UNITED STATES BANKRUPTCY COURT
EASTERN DISTRICT OF KENTUCKY
RANDY DEAN DENNEY
CAROLYN LYNN DENNEY
DEBTORS CASE NO. 90-00760
MAXIE HIGGASON, TRUSTEE PLAINTIFF
VS. ADV. NO. 91-0070
RANDY DEAN DENNEY,
CAROLYN LYNN DENNEY,
and MONTICELLO BANKING
This matter is before the Court on the plaintiff's Motion for Summary Judgment. The plaintiff, the trustee herein, seeks to avoid the lien of defendant Monticello Banking Company ("the Bank") pursuant to 11 U.S.C.'547. This Court has jurisdiction of this matter pursuant to 28 U.S.C. '1334(b); it is a core proceeding pursuant to 28 U.S.C. '157(b)(2)(K).
This action was commenced by the filing of the plaintiff's Complaint on March 22, 1991. Therein the plaintiff alleged that on April 17, 1990, prior to the filing of the debtors' bankruptcy petition on November 5, 1990, they executed and delivered to the Bank a Simple Interest Note and Security Agreement which granted a security interest in a 1988 Chevrolet Corsica. The Bank did not perfect its lien until August 28, 1990, when the title was presented to the Wayne County Court Clerk for recording of the lien on the certificate of title. The plaintiff maintains that this is an avoidable preference pursuant to 11 U.S.C.'547.
The Bank filed its Answer on April 22, 1991. The debtors did not file an Answer. Trial was set for October 25, 1991. However, at a hearing conducted October 24, 1991, the matter was ordered submitted on the plaintiff's Motion for Summary Judgment. The plaintiff filed his Motion for Summary Judgment on November 7, 1991. This Court entered an Order on November 13, 1991, continuing the trial of the matter and submitting on the Motion for Summary Judgment. The defendants were given seven days from the date of entry of the Order to respond to the Motion. No response has been filed by any of the defendants.
Perfection of a lien on a motor vehicle is accomplished by the notation of the lien on the certificate of title. KRS 186A.190. This is the sole and exclusive method of perfection of such liens. The record in this case demonstrates that the Bank did not perfect its lien on the vehicle in question until August 28, 1990. 11 U.S.C.'547(c)(3)(b) provides that the trustee may not avoid a transfer that creates a security interest in property acquired by the debtor that is perfected on or before ten days after the debtor receives possession of the property. Clearly the Bank's security interest was not perfected within ten days of the debtor's possession of the property.
In addition, 11 U.S.C.'547(e)(2)(B) provides that for the purposes of this section, a transfer is made at the time such transfer is perfected, if the transfer is perfected after ten days after the transfer takes effect between the transferor and transferee. Therefore, according to these two provisions the plaintiff may avoid the lien of the Bank pursuant to 11 U.S.C. '547(b), since the requisite elements are present: the transfer was for the benefit of a creditor, for on account of an antecedent debt, made while the debtor was insolvent, on or within 90 days before the date of filing of the petition. The cases cited by the plaintiff, Matter of Hamilton (Howard Thornton Ford, Inc. v. Fitzpatrick), 892 F.2d 1230 (5th Cir. 1990), and In re Arnette, 731 F.2d 358 (6th Cir. 1984) support such a finding.
Federal Rule of Civil Procedure 56(c) provides that "[t]he judgment sought shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." FRCP 56(e) requires that the party against whom the motion for summary judgment has been made must "set forth specific facts showing that there is a genuine issue for trial."
The defendants herein have not set forth any specific facts showing that there is a genuine issue for trial. The entire record in this case shows that there is no genuine issue as to any material fact and that the plaintiff is entitled to judgment as a matter of law. Therefore, in consideration of all of the foregoing, it is the opinion of this Court that the plaintiff's Motion for Summary Judgment should be sustained.
Entered this ____day of ______________, 1992.
By the Court -
Maxie Higgason, Esq., Trustee
David C. Hull, Esq.