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In re Buttke
United States Bankruptcy Court for the District of South Dakota
2012 WL 529241 (2012)
A month before Patrick and Shana Buttke (debtors) filed for Chapter 7 bankruptcy, the Buttkes purchased a 2004 GMC Envoy with funds provided by William Buttke. William was indicated as a lienholder on both the certificate of title, which transferred ownership to the Buttkes, and on the Buttkes’ application for a new title. However, the Buttkes and William never executed any separate document that established a security interest in the vehicle for William. William took possession of the vehicle after the filing of the bankruptcy petition and titled it in his name. The bankruptcy trustee began an adversary proceeding in regard to the vehicle against William. The trustee asked for judgment that William did not have a valid lien and that he be compelled to provide the vehicle or its value to the bankruptcy estate. The trustee also sought damages of $250 for William’s violation of the automatic stay. William argued that his lien was valid by virtue of his being listed as a lienholder on the certificate of title and title application for the GMC Envoy. The trustee argued that a South Dakota statute required that William have a signed security agreement describing the vehicle or possession of the vehicle, but he had neither. The trustee moved for summary judgment.
Rule of Law
Holding and Reasoning (Nail, J.)
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