In re Fink

Pauline Fink (debtor) purchased a mobile home from a mobile-home dealer and granted the dealer a security interest in the mobile home. The dealer transferred the security interest to Endicott Trust Company of New York (Endicott) (creditor), which filed a financing statement describing the mobile home. Soon after purchasing the mobile home, Fink purchased the real property that the mobile home was to sit on from Wemco Corporation (creditor). Wemco was given a purchase-money security interest in the real property. The mobile home was placed on a concrete foundation on the real property. Shingles and roofing were installed on the mobile home, and the various sections of the home were bolted together. A septic system was installed, and water lines and electricity were connected. Essentially, the mobile home was constructed on the real property in a similar fashion to traditional homes. Fink later filed for bankruptcy. Endicott filed a claim related to its security interest in the mobile home. The bankruptcy trustee moved to avoid Endicott’s claim, arguing that Endicott did not have a perfected security interest in the mobile home. Although Endicott had filed a financing statement to perfect its security interest, the trustee asserted that Endicott improperly had followed the requirements to perfect a security interest in personalty, rather than a fixture. To perfect a security interest in a fixture, a party was required to file a financing statement in the office where the mortgage on the real property was filed. The financing statement also had to contain a description of the relevant real property. Endicott opposed the trustee’s motion, arguing that the mobile home was personalty rather than a fixture.