William S. Meeks v. Mercedes Benz Credit

United States Court of Appeals
FOR THE EIGHTH CIRCUIT
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No. 00-3484
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William S. Meeks, Trustee, *
*
Appellant, *
* Appeal from the United States
v. * District Court for the Western
* District of Arkansas.
Mercedes Benz Credit Corporation, *
* [TO BE PUBLISHED]
Appellee, *
*
Billy Harold Stinnett; Terry Lynn *
Stinnett, *
*
Debtors. *
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Submitted: July 5, 2001
Filed: July 16, 2001
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Before HANSEN, MORRIS SHEPPARD ARNOLD, and BYE, Circuit Judges.
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PER CURIAM.
Bankruptcy trustee William S. Meeks (Trustee) appeals the district court’s1
judgment affirming the bankruptcy court’s2 judgment in favor of Mercedes-Benz Credit
Corporation (MBCC) in his adversary proceeding to avoid MBCC’s lien on proceeds
from the sale of a truck.
Billy Stinnett (Debtor) purchased a Freightliner truck (on credit) from Texarkana
Truck Center, Inc. (TTC), in Texas. The parties’ security agreement indicated that
Debtor’s home address was in Arkansas. TTC immediately assigned the contract and
its interest in the truck to MBCC. On Debtor’s behalf, Trux, Inc. registered and titled
the truck in Oklahoma, using a business address it acquired for him. Oklahoma
subsequently issued a title reflecting a lien in favor of MBCC. Upon purchasing the
truck, Debtor immediately drove it to his Arkansas residence, and thereafter operated
the truck from his residence, hauling loads primarily to Texas, Colorado, Oklahoma,
and Kansas. Debtor never owned a business in Oklahoma.
The bankruptcy court concluded that under Ark. Code Ann. § 409-103(2)(b),
Oklahoma law controlled the perfection of MBCC’s security interest; and because
Oklahoma law required indication of a security interest on the certificate of title for
perfection, MBCC’s interest was perfected for purposes of Arkansas law. The court
thus entered judgment for MBCC. Trustee appealed to the district court. Noting that
neither party questioned any findings of fact, and reviewing de novo the bankruptcy
court’s conclusions, the district court affirmed the decision of the bankruptcy court.
This appeal followed.
1
The Honorable Jimm Larry Hendren, Chief Judge, United States District Court
for the Western District of Arkansas.
2
The Honorable Mary Davies Scott, United States Bankruptcy Judge for the
Western District of Arkansas.
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After de novo review, see In re Mathiason, 16 F.3d 234, 235 (8th Cir. 1994),
we conclude the bankruptcy court correctly determined MBCC’s interest was perfected
for purposes of Arkansas law. See Butner v. United States, 440 U.S. 48, 54-55 (1979)
(state law applies to determine security interests); Ark. Code Ann. § 4-9-103(2) (Supp.
1999) (where goods are covered by certificate of title issued under statute of another
jurisdiction--under law of which security interest must be indicated on certificate as
condition of perfection--perfection of security interest is governed by law of jurisdiction
issuing certificate of title; law continues to govern until goods are registered in another
jurisdiction); Okla. Stat. Ann. tit. 47 § 1105(G) (2000) (statement of lien or
encumbrance shall be included on Oklahoma certificate of title and shall be deemed
continuously perfected).
The Trustee argues that Arkansas’s statutes concerning motor vehicle
registration, see Ark. Code Ann. §§ 27-14-801, 802 (1994), apply to determine the
validity of MBCC’s security interest, and that under these provisions, the security
interest was not perfected because the truck was never registered in Arkansas. We
agree with the bankruptcy court and the district court, however, that section 4-9-
103(2)(a), (b) (Supp. 1999)--Arkansas’s codification of a section of the Uniform
Commercial Code (UCC) --applies instead. The issue involved in this appeal is the
perfection of MBCC’s security interest, not compliance with Arkansas’s vehicle
registration laws, which serve a different purpose. See In re Durette, 228 B.R. 70, 72-
74 (Bankr. D. Conn. 1998) (considering virtually identical factual situation involving
similar motor-vehicle-statute conflict with UCC provision; vehicle registrations and
certificates of title are governed by separate statutes and serve distinct purposes:
purpose of registration requirements is identification and revenue while purpose of
requiring that lien be noted on title certificate for perfection is to provide notice of
encumbrance to potential purchasers or creditors); Commercial Nat’l Bank of
Shreveport v. McWilliams, 606 S.W.2d 363, 365 (Ark. 1980) (“the general policy
involved in certificate of title laws . . . is that lien holders and third parties should be
able to rely upon certificates of title”).
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As the district court noted, applying the UCC provision enables buyers and
lenders readily to ascertain the existence of liens on vehicles and promotes the purpose
of the UCC. See In re Paige, 679 F.2d 601, 602 (6th Cir. 1982) (purpose of UCC is
to promote uniform recognition of security interests which have been noted on
certificate of title; where Michigan debtor purchased truck in Indiana and titled and
registered truck in Illinois using Illinois address, creditor’s lien was validly perfected
under Michigan’s codification of UCC § 9-103(2) because Illinois certificate of title
indicated lien).
Finally, we have considered but reject Trustee’s remaining arguments.
Accordingly, we affirm.
A true copy.
Attest:
CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.
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