Colortyme, Inc. v. Burton (In Re Burton)

128 B.R. 820 (1989)

In re Mattie Pearl BURTON, Jacqueline Norwood, Nellie Mary Ward, Deletha Washington, Josephine Woods, Carolyn Brown, Debtors.
COLORTYME, INC., Appellant,
v.
Mattie Pearl BURTON, Jacqueline Norwood, Nellie Mary Ward, Deletha Washington, Josephine Woods, Carolyn Brown, Appellees.

Bankruptcy Nos. BK 87-00888, BK 88-02452, BK 88-02672, BK 86-09928, BK 88-01782 and BK 88-09488, Nos. CV 88-A-2350-W, CV 89-A-0407-S.

United States District Court, N.D. Alabama, W.D.

July 19, 1989.

Edwina Miller, Tuscaloosa, Ala., for debtors Mattie Pearl Burton and Deletha Washington.

Joseph G. Burns, Jr., Tuscaloosa, Ala., for debtor Jacqueline Norwood.

Thomas A. Nettles IV, Tuscaloosa, Ala., for debtor Nellie Mary Ward.

Phillip Lisenby, Tuscaloosa, Ala., for debtor Josephine Woods.

Jane K. Dishuck, standing trustee, Tuscaloosa, Ala.

Bobby Wooldridge, Tuscaloosa, Ala., for trustee.

Donna Smalley, Tuscaloosa, Ala., for Colortyme, Inc.

Prior reports: 128 B.R. 807 (Bkrtcy.Ala. 1989); 128 B.R. 815 (Bkrtcy.Ala.1989).

MEMORANDUM OPINION

CLARENCE W. ALLGOOD, Senior District Judge.

For purposes of appeal the above cases have been consolidated as they all involve the same creditor and the same issues.

The issue for determination is whether the Bankruptcy Judge erred as a matter of law in finding that the documents entitled lease agreements by Colortyme, Inc., are in fact true leases or merely disguised sales contracts.

The Bankruptcy Judge examined the full record carefully, reviewing the terms of the "rental agreements"; the applicable sections of the Alabama Code, including the Uniform Commercial Code; and the controlling case law. In conclusion, the court found the transactions were not true leases but disguised security interests.

Colortyme appeals the decisions, contending the court erred as a matter of law in finding the agreement amounted to a sales contract.

After careful consideration of the record and briefs, it is the opinion of this court that the decision of the Bankruptcy Judge in each of these cases is due to be and hereby is AFFIRMED.

An order in conformity with this memorandum opinion will be entered.