11438 Highway 50, LLC, successor in interest to Regions Bank, successor by merger to Union Planters Bank, N.A., successor in interest to NBD Bank, N.A. v. Timothy John Luttrell
2017 Ind. App. LEXIS 326
| Ind. Ct. App. | 2017Background
- Timothy Luttrell and Don Short formed an oral partnership, J&D Sawing, in 2005; the partners purchased and installed a 50-ton crane and a hydraulic narrow-belt saw in a building on Indiana Stone Works (ISW) property for use in stone fabrication.
- J&D Sawing maintained separate utilities for the building; the equipment was bolted/anchored to rails and connected to electricity and water but could be disassembled and moved (saw in ~2 days; crane removable but would require heavy gear).
- J&D Sawing reported losses and never fully purchased the building; Luttrell claimed the equipment remained partnership personal property and intended to buy the real estate later.
- Regions/Union Planters/NBD Bank (the Lender) held mortgages on ISW and had filed a UCC financing statement claiming interests in "all equipment, fixtures...and attachments" of ISW; the Lender intervened claiming the crane and saw were fixtures subject to its mortgage.
- Luttrell sued to dissolve the partnership and sought possession of the crane and saw; Short and ISW defaulted. The trial court awarded the equipment to Luttrell, finding they were not fixtures subject to the Lender's liens.
- On appeal the sole consolidated issue was whether the crane and saw were fixtures subject to the Lender’s mortgage liens; the Court of Appeals affirmed the trial court.
Issues
| Issue | Plaintiff's Argument (Luttrell) | Defendant's Argument (Lender) | Held |
|---|---|---|---|
| Whether the crane and saw are fixtures attached to ISW realty and thus subject to the Lender's mortgage liens | Equipment purchased by J&D Sawing remained partnership personal property; partners intended equipment to remain removable and not to become part of ISW realty | Equipment is large, installed in a building built for them, bolted/anchored and integral to the building’s intended use, so objectively fixtures subject to the mortgage | The court held the equipment are not fixtures; intent to make them permanent accessions was not shown, so they remain personal property of J&D Sawing and are not subject to the Lender's mortgage liens |
Key Cases Cited
- Dinsmore v. Lake Elec. Co., 719 N.E.2d 1282 (Ind. Ct. App. 1999) (articulates three-part test for fixtures and emphasizes intent controls)
- Gill v. Evansville Sheet Metal Works, Inc., 970 N.E.2d 633 (Ind. 2012) (defines fixture as personal property that becomes part of real estate by attachment)
- Ochs v. Tilton, 103 N.E. 837 (Ind. 1914) (early definition of fixture)
- State ex rel. Green v. Gibson Circuit Court, 206 N.E.2d 135 (Ind. 1965) (fixture determination is mixed question of law and fact dependent on circumstances)
- Citizens Bank of Greenfield v. Mergenthaler Linotype Co., 25 N.E.2d 444 (Ind. 1940) (intention inferred from circumstances governs fixture analysis)
- Peed v. Bennett, 52 N.E.2d 629 (Ind. Ct. App. 1944) (intention to create permanent accession must be shown)
- Hamilton v. Huntley, 78 Ind. 521 (Ind. 1881) (historical support for fixture analysis focusing on integration with building)