29 in order to redeem the property. That amount reflected the amount paid at the tax sale plus 20% statutory interest. 26 U.S.C. § 6337(b)(2). Murray refused the tender, and payment was then made to the Internal Revenue Service on behalf of Murray. The I.R.S. then issued a full lien release. The escrow for the transaction between the Van Winkles and the Zerbels closed in mid-March, and the Zerbels moved into the mobile home on March 18, 1987.

Murray filed a complaint on April 17, 1987, alleging that the mobile home is personal property which cannot be redeemed after a tax lien sale. The complaint alleged trespass and wrongful possession of personal property. It also alleged that O'Mara and Century 21 Clarke Realty, the real estate brokers with whom the Van Winkles had listed the property, acted "intentionally and with knowledge that it was contrary to law to dispossess" Murray.

Both sides moved for summary judgment. The trial court concluded that the mobile home was real property as a matter of law and granted judgment in favor of appellees. This appeal followed. The issue in this case is whether the mobile home is a fixture on the land with the result that both the land and the mobile home were redeemed by the payment to the I.R.S., and the Zerbels then took title to both from the Van Winkles. Murray contends it is per sonal property which cannot be redeemed and thus belongs to him.

The mobile home at issue is a 24 foot by 60 foot double wide. The tires, wheels and axles have been removed from it, and the towing tongues are buried in the dirt beneath a planter box on the north side of the home. The planter box contains mature evergreen shrubs and has a concrete bulkhead as a retaining wall. The frame of the mobile home is supported by concrete block. Wooden fiberboard skirting is attached to each side. Attached to the front of the mobile home is a concrete porch, 12 feet wide, 60 feet long and 16 inches high. The porch is covered by a metal patio roof which is attached to the mobile home. The porch contains a fishpond and a cemented rock waterfall. Along the back of the home is another poured concrete slab in two sections, one 12 feet wide running the entire length of the home, and an adjacent section 12 feet wide and 30 feet long. A wooden roof covers the rear porch, and there is a frame storage room 12 feet wide and 20 feet long. The home receives underground electrical power and has underground gas and telephone connections. It is attached to a septic tank. Its water supply is a private well owned together with other area homeowners, and the home is connected to the well by underground pipes.

It is apparent from the record that the I.R.S. considered the mobile home to be a fixture. The notice of seizure, the notice of public sale, the advertisement of the sale and the certificate of sale of seized property all describe the land as follows:

Real Property: [legal description]. Residence is a 1972, double wide, Whittier Mobile Home, affixed, 24' X 60', VIN WIPA7707151191X and VIN W1PA77071S1191U. (Emphasis added.)

Additionally, in neither the sale notice nor the certificate of sale did the I.R.S. list any personal property separate from the real property as is required by 26 C.F.R. §§ 301.6335-1 and 301.6337-1. Of course, as Murray has pointed out, the determination of whether property is real or personal is one of state law, not federal. Humble Oil & Refining Co. v. Copeland, 398 F.2d 364 (4th Cir.1968); Commissioner v. Skaggs, 122 F.2d 721 (5th Cir.1941), cert. denied, 315 U.S. 811, 62 S.Ct. 796, 86 L.Ed. 1210 (1942).

In Arizona, as in many other states, we employ a three-part test for determining when a chattel has become a fixture. "There must be an annexation to the realty or something appurtenant thereto; the chattel must have adaptability or application as affixed to the use for which the real estate is appropriated; and there must be an intention of the party to make the chattel a permanent accession to the freehold." Fish v. Valley National Bank, 64 Ariz. 164, 170, 167 P.2d 107, 111 (1946). Of the three parts, the most important is "the intention of the parties as respects the use and adaptability thereof." Voight v. Ott, 86 Ariz. 128, 134, 341 P.2d 923, 927 (1959). The above test applies when the parties have not entered into an agreement which characterizes the item as real or personal. Gomez v. Dykes, 89 Ariz. 171, 359 P.2d 760 (1961). Finally, for purposes of determining the intention of the parties, we may examine the parties' relationship to each other. City of Phoenix v. Linsenmeyer, 78 Ariz. 378, 280 P.2d 698 (1955).

In this case, however, the pertinent parties, the Van Winkles as the affixors and Murray as the purchaser of the property from the I.R.S., had no relationship with each other. In looking at the Van Winkles' intentions, then, we must look to objective manifestations of their intent. Kerman v. Swafford, 101 N.M. 241, 680 P.2d 622 (1984); Logan v. Mullis, 686 S.W.2d 605 (Tex.1985). Both the mobile home and the real property were owned by the Van Winkles. "Generally, it is presumed that where the owner of the merchandise is also the owner of the realty, permanent accession to the freehold is intended." Energy Control Services v. Arizona Department of Economic Security, 135 Ariz. 20, 23, 658 P.2d 820, 823 (App.1982).

Not only have the tires, wheels and axles of the mobile home been removed, but the towing tongues have been buried beneath a permanent planter. Cement slabs have been poured in the front and back, and porch roofs have been installed above the porches and are attached to the mobile home. Built into the front porch slab are a fishpond and rock waterfall. Attached to the rear slab and nestled against the mobile...