Thompson v. Titlemax of Ala., Inc.

Decision Date26 August 2020
Docket NumberCASE NO. 2:19-CV-00860-RAH (WO)
Citation621 B.R. 267
Parties Donna R. THOMPSON, Appellant/Debtor, v. TITLEMAX OF ALABAMA, INC., Appellee.
CourtU.S. District Court — Middle District of Alabama

David Gerald Poston, Michael Derek Brock, Brock & Stout LLC, Enterprise, AL, for Appellant/Debtor.

David Anthony Butler, Jeffrey Lee Ingram, Galese & Ingram P.C., Birmingham, AL, for Appellee.



This appeal touches upon the extent of the automatic stay provided by Title 11 of the United States Code ("Code" or "Bankruptcy Code") to certain debtors upon the filing of a voluntary petition for bankruptcy relief and implicates the nature of a pawnbroker's rights under the Alabama Pawnshop Act ("APA"), Ala. Code § 5-19A-1 et seq.

In this appeal, Donna R. Thompson ("Thompson") challenges the Order Granting Motion ("Order") (Doc. 2-15; Doc. 2-16; see also Doc. 82, BK Case No. 18-bk-326091 ), issued by the United States Bankruptcy Court for the Middle District of Alabama ("Bankruptcy Court") on October 24, 2019. As its title reveals, the Order awarded the relief requested by TitleMax of Alabama, Inc. ("TitleMax") in the Amended Motion for Relief of Stay ("Stay Motion"), as set forth in its Memorandum Opinion released on that same October day ("Bk Opinion").

For the reasons set forth below, the Court affirms the Order. (Doc. 2-16.)


This Court has appellate jurisdiction over this appeal from the final judgment of the Bankruptcy Court pursuant to 28 U.S.C. § 158(a).

In an appeal of a bankruptcy court decision, the district court sits as an appellate court. Williams v. EMC Mortg. Corp. (In re Williams) , 216 F.3d 1295, 1296 (11th Cir. 2000). The district court reviews the bankruptcy court's findings of fact under the clearly erroneous standard and conclusions of law under the de novo standard of review. In re Piazza , 719 F.3d 1253, 1260 (11th Cir. 2013). "The court may affirm the bankruptcy court's judgment ‘on any ground that appears in the record, whether or not that ground was relied upon or even considered by the court below.’ " Perry v. United States , 500 B.R. 796, 798 (M.D. Ala. 2013) (Watkins, J.) (quoting Thomas v. Cooper Lighting, Inc. , 506 F.3d 1361, 1364 (11th Cir. 2007) ).


On June 22, 2012, Thompson entered into a 30-day title pawn for $4,000 with TitleMax concerning Thompson's 2003 Nissan Xterra ("Nissan"). (Doc. 2-12 at 33; Doc. 2-21.)

The terms of the arrangement were set forth in a four-page pawn ticket2 ("First Ticket") that was executed by Thompson and TitleMax (collectively, "Parties"). (Doc. 2-12 at 34; Doc. 2-21.) This contract provided, inter alia , that the pawn would mature within 30 days on July 22, 2012, and in exchange, TitleMax would hold title in, constructive possession of, and a security interest in the Nissan. (Doc. 2-21.) It further provided that Thompson agreed to deliver to TitleMax the endorsed certificate of title and extra keys to the Nissan. (Id. )

Most crucially, the First Ticket contemplated that the Parties subsequently could renew the pawn. (Doc. 2-21.) To do so, Thompson was required to pay a pawnshop charge. (Id. at 4.) Alternatively, Thompson could redeem the Nissan by remitting $4,399.60 to TitleMax. (Id. at 1.) However, no contractual provision compelled Thompson to redeem, renew or to make any payment on the Nissan. (Id. ) Instead, if not redeemed within 30 days of its maturity, the Nissan would be forfeited, and all right, title and interest in and to the Nissan would vest in TitleMax. (Id. at 2.)

After consummation of the transaction, TitleMax obtained a new certificate of title on the Nissan that listed it as the lienholder. (Doc. 2-12 at 26-27, 30.) Thompson apparently chose not to redeem the Nissan at the initial maturity and instead elected to repeatedly renew the pawn every month until September 2018. (Id. at 52; see also Doc. 2-20.) When Thompson made a payment, she usually would sign a payment receipt, which TitleMax, in turn, would scan and save onto its computer system. (Docs. 2-19 at 2-24.) At the time of each renewal, the Parties were to also execute a new pawn ticket, which also was to be signed and scanned into TitleMax's computer system.

Although Thompson generally made payments every month in an effort to renew the pawn, at trial, TitleMax only provided pawn tickets for the months of June 2012, January 2016, March 2016 and September 2018. (Docs. 2-17; 2-21; 2-22; 2-23.) TitleMax did not present a pawn ticket for the February 2016 renewal and could not explain what happened to the ticket, although Thompson did make a payment that month. (Doc. 2-12 at 49, 59, 64-65.)

At the evidentiary hearing, Thompson testified that there was never a time when she made a payment that she also did not sign a pawn ticket. (Id. at 68-70.) She recalled always "signing something" when she went in to make a payment. (Id. at 71.)

Thompson entered into her final pawn renewal on September 1, 2018, through an executed pawn ticket that required payment of $4,324.09 on or by October 1, 2018. (Id. at 24, 31; see also Doc. 2-17.) After that renewal, however, Thompson did not make the payment by the maturity date, renew her pawn, or redeem the Nissan. (Doc. 2-12 at 28; see also Doc. 2-20.) Instead, she filed for Chapter 13 bankruptcy protection on September 14, 2018. (Doc. 2-3.)

In her bankruptcy plan, Thompson proposed to pay TitleMax for the Nissan, and therefore effectively redeem the vehicle over the 58-month term of her proposed plan. (Doc. 2-4; Doc. 2-12 at 73-74.) As part of her initial filings, she did not challenge TitleMax's lien in the Nissan, the validity of any pawn renewal, or any rights or interest that TitleMax had in the Nissan. Rather, she proposed to pay off the entire pawn balance to TitleMax over the duration of her bankruptcy plan while, at the same time, retaining possession of the Nissan.

Unsurprisingly, this move caused a fracas. First, TitleMax filed an objection to Thompson's plan, claiming that Thompson had forfeited the Nissan to TitleMax when Thompson failed to redeem the Nissan under the statutory period provided by 11 U.S.C. § 108(b) of the Bankruptcy Code. (Doc. 2-5.) TitleMax also argued that Thompson could not extend the redemption period over the 58-month life of her plan and filed a Motion for Relief of Stay, which it later amended. (Doc. 2-6.)

In response to these filings, Thompson changed her strategy. First, she amended her bankruptcy schedules to dispute TitleMax's claim in the Nissan. (Doc. 2-7.) Second, she filed an amended plan that removed payments to TitleMax. (Docs. 2-10; 2-11.) According to Thompson, she changed course on the advice of her attorney. (Doc. 2-12 at 74.)

The relevant issues were thusly teed up for review by the Bankruptcy Court. The tribunal held a hearing and received evidence on TitleMax's Stay Motion on April 18, 2019.3 (Doc. 2-12.) On October 24, 2019, the Bankruptcy Court issued its Order and Bk Opinion. (Docs. 2-15; 2-16.) As explained therein, the Stay Motion was granted because the Nissan "either [was] never property of [Thompson's] estate[ ] because the redemption period ended prior to bankruptcy, or the right of redemption ‘dropped out’ of the estate at the conclusion of the extended redemption period provided by § 108(b) of the Bankruptcy Code." (Doc. 2-15 at 14.)

By the relevant deadline, Thompson filed this appeal.


The issue on appeal to this Court is the Bankruptcy Court's decision to grant TitleMax's Stay Motion, the effect of which was to allow TitleMax the ability to obtain possession of the Nissan from Thompson. In her appeal brief, Thompson spins a meandering tale of back and forth transfers of ownership interest and right in the Nissan that she says ultimately resulted in ownership of and right in the Nissan vesting in her name prior to her bankruptcy filing. Therefore, according to Thompson, the Bankruptcy Court granted relief from the automatic stay on the basis of a mistaken view that TitleMax was the owner of the Nissan.

More specifically, Thompson first argues that, because TitleMax presented no executed pawn ticket in February 2016, there could be no valid pawn renewal in March 2016, and therefore "§ 5-19-A-6 divested Thompson of all right, title and interest in the Nissan Xterra" that month. (Doc. 6 at 21.) In other words, according to Thompson, "the vehicle title vested absolutely in TitleMax in March 2016," (Id. at 22), and "[o]n March 5, 2016, TitleMax was the sole owner of the Nissan that is the subject of TitleMax's objection." (Id. at 33.)

Having asserted TitleMax's ownership of the Nissan began on March 5, 2016, Thompson then categorizes the Parties' subsequent efforts to consummate pawn renewals as being invalid under the APA because Thompson could not pawn a vehicle she did not own. (Id. at 33-34.) Thompson then flip flops, contending that TitleMax later forfeited, waived or abandoned its ownership interest and right in the Nissan by failing to re-title the Nissan into TitleMax's name as required under the Alabama Uniform Certificate of Title and Antitheft Act ("AUCTAA"), Alabama Code § 32-8-1 et seq. (Id. at 38-39.) Thompson also maintains, in the alternative, that TitleMax's security interest in the Nissan, as reflected on the certificate of title, was voided under § 5-19A-7(b) of the APA because TitleMax collected improper and excessive pawn fees on the Nissan after title vested back into TitleMax on March 5, 2016. (Id. at 38.)

The complicated web which Thompson attempts to weave is ultimately unavailing because the end point remains the same – TitleMax's Stay Motion was properly granted.

I. Thompson's Flawed Theory

In its Bk Opinion, the Bankruptcy Court concluded that title and right vested in TitleMax on November 15, 2018, because Thompson failed to redeem the Nissan after the September 1, 2018, pawn renewal. Thompson challenges the validity of the ...

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