ELECTRONIC CITATION: 2006 FED App. 0005P (6th Cir.)

File Name: 06b0005p.06

BANKRUPTCY APPELLATE PANEL OF THE SIXTH CIRCUIT

In re: LAQUITA CURRY, )

)

Debtor. )

_____________________________________ )

)

TIDEWATER FINANCE COMPANY, )

)

Appellant, )

) 

)

 v. ) No. 05-8083

)

LAQUITA CURRY, )

)

)

Appellee. )

 )

Appeal from the United States Bankruptcy Court

for the Southern District of Ohio, Western Division at Dayton

Case No. 05-36056 

Argued: May 3, 2006

Decided and Filed: August 10, 2006

Before: GREGG, PARSONS, and WHIPPLE, Bankruptcy Appellate Panel Judges.

____________________

COUNSEL

ARGUED: James R. Sheeran, Chesapeake, Virginia, for Appellant. Jeffrey R. McQuiston,

SKELTON, McQUISTON, GOURNARIS & HENRY, Dayton, Ohio, for Appellee. ON BRIEF:

James R. Sheeran, Chesapeake, Virginia, for Appellant. Jeffrey R. McQuiston, SKELTON,

McQUISTON, GOURNARIS & HENRY, Dayton, Ohio, ScottG.Stout,Dayton,Ohio,for Appellee.
-2-

____________________

OPINION

____________________

JAMES D. GREGG, Bankruptcy Appellate Panel Judge. Tidewater Finance Company

(“Tidewater”) appeals the bankruptcy court’s order denying its motion to terminate the automatic

stay to sell a repossessed motor vehicle and overruling its objection to confirmation of the chapter

13 plan proposed by Laquita Curry (“Debtor”) based on the plan’s “cram down” treatment of its

claim secured by the vehicle. The bankruptcy court rejected Tidewater’s argument that its

prepetition repossession of the Debtor’s vehicle changed the parties’ respective property rights,

thereby prohibiting modification and “cram down” of Tidewater’s secured claim. For the reasons

that follow, the bankruptcy court’s order is AFFIRMED.

I. ISSUE ON APPEAL

Must a chapter 13 debtor whose vehicle has been repossessed prepetition pay a secured

creditor the full redemption value otherwise required by state law to adequately protect the secured

creditor’s interest and regain possession of the vehicle? 

II. JURISDICTION AND STANDARD OF REVIEW

The Bankruptcy Appellate Panel of the Sixth Circuit has jurisdiction to decide this appeal.

The United States District Court for the Southern District of Ohio has authorized appeals to this

Panel and a final order of the bankruptcy court may be appealed as of right pursuant to 28 U.S.C.

§ 158(a)(1). For purposes of appeal, a final order “ends the litigation on the merits and leaves

nothing for the court to do but execute the judgment.” Midland Asphalt Corp. v. United States, 489

U.S. 794, 798, 109 S. Ct. 1494, 1497 (1989) (citations omitted). The bankruptcy court’s order

denying relief from the automatic stay is a final, appealable order. Nat’l City Bank v. Elliott (In re

Elliott), 214 B.R. 148, 149 (B.A.P. 6th Cir. 1997). The order confirming the Debtor’s chapter 13

plan over Tidewater’s objection is also a final order for purposes of appeal. See Schory & Sons, Inc.

v. Francis (In re Francis), 273 B.R. 87, 89 (B.A.P. 6th Cir. 2002); First Union Mortgage Corp. v.

Eubanks (In re Eubanks), 219 B.R. 468, 469 (B.A.P. 6th Cir. 1998). 
1

 “Cram down” is a bankruptcy term used when a plan is confirmed over a claim holder’s

objection. Kenneth N. Klee, All You Ever Wanted to Know About Cram Down Under the New

Bankruptcy Code, 53 Am. Bankr. L.J. 133 (1979); Till v. SCS Credit Corp., 541 U.S. 465, 468-69,

124 S. Ct. 1951, 1954 (2004) (recognizing the “cramdown” option in a chapter 13 case that is

exercised “by providing the creditor both a lien securing the claim and a promise of future property

distributions (such as deferred cash payments) whose total ‘value, as of the effective date of the plan,

. . . is not less than the allowed amount of such claim’”). Often, in such situations, a secured

creditor’s claim is bifurcated such that it is treated as secured to the extent of the value of the

collateral, with the balance of the claim treated as an unsecured claim, see Americredit Fin. Servs.,

-3-

Because the parties to this appeal have stipulated to the facts underlying this dispute, the

appeal presents only legal questions. A bankruptcy court’s conclusions of law are reviewed de novo.

Adell v. John Richards Homes Bldg. Co. (In re John Richards Home Bldg. Co.), 439 F.3d 248, 254

(6th Cir. 2006); In re Downs, 103 F.3d 472, 476-77 (6th Cir. 1996). “De novo review means that

the appellate court determines the law independently of the trial court’s determination.” Treinish

v. Norwest Bank Minn., N.A. (In re Periandri), 266 B.R. 651, 653 (B.A.P. 6th Cir. 2001).

III. FACTS

The underlying facts are undisputed. On January 6, 2004, the Debtor purchased a 2000

Saturn SL from Jeff Wyler Chevrolet, Inc. in Batavia, Ohio pursuant to the terms of a Retail

Installment Contract and Security Agreement (“Contract”) that obligated her to pay $10,888.20 with

annual interest of 21.95% in 60 monthly installments. The vehicle was the collateral that secured

the Debtor’s obligation under the Contract. The Contract was subsequently assigned to Tidewater

and its security interest was duly perfected.

After the Debtor defaulted on her required monthly payments, Tidewater lawfully

repossessed the vehicle on May 25, 2005. The Debtor then filed her chapter 13 petition and plan and

demanded that Tidewater return the vehicle to her possession. As of the petition date, June 17, 2005,

Tidewater had not obtained a Certificate of Title to the vehicle or disposed of the vehicle. The

accelerated balance owed pursuant to the Contract as of the filing of the chapter 13 petition was

$10,718.83, which included $10,008.88 in principal, $300.95 in accrued interest, $9.00 in late fees,

and $400.00 in repossession fees. 

The Debtor did not reinstate the Contract or redeem the vehicle under Ohio law in her plan.

Rather, the Debtor proposed a “cram down.”1 The plan valued the vehicle and Tidewater’s secured
Inc. v. Nichols (In re Nichols), 440 F.3d 850 (6th Cir. 2006), notwithstanding that this would be

impermissible under state law.

2

 A commercial publication commonly used to value vehicles. Fed. R. Evid. 802(17) and

902.

-4-

claim at $6,700 and proposed to pay that amount with interest at 7.3%. The remainder of the balance

owed under the Contract was treated as an unsecured claim to be paid a 9% distribution without

interest. As of the petition date, the NADA2 retail value of the vehicle was $7,875 and the trade in

value was $6,200. 

Tidewater filed a Motion to Terminate the Automatic Stay (“Motion”) and objected to

confirmation of the Debtor’s chapter 13 plan (“Objection”). Both the Motion and the Objection were

based on Tidewater’s argument that its prepetition repossession of the Debtor’s vehicle changed the

parties’ property rights in the vehicle. Tidewater asserted that its secured claim was not subject to

modification and “cram down.” The bankruptcy court rejected Tidewater’s arguments, overruled

its Objection, and denied its Motion. This timely appeal followed.

IV. DISCUSSION

Pursuant to Article 9 of the Uniform Commercial Code (“UCC”) as enacted by Ohio,

Tidewater lawfully repossessed the Debtor’s vehicle when she defaulted on her obligations under

the Contract. See Ohio Rev. Code Ann. § 1309.609. The Debtor then had the option of redeeming

the vehicle by tendering fulfillment of all obligations owed under the Contract, including fees and

repossession costs. See Ohio Rev. Code Ann. § 1309.623. While Tidewater concedes that under

Ohio law the Debtor retained an interest in the vehicle after repossession, it argues that the

competing interests of the Debtor and Tidewater in the vehicle were fixed by Ohio law at the time

of repossession. Tidewater further argues that the United States Supreme Court’s holding inButner

v. United States, 440 U.S. 48, 99 S. Ct. 914 (1979), requires that its rights be treated in bankruptcy

uniformly with the treatment that its rights would receive under Ohio UCC law. Tidewater frames

its appeal as follows: “[T]his case is not an ownership dispute - it is a uniform treatment and

adequate protection controversy.” (Appellant Br. at 8.) According to Tidewater, its possessory

interest in the vehicle is equal to the state law redemption value of $10,718.83, the full amount owed

to it. Tidewater contends, therefore, that to adequately protect its interest and regain possession of
3

 This section of the Bankruptcy Code, along with numerous others, was amended by the

Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (“BAPCPA” or “the Act”),

effective October 17, 2005. Because the Debtor’s bankruptcy case was filed before the effective date

of the Act, all references to the Bankruptcy Code in this opinion are to the pre-BAPCPA version.

See Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, Pub. L. No. 109-8,

§ 1501(b)(1), 119 Stat. 23, 216 (stating that, unless otherwise provided, the amendments do not

apply to cases commenced under title 11 before the effective date of the Act).

-5-

the vehicle, the Debtor’s sole option is to exercise her state law right of redemption. According to

Tidewater, the Debtor has no ability to “cram down” its claim through chapter 13.

Contrary to Tidewater’s assertions, Butner does not dictate the result Tidewater seeks. The

bankruptcy estate that is created upon the filing of a petition consists of all legal and equitable

interest in property held by the debtor at the time of filing, wherever that property is located and by

whomever it is held. 11 U.S.C. § 541(a).3 When disputes over whether property is included in the

estate arise, the bankruptcy court will determine the status and nature of the debtor’s ownership or

interest in the disputed property under applicable non-bankruptcy law, often state law, as of the time

the bankruptcy petition was filed. Butner, 440 U.S. at 54-55. If a debtor has an interest in the

property under non-bankruptcy law, the court must then determine whether the interest is included

in the estate utilizing federal bankruptcy law. Id.; United States v. Whiting Pools, Inc., 462 U.S. 198,

205, 103 S. Ct. 2309, 2313 (1983). 

In Butner, the Supreme Court considered whether a security interest in real property,

including rents and profits, should be governed by state or federal law. Although the Court

recognized that Congress’ constitutional authority to establish “‘uniform Laws on the subject of

Bankruptcies throughout the United States’ would clearly encompass a federal statute defining the

mortgagee’s interest in the rents and profits earned by property in a bankrupt estate,” it found that

Congress had not exercised its power to fashion such a rule. Butner, 440 U.S. at 54. The Court then

explained that, generally, “[p]roperty interests are created and defined by state law” and that

“[u]nless some federal interest requires a different result, there is no reason why such interests should

be analyzed differently simply because an interested party is involved in a bankruptcy proceeding.”

Id. at 55. The Court further explained that “[u]niform treatment of property interests by both state

and federal courts within a State serves to reduce uncertainty, to discourage forum shopping, and to
-6-

prevent a party from receiving ‘a windfall merely by reason of the happenstance of bankruptcy.’”

Id. (citation omitted). 

Tidewater argues that if the Debtor bifurcates its claim and “crams down” its interest in the

vehicle to anything less than the full amount due under the Contract, the Debtor will have obtained

nonuniform treatment of her interest. However, Butner requires that when an actual conflict exists

between state laws and bankruptcy laws enacted by Congress, the state laws are suspended. Id. at

54 n.9 (citations omitted.) In this instance, the Ohio UCC redemption provision conflicts with the

Bankruptcy Code, and Tidewater’s argument that Ohio law governs fails. 

The Bankruptcy Code requires any entity in “possession, custody, or control, during the case,

of property that the trustee may use, sell, or lease under section 363” to deliver such property to the

trustee. 11 U.S.C. § 542(a). The Bankruptcy Code also permits a trustee to “use, sell, or lease . . .

property of the estate.” 11 U.S.C. § 363. Thus, if the vehicle is property of the estate, §§ 363 and

542(a) provide the Debtor with the right of possession. See 11 U.S.C. § 1303 (providing that “debtor

shall have, exclusive of the trustee, the rights and powers of a trustee under sections 363(b), 363(d),

363(e), 363(f), and 363(l), of this title”); Whiting Pools, Inc., 462 U.S. at 207 (“In effect, § 542(a)

grants to the estate a possessory interest in certain property of the debtor that was not held by the

debtor at the commencement of reorganization proceedings.”). Further, a debtor is permitted to

modify the rights of holders of secured claims, other than those secured solely by a security interest

in real property that is the debtor’s residence. See 11 U.S.C. § 1322(b)(2). Therefore, the Ohio UCC

law that requires the Debtor to redeem, by paying the full amount due under the accelerated Contract

to regain possession of the vehicle, conflicts with the Bankruptcy Code. 

The first analysis to be conducted under Butner, determination of ownership rights under

non-bankruptcy law, has been addressed by the Supreme Court in Whiting Pools. In that case, the

IRS seized a chapter 11 debtor’s personal property pursuant to a tax levy before the debtor filed his

bankruptcy petition. Although the IRS possessed the property, it had not been sold. The IRS

asserted that the bankruptcy estate was not entitled to possession of the property because the levy

was complete before the petition was filed. Therefore, according to the IRS, the debtor had no

interest in the property. Considering the interplay between the definition of the bankruptcy estate,

11 U.S.C. § 541(a)(1), and the turnover provisions, 11 U.S.C. § 542(a), the Court explained that
4

 We recognize that the Supreme Court limited application of its holding to chapter 11 cases.

Whiting Pools, 462 U.S. at 208 n.17. (“Section 542(a) also governs turnovers in liquidation and

individual adjustment of debt proceedings under Chapters 7 and 13 of the Bankruptcy Code . . . . Our

analysis in this case depends in part on the reorganization context in which the turnover is sought.

We express no view on the issue whether § 542(a) has the same broad effect in . . . adjustment of

debt proceedings.”). However, because the definition of the “estate” is broader in chapter 13 than

in chapter 11, see 11 U.S.C. § 1306, there is no meaningful distinction between chapter 11 and

chapter 13 cases insofar as the Whiting Pools holding is concerned. Numerous courts have applied

the Whiting Pools analysis to chapter 13 cases. See, e.g. Tidewater Finance Co. v. Moffett (In re

Moffett), 356 F.3d 518 (4th Cir. 2004) (citing Whiting Pools in Chapter 13 context); Charles R. Hall

Motors, Inc. v. Lewis (In re Lewis), 137 F.3d 1280, 1285 (11th Cir. 1998) (citing Whiting Pools in

chapter 13 context); Nat’l City Bank v. Elliott (In re Elliott), 214 B.R. 148, 151-52 (B.A.P. 6th Cir.

1997) (applying Whiting Pools analysis to chapter 13 case); In re Robinson, 285 B.R. 732, 735

(Bankr. W.D. Okla. 2002) (concurring with other courts that have interpreted Whiting Pools to apply

in a chapter 13 context); Sutton v. Ford Motor Credit Co. (In re Sutton), 87 B.R. 46, 49 n.1 (Bankr.

S.D. Ohio 1988) (holding that Whiting Pools is equally applicable to chapter 13 cases).

-7-

“[a]lthough these statutes could be read to limit the estate to those ‘interests of the debtor in

property’ at the time of the filing of the petition, we view them as a definition of what is included

in the estate, rather than as a limitation.” Whiting Pools, 462 U.S. at 203. Given the broad scope

of the statute, the Court concluded that “§ 541(a)(1) is intended to include in the estate any property

made available to the estate by other provisions of the Bankruptcy Code” and § 542(a) is such a

provision. Id. at 205. While there are limitations on the reach of § 542(a), the Court further

explained that “none requires that the debtor hold a possessory interest in the property at the

commencement of the reorganization proceedings.” Id. at 206. 

The Court then examined the enforcement provisions of the Internal Revenue Code to

determine whether ownership of the property was transferred to the IRS upon seizure. While it

acknowledged that § 542(a) may not apply if ownership was transferred to the IRS upon seizure, the

Court held that the enforcement provisions of the Internal Revenue Code do not provide for transfer

of ownership of the property until it is sold at a tax sale. Id. at 210. Therefore, the seized property

was property of the estate and subject to the turnover requirements of § 542(a). Id. at 211.4 And in

return, “[t]he [creditor], under § 363(e), remains entitled to adequate protection for its interests . . . .

Section 542(a) simply requires the [creditor] to seek protection of its interest according to the

congressionally established bankruptcy procedures . . . .” Id. at 211-12. 
-8-

The Supreme Court’s holding in Whiting Pools undercuts Tidewater’s argument. Once a

debtor’s interest in the repossessed vehicle is determined by state law, the rights and remedies

provided to secured creditors and chapter 13 debtors by the Bankruptcy Code govern. Under the

Bankruptcy Code, Tidewater’s possessory interest in the vehicle is replaced by its right to adequate

protection. See Whiting Pools, 462 U.S. at 207; TranSouth Fin. Corp. v. Sharon (In re Sharon), 234

B.R. 676, 683 (B.A.P. 6th Cir. 1999). Tidewater attempts to distinguish Whiting Pools by asserting

that the holding is limited to cases in which the IRS is the secured creditor and seizure occurred

under the Internal Revenue Code. However, the Court did not so constrain its holding. The Court

specifically stated, “[w]e see no reason why a different result should obtain when the IRS is the

creditor.” Whiting Pools, 462 U.S. at 209. Tidewater offers no persuasive reason why the Whiting

Pools holding is not generally applicable to all secured creditors. A vehicle repossessed under Ohio

law before commencement of a bankruptcy case, which has not been sold or otherwise disposed of,

is property of the bankruptcy estate. See In re Sharon, 234 B.R. at 682 (determining that “possession

of the Debtor’s car was part of the bundle of rights that became ‘property of the estate’”); Nat’l City

Bank v. Elliott (In re Elliott), 214 B.R 148, 152 (B.A.P. 6th Cir. 1997) (stating that the vehicle was

property of the estate, notwithstanding the fact that secured creditor obtained repossession title,

because under Ohio law ownership does not transfer until vehicle is sold). 

In Elliott, the creditor repossessed the vehicle and, pursuant to Ohio’s version of the UCC,

obtained a “repossession title” in its name. Because the vehicle had not yet been sold, the Ohio UCC

provided the debtors with a statutory right of redemption. The creditor argued that the statutory

privilege of redemption did not confer upon the debtors any interest in the vehicle; instead the

prepetition repossession entitled the creditor to a transfer of ownership pursuant to Ohio Rev. Code

Ann. § 4505.10(A). As such, according to the creditor, the vehicle was not property of the estate.

The Bankruptcy Appellate Panel, however, recognized that “[u]nder Ohio law, a change of

vehicle ownership is not consummated until the certificate of title is issued in the name of the

purchaser.” In re Elliott, 214 B.R. at 150 (citing Rockwell v. Thomas, 116 Ohio App. 544, 189

N.E.2d 168 (1962)). The Panel further noted “[n]either possession nor title are alone determinative

of whether an interest constitutes property of the estate under § 541 . . . . ” Id. at 151 (citing, inter

alia, In re Gunder, 8 B.R. 390, 392-93 (Bankr. S.D. Ohio 1980) and Jackson v. GMAC (In re

Jackson), 142 B.R. 172 (Bankr. N.D. Ohio 1992)). Relying on the foregoing principles and citing
-9-

Whiting Pools, the Panel concluded, “[i]t is only after the disposition that the debtor loses all interest

in the property and full ownership vests in a third party.” Id. at 152. Accordingly, the Panel held

that the vehicle was property of the estate and subject to turnover. Id.

Here, Tidewater did not sell or dispose of the Debtor’s vehicle. Nevertheless, Tidewater

argues that the Bankruptcy Appellate Panel decisions in Sharon and Elliott are erroneous in that

“they overlook the critical fact that the debtor lost the right to possess the vehicle unless he or she

exercises the right to redeem it” as provided under state law. (Appellant Br. at 15.) However, in

accordance with Whiting Pools, § 542(a) grants to the estate a possessory interest in the repossessed

collateral and, as discussed previously, to the extent Ohio law conflicts with the Bankruptcy Code,

the Ohio statutory provisions are suspended. Thus, the Debtor’s bankruptcy right to regain

possession of the vehicle is a result of federal law under § 542(a), not the Ohio redemption statute.

Accordingly, the Debtor’s vehicle is property of her bankruptcy estate.

Because the vehicle is property of the Debtor’s bankruptcy estate, the automatic stay

provisions of 11 U.S.C. § 362(a) apply. In re Sharon, 234 B.R. at 682. However, at Tidewater’s

insistence as a secured creditor, the Debtor must provide adequate protection of Tidewater’s interest

in the property. See 11 U.S.C. § 363(e); Whiting Pools, 462 U.S. at 204; Volvo Commercial Fin.

LLC v. Gasel Transp. Lines, Inc. (In re Gasel Transp. Lines, Inc.), 326 B.R. 683, 691 (B.A.P. 6th

Cir. 2005) (Gregg, J., concurring). Without citing any authority, Tidewater argues that its

repossession conferred on it a “heightened interest” in the collateral, the value of which exceeds its

allowed secured claim and equals the amount necessary to redeem the vehicle. Therefore, according

to Tidewater, adequate protection of its interest can be provided only by tender of the full redemption

value pursuant to state law. However, because disposition of the vehicle “is the cut off point of a

Chapter 13 debtor’s power to modify a secured creditor’s claim under § 1322(b)(2) of the

Bankruptcy Code,” and Tidewater has not yet disposed of the vehicle, § 1322(b)(2) remains available

to the Debtor. See In re Elliott, 214 B.R. at 152-53 (rejecting creditor’s argument that debtor’s plan

must provide for payment in lump sum, as required by Ohio law, based upon power to modify

secured creditor’s claim). Just as the Debtor lost the right of possession to her vehicle prior to her

chapter 13 petition and outside of bankruptcy could not have regained possession without redeeming

the vehicle through payment in full, the debtor in Whiting Pools lost the right of possession by virtue

of the IRS seizure prior to filing its bankruptcy petition and outside of bankruptcy could not have
5

 This section of the Internal Revenue Code provides that: 

Any person whose property has been levied upon shall have the right to pay the

amount due, together with the expenses of the proceeding, if any, to the Secretary at

any time prior to the sale thereof, and upon such payment the Secretary shall restore

such property to him, and all further proceedings in connection with the levy on such

property shall cease from the time of such payment. 

26 U.S.C. § 6337(a).

-10-

regained possession except by tendering payment in full, much like redeeming the collateral under

the UCC. See 26 U.S.C. § 6337(a).5 However, despite the Internal Revenue Code’s requirement of

full payment of all obligations owed to regain possession, the Supreme Court’s opinion in Whiting

Pools is conspicuously silent on any requirement that a debtor must make full payment in a

reorganization plan. Rather, in Whiting Pools the Court held that bankruptcy law gives the debtor

a right of possession enforceable by turnover under § 542(a) and the Bankruptcy Code replaces the

protection afforded to secured creditors by possession with other rights such as adequate protection.

Whiting Pools, 462 U.S. at 207. The Ohio UCC permits repossession and eventual sale of a debtor’s

vehicle as the procedural mechanism to foreclose and satisfy a security interest. Contrary to

Tidewater’s assertions, this procedural remedy does not change the parties’ substantive rights. Only

the diminution of the value of the collateral is entitled to protection. Whiting Pools, 462 U.S. at 210-

11; In re Balderas, 328 B.R. 707, 720 (Bankr. W.D. Tex. 2005). 

In support of its tenuous argument that payment of the full redemption value is the sole

method to adequately protect its interest, Tidewater relies upon the distinguishable decisions of the

Eleventh Circuit Court of Appeals in Bell-Tel Fed. Credit Union v. Kalter (In re Kalter), 292 F.3d

1350 (11th Cir. 2002) and Charles R. Hall Motors, Inc. v. Lewis (In re Lewis), 137 F.3d 1280 (11th

Cir. 1998). In Kalter and Lewis, applying Florida and Alabama law respectively, the Eleventh

Circuit determined that ownership of the vehicles immediately transferred to the creditors upon

repossession; therefore, the debtor’s only interest in the vehicle was a bare right of redemption. In

re Kalter, 292 F.3d at 1360; In re Lewis, 137 F.3d at 1284. Relying on state law, the Eleventh

Circuit held that turnover was inappropriate because the debtors’ chapter 13 plans failed to redeem

their vehicles. In re Kalter, 292 F.3d at 1356; In re Lewis, 137 F.3d at 1285.

Tidewater’s reliance upon Kalter is misplaced. Ohio law, unlike Florida law, does not

provide for immediate transfer of full ownership until disposition, usually repossession sale, of the
-11-

vehicle. As the Eleventh Circuit later recognized in Motors Acceptance Corp. v. Rozier (In re

Rozier), 376 F.3d 1323, 1324 (11th Cir. 2004), the result is governed by applicable state law. In

Rozier, the Eleventh Circuit certified the question of ownership to the Georgia Supreme Court which

held that, under Georgia law, ownership does not pass to the creditor upon repossession alone. Id.

at 1324; Motors Acceptance Corp. v. Rozier, 597 S.E.2d 367, 368 (Ga. 2004). Consistent with the

answer to its certified question, the Eleventh Circuit held that because ownership did not transfer

upon repossession under Georgia law, the debtor’s vehicle was property of the estate. In re Rozier,

376 F.3d at 1324. 

In Kalter, the Eleventh Circuit Court of Appeals examined Florida’s UCC and certificate of

title statute to determine whether a Florida debtor whose car is repossessed prepetition retains

ownership of the vehicle. Because the court found no language in the UCC addressing title, transfer

of title, or ownership of repossessed collateral, thereby restricting case law interpreting the statute,

it concluded that the Florida UCC provided no guidance as to who owns the vehicle upon

repossession. In re Kalter, 292 F.3d at 1354-56. However, the Eleventh Circuit held that the Florida

certificate of title statute, Fla. Stat. § 319.28, expressly mandated that ownership transfers upon

repossession. The court relied upon language stating that a repossessing creditor may submit an

affidavit “announcing the repossession as ‘proof of ownership.’” Id. at 1357-58.

In contrast to Florida law, as noted by the court in Sutton v. Ford Motor Credit Co. (In re

Sutton), 87 B.R. 46, 48 (Bankr. S.D. Ohio 1988), Ohio’s certificate of title statute, Ohio Rev. Code

Ann. § 4505.10, explicitly refers to the Article 9 provisions of the governing Ohio law. “Ohio Rev.

Code § 4505.10 contemplates a ‘completion’ of the repossession procedure under state law, wherein

a debtor’s rights to redeem . . . may be cut off, before ownership of a motor vehicle is transferred by

operation of law.” Id. Unlike Ohio’s certificate of title statute, Florida’s statute makes no reference

to Florida’s version of the UCC. The Kalter court lacked case law interpreting the Florida UCC as

guidance. In re Kalter, 292 F.3d at 1356. In contrast, the Sixth Circuit Bankruptcy Appellate Panel

relied upon prior Ohio case law to interpret the applicable provisions of the Ohio UCC. See In re

Elliott, 214 B.R. at 151. In Smith v. Acceleration Life Ins. Co., 446 N.E.2d 855, 859 (Ohio App.

1982), an Ohio appeals court held that a debtor’s insurable interest in collateral “is extinguished, at

the earliest, by the expiration of his right to retain possession of the collateral under [the right to
-12-

redeem]. Only at this point in time is the secured creditor-beneficiary in a position to assert full

control over the collateral and subject the value of the collateral to the payment of the debt.” 

In addition, because the Eleventh Circuit in Kalter rejected the Florida UCC as determinative

of the issue, it dismissed several of the debtor’s arguments. One of the rejected arguments was that

a provision of the Florida UCC, Fla. Stat. § 679.504 (now Fla. Stat. § 679.617), established that

ownership of the repossessed collateral remained with the debtor because it stated that when the

secured party sells the collateral to a purchaser, “all of the debtor’s rights therein” pass to the

purchaser. Based on the then broad definition of “debtor” in the Florida statute, the court concluded

that the term “debtor,” as used in the statute, could encompass either the debtor or the creditor in

possession of the collateral. In re Kalter, 292 F.3d at 1354-55. However, the definition of debtor

in both the Florida UCC and the Ohio UCC has been amended to read a “person having an interest,

other than a security interest . . . .” The Official Comments make it clear that “[s]ecured parties and

other lienholders are excluded from the definition of ‘debtor’ . . . .” Ohio Rev. Code Ann.

§ 1309.102; Fla. Stat. § 679.1021 (emphasis added). Because the purchaser of the collateral obtains

ownership of the collateral, it follows that this was one of the debtor’s rights at the time the creditor

sold it, mandating the conclusion that ownership does not transfer upon repossession alone. 

Moreover, effective July 1, 2001, Ohio enacted a new provision which clarifies that the Ohio

Certificate of Title statute, Ohio Rev. Code Ann. § 4505.10, does not alter the substantive rights of

a debtor and a secured creditor in Ohio and is not determinative of the issues here. See Ohio Rev.

Code Ann. § 1309.619. Section 1309.619, entitled “Transfer of record of legal title,” recognizes that

the debtor’s ownership does not cease until the vehicle is disposed of by the creditor. In pertinent

part, it states that the transfer of legal title to collateral to a secured party “is not of itself a disposition

of collateral under this chapter and does not of itself relieve the secured party of its duties under this

chapter.” Id. Clarifying the issue, the official comment states, “A secured party who has obtained

. . . legal title retains its duties . . . and the debtor retains its rights as well.” Ohio Rev. Code Ann.

§ 1309.619 Official cmts. 2 (2000). Section 1309.619 was effective prior to the date of the

repossession at issue, and there is no question that the Debtor retained ownership of the vehicle. 

Tidewater’s reliance upon Lewis is also misplaced. In that case, the Eleventh Circuit

determined, notwithstanding the Alabama UCC effective in 1965, that Alabama continued to rely
-13-

on the common law of conversion without reconciling the import of the Alabama UCC. The

common law of conversion requires that upon a debtor’s default, title and right of possession pass

to the creditor. In re Lewis, 137 F.3d at 1283-84. The common law of conversion was not addressed

in Elliott, and Ohio’s state courts have relied upon the UCC rather than common law conversion.

Tidewater also advances a Fourth Circuit Court of Appeals case, in which it was a party, in

support of its arguments. Tidewater Finance Co. v. Moffett (In re Moffett), 356 F.3d 518 (4th Cir.

2004). The facts in Moffett are similar to this case. Tidewater repossessed the debtor’s vehicle

before the filing of her chapter 13 petition. When the debtor demanded the vehicle be returned,

Tidewater responded by requesting relief from stay. Tidewater argued that its repossession stripped

the debtor and the bankruptcy estate of any interest in the vehicle except bare legal title and an

intangible right of redemption. The Fourth Circuit recognized that the issue concerning who holds

legal ownership of the repossessed vehicle under Virginia law was “significant, as it determines

whether Moffett had a legal as well as an equitable interest in the repossessed vehicle that became

part of her bankruptcy estate.” Id. at 523. Citing Whiting Pools, the Fourth Circuit then explained

that “if Moffett retained ownership of the repossessed vehicle under Virginia law, then the vehicle

would automatically become part of her estate. In such a case, there would be no need for her to

exercise her right of redemption in order to bring the vehicle within the estate.” Id. at 524 (citation

omitted). However, because the debtor’s chapter 13 plan proposed to exercise her right to redeem

the vehicle as provided for by Virginia state law, the Fourth Circuit did not address and determine

the issue of ownership of the vehicle and whether it was necessary for the debtor to exercise her right

of redemption to bring the vehicle into the estate. Therefore, contrary to Tidewater’s argument,

Moffett is not persuasive authority in the instant case. 

Summarizing, pursuant to Ohio law, the Debtor in this case retained ownership of her vehicle

notwithstanding repossession by Tidewater. Therefore, the Debtor’s vehicle is property of her

bankruptcy estate and subject to turnover to her. The Debtor may provide adequate protection as

requested by Tidewater through a plan in which Tidewater is paid the value of its collateral. See In

re Howard, 212 B.R. 864, 876 (Bankr. E.D. Tenn. 1997) (explaining that the value of collateral is

“the source and limit of the secured creditors’ right to adequate protection”). Any plan must satisfy

the chapter 13 confirmation standards. As the Debtor is not surrendering the vehicle, any plan must

provide that Tidewater retain its lien and that the value paid under the plan is not less than the
-14-

allowed amount of Tidewater’s claim. See 11 U.S.C. § 1325(a)(5). The amount of Tidewater’s

allowed secured claim is determined by 11 U.S.C. § 506(a), which provides that a claim is secured

“to the extent of the value of such creditor’s interest in the estate’s interest in such property . . . and

is an unsecured claim to the extent that the value of such creditor’s interest . . . is less than the

amount of such allowed claim. Such value shall be determined in light of the purpose of the

valuation and of the proposed disposition or use of such property . . . .” 11 U.S.C. § 506(a). The

plan proposed by the Debtor, and confirmed by the bankruptcy court, satisfies the requirements of

11 U.S.C. § 1325 for treatment of Tidewater’s allowed secured claim. Tidewater’s requested relief

from stay to sell the vehicle and objection to confirmation are unwarranted.

V. CONCLUSION

The bankruptcy court’s order denying Tidewater’s motion to terminate the automatic stay and

overruling its objection to confirmation of the chapter 13 plan is AFFIRMED.