In re Carman Boats, Inc.

399 B.R. 158 (2009)

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In re Carman Boats, Inc.

United States Bankruptcy Court for the District of Maryland
399 B.R. 158 (2009)

  • Written by Sharon Feldman, JD

Facts

Gordon Bonner (creditor) signed a contract to have Carman Boats, Inc. (Carman) (debtor) build a motorboat for him. The boat had been under construction for nearly three years when Carman filed for bankruptcy. At the time of the bankruptcy filing, the boat was located at Carman’s boatyard. Progress payments had been made, but some of the contract price was unpaid. The remaining work was mostly finish work. The engines had been tested, but there had been no sea trial. Carman had started the process to register the boat with the United States Coast Guard in Bonner’s name, but the paperwork had been rejected because Carman had not signed it. The bankruptcy trustee proposed selling the boat at auction. Bonner objected, claiming ownership of the boat under § 2-401(3)(b) of Maryland’s Uniform Commercial Code (UCC). Bonner argued that because his written contract with Carman was silent as to Carman’s delivery obligation and he and Carman did not agree that Carman was to deliver documents of title, title to the boat passed to Bonner when he entered into the contract with Carman to build the boat.

Rule of Law

Issue

Holding and Reasoning (Derby, J.)

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