Worry Free Services, Inc. v. Camareno (In Re Camarreno) , 105 F. App'x 3 ( 2004 )

United States Court of Appeals
Fifth Circuit
F I L E D
IN THE UNITED STATES COURT OF APPEALS June 17, 2004
FOR THE FIFTH CIRCUIT Charles R. Fulbruge III
Clerk
No. 03-50833
Summary Calendar
IN THE MATTER OF: LINDA M. CAMARENO,
Debtor.
WORRY FREE SERVICES, INC,
Appellant,
versus
LINDA M CAMARENO,
Appellee.
--------------------
Appeal from the United States District Court
for the Western District of Texas
USDC No. SA-03-CV-198
--------------------
Before HIGGINBOTHAM, DAVIS, and PRADO, Circuit Judges.
PER CURIAM:*
Worry Free Services, Inc., appeals from a bankruptcy court’s
order granting Camareno’s motion to avoid Worry Free’s lien, and
the district court’s subsequent affirmance. Worry Free asserted
to the courts below that the air conditioning and heating system
(“the system”) sold to Camareno and installed in her home was
personalty, as opposed to a fixture, making its UCC-1 financing
*
Pursuant to 5TH CIR. R. 47.5, the court has determined that
this opinion should not be published and is not precedent except
under the limited circumstances set forth in 5TH CIR. R. 47.5.4.
No. 03-50833
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statement filed with Texas’s Secretary of State sufficient to
qualify Worry Free as a secured creditor. The district court
found that the system was a fixture subject to Chapter 53 of the
Texas Property Code and that Worry Free’s UCC-1 filing was
insufficient. Worry Free contends on appeal that the courts
below clearly erred in finding the system to be a fixture and in
applying Chapter 53 of Texas’s Property Code. We disagree and
affirm.
We review the lower court’s findings of fact for clear
error.1 A court’s findings of fact are clearly erroneous when
they are “implausible based upon the entirety of the record or
the reviewing court is left with the definite and firm conviction
that a mistake has been committed.”2 We review the lower court’s
legal conclusions de novo.3
The lower courts did not clearly err by concluding that the
system was a fixture. Section 9.313 provides that “goods are
‘fixtures’ when they become so related to particular real estate
that an interest in them arises under the real estate law of the
state.”4 The Texas Supreme Court explained that,
1
Kona Tech. Corp. v. S. Pac. Transp. Co., 225 F.3d 595, 601
(5th Cir. 2000).
2
N.A.A.C.P. v. Fordice, 252 F.3d 361, 365 (5th Cir. 2001)
(internal quotation marks omitted).
3
Kona, 225 F.3d at 601.
4
Tex. Bus. & Com. Code § 9.313(a)(1).
No. 03-50833
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[w]hether a chattel attached to permanent improvements
has become a part thereof depends on the intention with
which the fixture is annexed or put into position, and
this intention is to be inferred from the nature of the
article affixed, the relation and situation of the party
making the annexation and the policy of the law in
relation thereto, the structure and mode of the
annexation, and the purpose or use for which the
annexation is made.
Given that the system was installed in Camareno’s home, could not
easily be removed, and that reasonable buyers and sellers of the
system would expect it to be a permanent improvement to the
house, we find no clear error in categorizing the system as a
fixture.5
Given that the system was a fixture incorporated into
Camareno’s home, Worry Free was required to proceed under Chapter
53 of Texas’s Property Code. The Uniform Commercial Code (“UCC”)
applies, except as otherwise provided, to “a transaction
(regardless of its form) which is intended to create a security
interest in personal property or fixtures.”6 Section 9.104
describes which transactions are excluded from Article 9's reach,
and the relevant exclusion here provides that the chapter does
not apply “to a lien given by statute or other rule of law for
5
See, e.g., Carter v. Straus-Frank Co., 297 S.W.2d 195, 197
(Tex. Civ. App.–Texarkana 1956, no writ) (finding an installed air
conditioning system to be a fixture).
6
Tex. Bus. & Com. Code § 9.102(a)(1). The transaction at
issue occurred before the new version of the UCC took effect, and
the parties agree that the former version applies to this case.
All references and citations are to the former Article 9.
No. 03-50833
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services or materials.”7 Chapter 53 of the Texas Property Code
is one such statute; it governs mechanic’s, contractor’s, or
materialmen’s liens, and provides that a person is entitled to a
lien if he furnishes materials for construction or repair of a
house, building or improvement.8 “Material” is defined as “the
material, machinery, fixtures, or tools incorporated into the
work.”9 To claim a lien under Chapter 53, a person “must file an
affidavit with the county clerk of the county in which the
property is located,” and the affidavit must contain specific
information.10 Worry Free did not follow these procedures and
therefore cannot claim secured status.
Worry Free asserts that its failure to make a fixture filing
is not fatal because it has a contractual security interest in
the system, and Article 9 states that “this Chapter applies to
security interests created by contract.”11 Therefore, Worry Free
contends that its contractual security interest is valid despite
its lack of any fixture filing under Chapter 53 or Article 9.
This argument ignores the mandate of Article 9 and Chapter
53. In addition to requiring fixture filings to describe the
property and be filed in the County Clerk’s office of the country
7
Id. at § 9.104(3).
8
Tex. Prop. Code § 53.021(a)(1)(A).
9
Id. at § 53.001(4)(A).
10
Id. at §§ 53.052(a), 53.054(a)(1)-(7).
11
Tex. Bus. & Com. Code § 9.102(b).
No. 03-50833
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where a mortgage of the property would be filed, Article 9
specifically excludes from its coverage liens “given by statute
or other rule of law for services or materials.”12 Here, the
lower courts found the system to be a fixture incorporated into
Camareno’s home; as such, it falls within Chapter 53's coverage
and Worry Free was required to follow its mandate.13 It did not
do so, and now has no basis for secured creditor status.
Finally, Worry Free asserts that the lower courts erred in
finding that it held no constitutional lien. This argument was
not properly presented to the bankruptcy court, and we may not
consider it on appeal.14
AFFIRMED.
12
Id. at § 9.104(3).
13
Schumann v. Jenkins, 40 S.W.2d 214, 214 (Tex. Civ. App.–San
Antonio, writ ref.); In re Riordan, 238 F. Supp. 5, 6 (E.D. Tex.
1965).
14
In re Ginther Trusts, 238 F.3d 686, 689 (5th Cir. 2001).