Yaryan-Parks Trust v. Martinez

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UN TED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF NEW MEXI CO

In re:
PATRI CIA F. MARIT NEZ,
Debt or. No. 13-11- 13873 SL
YARYAN PARKS TRUST,
Pl ai ntiff,
v. Adv. No. 11-1163 S

PATRI CIA F. MARTTI NEZ,
Def endant .

MEMORANDUM OPT NON ON CROSS IMOIT ONS
FOR SUVMARY J UDGVENT

This matter is before the Court on cross notions for sunnary
judgnent. Plaintiff is represented by its attorney Fhlt Mnatt
Martinez, P.C. (David MNeill, Jr.). Defendant (“Defendant” or
“Debtor”) is represented by her attorney Ronald E. Folnes. The
issue presented in this adversary proceeding is whether the
Debtor retained a sufficient interest in a nobile hone at the
connencenent of her bankruptcy case such that she can cure the
associated defaulted debt!. For the reasons set forth below the
Court finds that Debtor does have a sufficient interest in the
nobile hone.

BACKGROUND
The facts are, generally, not in dispute. In Novenber,

2009, Defendant executed a Retail Installment Contract and

‘The Court has subject matter and personal j urisdiction
pursuant to 28 US.C. §§ 1334 and 157(b); this is a core
proceeding pursuant to 28 US.C. § 157(b)(2)(A), (K and/or (L);
and this Menorandum Opinion constitutes findings of fact and
conclusions of lawas may be required by Rule 7052 F.RB P.

INFORMATION

Page -2-
Security Agreement (“Contract”) in which she granted McCarson
(Plaintiff’s predecessor in interest) a security interest in a
1997 Golden West mobile home. 	The Contract had a purchase price
of $40,000. 	The Contract called for $10,000 as a down payment
and payment of the $30,000 balance through one hundred forty four
monthly payments of $450.26 with interest at an annual percentage
rate of 15%, plus a monthly payment of taxes and insurance of
$50.00 and an escrow fee of $4.29 (total payment of $504.55). 	A
New Mexico Certificate of Title issued for the mobile home on
December 1, 2009, lists the registered owners as Patricia F.
Martinez or Rudy Abel Avalos, and the lienholders as James C.
Parks and Charles E. Yaryan. 	Defendant failed to make payments
and on November 22, 2010 the Plaintiff gave Defendant a notice of
default. 	On December 15, 2010 Defendant filed a Chapter 7
bankruptcy in the District of New Mexico as case number 7-10-
16169-SL. 	She listed the mobile home on her Schedule B with a
value of $40,000 and listed an associated debt to Mountain States
Escrow for $25,000. 	She claimed the $15,000 of equity as an
exempt homestead. 	No objections were filed to her exemptions.
On February 10, 2011, Plaintiff filed a motion for relief from
the automatic stay regarding the mobile home. 	Defendant timely
filed an objection to the motion. 	Before any hearing on the stay
motion, debtor was discharged on April 4, 2011. 	On April 15,
2011 the Court granted the stay motion, finding that Debtor had
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Page -3-
received her discharge, which terminated the automatic stay as to
her, and that the case trustee had not responded to the stay
motion, so the stay was terminated as to the estate. 	The
bankruptcy case closed on April 18, 2011.
On June 13, 2011, Plaintiff filed a complaint in the Third
Judicial District Court to recover possession of the mobile home
and a Motion for Advance Payment of Rent. 	Plaintiff served
Defendant by serving her son by hand on June 15, 2011 and mailed
a copy of the summons and complaint to her state court attorney.
On July 18, 2011, Plaintiff filed an affidavit of non-military
service. 	On July 19, 2011, Plaintiff obtained a certificate of
the state of the record that Defendant had not appeared. 	On July
20, 2011 Plaintiff filed an application for default judgment and
writ of replevin. 	On July 27, 2011 Defendant, representing
herself, filed a response to the complaint and on August 5, 2011
attorney Carlos Quinonez filed an amended response on her behalf.
On August 10, 2011, Judge Arrieta of the Third Judicial District
Court entered a Default Judgment and Order Issuing Writ of
Replevin. 	This document provides:
1. 	The Court has jurisdiction over the parties and
the subject matter of this cause of action.
2. 	On November 20, 2009, Defendant executed a Retail
Installment Contract and Security Agreement (the
Contract) with Ron McCarson, under which Defendant
agreed to purchase a 1997 Golden West mobile home,
Model 7884, VIN GWCA21124231AB (the Mobile Home).
3. 	The Mobile Home is situated upon real property
located at 191 Mohican, Las Cruces, New Mexico,
which is not owned by Plaintiff or Defendant.
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Page -4-
4. 	The Contract was transferred and assigned by Ron
McCarsen to Plaintiff Yaryan-Parks Trust.
5. 	Plaintiff is therefore the lawful owner and holder
of the Contract.
6. 	The Contract requires Defendant to pay to
Plaintiff the sum of $504.55 each month beginning
on January 5, 2010, and continuing on the first
day of each month thereafter until fully paid.
Defendant has not made any of the payments on the
contract beginning with the payment due on
September 5, 2010.
7. 	Defendant agreed, as part of the Contract, that by
giving Plaintiff a security interest in the Mobile
Home, she waived all rights provided by law to
claim it exempt from legal process.
8. 	The Contract provides that upon the happening of
any event of default, Plaintiff may take immediate
possession of the Mobile Home.
9. 	Plaintiff gave Defendant notice of default on
November 22, 2010.
10. 	Defendant has ignored and refused all demands for
the return of the Mobile Home, despite having had
reasonable opportunity to comply therewith.
11. 	Plaintiff has the right to immediate possession of
the Mobile Home.
12. 	Plaintiff waived seizure and delivery of the
Mobile Home prior to trial.
13. 	No affidavit or replevin bond is required for this
action. NMSA 1978, § 42-8-7.
14. 	The value of the property is at least $30,000.00.
15. 	Plaintiff elects return of the Mobile Home plus
damages incurred by virtue of Defendant's default.
16. 	The Security Agreement should be foreclosed.
17. 	The Contract provides that in the event of a
default, Plaintiff has the right to retain all
money paid on the Contract.
18. 	In the event Defendant has damaged the Mobile Home
in any way, Plaintiff is entitled to reasonable
and necessary costs of repair.
19. 	Defendant should be restrained from damaging the
mobile home or its contents and from removing any
property from the mobile home that does not belong
to her.
IT IS, THEREFORE, ORDERED, ADJUDGED, AND DECREED that a
Writ of Replevin shall forthwith issue from this Court
against Defendant, for immediate return of the
possession of the mobile home which is the subject of
this cause of action to Plaintiff. 	Plaintiff is also
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Page -5-
awarded the sum of $504.55 per month or $16.81 per diem
from July 5, 2011 until Defendant is removed from the
property, as payment for rent.
IT IS FURTHER ORDERED, ADJUDGED, AND DECREED, that
Plaintiffs security interest in the mobile home is
foreclosed, and Defendant shall have no further right
of possession or other legal or equitable right to or
in the mobile home.
IT IS FURTHER ORDERED, ADJUDGED, AND DECREED, that
Defendant is restrained from damaging the mobile home
or its contents in any way and she is further
restrained from removing from the mobile home any
appliance or other items which are property of
Plaintiff or attached to the mobile home. 	Any
violation of this Order may be punished as contempt of
Court.
The docket entry corresponding to this document, dated
August 10, 2011 states:
Default Judgment and Order Issuing Writ of Replevin –
Writ of Replevin shall issue from this Court against
Deft for immediate return of possession of the mobile
home. 	Plntf is also awarded the sum of $504.55/mon or
16.81/diem from 07/05011 until Deft is removed from
Property as payment for rent.
- Plntf’S security interest in the mobile home is
foreclosed, and Deft shall have no further right to or
in the mobile home.
- Deft is restrained from damaging the mobile home or
its contents in any way and she is further restrained
from removing from the mobile home any appliance or
other items which are property of plntf or attached to
the mobile home. 	Any violation of this order may be
punished as contempt of court.
The next entry on the docket is dated August 15, 2011 and
states:
ALIAS/WRlT ISSUED
WRIT OF REPLEVIN - ISSUED
TO: SHERIFF OF DONA ANA COUNTY
COMMANDED TO TAKE FROM DEFT THE 1997 GOLDE WEST MOBILE
HOM, VIN .. .4231AB
TO REMOVE DEFT FROM THE PROPERTY, CONFISCATE FROM HER
ALL KEYS OR OTHER MEANS OF ACCESS TO THE MOBILE HOME
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2Although not necessary or relevant for this decision, the
Court notes that, in general, installment sale contracts for
items of personal property are not executory contracts. 	See
Johnson v. Smith (In re Johnson), 501 F.3d 1163, 1174 (10 th Cir.
2007)(collecting cases); Schnittjer v. Burke Construction Co. (In
re Drahn), 405 B.R. 470, 475 (Bankr. N.D. Iowa 2009)(“Contracts
for the sale of personal property are not executory when the only
remaining duty is the transfer of title after the debtor has
completed payments.”)(Mobile home case.) 	However, even if the
contract had been executory, it was no longer executory after the
Debtor breached and the seller obtained a judgment prior to the
(continued...)
Page -6-
AND SERVE UPON HER A COPY OF THIS WRIT OF REPLEVIN
TO TURN OVER THE PROPERTY TO PLTF UPON PAYMENT OF YOUR
FEES AND TO MAKE A FULL RETURN OF YOUR ACTIONS TAKEN
ON THIS WRIT ON OR BEFORE 4PM O8/30/2011
TO: DEFENDANT PATRICIA F MARTINEZ -
COMMANDED UPON SEIZURE OF THE MOBILE HOME BY THE
SHERIFF OF DONA ANA COUNTY, TO DEPART [T]HE MOBILE HOME
AND NEITHER EMTER (sic) IT OR THE PROPERTY UPON WHICH
IT IS SITUATED UNLESS AUTHORIZED BY THIS COURT, IN A
WRITTEN ORDER, TO DO SO.
On August 29, 2011, Defendant filed a voluntary petition
under Chapter 13 in the District of New Mexico Bankruptcy Court.
On August 29, 2011, her bankruptcy attorney filed a Notice of
Bankruptcy in the Third Judicial District case. 	On August 30,
2011 her state court attorney Carlos Quinonez filed a second
notice of bankruptcy in the Third Judicial District case.
Page 2 of Defendant’s Chapter 13 petition discloses her
previous Chapter 7 case. 	Her Schedule B lists the Golden West
Mobile Home as an asset with a $20,000 value, subject to a
$29,000 lien held by the Plaintiff. 	Schedule D lists the
Plaintiff as a secured creditor for the mobile home. 	Schedule G
also lists Plaintiff as a party to a “REC” 2 .
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2(...continued)
bankruptcy filing. 	In re Becker, 217 B.R. 231, 234 (Bankr. M.D.
Tenn. 1998).
3See note 2, above.
Page -7-
Defendant also filed her Chapter 13 plan on August 29, 2011.
The plan is the standard New Mexico form plan with no additions.
It proposes that she will pay $650 per month for sixty months
starting on September 15, 2011. 	Plan ¶ 4.4 item (3) states the
treatment of Plaintiff’s claim: the mobile home, value $20,000,
is collateral for an estimated claim of $29,000; the claim will
be bifurcated and the secured portion will be paid with interest
at 4% and the unsecured portion will share pro-rata with other
unsecured claims. 	The plan, ¶ 5, also lists Plaintiff as a party
to a “REC” which is to be assumed 3.
On September 2, 2011, Plaintiff filed a Motion in the
bankruptcy case seeking a declaration that the mobile home is not
property of the bankruptcy estate. 	Doc 13. 	The ground asserted
for the motion was the default judgment that declared Defendant
had no further interest in the mobile home. 	Defendant responded,
arguing that the default judgment had no such effect because the
writ of replevin had not been executed before her bankruptcy and
that she had both possession and legal title. 	Doc 28. 	Defendant
also pointed out that this issue could only be addressed by
adversary proceeding. 	The Court summarily denied the motion on
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the grounds that declaratory relief can only be obtained by
adversary proceeding. 	Doc 29.
On September 8, 2011, Defendant filed a Motion to Assume the
executory contract with Plaintiff. 	Doc 14. 	Plaintiff objected
on the grounds that the state court judgment terminated the
contract. 	Doc 27.
On September 8, 2011, Defendant also filed a Motion for
Valuation of the Mobile Home seeking to establish its value at
$20,000. 	Doc 16. 	Plaintiff objected to the valuation for
several reasons: 1) Defendant is no longer the owner, 2) as non-
owner she is not competent to testify to its value, 3) the
valuation is not based on any evidence, and 4) the Court lacks
jurisdiction to determine the value of non-estate property. 	Doc
26.
On October 11, 2011 Plaintiff filed this adversary
proceeding. 	The Complaint is entitled “Complaint to Declare
Personal Property Outside the Bankruptcy Estate and Objecting to
Discharge.” 	It argues that based upon the default judgment, the
mobile home is not part of the estate. 	It alleges nothing about
discharge or dischargeability and seeks no relief relating to
discharge.
Defendant answered timely and asserted various affirmative
defenses, including the fact that the mobile home ownership
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4Plaintiff’s arguments about Defendant’s failure to follow
New Mexico rules regarding initiating a reconsideration or appeal
are not relevant. 	The record contains a default judgment and
that is what this Court considers.
5Under New Mexico law,
In order to invoke collateral estoppel a party must
establish the existence of four elements: (1) the
parties are the same or in privity with the parties in
the original action; (2) the subject matter or cause of
action in the two suits are different; (3) the ultimate
facts or issues were actually litigated; and (4) the
issue was necessarily determined.
Reeves v. Wimberly, 107 N.M. 231, 233, 755 P.2d 75, 77 (Ct.App.
1988)(Citations omitted.)
Page -9-
remained in her name, she resided in it and the writ of replevin
was unexecuted when she filed her Chapter 13. 	Doc 5.
Plaintiff filed a Motion for Summary Judgment (doc 6) and a
Memorandum in Support (doc 7). 	Plaintiff makes two arguments.
First, it claims that the default judgment extinguished all
rights Defendant had in the mobile home 4. 	Second, it claims that
collateral estoppel 5 precludes Defendant from relitigating her
interests in the mobile home.
Defendant responded to the Motion for Summary Judgment (doc
11) and filed her own motion for summary judgment (doc 12) with
affidavit attached. 	Defendant makes three arguments. 	First, she
correctly claims that default judgments do not have preclusive
effect under New Mexico law. 	See, e.g., Blea v. Sandoval, 107
N.M. 554, 558, 761 P.2d 432, 436 (Ct.App.), cert. denied, 107
N.M. 413, 759 P.2d 200 (1988). 	Second, she claims that section
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6Debtor was still in possession of the Mobile home when she
filed bankruptcy. 	Therefore section 542, dealing with turnover
of property in another’s possession is not relevant in this case.
7 	Our courts have specifically recognized that
the elements of collateral estoppel we apply
may differ from the elements considered by
federal courts, see Edwards v. First Fed.
Sav. & Loan Ass'n of Clovis, 102 N.M. 396,
401–02, 696 P.2d 484, 489–90 (Ct.App. 1985)
(discussing differences between elements of
collateral estoppel in New Mexico courts and
federal courts), and we are required to
adhere to elements established by the New
Mexico Supreme Court. 	Id.
In re Estate of Duran, 2007-NMCA-068, ¶ 21, 141 N.M. 793, 799-
(continued...)
Page -10-
541 and 542 6 define property of the estate and that the mobile
home, in its current status, fits within those definitions.
Finally, she argues that the automatic stay prevents Plaintiff
from further perfection of any interest in or any attempt to
obtain physical repossession of the mobile home; therefore, she
has the opportunity to cure any defaults.
Plaintiff’s reply contains four arguments. 	First, that the
Tenth Circuit has an exception to the rule that default judgments
have no preclusive effect: when a defendant has “actually
litigated” in the case that ends up with a default judgment, it
will have preclusive effect. 	E.g., Melnor, Inc. v. Corey (In re
Corey), 583 F.3d 1249, 1251 (10 th Cir. 2009), cert. denied, 130
S.Ct. 1739 (2010). 	The Court is aware of the Tenth Circuit’s
application of that exception. 	The Court is unaware, however, of
whether New Mexico state cases use it 7 . 	However, even if it
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7(...continued)
800, 161 P.3d 290, 296-97 (Ct.App. 2007).
8This Court has seen this exception applied only in cases as
a sanction. 	See, e.g., Corey, 583 F.3d at 1251 (“Mr. Corey
actually litigated Melnor's fraud claim. 	The default was not
entered because of Mr. Corey's failure to contest the issue but
rather because his efforts in contesting it were abusive.”)
In the state case proceedings involved in this case the
docket shows no participation at all by the Defendant before the
Motion for Default Judgment was filed. 	See doc 7, page 2 of 3.
The resulting default could not then have been a result of any
actual participation by the Defendant.
Plaintiff also argues that there were earlier state court
lawsuits in which Defendant did participate, and asks this Court
to consider her participation in the series of cases. 	First, the
Court does not have any details of those other cases. 	Second, it
does not change the fact that in the latest case she did not
participate.
Plaintiff also attempts to attribute allegedly sanctionable
conduct by her state court attorney to her. 	See doc 15, pp. 6-8.
Plaintiff claims that the attorney falsely informed the state
court that Defendant had already filed for Chapter 13 protection.
But, whatever the attorney told the court, it did not stop the
court from entering a default judgment five days later. 	It
appears therefore that the misrepresentation caused Plaintiff no
harm. 	Furthermore, if an attorney misrepresented facts to
another court, it is not within this Court’s jurisdiction to deal
with it.
Page -11-
would apply in New Mexico state courts, the Court finds that the
exception would not be applicable 8 in this case. 	Finally, the
“causes of action” are completely different. 	The state court
cause of action was to regain title and possession to the mobile
home; the bankruptcy cause of action is whether Debtor retained
rights at the point she filed bankruptcy.
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9In Brooks Trucking Co., Inc. v. Bull Rogers, Inc., 2006-
NMCA-025, ¶ 10, 139 N.M. 99, 102, 128 P.3d 1076, 1079 (Ct.App.
2006) the New Mexico Court of Appeals listed the elements of res
judicata:
The elements of res judicata or claim preclusion
required as to the two actions at issue are (1) the
same parties or parties in privity, (2) the identity of
capacity or character of persons for or against whom
the claim is made, (3) the same subject matter, and (4)
the same cause of action. 	Moffat [v. Branch],
2005–NMCA–103, ¶ 11, 138 N.M. 224, 118 P.3d 732; Anaya
v. City of Albuquerque, 1996–NMCA–092, ¶ 6, 122 N.M.
326, 924 P.2d 735. In regard to the subject matter and
cause of action, res judicata “does not depend upon
whether the claims arising out of the same transaction
were actually asserted in the original action, as long
as they could have been asserted.” 	Id. ¶ 18 (internal
quotation marks and citation omitted).
10 Similarly, the Court finds that the Rooker-Feldman
doctrine would not apply. 	That doctrine, generally, prohibits a
losing party from seeking an appellate review of a state court
judgment in federal court. 	Kiowa Indian Tribe of Oklahoma v.
Hoover, 150 F.3d 1163, 1169 (10 th Cir. 1998). 	Debtor is not
attempting to set aside the state court judgment. 	Rather, she is
attempting to exercise her rights under Bankruptcy Code section
1322. 	See Woodsbey v. Easy Mortgage (In re Woodsbey), 375 B.R.
145, 148 (Bankr. W.D. Pa. 2007)(Rooker-Feldman doctrine does not
apply before sale of property.)
Page -12-
Plaintiff’s second reply is that the default judgment has
res judicata 9 effect in this case. 	The Court disagrees 10 . 	The
question for the state court was whether Plaintiff had a right of
replevin of the mobile home or whether the security interest
should be foreclosed. 	The question for the Bankruptcy Court is,
given the ruling of the state court judge, whether there was
still a sufficient legal or equitable interest in the Debtor such
that the Bankruptcy Code would allow a cure. 	This bankruptcy
issue was not an issue that was or could have been determined in
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Page -13-
the state court case; no bankruptcy had in fact been filed so no
bankruptcy defense could have been asserted.
Third, Plaintiff argues that the mobile home is not included
in the bankruptcy estate because Debtor had no “legal or
equitable” interest. 	The Court disagrees for the reasons set
forth in detail below.
Fourth, Plaintiff argues that Defendant’s status is that of
a trespasser and she cannot be construed as having a possessory
interest in the mobile home. 	The Court disagrees. 	First,
trespass is an action for injury to right of possession of real
property. 	Pacheco v. Martinez, 97 N.M. 37, 41, 636 P.2d 308, 312
(Ct.App. 1981). 	Neither party owns the real estate in this case.
Second, trespass involves entry onto another’s property without
permission. 	State v. Tower, 133 N.M. 32, 34, 59 P.3d 1264, 1266
(Ct.App.), cert. denied, 133 N.M. 30, 59 P.3d 1262 (2002).
Debtor entered the Mobile home with permission; she purchased it
as her residence. 	And, as to her continuing occupation, the
automatic stay of her bankruptcy prevented the writ of replevin
from having effect. 	The automatic stay has not been terminated
and her possession is lawful.
DISCUSSION
The concept of a consumer bankruptcy through which a debtor
could retain certain assets was introduced in the 1938 Chandler
Act, 52 Stat. 840 (1938)(repealed 1978). 	Whelan, Cohen and
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Wexler, Consumer Bankruptcy Reform: Balancing the Equities in
Chapter 13, 2 Am. Bankr. Inst. L. Rev. 165, 166 (1994)(Hereafter
“Balancing Equities”). 	The Bankruptcy Reform Act of 1978
repealed the Chandler Act but maintained the same underlying
philosophy that allowed debtors an opportunity to keep some or
all of their possessions. 	Id.
Before 1993, bankruptcy courts were split on the issue of
when or whether a debtor could cure a default on an obligation
secured by real property. 	Id. at 178. 	The majority of circuits
followed the Second Circuit case of DiPierro v. Taddeo (In re
Taddeo), 685 F.2d 24 (2nd Cir. 1982). 	This case held that a
debtor could de-accelerate an accelerated mortgage, reinstate the
original mortgage and cure defaults even if there were a
prepetition state court judgment for the accelerated balance.
Id. at 178-79 (citing Taddeo, 685 F.2d at 28).
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11 See Sen.Rep. No. 168, 103d Cong., 1st Sess. 21. (“Period
for curing default relating to principal residence.”)(October 28,
1993). 	Section 301 added a new subsection (c) to § 1322, which
addresses the contents of a debt adjustment plan. 	The new
section clarified and affirmed the ruling in Taddeo, and
provided:
(c) Notwithstanding State law and subsection (b)(2),
and whether or not a claim is matured or reduced to
judgment, a debtor who at the time of filing a petition
under this title possesses any legal or equitable
interest, including a right of redemption, in real
property securing a claim —
(i) may cure the default and maintain payments on the
claim pursuant to subsection (b)(3) or (5)[.]
Id. 	The language “[n]otwithstanding State law” along with the
specific reference to §§ 1322(b)(3) and (5), make clear that the
intent of Congress in amending § 1322 is to “clarif[y] that
Federal bankruptcy rights provided in §§ 1322 and 1325 preempt
any State laws in conflict with Federal law.” 	S.Rep. No. 168,
103d Cong., 1st Sess. 51 (1993). 	In addition, the language
“whether or not a claim is matured or reduced to judgment” (S.
540, § 301(c)) makes clear that “debtors should be given full
opportunity to retain their homes by paying the foreclosure
debts, curing the defaults, and reinstating the mortgage
payments.” 	Id. 	And that a foreclosure judgment obtained by the
mortgagee, in and of itself, will not prevent a cure. 	See S.Rep.
No. 168, 103d Cong., 1st Sess. 51 (1993).
See also Balancing Equities, 179 at n.85. 	Note: The current
version of section 1322(c) appears in text on the next page.
12 S.Rep. No. 168, 103d Cong., 1st Sess. 51 (1993).
State law may determine the nature of the property
which the debtor holds on the date of filing the
(continued...)
Page -15-
In 1993 Congress codified 11 the result in Taddeo and adopted
it as part of the 1994 Code amendments. 	Id. at 179. 	The
specific language of the amendments (and the legislative history)
suggest that a debtor can cure a real estate mortgage default
until a state law specifically terminates the debtor’s interest
in the property. 12 	Id.
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12 (...continued)
petition. 	However, if the debtor still possesses an
interest in the land, such as a right of redemption,
then the debtors may use preemptive Federal Bankruptcy
rights to save their homes from foreclosure
notwithstanding state law.
Id.
Page -16-
Before 2005, the Bankruptcy Code did not define “debtor’s
principal residence.” 	The Bankruptcy Abuse Prevention and
Consumer Protection Act of 2005 (“BAPCPA”), P.L. 109-8, added
Bankruptcy Code section 101(13A):
The term “debtor's principal residence”—
(A) means a residential structure, including incidental
property, without regard to whether that structure is
attached to real property; and
(B) includes an individual condominium or cooperative
unit, a mobile or manufactured home, or trailer.
The Bankruptcy Technical Corrections Act of 2010 added the
language “if used as the principal residence by the debtor” to
subparts (A) and (B) of section 101(13A), resulting in a current
definition of:
The term “debtor's principal residence”--
(A) means a residential structure if used as the
principal residence by the debtor, including incidental
property, without regard to whether that structure is
attached to real property; and
(B) includes an individual condominium or cooperative
unit, a mobile or manufactured home, or trailer if used
as the principal residence by the debtor.
Therefore, BAPCPA made clear that mobile homes, whether attached
to real property or not, deserved the protections reserved for
debtor’s “principal residence.”
Current 11 U.S.C. § 1322(c)(1) provides:
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Page -17-
Notwithstanding subsection [1322](b)(2) and applicable
nonbankruptcy law--
(1) a default with respect to, or that gave rise to, a
lien on the debtor's principal residence may be cured
under paragraph (3) or (5) of subsection (b) until such
residence is sold at a foreclosure sale that is
conducted in accordance with applicable nonbankruptcy
law[.]
(Emphasis added.) 	Therefore, BAPCPA extended the protection
afforded to a debtor’s principal residence situated on real
estate to a mobile home alone that serves as a principal
residence.
A debtor’s property rights are determined by reference to
state law. 	Butner v. United States, 440 U.S. 48, 55 (1979). 	The
extent that those rights are included in a bankruptcy estate are
determined, however, by federal law. 	Peters v. Wise (In re
Wise), 346 F.3d 1239, 1242 (10 th Cir. 2003)(Citing N.S. Garrott &
Sons v. Union Planters Nat’l Bank of Memphis (In re N.S. Garrott
& Sons), 772 F.2d 462, 466 (8 th Cir. 1985)). 	We start by
examining this Debtor’s remaining rights in the mobile home under
New Mexico law. 	New Mexico has two parallel methods to enforce
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13 N.M. Stat. Ann. § 55-103(b) provides:
Unless displaced by the particular provisions of the
Uniform Commercial Code, the principles of law and
equity, including the law merchant and the law relative
to capacity to contract, principal and agent, estoppel,
fraud, misrepresentation, duress, coercion, mistake,
bankruptcy and other validating or invalidating cause,
supplement its provisions.
See also Ruidoso State Bank v. Garcia, 92 N.M. 288, 290, 587 P.2d
435, 437 (1978)(The Uniform Commercial Code abolished the
doctrine of election of remedies. 	The statutes allow a creditor
two different causes of action, one for debt and one for mortgage
foreclosure. 	Recovery under one theory does not preclude later
recovery on the other.)
14 In this case it is undisputed that the mobile home is not
attached to the real estate, which is owned by a third party.
Therefore this opinion omits references to provisions of the UCC
and cases that deal with mobile homes that have become attached
to real estate. 	For an overview of the different treatment
afforded to attached mobile homes, see, e.g., Hensley v. Ray’s
Motor Co. of Forest City, 158 N.C.App. 261, 264, 580 S.E.2d 721,
723-24 (N.C. Ct.App. 2003).
Page -18-
liens on personal property, the Uniform Commercial Code 13 and the
replevin statutes.
UNIFORM COMMERCIAL CODE
Under New Mexico law a transaction, regardless of its form,
that creates a security interest in personal property by contract
is governed by Article 9 of the Uniform Commercial Code (“UCC”).
NMSA ¶ 55-9-109(a)(1). 	See also Id., cmt.2. (“When a security
interest is created this Article applies regardless of the form
of the transaction or the name that parties have given to it.”)
Mobile homes 14 are considered to be “goods” for purposes of the
UCC. 	See N.M. Stat. Ann. 1978 § 55-9-102(a)(44)(A)(v) (“‘Goods’
means all things that are movable when a security interest
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15 “The definition of ‘manufactured home” borrows from the
federal Manufactured Housing Act, 42 U.S.C. §§ 5401 et seq., and
is intended to have the same meaning. 	N.M. Stat. Ann. § 55-9-102
Cmt. 4. 	42 U.S.C. § 5401, Historical and Statutory Notes,
Codifications, provides:
References to “mobile homes”, wherever appearing in
text, were changed to “manufactured homes” in view of
the amendment of Title VI of the Housing and Community
Development Act of 1974 (this chapter) by section
308(c)(4) of Pub.L. 96-399 requiring the substitution
of “manufactured home” for “mobile home” wherever
appearing in Title VI of the Housing and Community
Development Act of 1974, and section 339B(c) of Pub.L.
97-35 (set out as a note under section 1703 of Title
12, Banks and Banking) providing that the terms “mobile
home” and “manufactured home” shall be deemed to
include the terms “mobile homes” and “manufactured
homes”, respectively.
Page -19-
attaches and: (A) includes: ... (v) manufactured homes 15 [.]”)
And, New Mexico courts have consistently applied the UCC to
mobile home transactions. 	See, e.g., Ybarra v. Modern Trailer
Sales, Inc., 94 N.M. 249, 609 P.2d 331 (1980)(“The issue on
appeal is whether plaintiffs met the conditions for revocation of
acceptance of the mobile home contract as required by [the
UCC]”); Jaramillo v. Gonzales, 2002-NMCA-072, ¶ 13, 132 N.M. 459,
463-64, 50 P.3d 554, 558-59 (Ct.App.), cert. denied, 132 N.M.
288, 47 P.3d 447 (2002) (Buyers of defective mobile home could
pursue either breach of warranty or revocation of acceptance
remedies under the UCC.) 	Substantially all jurisdictions realize
that the sale of a mobile home is a transaction in “goods” to
which the UCC applies. 	See, e.g., Roberson v. Manning, 268 P.3d
1090, 1096 (Alaska 2012) (A mobile home is personal property and
Case 11-01163-s Doc 17 Filed 07/30/12 Entered 07/30/12 09:57:30 Page 19 of 38

Page -20-
its sale is governed by the UCC.)(Applying Alaska law.); Henson
v. Green Tree Servicing, LLC, 197 N.C.App. 185, 189, 676 S.E.2d
615, 618 (N.C. Ct.App. 2009) (The UCC controls the rights of
parties in the sale of a mobile home.)(Applying North Carolina
law.); Reno Financial, Ltd. v. Valleroy, 229 S.W.3d 622, 623-24
(Mo. Ct.App. 2007)(A creditor was barred from seeking a
deficiency judgment after the sale of a mobile home because it
failed to comply with the UCC’s collateral disposition
provisions.)(Applying Missouri law.); and Supik v. Key Bank of
Central New York (In re Brown), 45 B.R. 766, 768 (Bankr. N.D.
N.Y. 1985):
At the inception, the Court holds the [mobile]
Home constitutes personal property which is, therefore,
covered by the N.Y.U.C.C. pursuant to § 9–102(1)(a)
(McKinney 1977). 	Both parties apparently admit the
U.C.C. covers the instant transaction so the Court will
dwell no further on this.
(Applying former New York law.)
Part 6 of Article 9, N.M. Stat. Ann. §§ 55-9-601 et. seq.,
deals with “Default.” 	Section 55-9-601 states the general rule
that, after default, a secured creditor has all Article 9 Part 6
rights and the rights provided for in any agreement of the
parties, subject, however, to limitations set forth in section
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16 Incidentally, “a sale pursuant to an execution [under Part
6 of the UCC] is a foreclosure of the security interest ... by
judicial procedure within the meaning of this section.” 	N.M.
Stat. Ann. § 9-601(f).
17 Section 55-9-608(a) provides:
If a security interest or agricultural lien secures payment
or performance of an obligation, the following rules apply:
(1) A secured party shall apply or pay over for application
the cash proceeds of collection or enforcement under Section
55-9-607 NMSA 1978 in the following order to:
(A) the reasonable expenses of collection and
enforcement and, to the extent provided for by
agreement and not prohibited by law, reasonable
attorney fees and legal expenses incurred by the
secured party;
(B) the satisfaction of obligations secured by the
security interest or agricultural lien under which the
collection or enforcement is made; and
(C) the satisfaction of obligations secured by any
subordinate security interest in or other lien on the
collateral subject to the security interest or
agricultural lien under which the collection or
enforcement is made if the secured party receives an
authenticated demand for proceeds before distribution
of the proceeds is completed.
(2) If requested by a secured party, a holder of a
subordinate security interest or other lien shall furnish
reasonable proof of the interest or lien within a reasonable
time. 	Unless the holder complies, the secured party need
not comply with the holder's demand under Subparagraph (C)
of Paragraph (1) of Subsection (a) of this section.
(3) A secured party need not apply or pay over for
application noncash proceeds of collection and enforcement
under Section 55-9-607 NMSA 1978 unless the failure to do so
would be commercially unreasonable. 	A secured party that
(continued...)
Page -21-
55-9-602 16 . 	That section lists some rights of the debtor and
duties of the secured party that cannot be waived or varied.
For example, (a) the debtor may not waive the requirement
that the creditor account for and pay surplus proceeds of
collateral (N.M. Stat.Ann. § 55-9-602(5) making § 55-9-608(a) 17
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17 (...continued)
applies or pays over for application noncash proceeds shall
do so in a commercially reasonable manner.
(4) A secured party shall account to and pay a debtor for
any surplus, and the obligor is liable for any deficiency.
18 Section 55-9-615(d) provides:
If the security interest under which a disposition is made
secures payment or performance of an obligation, after making the
payments and applications required by Subsection (a) of this
section and permitted by Subsection (c) of this section:
(1) unless Paragraph (4) of Subsection (a) of this section
requires the secured party to apply or pay over cash
proceeds to a consignor, the secured party shall account to
and pay a debtor for any surplus; and
(2) the obligor is liable for any deficiency.
19 Section 55-9-610(b) provides:
Every aspect of a disposition of collateral, including the
method, manner, time, place and other terms, must be commercially
reasonable. If commercially reasonable, a secured party may
dispose of collateral by public or private proceedings, by one or
more contracts, as a unit or in parcels, and at any time and
place and on any terms.
20 Section 55-9-611 provides, in relevant part:
(a) In this section, “notification date” means the earlier of the
date on which:
(1) a secured party sends to the debtor and any secondary
obligor an authenticated notification of disposition; or
(continued...)
Page -22-
and § 55-9-615(d) 18 unwaivable and unchangeable by agreement);
(b) the debtor may not waive the requirement that the creditor
dispose of collateral in a commercially reasonable manner (N.M.
Stat.Ann. § 55-9-602(7) making § 55-9-610(b) 19 unwaivable and
unchangeable by agreement); (c) the debtor may not waive
notification by the creditor before disposition of the collateral
(N.M. Stat.Ann. § 55-9-602(7) making § 55-9-611 20 unwaivable and
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20 (...continued)
(2) the debtor and any secondary obligor waive the right to
notification.
(b) Except as otherwise provided in Subsection (d) of this
section, a secured party that disposes of collateral under
Section 55-9-610 NMSA 1978 shall send to the persons specified in
Subsection (c) of this section a reasonable authenticated
notification of disposition.
(c) To comply with Subsection (b) of this section, the secured
party shall send an authenticated notification of disposition to:
(1) the debtor;
(2) any secondary obligor; and
(3) if the collateral is other than consumer goods: ...
(d) Subsection (b) of this section does not apply if the
collateral is perishable or threatens to decline speedily in
value or is of a type customarily sold on a recognized market.
(e) ...
21 Including the following, or a substantially similar,
statement:
You can get the property back at any time before we
sell it by paying us the full amount you owe (not just
the past due payments), including our expenses. 	To
learn the exact amount you must pay, call us at
(telephone number). 	If you want us to explain to you
in writing how we have figured the amount that you owe
us, you may call us at (telephone number) (or write us
at (secured party's address) ) and request a written
explanation. 	(We will charge you $ for the explanation
if we sent you another written explanation of the
amount you owe us within the last six months.)
N.M. Stat.Ann. § 55-9-614(3).
22 Section 55-9-613(1) provides:
(1) The contents of a notification of disposition are sufficient
if the notification:
(A) describes the debtor and the secured party;
(B) describes the collateral that is the subject of the
intended disposition;
(C) states the method of intended disposition;
(continued...)
Page -23-
unchangeable by agreement); (d) the debtor may not waive certain
contents 21 of the notice of disposition (N.M. Stat.Ann. § 55-9-
602(7) making § 55-9-613(1) 22 and § 55-9-614 23 unwaivable and
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22 (...continued)
(D) states that the debtor is entitled to an accounting of
the unpaid indebtedness and states the charge, if any, for
an accounting; and
(E) states the time and place of a public disposition or the
time after which any other disposition is to be made.
23 Section 55-9-614 provides, in relevant part:
In a consumer-goods transaction, the following rules apply:
(1) A notification of disposition must provide the following
information:
(A) the information specified in Subsection (1) of Section
55-9-613 NMSA 1978;
(B) a description of any liability for a deficiency of the
person to which the notification is sent;
(C) a telephone number from which the amount that must be
paid to the secured party to redeem the collateral under
Section 55-9-623 NMSA 1978 is available; and
(D) a telephone number or mailing address from which
additional information concerning the disposition and the
obligation secured is available.
(2) A particular phrasing of the notification is not required.
(3) The following form of notification, when completed, provides
sufficient information:
(Name and address of secured party)
(Date)
NOTICE OF OUR PLAN TO SELL PROPERTY
(Name and address of any obligor who is also a debtor)
Subject: (Identification of Transaction)
We have your (describe collateral) , because you broke promises
in our agreement.
(For a public disposition:)
We will sell (describe collateral) at public sale.
A sale could include a lease or license. 	The sale will be held
as follows:
Date:
Time:
Place:
You may attend the sale and bring bidders if you want.
(For a private disposition:)
We will sell (describe collateral) at private sale sometime after
(continued...)
Page -24-
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23 (...continued)
(date). 	A sale could include a lease or license.
The money that we get from the sale (after paying our costs) will
reduce the amount you owe. 	If we get less money than you owe,
you (will or will not, as applicable) still owe us the
difference. 	If we get more money than you owe, you will get the
extra money, unless we must pay it to someone else.
24 Section 55-9-616 provides:
(a) In this section:
(1) “explanation” means a writing that:
(A) states the amount of the surplus or deficiency;
(B) provides an explanation in accordance with
Subsection (c) of this section of how the secured party
calculated the surplus or deficiency;
(C) states, if applicable, that future debits, credits,
charges, including additional credit service charges or
interest, rebates and expenses may affect the amount of
the surplus or deficiency; and
(D) provides a telephone number or mailing address from
which additional information concerning the transaction
is available; and
(2) “request” means a record:
(A) authenticated by a debtor or consumer obligor;
(B) requesting that the recipient provide an
explanation; and
(C) sent after disposition of the collateral under
Section 55-9-610 NMSA 1978.
(b) In a consumer-goods transaction in which the debtor is
entitled to a surplus or a consumer obligor is liable for a
deficiency under Section 55-9-615 NMSA 1978, the secured party
shall:
(1) send an explanation to the debtor or consumer obligor,
as applicable, after the disposition and:
(A) before or when the secured party accounts to the
debtor and pays any surplus or first makes written
demand on the consumer obligor after the disposition
for payment of the deficiency; and
(B) within fourteen days after receipt of a request; or
(continued...)
Page -25-
unchangeable by agreement); (e) the debtor may not waive an
explanation of any surplus or deficiency claimed by the creditor
(N.M. Stat.Ann. § 55-9-602(9) making § 55-9-616 24 unwaivable and
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24 (...continued)
(2) in the case of a consumer obligor who is liable for a
deficiency, within fourteen days after receipt of a request,
send to the consumer obligor a record waiving the secured
party's right to a deficiency.
(c) To comply with Subparagraph (B) of Paragraph (1) of
Subsection (a) of this section, a writing must provide the
following information in the following order:
(1) the aggregate amount of obligations secured by the
security interest under which the disposition was made and,
if the amount reflects a rebate of unearned interest or
credit service charge, an indication of that fact,
calculated as of a specified date:
(A) if the secured party takes or receives possession
of the collateral after default, not more than
thirty-five days before the secured party takes or
receives possession; or
(B) if the secured party takes or receives possession
of the collateral before default or does not take
possession of the collateral, not more than thirty-five
days before the disposition;
(2) the amount of proceeds of the disposition;
(3) the aggregate amount of the obligations after deducting
the amount of proceeds;
(4) the amount, in the aggregate or by type, and types of
expenses, including expenses of retaking, holding, preparing
for disposition, processing and disposing of the collateral,
and attorney's [attorney] fees secured by the collateral
which are known to the secured party and relate to the
current disposition;
(5) the amount, in the aggregate or by type, and types of
credits, including rebates of interest or credit service
charges, to which the obligor is known to be entitled and
which are not reflected in the amount in Paragraph (1) of
this subsection; and
(6) the amount of the surplus or deficiency.
(d) A particular phrasing of the explanation is not required. An
explanation complying substantially with the requirements of
Subsection (a) of this section is sufficient, even if it includes
minor errors that are not seriously misleading.
(e) A debtor or consumer obligor is entitled without charge to
one response to a request under this section during any six-month
period in which the secured party did not send to the debtor or
consumer obligor an explanation pursuant to Paragraph (1) of
(continued...)
Page -26-
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24 (...continued)
Subsection (b) of this section. 	The secured party may require
payment of a charge not exceeding twenty-five dollars ($25.00)
for each additional response.
25 Section 55-9-620 provides:
(a) Except as otherwise provided in Subsection (g) of this
section, a secured party may accept collateral in full or partial
satisfaction of the obligation it secures only if:
(1) the debtor consents to the acceptance under Subsection
(c) of this section;
(2) the secured party does not receive, within the time set
forth in Subsection (d) of this section, a notification of
objection to the proposal authenticated by:
(A) a person to which the secured party was required to
send a proposal under Section 55-9-621 NMSA 1978; or
(B) any other person, other than the debtor, holding an
interest in the collateral subordinate to the security
interest that is the subject of the proposal;
(3) the collateral is consumer goods, the collateral is not
in the possession of the debtor when the debtor consents to
the acceptance; and
(4) Subsection (e) of this section does not require the
secured party to dispose of the collateral or the debtor
waives the requirement pursuant to Section 55-9-624 NMSA
1978.
(b) A purported or apparent acceptance of collateral under this
section is ineffective unless:
(1) the secured party consents to the acceptance in an
authenticated record or sends a proposal to the debtor; and
(2) the conditions of Subsection (a) of this section are
met.
(c) For purposes of this section:
(1) a debtor consents to an acceptance of collateral in
partial satisfaction of the obligation it secures only if
the debtor agrees to the terms of the acceptance in a record
authenticated after default; and
(2) a debtor consents to an acceptance of collateral in full
(continued...)
Page -27-
unchangeable by agreement); (f) the debtor may not waive
formalities when the creditor seeks to retain collateral in
satisfaction of some or all of the obligation (N.M. Stat.Ann. §
55-9-602(10) making §§ 55-9-620 25 , 55-9-621 26 and 55-9-622 27
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25 (...continued)
satisfaction of the obligation it secures only if the debtor
agrees to the terms of the acceptance in a record
authenticated after default or the secured party:
(A) sends to the debtor after default a proposal that
is unconditional or subject only to a condition that
collateral not in the possession of the secured party
be preserved or maintained;
(B) in the proposal, proposes to accept collateral in
full satisfaction of the obligation it secures; and
(C) does not receive a notification of objection
authenticated by the debtor within twenty days after
the proposal is sent.
(d) To be effective under Paragraph (2) of Subsection (a) of this
section, a notification of objection must be received by the
secured party:
(1) in the case of a person to which the proposal was sent
pursuant to Section 55-9-621 NMSA 1978, within twenty days
after notification was sent to that person; and
(2) in other cases:
A) within twenty days after the last notification was
sent pursuant to Section 55-9-621 NMSA 1978; or
(B) if a notification was not sent, before the debtor
consents to the acceptance under Subsection (c) of this
section.
(e) A secured party that has taken possession of collateral shall
dispose of the collateral pursuant to Section 55-9-610 NMSA 1978
within the time specified in Subsection (f) of this section if:
(1) sixty percent of the cash price has been paid in the
case of a purchase-money security interest in consumer
goods; or
(2) sixty percent of the principal amount of the obligation
secured has been paid in the case of a non-purchase-money
security interest in consumer goods.
(f) To comply with Subsection (e) of this section, the secured
party shall dispose of the collateral:
(1) within ninety days after taking possession; or
(2) within any longer period to which the debtor and all
secondary obligors have agreed in an agreement to that
effect entered into and authenticated after default.
(g) In a consumer transaction, a secured party may not accept
collateral in partial satisfaction of the obligation it secures.
26 Section 55-9-621 provides:
(a) A secured party that desires to accept collateral in full or
(continued...)
Page -28-
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26 (...continued)
partial satisfaction of the obligation it secures shall send its
proposal to:
(1) any person from which the secured party has received,
before the debtor consented to the acceptance, an
authenticated notification of a claim of an interest in the
collateral;
(2) any other secured party or lienholder that, ten days
before the debtor consented to the acceptance, held a
security interest in or other lien on the collateral
perfected by the filing of a financing statement that:
(A) identified the collateral;
(B) was indexed under the debtor's name as of that
date; and
(C) was filed in the office or offices in which to file
a financing statement against the debtor covering the
collateral as of that date; and
(3) any other secured party that, ten days before the debtor
consented to the acceptance, held a security interest in the
collateral perfected by compliance with a statute,
regulation or treaty described in Subsection (a) of Section
55-9-311 NMSA 1978.
(b) A secured party that desires to accept collateral in partial
satisfaction of the obligation it secures shall send its proposal
to any secondary obligor in addition to the persons described in
Subsection (a) of this section.
27 Section 55-9-622 provides:
(a) A secured party's acceptance of collateral in full or partial
satisfaction of the obligation it secures:
(1) discharges the obligation to the extent consented to by
the debtor;
(2) transfers to the secured party all of a debtor's rights
in the collateral;
(3) discharges the security interest or agricultural lien
that is the subject of the debtor's consent and any
subordinate security interest or other subordinate lien; and
(4) terminates any other subordinate interest.
(b) A subordinate interest is discharged or terminated under
Subsection (a) of this section, even if the secured party fails
to comply with Chapter 55, Article 9 NMSA 1978.
Page -29-
unwaivable and unchangeable); and (g) the debtor may not waive
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28 Section 55-9-624 provides:
(a) A debtor or secondary obligor may waive the right to
notification of disposition of collateral under Section 55-9-611
NMSA 1978 only by an agreement to that effect entered into and
authenticated after default.
(b) A debtor may waive the right to require disposition of
collateral under Subsection (e) of Section 55-9-620 NMSA 1978
only by an agreement to that effect entered into and
authenticated after default.
(c) Except in a consumer-goods transaction, a debtor or secondary
obligor may waive the right to redeem collateral under Section
55-9-623 NMSA 1978 only by an agreement to that effect entered
into and authenticated after default.
Page -30-
the right to redeem collateral (N.M. Stat. Ann. § 55-9-602(11)
making § 55-9-624 28 unwaivable and unchangeable.
Part 6 of Article 9 also determines when the rights in
collateral transfer after default. 	If the secured creditor
disposes of the collateral, Section 55-9-617(a) applies and
provides:
(a) A secured party's disposition of collateral after
default:
(1) transfers to a transferee for value all of the
debtor's rights in the collateral;
(2) discharges the security interest under which
the disposition is made; and
(3) discharges any subordinate security interest
or other subordinate lien.
On the other hand, if the secured creditor accepts the collateral
in full or partial satisfaction, Section 55-9-622(a) applies and
provides:
(a) A secured party's acceptance of collateral in full
or partial satisfaction of the obligation it secures:
(1) discharges the obligation to the extent
consented to by the debtor;
(2) transfers to the secured party all of a
debtor's rights in the collateral;
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29 Recall, however, than under Section 55-9-620(a)(3) a
creditor may not accept collateral in satisfaction of an
obligation when the collateral is consumer goods in the debtor’s
possession.
Page -31-
(3) discharges the security interest or
agricultural lien that is the subject of the
debtor's consent and any subordinate security
interest or other subordinate lien; and
(4) terminates any other subordinate interest.
These sections makes it clear that the ultimate disposition or
acceptance 29 of the collateral transfers the debtor’s rights;
this necessarily means that the debtor retains those rights until
the disposition or acceptance occurs. 	See Motors Acceptance
Corp. v. Rozier, 278 Ga. 52, 53, 597 S.E.2d 367, 368
(2004)(Footnote omitted):
The UCC's statutory framework makes clear that
repossession alone is not enough to extinguish the
debtor's ownership in the collateral, but that a
creditor must go through additional steps after
repossession to obtain ownership. 	For example, OCGA §§
11-9-610 to -614 provide the procedure by which a
creditor may dispose of collateral after default, and
OCGA § 11-9-610(c) specifically provides that the
“secured party may purchase [the] collateral.” 	The
creditor would not need to purchase the collateral if
it already owned it. 	Also, OCGA §§ 11-9-620 to -622
allow a creditor to accept the collateral in full or
partial satisfaction of the debt with the debtor's
consent. 	These provisions would also be meaningless if
the creditor already owned the collateral. 	“This Court
is to construe the statute to give sensible and
intelligent effect to all of its provisions and to
refrain from any interpretation which renders any part
of the statute meaningless.”
In this case Plaintiff obtained a judgment but never
actually transferred the collateral. 	Therefore, Debtor still had
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Page -32-
all of the non-waivable rights mentioned above. 	These rights
became property of the bankruptcy estate under Section 541 	(“The
commencement of a case ... creates an estate. 	Such estate is
comprised of all the following property, wherever located and by
whomever held: (1) ... all legal or equitable interests of the
debtor in property as of the commencement of the case.”) 	“No
court has held that debtors can use the bankruptcy cure
provisions to recover property in which they no longer have any
interest under state law.” 	Jim Walter Homes, Inc. v. Spears (In
re Thompson), 894 F.2d 1227, 1229 (10 th Cir. 1990). 	But, if a
mortgage debtor has some legal or equitable interest in property
that enters the bankruptcy estate, the debtor may attempt to
retain the property through the bankruptcy cure provisions. 	Id.
(Citations omitted.)
Specifically, a statutory or equitable right of redemption
becomes property of the bankruptcy estate. 	Id. at 1230. 	This
right alone allows a debtor to cure under § 1322(b) until a
foreclosure sale. 	Id. 	Although Plaintiff obtained a foreclosure
judgment, Debtor retained a redemption right which allows her to
cure the related obligation in her bankruptcy case. 	See McCarn
v. WYHY Federal Credit Union (In re McCarn), 218 B.R. 154, 160
(10 th Cir. BAP 1998):
[U]nder section 1322(b), a plan may provide for the
cure of defaults, but if the default involves a lien on
the debtor's principal residence, under section
1322(c)(1), the cure may only be made prior to the time
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that the property is sold at a foreclosure sale
conducted in accordance with applicable nonbankruptcy
law. 	The language of section 1322(c)(1) is clear and
unambiguous in establishing the date of the actual
foreclosure sale as the cut-off for curing a mortgage
default under section 1322(b), and supports the
bankruptcy court's conclusion that the debtors had no
right to cure their default to the Credit Union because
their home had been sold at a foreclosure sale prior to
the time that they filed chapter 13. In re Sims, 185
B.R. 853, 864–66 (Bankr. 	N.D. Ala. 1995) (section
1322(c)(1) clearly and unambiguously sets a bright-line
date, the date of the actual foreclosure sale, as the
cut-off to cure a default under a mortgage)[.]
See also Tidewater Finance Co. v. Moffett (In re Moffett), 356
F.3d 518, 521-22 (4 th Cir. 2004):
[T]he UCC grants certain rights to the debtor upon
repossession and otherwise imposes duties on a secured
creditor in possession of collateral. 	Most importantly
for purposes of this case, § 8.9A-623(c)(2) of the UCC
granted Moffett the right to redeem the vehicle at any
time before Tidewater Finance disposed of it. 	This
right of redemption was further protected by a duty
imposed on Tidewater Finance to notify Moffett of any
planned disposition, at least ten days prior to
disposing of the vehicle. 	See id. §§ 8.9A-611,
8.9A-612. 	Indeed, Tidewater Finance was even required
to advise Moffett of her right of redemption. 	See id.
§ 8.9A-614. 	Moffett was also entitled to any surplus
amount that the secured creditor made in excess of its
interest in the collateral. 	See id. § 8.9A-615(d).
Furthermore, the UCC makes clear that Moffett's rights
of redemption, notification, and surplus-among other
rights-are not extinguished until Tidewater Finance
disposes of the repossessed vehicle under § 8.9A-610 or
itself accepts the collateral under § 8.9A-620 of the
UCC. 	See id. § 8.9A-617. 	Since Tidewater Finance has
not taken any steps to dispose of the vehicle, Moffett
still possessed these rights when she filed for
bankruptcy.
These interests, and particularly the statutory
right of redemption, are unquestionably “legal or
equitable interests” of Moffett's that are included
within her bankruptcy estate. 	See 11 U.S.C. §
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541(a)(1). 	As the Supreme Court observed in Whiting
Pools, Congress broadly defined the property of the
estate in § 541(a)(1) to include all tangible and
intangible property interests of the debtor. 	See 462
U.S. at 204-05, 103 S.Ct. 2309 and n.9 (quoting
legislative history); see also Black's Law Dictionary
1234 (7th ed. 1999) (defining “property of the estate”
to include “the debtor's tangible and intangible
property interests (including both legal and equitable
interests)”). 	Indeed, the Whiting Pools Court
expressly stated that “interests in [repossessed]
property that could have been exercised by the
debtor-in this case, the rights to notice and the
surplus from a tax sale-are already part of the estate
by virtue of § 541(a)(1).” 	462 U.S. at 207 n. 15, 103
S.Ct. 2309 (internal citation omitted).
Consequently, Moffett's statutory right to redeem
the vehicle was properly made part of her bankruptcy
estate under 11 U.S.C. § 541(a)(1). 	Accord Charles R.
Hall Motors, Inc. v. Lewis (In re Lewis), 137 F.3d
1280, 1284 (11th Cir. 1998)(holding that a statutory
right of redemption under Alabama's UCC is part of a
debtor's bankruptcy estate); see also Bell-Tel Fed.
Credit Union v. Kalter (In re Kalter), 292 F.3d 1350,
1355-56 and n. 4 (11th Cir. 2002) (following Lewis when
interpreting Florida's UCC).
See also 	Capital Realty Services, LLC v Benson (In re Benson),
293 B.R. 234, 239 (Bankr. D. Ariz. 2003)(A debtor’s right to cure
a default on a principal residence exists at least until
completion of the trustee’s sale, notwithstanding any state law
that might terminate that cure right earlier.)(Construing 11
U.S.C. § 1322(c)(1)). 	See also Jim Walter Homes, Inc., 894 F.2d
at 1231 (10th Cir. 1990)(If a debtor files a chapter 13 petition
before a foreclosure sale, he has a right to cure.)(decided under
former section 1322). 	Therefore, the Court concludes that under
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the New Mexico UCC, the mobile home became property of the
estate.
THE REPLEVIN STATUTE
The common law remedies of replevin and detinue were
codified in New Mexico in 1847.
Replevin at common law was maintainable in cases where
there was an unlawful taking and an unlawful detention
of personal property. 	Detinue at common law was
maintainable for the recovery of personal property in
all cases where there was an unlawful detainer,
regardless of the manner of taking. 	In replevin there
was a seizure under a writ of replevin of the
subject-matter of the litigation at the beginning of
the proceeding. 	In detinue recovery of the property
was had only after judgment. 	In 1847 the Legislature
of the then territory passed an act on the subject of
the recovery of personal property, which has, with some
slight amendments which are immaterial to this
consideration, remained the law to this day. 	The
provisions of this act, together with the amendments
referred to, were re-enacted by chapter 107 of the
Session Laws of 1907, and now appear as section 4340 et
seq., Code 1915. 	Section 4340 is as follows:
“Any person having a right to the immediate
possession of any goods or chattels, wrongfully
taken or wrongfully detained, may bring an action
of replevin for the recovery thereof and for
damages sustained by reason of the unjust caption
or detention thereof.”
It is to be observed that this section provides for an
action in all cases where, under the common law, either
replevin or detinue might have been maintained. 	It
provides that when goods or chattels have been
“wrongfully taken or wrongfully detained,” the action
may be brought. 	If the conjunction “and” had been
employed in the statute instead of the disjunctive
“or,” it might well be said that the Legislature
intended the action provided for to be an action in the
nature of replevin only. 	But having provided that the
action may be maintained when the goods or chattels are
wrongfully detained, it is clear that the statute was
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designed to cover also cases which, under the common
law, would authorize an action of detinue only.
Troy Laundry Machinery Co. v. Carbon City Laundry Co., 27 N.M.
117, 119-20, 196 P. 745, 746 (1921).
The replevin statutes are currently found in the New Mexico
Statutes at Chapter 42 (“Actions and Proceedings Relating to
Property”) in Article 8 (“Replevin”). 	Current Section 42-8-1 is
identical to Section 4340 of the 1915 code. 	Replevin may be used
to recover a mobile home after a default on an installment sales
contract. 	Security Pacific Financial Services, a Division of
Bank of America, FSB v. Signfilled Corp., 1998-NMCA-046, 125 N.M.
38, 43, 956 P.2d 837, 842 (Ct.App. 1998).
In the case before the Court, the state court issued a writ
of replevin, which had not been served or returned by the filing
of the bankruptcy. 	Under New Mexico law, the writ of replevin is
the equivalent to a summons. 	Citizens Bank, Farmington v.
Robinson Bros. Wrecking, 76 N.M. 408, 412, 415 P.2d 538, 540
(1966).
The jurisdiction of the court, to hear and
determine actions in replevin instituted pursuant to
this statute, is dependent upon the issuance and
service of the writ which brings under the control of
the court the property for the purpose of rendering a
judgment in accordance with the object and purpose of
the statute, viz.: To determine the right to the
immediate possession of the property, and damages for
its unlawful caption or detention.
Johnson v. Terry, 48 N.M. 253, 256, 149 P.2d 795, 797 (1944).
See also Novak v. Dow, 82 N.M. 30, 34, 474 P.2d 712, 716 (Ct.App.
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1970)(Same.) 	Therefore, the mere issuance of the writ by the
state court did not divest Debtor’s interest in the mobile home
under state law. 	Therefore, the mobile home is property of the
estate.
CONCLUSION
In summary, the Court finds that neither collateral estoppel
or res judicata apply. 	The Bankruptcy Code specifically
addresses the issue of the outer limits of home mortgage cure
which allows a Debtor a chance to cure until the home is sold.
The home was not sold. 	To the extent New Mexico state law would
be different, it is preempted by the Bankruptcy Code. 	The Court
will grant Debtor’s Motion and deny Plaintiff’s Motion and will
enter a judgment in favor of Defendant.
Honorable James S. Starzynski
United States Bankruptcy Judge
Date entered on docket: July 26, 2012
Copies to:
David McNeill, Jr
HOLT MYNATT MARTINEZ P.C.
PO Box 2699
Las Cruces, NM 88004-2699
Ronald E Holmes
112 Edith Blvd NE
Albuquerque, NM 87102-3524
Kelley L. Skehen
625 Silver Avenue SW
Case 11-01163-s Doc 17 Filed 07/30/12 Entered 07/30/12 09:57:30 Page 37 of 38

Suite 350
Al buguerque, NM 87102- 3111

Page - 38-

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