EL ECTRONI C CI TATI ON: 2012 FE D App. 0006P (6th Cir.) File Na me: 12b0006p.06
BA NK RU P TC Y A P P ELLA TE P AN EL OF THE SI XT H C IR CU IT

I n re: WI L L I AM W. P I ERCE, J R.,

Debtor.

______________________________________ VANDE RBI L T MORTGAGE A ND FI NANCE, I

NC., Ap pe lla nt,

v . MAXI E E. HI GGASON, JR., CHAPTER 7 TRUSTEE,

Appellee

.

______________________________________ ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) No. 11-8065

Appea l from the United States B ankruptc y Court for the E astern D istrict of Kentuc ky Ba nkruptcy Case No. 10- 61119 Adver sary

Procee ding N o. 11-6008 Argued Apr il 23, 2012
Dec ided and F iled: J une 1, 2012
B e fo re : F UL TO N, HA RRI S, a nd PRE STO N, B ank

ru ptc y Ap pe llate Pane l Judg e s.

____________________ CO UN SEL
ARG UED: J ohn P. Brice , L exington, Kentucky , for Appe llant. Michael B. Ba ker, THE B AKER FI RM, PL L C, Florenc e, Kentucky , for Appe llee. ON BRIEF: J o h nP

. B r i c e , L e x i n g t o n , K e n tu c ky, for Appe llant. Michael B . Ba ker, TH E BA KER FI RM, PL L C, Florenc e, Ke ntucky , for Appe llee.Ap pe lla nt s tate s th a t th e iss ue s a

re a s f oll ow s: 1
1. Whe ther the B ankruptc y Court errone ously

decide d that a se c ur ity int e re st n oted o n a

c e rt if ic a te of tit le is n ot v a lid ly perf ecte d under K entucky

law? 2. Whe the r t

he fi lin g of

a tit le lie n s tate me nt i n a

c ounty other than the debtor’s pr incipal re sidence invalidates the pe rfe ction of a se curity

interest noted on a

cer tificate of title? 3. Whether a s ec u ri t y i n t ere st noted on a ce rtificate of title is perf

ecte d under Kentucky law re g ardle ss of any defe ct in the fi lin g of the tit le lie n s tate me nt? 4. Whether the Commonwealth of K entucky is entitled to establish and enf

orce the procedure s by

which sec urity

interests ar e pe rf e c te d in manu fa c tur e d h ome s? 5. W hether

the B ankruptc y

Court’s utiliz ation of 11 U. S.C. § 5 44 to vo id a se c ur ity int e re st n ote d o n a c e rt if ic a te of tit le violates the Ten t h Am endment to the Constituti on of the United -2- ____________________ OP IN ION

____________________

THOMAS H. F UL TON, B ankruptc y Appellate Pane l J udg e. Va n d er bilt Mortgag e and Financ e, Inc. (“ Appellant”) appea ls the g rant of summary judgme nt by

the U.S. Ba

nkruptcy Court for the E astern D istrict of Kentuc ky (the “ Ba nkruptcy Court”) to Maxie E. Hig g ason, Jr., Chapter 7 Trustee (“A

ppellee” ) for

Debtor William W

. Pierce , J r. (“ Debtor” ), which a voids Appellant’s lien on Debtor’ s manufac tured home unde r 11 U.S.C. § 544.

ISS UES ON APP EAL
Although A

ppellant osten s ib ly

r aises five issues on appea l, those issues essentially boil down to o ne qu e sti on : U nd e r t

he Ke ntu c ky

Re vis e d St a tut e s, is a se c ur ity int e re st i n a manu fa c tur e d h ome p er fe ct edwh er e t h e s ec ure d p ar t y o b t ai n edn o t at i o no f i t s l i en o nt h e c er t i fi ca t e o f t i t l e b y fi l i n g a title lien statement in a county other than that of the debtor’ s residenc e? 1States of Amer ica?

These que stions in di ffe rent wa y s all ask the P an el t o d etermine whether the B ankruptc y

Court c or re c tly a pp lie d th e pr ov isi on s of the Ke ntu c ky Re vis e d Stat ute s g ov e rn ing pe rf

e c tio n o f s e c ur ity interests i n manufa cture d homes. Appellant’s Tenth Amendment argument, in particular , beg s the question as to whether

the B ankruptc y

Court pr operly interpre ted Kentucky state law. “[A] feder al court upholds, rather than disrupts, Ke ntucky ’s s tatutory reg ime when it interpre ts a Ke ntucky law to mean what its words sa y . Fe dera l bankruptcy

courts apply

state law to de termine if a cre ditor has perf ecte d a sec urity

interest....” W

estenhoe fer v. Vande rbilt Mort

g
. & F i n ., Inc. ( In re Epling) , 2 0 1 1 W L 4 3 5 6 3 5 8 (E

. D. Ky

. 2 0 1 1 ) a t* 4 (c i t i n g Stellwagen v. Clum , 245 U.S. 605, 613 (1918)). -3- JU RI SDI CT ION AN D ST AN DA RD OF RE VI EW

The B ankruptc y

Appellate Pane l of the Six th Circ uit ( the “B AP”) has jurisdiction to decide this appeal. The United States District Co u rt fo r t h e Ea stern District of K entucky has authorized

a pp e a ls t o th e B AP.

For purposes of a

ppeal, a n order is final if it “‘ends the litigation on the mer its and le aves nothing f or the c ourt t o d o b u t ex ecute the judg ment.’” Midland Asphalt Cor p. v. United States , 489 U.S. 794, 798, 109 S. C t. 1494, 1497 (1989) (c itations omi tted). A g rant of summary judgme nt constitutes a final and appea lable order

. Palmer v. W ashington Mut. Bank (

In re Ritchie

) , 4 16 B .R. 638 (B .A.P. 6th Ci r. 2009).

The issue ra ised in this appeal is an issue of la w and, there fore , is to be review ed de novo

. See Deutsche Bank Nat. Trust Co. v. Tucke r , 621 F.3d 460 ( 6th Cir. 2010) (statutory interpre tation

an d application re viewed de novo ). “U nder a de novo s ta n d ar d o f r e v ie w , th e r e v ie w in g court d e c id e s anis s u e in d e p e n d e n tl y o f , an d w it h o u t d e f e r e n c e to , th e tr ia l c o u rt’ s d e te r mination.” Menninge r v. Acc redited HomeLenders ( In re M orgeson) , 371 B.R. 798, 800 (B.A.P. 6t h Cir. 2007). Essentially , the rev i ew i n g co u rt decide s the issue “a s if it had not been he ard be fore .” Mktg. & Cre a t i ve Solutions , Inc. v . Scripps Howard Broad. Co. (I n re Mk tg. & Creative Solutions, Inc.) ,Only a duplicate Certificate of Title issued on Fe bruar y 16, 2011, has bee n place d into the 2 re c or d. Al tho ug h the B ank ru ptc y Court c ite d App e lla

nt’ s fa ilure to sub mit the or ig ina l Ce rt if ic a te of Title as an independent g round for avoiding Appellant’s lien– i.e. , failure to provide basic pr oof of per fec tion of its li en prior to De b tor’s petition–the parties do not dispute that the or igina l Certificate of Title identified A ppellant as a

lienholder. -4- 338 B.R. 300, 302 (B .A.P. 6th Ci r. 2006) (citation omitt ed). “No def ere nce is g iven to the trial court’s c onclusions of law.” Id . (citations omitted) .

F AC TS

The fa cts are not in disput e. I n April of 2007, De btor purcha sed a ma nufac tured home ( the “Manuf actur ed Home” ) fr om Clay ton Homes of Corbin, Kentucky (“Clay ton Homes”) , borrowing the funds fr om Appellant. To secur e repa y ment of the loan, Debtor g rante d a sec urity interest in the Manu fa c tur e d H ome to A pp e lla nt.

A p p e l l an tf

i l e d ana p p l i c a t i o nf

o r f i r s tt i t l e an d a t i t l e l i e ns t a t e m e n tw i t h t h e W h i t l e y C o u n t y, Ke ntu c ky , Co un ty Cle rk

. Cla y ton Ho me s is loc a te d in Whitle y County

. De bto r r e sid e d at th e tim e i nL a u r e l C o u n t y, K e n tu c ky.
At some point therea fter, the Commo n we al t h of Ke ntucky Transpor tation Cabinet issued 2 a Certific ate of

Title for the Ma

nufac tured Home , which identified A ppellant as “ First L ienholder”

and de sc ri be d th e “ F ir st L ie n” a s f oll ow s:

No tatio n N o. County 7 0 0 1 8 1 1 W H IT Filing Date 04-30-07

On J uly 15, 2010, Debtor f

iled his voluntary

Chapter 7 ba

nkruptcy petition. Appellee was
a pp oin te d Ch a

pte r 7 Tr us te e and , on Febru ary

28 , 2 01 1, ini tiate d th e a dv e rs ary pr oc e e din g that is-5-

th e s u b je c t o f th is a

p p e a l ( th e “ A dv e r s ar

y Pr o c e e d in g ” )

. T h e A dv e r s ar y Pr o c e e d in g s o ug ht to, among other thing s, avoid Appellant’s lien on the Manufa cture d Home under 11 U.S.C. § 544.
Appellant and A

ppellee f iled cross-motions for summar y judgme nt in t h e Adve rsar y Pr oc e e din g , a

nd on Se pte mbe r 2 0 , 2 0 1 1 , t

h e B a nk ru ptc y Court g ra nte d App e lle e su mma

ry jud g me nt,
c on c lud ingthat App e lla

nt h a d f a ile d to pe rf

e ct its lie n a g a ins t th e Ma nu fa c tur e d H ome be c a

us e it had filed the require d title lien statement in Whitley County rathe r than L aure l County . Appellant timely appea led the B ankruptc y Court’s decision.

DI SCU SSIO N
The parties ag ree that the s ole m eans for per fec ting a secur ity interest in prope rty

requiring

a ce rtificate of title “is by notation of the lien on the [ proper ty ’s] certificate of title.” Johnson v. Branch Bank

ing and Trust

Co. , 313 S.W .3d 557, 560 (Ky . 2010). The B ankruptc y Court concluded, and Appe llee asse rts here , that Appellant’s se curity interest in the Manuf

actur ed Home was unperf ecte d at the time of Debtor’ s petition de spite notation of Appellant’s lien on the ce rtificate of tit le be c a us e the pr op e r p ro c e dure ha d n ot b e e n f oll ow e d in

ob ta ini ngthat no tatio n. I n o the r w or ds , the notation was not “in a ccor dance with this chapter” ( i.e. , KRS Ch. 186A) beca use the notation had been made following submissi on of a title lien state ment to the Whit ley County Clerk ra ther than the

c l e r k o f t h e c o u n t y o f

D e b t o r ’ s r e s i d e n c e , L a

u r e l C o u n t y.
Ap pe lla nt a sse rt s th a t it s li e n w a s p e rf e c ted whe n note d o n th e c e rt if ic a te of tit le e ve n if Appellant did not follow proper proce dure to obta i n t h e notation– i.e. , e ve n if the Whit le y

County Cle rk mis take nly

c a us e d th e no tatio n to be pla c e d on the c e rt if ic a te . App e lla

nt a lte rn a tiv e ly

a sse rt s that it in fac t followed proper procedur e in obt aining the notation beca use Ke ntucky

has a two- trac k sy stem for obtaining notation, one for ne w prope rty for whic h a ce rtificate o f title has never been issued and a se parate one f or prope rty

for whic h a ce rtificate of title has pre viously been issued.-6-

Although the Kentucky

Supreme Court has c onsidered the issue of when a lien is perfe cted under K RS C h. 186A, conc luding that pe rfe ction is not complete until the lien i s noted on the

cer tificate of title, it has not di rec tly addre ssed whether perfec tion is achie ved where the notation was obtained despite a

filing de ficienc y . See J

ohnson , 313 S.W .3d at 560 (including citations to prior

case s where liens either we re not noted or wer e incor

rec tly noted as re lease d). I t has also not addre ssed whethe r KRS Ch. 186A in fact cr eate s a two-trac k notation sy stem as asser ted by Appellant. To de cide the me rits of this appeal, then, the Panel must determin e “h o w that cour t would rule if it wer e face d with the issue.” Meridian Mut. Ins. Co. v. Kellman , 197 F.3d 1178, 1181 (6th Cir. 1999). In doing so, the Panel “may use t he decisional law of the state’s lower courts, other fede ral c ourts construing state law, restatements of law, law revie w commentar ies, and other jurisdictions on the ‘majority ’ rule in makingits determination.” Id. (c i t i n g Grantham & Mann v. Am e ric an Sa

fe ty Pr od s. , 831 F.2d 596, 608 ( 6th Cir. 1987)).

KR S 18 6A .1 90 g ov e rn s th e pe rf e c tio n o f s e c ur ity

int e re sts in “ c e rt if

ic a te of tit le ” pr op e rt

y
su c h a s mo tor

ve hic le s and

manu fa c tur e d h ome s. I t st a te s in pe rt ine nt p art

a s f oll ow s:
(1) ....the per fec tion and discharg e of a s ec u rity interest in any proper ty for whic h has bee n issued a Ke ntucky cer tificate of title shall be by

notation on the cer

tificat e o f title. The no tat ion of the se c ur ity inte re st on thec e rti

fic ateof t itl e sh all bein a c c or

da nc e with thi

s c ha pte r and shall rema in effe ctive from the date on which the se curity i n t erest is noted on the cer tificate of title.... ( 2 )

.. . . t h e n o t a t i o no f s e c u r i t y i n t e r e s t s r e l a t i n g t o p r o p e rt y req u ir e d to b e ti tl e d

in K e n tu c ky

th r o u g h th e c o u n ty

c le rk sh all bedo nein t

heoff ic e of t hec ou nty c le rk of t hec ou nty in which the debtor resides

....

.... (6) I n noting t h e s ecur ity interest upon a c ertificate of title, the county cler k shall ensure that the ce rtificate of title bear s the lienholder’s na

me, mailing a ddress and zip code, the date the lien was noted, the notation numbe r, and the county in which-7- the sec urity

interest wa s noted. Th e cler k shall obtain the information require d by

this subsection for notation upon the cer tificate of title from the tit le li en stat e me nt d esc rib e d in KR S 1 8 6 A

. 1 95 to be provided to the c ounty cler k by the s e c u r e d p art y.

.... (Emphasis adde d.)

KR S 18 6A .1 95 state s a s f oll ow s:
(1) As used in this chapter , a tit le lie n sta te me nt is a do c um e nt to be su bm itt e d by the se c ur e d p ar ty to t hec ou nty c le rk . Upon su bmi ssi on of the tit le lie n state me nt, the c ounty c ler k s hall us e the inf

or matio n c on tain e d th e re in t o n ote the se c ur ity interest on the c ertificate of title.... (2) I f a title lien statement a nd the re quired fe es ac company the application for

first title of any

pro p er t y in the name of an owner , the county cler

k shall enter the information r eq u ired by KR S 18 6A .1 90 (6 ) i nto the a uto mat ed sy ste m so a s to produce a cer

tificate of title in Fr ankfor t be aring i n addition to any other re quired infor

mation, the information desig nated b y K R S 1 8 6 A

. 1 9 0 ( 6 )

. T h e c l e r k s h a l l t h e r e b y

p r o d u c e , in a c c or da nc e wi th d e sig n o f t

he a uto mate d s y ste m, a

c e rt if ic a te of re g istration, if require d. (3) I f a title lien statement a nd the require d fee s are not rec eived at the time of a

pplication for first title of any proper ty in the name of the owner due to the owner’s re side n cy in another c ou nty , or if the form presc ribed by KRS 186A.060 indicates a pendinglien but the t itle lien statement does not ac company the application for title, the county c lerk shall ente r into the Automated Vehicle Informati on System ( AVIS) the name and ad dr ess o f th e lie nh old

e r a nd the c ou nty whe re thelie n is to be noted or that a lien is pending. The clerk shall indicate a tit le is n ot to b e iss ue d unti l the lie n has be e n n ote d a nd fe es, according to KRS 186A.190, paid in the county of the owner’s residence or in thirty (

30) days. The c ounty

shall then issue the re g istration. The county clerk in thecounty of the owner’ s-8- reside nc esh all , afte r re c e iv ing thetit le lie n s tate me nt and fee s contained in KRS 186A.190, enter into the Automated VehicleInfo r ma t ion System ( AVIS) the date of lien notation and the notation number, thus enabling the system to produce thetit le in F

ra nk for t.

.... ( 5 ) The s e c u r it

y in te r e s t n o te d

o nth e c e rti f

ic a te o f ti tl e s h a ll be de e me d p e rf

ect ed a t th e tim e the se c ur ity int e re st attaches ( KRS 355.9-203) if the secured party tenders the required fees and submits a pr o

p er ly comple ted title lien statement and application for f

irst ti tle or , in the c a se of

pr op e rt y pr e vio us ly titled in the name of it s debtor, the c ertificate of title to the appropriate county clerk within tw enty ( 20) days of attachment. Otherwise, the s ecurity intere st shall be deeme d perfec ted at the time th a t s u ch fees are tendere d and such do c um e nts ar e su bm itt e d to theap pr op ria te c ou nty

c le rk

. (Emphasis adde d.)
Appellant’s a

rg ument is based in la

rg e part upon the following provisions of KRS 186A.120:
(1) Application for a

first cer tificate of reg istration or title and plate, shall be ma de by

the owner

to the cou n t y

cler k of the c ounty in whic h h e re sid e s, e xce pt t hat, i f a ve hic le is purcha sed fr om a dea ler other than i n the county in which the purcha ser f

or use r esides, the pur chase r, or the d eale r on behalf of the purc haser , may

ma k e a pplication for registration to the county cler

k in either the c ounty

in which the purc haser resides, or in the county in which the deale r’s princ ipal place of business is located. (2 ) (a ) Whe n p ur c ha se r o f a ve hi c le up on wh ic h a lie n is to be re corde d is a reside nt of a county other than that of the dea ler, the a

pplication for registration or t itle may be made to the county

cler k in either c ounty

. The lien must be rec orded in the county of the pur chaser’s residence

.Ap pe lla nt’ s argume nt her e a lle g inga “ tw o- tr a c k” lie n n otatio n s y ste m do e s n ot a pp e ar t o 3 have be en addr essed by

the cour ts in Epling

and W alling

. Appellant is extremely familiar with this path as the losing pa rty in both Epling

and W alling

. 4 2011 WL 4356358 at *2. 5 -9-

(b ) I f t

he ve hic le a

pp lic a tio n f

or re g ist ratio n o r t itl e is prese nted to the county

cler k of dea ler’s loc ation rathe r t ha n p ur c ha se r’ s r e sid e nce, t he c le rk sh a ll proce ss documents in a manne r to t h at o f any appl ication, with t he ex ception that the AVIS sy stem sh all bepr og ra mm e d in a m an ne r tha t th e tit le sh all not be i ssued from Frankfort until the lien infor mation has been entered by

the county c lerk of the purchaser’s re

sidence

.

.... (Emphasis adde d.)

The U.S. District C ourt for the Easter n District of Kentucky and the Ba nkruptcy Court have previously

in te r p r e te d KRS Ch. 186A under substantially simil ar f acts a nd reje cted the ba sic position taken by Appellant her e. See E

pling , 2011 WL 4356358, and Palmer v. V anderbilt Mortg. & Fin., 3 Inc. ( In re W alling) , 2010 WL 5421148 (B ankr. E.D . Ky . 2010). T h e P an el fi nds both decisions

we ll- re a so ne d a

nd pe rs ua siv e . T he re le va

nt s ta tut or y pro vi sio ns are un a mbi g uo us , a nd a pla in

rea ding of the same le ads to the conc lusion that Appellant’s lien is unperfe cted unde r Ke ntucky law. Whil e the Pane l be lie ve s th a t it wo uld be unne c e ssa

ri ly du pli c a tiv e to res tate e nti re ly the c ourt s’ analy ses in Epling

and W alling , a fe w poi nts may be emphasiz ed without trea ding too far down an alre ady well-wor n path. 4

First, as note d in Epling , t h e K en tu ck y S u p re m e C ourt in Johnson c o n c luded that “pe rfe ction 5 of a ve hicle lien does not oc cur until phy sical notation is made on the title pursu a n t t o KRS 186A.190 .” Johnson , 3 13 S.W. 3d a t 56 1 ( e mph a sis a dd e d) . Wh ile to s ome e xten t dic ta –the cour t in J o h n son was foc using on w hen per fec tion occurr ed rather than if pe rf e c tio n o c c ur

re d– thi s is“The notation of the secur ity interest on the cer tificate of title sh all

bein a c c or

da nc e with 6 this chapter.... ” KRS 186A.190(1) ( emphasis adde d). -10- consistent with a plain re ading of the second sentenc e of KRS 186A.190( 1) and supports Appe llee’s 6 position t hat obtaining title no t at i o n other than in the ma nner pr escr ibed ( i.e. , oth e r t ha n “ in

acc ordanc e with this chapter ”) r ender s that titl e notation insufficie nt to perf ect the lien in que stion.
Second, setting aside Appellant’s “two-tra ck” a rg ument for the moment, se vera l provisions of KR S Ch. 18 6A , wh e n re a d tog e the r, c le arl y c on te mpl a te tha

t a se c ur e d c re dit or

wi ll a pp ly fo r t itl e lien notation by

filing a “title lien statement” w ith the clerk of the debtor’s county of residenc e and that only that county

cler k will enter t h e i n fo rm ation into the AVI S. See KRS 186A.190(2), (6) ; KRS 186A.195(1), (3) ; KRS 186A.120(2)(a) , ( b )

. M o r e over, K RS 186A.195(5) supports Appellee ’s

argume nt t

hat, i f t he se c ur e d c re dit or

fa ils to f oll owthe c or

re c t pr oc e dure , th e c re dit or ’s lie n w ou ld be dee med unper fec ted until the c reditor does so. “Other wise, the sec urity

interest shall be de emed perf ecte d at the time that such fe es ar e t ender ed and suc h documents ar e submitted to the ap pr op ria te c ou nty

c le rk .” KRS 186A.195(5) ( emphasis adde d).
Third, Appellant ove rstates the a pplicabil i t y o f prior K entucky decisions in asser

ting that Epling and W alling are inconsistent w ith “ settled” Kentucky law. Appellant cites ca ses in which the

c ourt s in qu e sti on sim

ply did no t have to c on sid e r wh e the r pr op e r pr oc e dure ha d b e e n f oll ow e d in notation of liens on titles. See State Auto. Mut. Ins. Co. v . Chrysler Credit Corp. , 792 S.W .2d 626 ( K y . A p p
. 1 9 9 0 ) , and Hi ers v. Bank One , 946 S.W .2d 196 (Ky . App. 1996). Appe llant also cites

case s where the titles in question contained no lien notations a nd, there fore , the issue was w hether the liens could be de emed perf ecte d despite the lack of notation, not whether proper proce dure ha d b ee n fo l lowed in obtaining the notations. S e e G e n e r a l M

o to r s A c c e p ta n c e Co r

p
. v
. H odge , 485 S.W .2d 894 (Ky

. 1972), and Ke ntu c k y Fi n. Co. v . S

prad lin , 717 S.W .2d 843 (Ky . App. 1986) (title contained no lien notation because it had been mistake nly rele ased b y

the county

cler k upon

rec eipt of a f

org ed lien re lease ). Appe llant also mistakenly relies upon Lincoln Bank & Trust Co. v. Que enan , 3 44 S.W. 2d

38 3 ( Ky . 1 96 1) , w hic h no t on ly c on str ue d a pr ior ve rs ion of the statut e inThus , App e lla nt w ou ld h a ve the pr ov isi on re a d as if it s a id s ome thi nglik e the fo llo wi ngwi th 7 respe ct to initial ti tle applications: “The secur ity interest no t ed on the certificate of title shall be deeme d perf

ecte d at the time the secur ity interest attache s if the secur ed party tender s the requir ed fee s and subm its a proper ly completed lien state ment and application for first title.” As Appe llant conce des, howeve r, this is not how the Kentuc ky

Supreme Court re ad that provision in Johnson

. See Johnson , 313 S.W .3d at 560. -11- qu e s t i o n h e r e , b u t w a s p r i m ar i l y c o n c e r n e d w i t h p e r f

e c t i o no f s e c u r i t y i n t e r e s t s i nd e a l e r i n v e n t o r y.
Appellant asse rts alternatively that it in fac t followed proper procedur e in fil ing its title lien state me nt w iththe c le rk

of a c ounty oth e r t ha n D e bto r’ s c ounty of re sid e nc e . App e lla nt b a se s it s argument on KRS 186A.120, whi ch covers applications for initial ti tle and re g istration for new proper ty

. KRS 186A.120( 1) and (2) provide that, wher e the proper ty is pur chase d by an end u s er who re sides in a county other than the county of the seller’ s principal place of business, application for reg istration or title may be made in e ither the purcha ser’ s county or the seller’ s county . Appellant essentially

argues that this permi s s i o n to apply for initial “title or re g istration” outside a de btor’s

c o u n t y o f r e s i d e n c e am o u n t s t o p e r m i s s i o n a l s o t o a

p p l y f o r t i t l e l i e nn o t a t i o ni nt h e s e l l e r ’ s c o u n t y.

I n making the ar g ument for a “two-tra ck” sy stem, Appellant also looks to t h e p h ra se “f or wh ic h h a s b e e n is su e d a

Ke ntu c ky

c e rt if ic a te of tit le ” in t he fi rs t sen te nc e of

KR S 18 6A .1 90 (1 ) t o distinguish circ umstances whe re a cer tificate of title has al re ad y

been obta ined ( e.g. , li e ns a g a ins t older “ used” pr operty

) fr om circumstanc es where the initi al ce rtificate of title has not been obta ined ( e.g. , purcha se money

liens ag ainst “new ” property , as here). To bolster i ts argument for a two-trac k sy stem further , Appellant also re ads the phra se “if the secur ed par t y t en d er s t h e re quired fe es and submits a properly

completed title l ien statement a nd application for

first title” in KRS 186A.195(5) as if it is not modi fied by

the phra se “to the a

ppropriate county

cler k” later in the same sente nce. 7

Th e Pane l is no t pe rs ua de d b y Ap pe ll ant ’s st rai ne d r e a din g of KR S Ch. 18 6A . KRS 186A.120 only

expressly addre sses applications for cer tificates of titl e or r eg istration, allowing the m t o b e m a d e i na c o u n t y o t h e r t h an t h a t o f t h e p r o p e rt y o w n e r ’ s r e s i d e n c e
. K R S 1 8 6 A

. 1 2 0 ( 2 ) ( a )

. In stark contr as t , i t i s s i l ent as to whe ther title lien statements may be filed outside the c ounty of the-12-

debtor’s residenc e. Had the Kentucky Gene ral Asse mbly

intended for

title lien statements to be filed outside the county

of the de btor’s re sidence , it would have ma de that point expli cit here . I ndeed, the very next sentenc e states, “The lien must be rec orded in the county of the purchas er ’s re sidence .” Id . Appellant ar g ues that re cordinga lien and submitting a l i en to be re corde d are two differ ent things. The Panel believe s, howeve r, that the juxt aposition of these two sente nces sig nals the Kentucky Gene ral Asse mbly ’s intention that titl e lien stateme nts be filed in the county of the de bto r’ s r e sid e nc e e ve n if the ini tia l a

pp lic a tio n f

or c e rt if ic a te of tit le or re g ist ratio n is fi le d in another county under K RS 186A.120(2)(a)

.

CO NC LU SION

For the fore g oing r easons, the Pane l AFF I RMS t he g rant of summar y judgme nt in favor of Ap pe lle e by

the B ank ru ptc y Court

.