J. Michael Morris v. Rita Herrell and Melissa Dawn Baier (In re Melissa Dawn Baier); Adv. No. 04-5054; Case No. 03-15687-7 (July 7, 2005) (R. Nugent)
ORDER DENYING DEFENDANTS’ MOTION FOR RECONSIDERATION AND FOR OTHER RELIEF
Facts:
On June 2, 2005, the Court entered judgment in favor of the Chapter 7 trustee on his complaint to avoid an unrecorded second mortgage granted by the debtor Melissa Dawn Baier (“debtor”) to her mother and co-defendant Rita Herrell. The defendants filed a motion to reconsider, challenging the validity of the mortgage and claiming that there was neither delivery nor acceptance of the mortgage. The Court denied the motion.
Holding:
A motion to reconsider, or more appropriately, a motion to alter or amend judgment, is only appropriate when there is a change in controlling law, new evidence, or the need to correct an error. None of these exist. The defendants argue the same issues that were argued at trial. There is ample evidence that the debtor intended to grant a mortgage to her mother. Furthermore, there is a presumption of acceptance when the deed is delivered. The defendants have neither provided any new evidence nor presented any new arguments.
In re Bradley A. Wodke; Case No. 03-16776-11 (June 28, 2005) (R. Nugent)
MEMORANDUM OPINION
Facts:
In June 2001, the debtor Bradley Wodke (“debtor”) purchased a John Deere 4300 compact utility tractor and tiller from a John Deere & Company (“Deere”) dealer. The debtor signed a security agreement and represented that the tractor and tiller would be used primarily for personal, family, or household purposes. The debtor operates a sole proprietorship machine shop. On June 15, 2001, Deere filed a financing statement with the register of deeds of Marion County.
The debtor filed a Chapter 11 bankruptcy petition. The debtor disputes whether Deere perfected its security interest; and to the extent it was properly perfected, the appropriate value to be paid under the plan.
The Court held that the tractor and tiller were consumer goods, and that the financing statement was properly filed [see Holding #1]; that the security interest remained perfected under revised Article 9 [see Holding #2]; and that the proper value of the tractor was $11,800.00, and the tiller was $1,200.00 [see Holding #3].
Holdings:
1. The transaction between Deere and the debtor was for consumer goods. The debtor represented in the security agreement that the purchase was a consumer goods transaction.
2. The local filing of the financing statement with the register of deeds properly perfected the security interest under former Article 9. Even though the method of perfecting a purchase money security interest in consumer goods changed with revised Article 9, the change did not require Deere to take further action.
3. After live testimony, Deere presented convincing evidence that the tractor was worth $11,800.00, and the tiller $1,200.00.
J. Michael Morris v. ABN Amro Mortgage Group, Inc. and Elizabeth Anne Olson (In re Elizabeth Anne Olson); Adv. No. 03-5195; Case No. 03-11367-7 (R. Nugent) (June 22, 2005)
MEMORANDUM OPINION
Facts:
On April 13, 2000, the debtor Elizabeth Anne Olson (“debtor”) executed a mortgage in favor of ABN Amro Mortgage Company (“ABN”), which was filed with the register of deeds in Lyon County. On March 25, 2003, the debtor filed a chapter 7 bankruptcy. The trustee filed a motion to avoid the lien on the basis that the residence is a mobile or manufactured home and that ABN failed to properly perfect its security interest in the residence.
Holding:
The Court held that the Kansas Manufactured Housing Act (“KMHA”) defines a manufactured home, in part, as a structure that is transportable. A manufactured home does not lose its character when it is subsequently affixed to a permanent foundation or when permanent additions are made to the residence. The residence is a manufactured or mobile home, and therefore covered by KMHA. Unless ABN can show that the certificate of title has been eliminated, and therefore the residence falls outside the KMHA, the mortgage will be avoided.
In re Kerry Leeburnes McCambry and Tina Marie McCambry; Case No. 04-20520-13 (July 1, 2005) (R. Berger)
MEMORANDUM OPINION AND ORDER
Facts:
The debtors Kerry McCambry and Tina McCambry (“debtors”) filed a chapter 13 bankruptcy petition, and in doing so claimed an entire duplex as their exempt homestead. The chapter 13 trustee objected. The debtors occupy one-half of a duplex as their residence and rent the other half to a tenant. The property is encumbered by a single note and mortgage. The debtors maintain and use the lawn of the entire duplex, maintain the interior and exterior of the entire duplex and insure and pay taxes on the entire structure. There is one utility line, and the debtors maintain and have access to personal property located in both residences. The Court held that the entire duplex was an exempt homestead.
Holding:
The debtors retain a greater homestead interest in the entire duplex than any single interest in their unit. In Hoffman v. Hill, the Kansas Supreme Court held that a building used as both a residence and a hotel/boarding house qualified as exempt. Furthermore, in Merchants Nat’l Bank of Kansas City v. Kopplin, the Kansas Court of Appeals affirmed that property used as a hotel and a place of residence qualifies as exempt. The debtors have demonstrated considerable control and use of the entire complex and in a manner consistent with a homestead. But, see In re Belcher, 579 F.2d 73, 75 (10th Cir. 1978) (affirmed that only a portion of a duplex qualifies as exempt, holding that the fact that the duplex units were part of the same structure was a factor, but was not dispositive).
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