Tustian v. Schriever

Pinnacle Financial Services, Inc. (Pinnacle) was in the business of selling manufactured homes. Pinnacle acquired financing from Deere Credit Services (Deere) (plaintiff) to purchase homes and granted Deere a purchase-money security interest in its inventory and proceeds. In April 1996, Deere perfected its security interest by filing a financing statement. In October, Pinnacle received funds from Deere pursuant to the security agreement. Pinnacle then purchased and moved a manufactured home to a property it owned in Tremonton, Utah. Around this time, Pinnacle also secured a loan from Sodberry Ltd. and granted Sodberry a deed of trust for the property. In October 1997, Pinnacle defaulted on its obligations to Deere and to Sodberry. The next month, Sodberry’s trustee began the process of selling the property. The sale included the real estate with the manufactured home. In January 1998, another party, Karen Schriever (defendant), was granted a judgment against Pinnacle. Schriever then purchased the property from Sodberry at a foreclosure sale. After paying expenses from the sale and recouping Pinnacle’s amount owed on the loan, Sodberry deposited the leftover proceeds with a local clerk of the court and listed both Deere and Schriever as potential claimants. There was no agreement providing for allocation of proceeds between the land and the home. The district court treated the pleadings as cross-motions for summary judgment and held that Deere’s security interest had priority over Schriever’s as a judgment creditor, whether the home was chattel or a fixture. Schriever appealed. On appeal, Deere waived the chattel argument, and the Utah Supreme Court analyzed the issue treating the home as a fixture.