In re Dabbs
United States Bankruptcy Court for the District of South Carolina
625 B.R. 15, 103 U.C.C. Rep. Serv. 2d 1477 (2021)
- Written by Jamie Milne, JD
Facts
When Herbert Dabbs (debtor) wanted to purchase new siding for his home, he applied to Wells Fargo Bank N.A. (Fargo) (creditor) for a home-projects credit-card account to make the purchase. The signed application (purchase agreement) stated that Dabbs gave Fargo a purchase-money security interest in any goods purchased under the agreement. Once Fargo approved the application, Dabbs purchased the desired siding. Dabbs later filed for bankruptcy. Fargo filed a proof of claim in the bankruptcy proceeding, stating that it held a secured claim for $14,797.51 in relation to Dabbs’s siding purchase. In support, Fargo submitted the purchase agreement, which had an attached invoice from the siding vendor describing the purchased siding and the location of its installation on Dabbs’s home. Dabbs objected to Fargo’s claim, arguing that Fargo held only an unsecured claim because (1) the purchase agreement was not a security agreement creating a security interest in the siding as collateral and (2) even if Fargo had a security interest in the siding, that interest was not properly perfected. The bankruptcy court considered Dabbs’s objection.
Rule of Law
Issue
Holding and Reasoning (Waites, J.)
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