454 B.R. 158
Bankr. D. Kan.2011Background
- Dalebout entered into a Charge Slip financing six windows with Wells Fargo on April 10, 2006.
- Dalebout signed a Home Projects Visa Credit Card Account Application containing a security-interest promise.
- Charge Slip states a purchase money security interest and that described property remains personal property and not a fixture when attached to real property.
- Windows were installed at the Dalebout residence in Manhattan, Kansas; Dalebout owned the home and may have been married to Amy at installation.
- Debtors filed Chapter 13 on Oct. 6, 2010; Wells Fargo filed a secured claim and later amended; Debtors objected to secured status.
- Court adopts stipulated facts and applies Kansas fixture law to decide whether the windows are fixtures or personal property.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Are the replacement windows fixtures under Kansas law? | Dalebout argues windows are fixtures; they become real property. | Wells Fargo contends the windows are personal property due to contract and lack of mortgage. | Windows are not fixtures; Wells Fargo retains a security interest in personal property. |
| Does the parties’ agreement to treat the property as personal property binding between them? | Dalebout and Wells Fargo agreed the windows would remain personal property. | Wells Fargo relies on contractual language to treat as personal property; binding between the two parties. | Yes, binding between the parties to the purchase agreement. |
| Can removal of the windows cause substantial damage to real property to override the agreement? | No substantial damage shown; replacement windows removable without injury. | Removal could damage the real property; not shown in stipulations though. | No evidence in record of substantial damage; not controlling to override personal property treatment. |
| Has Wells Fargo perfected a security interest absent a mortgage or fixture filing? | Wells Fargo perfected via attachment under UCC; no real property lien required. | Perfection requires appropriate security interest in fixtures or real property; here unclear. | Wells Fargo has a secured interest in the windows as personal property under the UCC. |
Key Cases Cited
- In re Williams, 381 B.R. 742 (Bankr. W.D. Ark. 2008) (parties’ contract can control fixture/personal-property status between them)
- In re Hinson, 77 B.R. 34 (Bankr. M.D.N.C. 1987) (outsider third parties not bound by agreement to treat property as personal property)
- Hoffman Management Corp. v. S.L.C. of North America, Inc., 800 S.W.2d 755 (Mo. App. W.D. 1990) (intent of the parties controls whether installed systems are fixtures or personal property)
- Rowand v. Anderson, 33 Kan. 264 (6 P. 255 (1885)) (agreement may affect fixture status against subsequent owners if notice exists)
- In re Farmland Indus., Inc., 298 B.R. 382 (Bankr. W.D. Mo. 2003) (fixture analysis framework; three-part test and intent)
- Stalcup v. Detrich, 27 Kan. App. 2d 880 (10 P.3d 3 (2000)) (burden on claimant to show goods remain personal property)