Vanderbilt Mortgage and Finance, Inc. v. Higgason (In re Pierce)

2012 Fed App 0006P (6th Cir. BAP Apr. 23, 2012)
Affirmed grant of summary judgment by bankruptcy court to chapter 7 trustee avoiding lien on manufactured home under Section 544 because lien was not perfected under Kentucky law. Creditor had filed its required title lien statement in the county where the seller of the manufactured home was located rather than the residence of the debtor, and therefore the notation on the certificate of title did not perfect its security interest.
Procedural context:
Bankruptcy court granted summary judgment to chapter 7 trustee, avoiding lien on debtor's manufactured home purportedly held by creditor. Creditor appealed to Bankruptcy Appellate Panel.
Debtor purchased a manufactured home from a seller in Whitley County, Kentucky, with funds borrowed from creditor, and granted creditor a security interest in the manufactured home. Creditor filed a title lien statement with the clerk of Whitley County, and that clerk subsequently issued a certificate of title identifying the creditor as holding a lien on the manufactured home. Under Kentucky law, the certificate of title has to be issued by the county of the debtor's residence, and the debtor's residence was in Laurel County. The bankruptcy court held that the lien was not perfected in accordance with Kentucky law despite the fact that there was a certificate of title with the name of the creditor as lienholder. The BAP affirmed.
Fulton, Harris & Preston

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