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Kathleen Laughlin, Chap. 13 Trustee v. American Nat'l Bank (In re Sharyn Bennett), Ch. 13, BK04-40661, A04-4110 (Aug. 5, 2005)

The court granted summary judgment to the lender holding a lien on the debtor’s vehicle when the Chapter 13 trustee sought to avoid that lien. The issue was whether the lender’s security interest was properly perfected within 20 days of the debtor taking possession of the vehicle. The debtor purchased the leased vehicle on Dec. 30, 2003, the dealership received the certificate of title from the lease financing company on Jan. 8, 2004; the debtor signed the odometer certification sometime thereafter; and the new certificate of title was issued on Jan. 26, 2004. Under Nebraska motor vehicle titling laws, a debtor who physically possesses a vehicle without also obtaining a certificate of title has no ownership or other interest in the car. The earliest the dealership could have transferred the title was January 8. The lender’s security interest was perfected on January 26, which was within the 20-day window of § 547(c)(3)(B), so it was timely and not avoidable. Because the decision on this motion also resolved the allegations in the trustee’s complaint, summary judgment was entered in favor of the lender even though it had not been requested.

Friday, August 5, 2005
Judge Timothy J. Mahoney (Retired)