This matter is before the Court on the debtors' Motion to Determine Valuation of Mobile Home Based Upon Wholesale Value, filed herein on July 31, 1992. The debtors simultaneously submitted the affidavit of Joe Thompson, a real estate agent and former mobile home dealer, in support of their Motion. Creditor Vanderbilt Mortgage and Finance, Inc. ("Vanderbilt") filed its Affidavit of Appraisal on August 3, 1992. Vanderbilt's appraisal was performed by Thomas Dooley, the general manager of Clayton Mobile Homes, where the debtors purchased the subject mobile home. A valuation hearing was conducted in this Court on August 11, 1992. Vanderbilt filed its Response to the debtors' Motion on August 20, 1992.

Mr. Thompson set the wholesale value of the mobile home at $11,600.00 and the "fair market value" at $14,900.00. His appraisal states that the mobile home has "no book value", but also goes on to state that "...the values as indicated by the NADA book in this case are not appropriate and not properly read." Mr. Dooley's appraisal sets the "fair market value" of the mobile home at $26,000.00. He states that according to the NADA Mobile/Manufactured Housing Appraisal Guide the retail value of the mobile home is $24,466.00 and the wholesale value is $21,200.00. The record in this case indicates that the cash price of the mobile home on March 30, 1989, the date the debtors purchased it from Clayton Mobile Homes, was $24,937.50.

The determination of the value of the security shall be made in light of the proposed use or disposition of the collateral in the case. 11 U.S.C. '506(a). In the present case the debtor proposes to keep the collateral and pay the secured creditor the amount of its secured claim plus a recovery on any unsecured portion along with other unsecured creditors. This Court agrees with In re Robertson, 135 B.R. 350 (Bkrtcy.E.D.Ark. 1992) that "[w]hen the debtor intends, as here, to retain the collateral, the value of the creditor's interest should be determined without regard to hypothetical liquidation costs." At page 352.

Several possible bases have been used when determining the appropriate valuation for the claim of a secured creditor in a Chapter 13 case: (1) wholesale; (2) retail replacement cost; and (3) combinations of the two. In re Malody, 102 B.R. 745 (9th Cir.B.A.P. 1989).

The debtors contend that the mobile home should be valued at wholesale because Vanderbilt is not in the business of selling mobile homes and would only have recovered wholesale value in the event of foreclosure. In support of their position they cite several cases including Grubbs v. National Bank of South Carolina, 114 B.R. 450 (D.S.C. 1990), which stated "...secured claims should be fixed at wholesale value because the creditors are not in the business of selling at retail and have not shown the capacity to do so." At page 452. The other cases cited by the debtors generally employ the same reasoning.

Vanderbilt responds that it is in a unique position in that it and the mobile home dealer (Clayton Mobile Homes) are wholly-owned subsidiaries of the mobile home manufacturer. Vanderbilt states that each mobile home that is repossessed is returned to the dealer's lot to be cleaned up and sold at retail. Vanderbilt cites In re Johnson, 117 B.R. 577, 582 (Bkrtcy.D.Idaho 1990), in which the court set the value of a vehicle at a sum which the court believed the creditor, an automobile dealer, would receive on resale of the vehicle already in its possession. The court assumed that the vehicle would not be sold to another dealer or at auction because there was a strong demand for the particular vehicle in that market.

Because the debtors have provided that the collateral in this case shall be retained, the Court finds that the retail value is the appropriate valuation for the mobile home in question in the present case. Matter of Reynolds, 17 B.R. 489 (Bkrtcy.N.D.Ga. 1981).

The values, whether "wholesale", "retail" or "fair market", placed on the mobile home in question by the two appraisal witnesses are at the far ends of the spectrum. The testimony of Mr. Dooley is colored at least somewhat by his interest in the outcome of this matter. In addition, this Court finds it hard to believe that an almost four-year old used mobile home would sell for more than what it cost new, no matter who sold it. The testimony of Mr. Thompson ignores, or at least does not refute, the published values in regard to the mobile home, and the condition and special features of the home which apparently add to its value. Because of the great disparity in the appraisals in this case and the Court's concerns expressed herein, the Court will require a third appraisal to be obtained by the Trustee on the basis outlined herein.

An order in conformity with this opinion will be entered separately.


By the Court -







Copies to:


Paul D. Deaton, Esq.

Christopher M. Hill, Esq.

Sidney N. White, Esq., Trustee