# United States Court o f Ap peals For the First Circuit

Nos. 01-1747 01-1841 IN RE: PERRY HOLLOW MANAGEMENT COMPANY, INC., A/K/A PERRY HOLLOW MGMT. CORP.; PERRY HOLLOW GOLF CLUB, INC., Debtors YAMAHA MOTOR CORPORATION, USA,

Appellant, YAMAHA MOTOR CO., LTD., Plaintiff,
v. PERRY HOLLOW MANAGEMENT COMPANY, INC. A/K/A/ PERRY HOLLOW MGMT. CORP.; PERRY HOLLOW GOLF CLUB, INC., Debtors, Appellees, JEFFREY A. SCHREIBER, Chapter 11 Trustee, Appellee, GERALDINE L. KARONIS, Assistant U.S. Trustee.

APPEALS FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE [Hon. Joseph A. DiClerico, U.S. District Judge ]

Before Torruella, Circuit Judge , Coffin, Senior Circuit Judge , and Lynch, Circuit Judge . Diane M. Puckhaber , with whom Perkins & Puckhaber, P.A. was on brief, for appellant. EdwardC. Dial, Jr. , wit h whom Jeffrey A. Schreiber and-2-

Schreiber & Associates, P.C. were on brief, for appellee. Robert D. Kamenshine , Attorney, Appellate Staff Civil Division, with whom Robert D. McCallum, Jr. , Assistant Attorney General and William Kanter , Attorney, Ap pel late Staff Civil Division, were on brief for the United States Trustee.
July 23, 2002-3- TORRUELLA, Circuit Judge . Yamaha Motor Corporation, USA ("Yamaha"), appeals fromthe judgment enteredby the District Court for the District of New Hampshire. The judgment affirmed the bankruptcy court's decision to set aside Yamaha’s security interest in and allow the sale of seventy-two golf carts, which were part of the bankruptcy estate of Perry Hollow Golf Club, Inc. and Perry Hollow Management Company, Inc. (collectively "Perry Hollow"). For the reasons discussed below, we affirm the district court's judgment. I. Factual and Procedural Background

On or about March 24, 1996, Yamaha and Perry Hollow enteredinto a conditional sales agreement for the purchase of seventy-two golf carts. The agreemen t r equired Perry Hollow to make eighteen equal payments between June of 1996 and August of 2001. The pap erwo rk and correspondence generated during the transaction listedPerry Hollow’s address as 250 Perry Hollow Road, Wolfeboro, New Hampshire. Yamaha, through an agent, delivered the golf carts to Perry Hollow Country Club, which was actually located at 250 Perry Hollow Road, New Durham, New Hampshire. Pursuant to
a security interest in the golf carts accorded to Yamaha under the agreement, Yamaha filed UCC-1 financing statements with the New Hampshire Secretary of State and wit h th e clerk of the town of Wolfeboro, New Hampshire to protect its status as a secured creditor. In O ctob er of 1999, Perry Hollow filed a voluntary petition for reorganization un der Chapter 11 of the Bankruptcy1 Section 544(b) provides: "The trustee may avoid any transfer of

an interest of the debtor in property or any obligation incurredby the debtor that is voidable under applicable law by a creditor holding an unsecured claim . . . ." 11 U.S.C. § 544(b).

2 This rule states that, "An order authorizing the use, sale, or lease of property other than cash collateral is stayed until the -4- Code. Perry Hollow continued to operate the golf club as a debtorin -posse ssion until April of 2000, when Jeffrey A. Schreiber was appointed as Chapter 11 Trustee ("Trustee") for Perry Hollow.

Du ring the course of the bankruptcy proceedings, the Trustee moved for summary judgme nt against Yamaha on the grounds that the Trustee, pursuant to 11 U.S.C. § 544(b), 1 may avo id Yamaha’s security interest in the golf carts because it was unperfected. The Trustee argued that Yamaha failed to perfect its security interest inasmuch as the UCC-1 financing statement was filedin the wrong town. Yamaha fil ed i n Wolfeboro, but Perry Hollow is located in New Durham. In resp onse, Yam aha filed a cross-motion for summary judgment seeking to establish the validity of its security interest.

On October 17, 2000, the bankruptcy court granted the Trustee’s motion for summary judgment and deni ed Yamaha’s crossmotion. Yamaha appealed. On October 30, 2000, the Trustee filed
a motion for authorization to sell the golf carts free and clear of any liens or encumbrances. Yamaha filed a motion in opposition. After a hearing, in which Assistant U.S. Trustee Geraldine Karonis ("AUST Karonis") participated, the bankruptcy court granted the Trustee's motion as well as his request to waive the ten-day automatic stay, pursuant to Bankruptcy Rule 6004(g). 2 On Novemberexpiration of 10 days after entry of the order, unless the court

orders otherwise." Fed. R. Bankr. P. 6004(g).
3 Rule 4(a)(1)(A) requires a notice of appeal to be filed within thirty days of the judgment in a civil case. -5- 26, 2000, Yamaha filed another notice of appeal from the bankruptcy
co urt’s rulings and moved for a stay of the sale pending appeal. The bankruptcy court denied Yamaha’s motion for a stay. See In re Perry Hollow Golf Club, Inc. , Nos. 99-13372-MWV, 99-13373-MWV, 2000 WL 1854779 (Bankr. D.N.H. Nov. 28, 2000). Yamaha appealed that decision as well. On January 8, 2001, the district court consolidated the appeals "for all purposes."

On March 27, 2001, the distr ict court entered judgment against Yamaha, affirming the bankruptcy court’s decisions. See In
re Perry Hollow Mgmt. Co. , 260 B.R. 58 (D.N.H. 2001). Yamaha moved for a stay of the district court's judgment pending appeal to this Court. On May 8, 2001, the district court denied Yamaha’s motion
on the ground that Yamaha was unlikely to succeed on appeal. On May 14, 2001, Yamaha filed a notice of appeal, challenging both the district court’s March 27 judgment and the May 8 order denying a stay. This Court issued an order directing Yamaha to show cause why its appeal from the March 27 judgment should not be dismissed
as untimely pursuant to Federal Rule of Appellate Procedure 4(a)(1)(A). 3 O n January 9, 2002, upon review of the parties' arguments, this Court issued an order stating that there was an arguable basis for finding the appeal timely under Federal Rule of Appellate Pro cedure 4(a)(1)(B) and permitting the appeal to4 Despite this Court's clear directive, Yamaha fail ed t o brief

this issue.

5 Earlier i n the proceedings the U.S. Trustee argued that the thirty-day rule applied to this appeal becau se the U.S. Trustee, -6- proceed. However, the order instructed the parties to brief this jurisdictional issue along with the merits of the case. 4 II. Discussion A. Standard of Review

In an appeal from the district court r e viewing proceedings before the bankruptcy court, we indepe nden tly review the bankruptcy court's decision, applying the "clearly erroneous" standard to findings of fact and de novo review to conclusions of law. In re SPM Mfg. Corp. , 984 F.2d 1305, 1310-11 (1st Cir. 1993). No special deference is owed to th e di strict court's determinations. See id. at 1311. B. Jurisdictional Issue

Before we can reach the merits of appellant's claims, we must first determine that we are vested with jurisdiction. Yamaha filedthe instant appeal forty-eight days after the district court entered judgment. Federal Rule of Appellate Procedure 4(a)(1)(A) provides a default thirty-day deadline for filing an appeal in a civil case. However, "[w]hen the United States or its officer or agency is a party" in the case, then the appellant has sixty days after the judgment to file a no tice of appeal. Fed. R. App. P. 4(a)(1)(B). Although the parties no longer contest the timeliness of t hi s appeal, 5 the timely filing of an appeal is "mandatory anddespite being an agency of the United States, was not a "party" to

the instant appeal. The U.S. Trustee has now changed its position. -7- jurisdictional." Acevedo-Villalobos v. Hernández , 22 F.3d 384, 387 (1st Cir. 1994) (internal quotation marks omitted). Therefore, unless the sixty-day rule applies, we must dismiss for lack of jurisdiction. See id. (noting that court "lack[s] jurisdiction over late appeals").

The United States, its officer, or agency is a "party" to
a case not only where it is a named party to the appeal, see In re Lloyd, Carr, & Co. , 617 F.2d 882, 884 n.1 (1st Cir. 1980), but also where it has actively participated in the proceedings, see id. ; cf. In re Serrato , 117 F.3d 427, 429 (9th Cir. 1997) (holding that U.S. Trustee did not become party merely by his involuntary appearance to quash a summons).

This appeal encompasses challenges to two separate bankruptcy court proceedings, which the district court consolidated "for all purposes." The first is an adversary proceeding, see Fed. R. Bankr. P. 7001, challenging the validity of Yam aha's security interest in the golf carts. The second is a contested matter, see Fed. R. Bankr. P. 9014, in which Yamaha opposed the Trustee's motion for authorization to sell the golf carts.

In the adversary proceeding, the only participants were Yamaha and the Trustee. Because the Trustee is a private bankruptcy tru ste e, who is not employed by the United States government, the Trustee is not an officer of the United States. See In re Serrato , 117 F.3d at 428; 28 U.S.C. § 586(a)(1)-8-

(providing that U.S. Trustee is responsible for maintaining a panel of "private trustees" for Chapter 7 cases). Therefore, the sixtyday rule was not applicable to the adversary proceeding.

The contested matter, although primarily between Yamaha and th e Trustee, involved a third party as well. AUST Kar onis , exercising the U. S. Trustee's discretionary right to "raise," "appear," or "be heard on any issue" in a bankruptcy proceeding,
see 11 U.S.C. § 307, cross-examined the potential buyer of the golf carts regarding his financial capacity. By so doing, AUST Karonis, and, therefore, the U.S. Trustee, an agency of the United States,
see Joelson v. United States , 86 F.3d 1413, 1417 (6th Cir. 1996), became a party to the cont ested matter. See In re Lloyd, Carr & Co. , 617 F.2d at 883 n.1 (explaining that "the government's participation here was sufficiently active . . . to invoke the 60- day limit"). As a result, the sixty-day per iod applied to the appeals of the contested matter.

Because the contestedmatter and the adversary proceeding
were consolidated "for all purposes," the sixty-day limit governing the contested matter extends to the entire consolidated case. See In re Adams Apple, Inc. , 829 F.2d 148 4, 1487 (9th Cir. 1987) (finding that where the United States was a party to one case, the sixty-day rule applied to the other case if the cases were consolidated); cf. Bay State HMO Mgmt., Inc. v. Tingley Sys., Inc. , 181 F.3d 174, 182 (1st Cir. 1999) (holding that consolidated cases shouldbe treated as single action for purposes of determining res ju dicata ). Therefore, because Yamaha filed its notice of appeal6 This statute has since been amended, taking effect on July 1,

2001, to eliminate the requirement of having to file the financing statement with the clerk of the town. See N.H. Rev. Stat. Ann. § 38 2-A: 9-501(a)(2) (Supp. 2001). This amendment, however, has no bearing on this case. -9- within sixty days of the district court's judgment, its appeal is timely, and we can proceed to the merits of the case. C. Perfection of the Security Interest

New Hampshire law provides that a creditor, to perfect a security interest, must file a UCC-1 financing statement with the Secretary of State and, if the debtor conducts business in only one town within the state, also with the clerk of such town. See N.H. Rev. Stat. Ann. § 382-A:9-401(1)(c) (19 94). 6 When a debtor conducts busin ess i n more than one town within the state, then a creditor need only file a UCC-1 fi nan cing statement with the Secretary of State. See id. The bankruptcy court determined, and the district court affirmed, that Yama ha’s security interest was not perfected according to New Hampshire state law inasmuch as Yamaha did not file a UCC-1 financing statement with the clerk of the town of New Durham, the town where Perry Hollow conducted business. On appeal, Y amah a offers three theories to support its claimthat fil ing in Wolfeboro was sufficient to perfect its security interest. First, Yamaha argues that it was not required to file in New Durham because Perry Hollow conducted business in
more than one town within the state. Second, Yamaha contends that
even if it was required to file in New Durham, it "sub stant ially7 This statute was amended and reenacted in 2001 as N.H. Rev.

St at. Ann. § 382-A:9-506(a) (Supp. 2001) (stating that financing statements "substantially satisfying" the requirements are -10- complied" with the filing requirements so as to perfect its security interest. Third, Yamaha claims that it justifiably relied
on Perry Hollow’s representations that it was located in Wolfeboro, thereby excusing Yamaha's failure to file in New Durham under Field
v. Mans , 516 U.S. 59 (1995).

Yamaha argues that because Perry Hollow had a mailing address in Wolfeboro and a physical location in New Durham, Perry Hollow was conducting business in more than one town in the state, thereby relieving Yamaha of the duty to file a financing statement with anyone other than the Secretary of State. The bankruptcy court, however, found that Perry Hollow does business only in one town within New Hampshire. Given that the Wolfeboro address was only a mailing address, we cannot say that this finding was clearly
erroneous. Therefore, under New Hampshire law, Yamaha had to file
a financing statement with both the Secretary of State andthe clerk of the town of New Durham to perfect its security interest.

Relying on In re Circus Time , 641 F.2d 39 (1st Cir. 1981), Yamaha further argues that even if it was obligated to file in New Durham, it "substantially complied" with this requirement. In Circus Time , this Court held that minor errors, not seriously misleading, in certificates of title were not sufficient to render
a security interest in those vehicles unperfected; "subs t antial compliance" with the documentary requirements was sufficient. See id. at 43; see also N.H. R ev. Stat. Ann. § 382-A:9-402(8) (1994) 7effective). -11-

(providing that a "financing statement substantially complying" with requirements is effe cti ve). This case, however, is easily dist inguishable. Circus Time involved errors in the financing documents ( i.e. , the certificates of title), as opposed to errors in the filing process. The doctrine of substantial compliance has not been extended to filing requirements. See In re Covey , 66 B.R. 459, 460 (Bankr. D.N.H. 1986) (holding that security interest was not perfectedsince debtor conducted business only in one town in the state and creditor did not file financing statement in that town); In re Sports Enters., Inc. , 38 B.R. 282, 282-83 (D.N.H. 1984) (holding that security int erest was unperfected where creditor, in addition to filing with the Secretary of Sta te, mistakenly filed with the clerk of the town adjacent to where debtor conductedbusiness); see also N.H. Rev. Stat. Ann. 382-A:9- 401, Offic. Comm. 5 (stating that "filing in only one of two required places is not effective").

A misfiled UCC-1 financing statement fails to serve the intendedpurpose of the filing requirement, which is to give proper notice that a secured interest exist s. If w e were to adopt Yamaha's argument, we would be placing an undue burden on all creditors. In addition to checking for prior encumbrances with the clerk of the town where the debtor is actually located, creditors wouldbe forced to undergo the task of checking for misfiled security interests i n adjacent towns, perhaps even statewide. Moreover, Yamaha's proposed scheme wo uld reward creditors who-12-

negligently misfile their UCC-1 fi nanc ing statements. Such an outcome would undermine the statute's purpose. Therefore, we hold that Yamaha's actions in this case were insufficient to perfect its security interest.

Yamaha's final justification for filing in Wolfeboro, insteadof New Durham, is that it "justifiably relied" on Perry Hollow's representations that it was located in Wolfeboro. As a result, Yamaha argues that under Fieldv. Mans , 516 U.S. 59 (1995), its security interest shouldnot be avoidable. In Field , the Court heldthat a creditor, who, in extending credit, placed "justifiable reliance" on fraudulent representations made by the debtor, could except a debt from discharge under 11 U.S.C. § 523(a)( 2)( A). Field , 516 U.S. at 74.

Yamaha alleges that Perry Hollow made false representations by not providing the true location of its business andthat, therefore, Yamaha could justifiably rely on the Wolfeboro address prov ided by Perry Hollow when filing the financing statement. This argument is flawed. First, Fieldapplies to actions under 11 U.S.C. § 523(a) to except a debt from discharge. This is not the case here.

Second, Yamaha fails to proffer evidence that Perry Hollow committed fraud in providing its Wolfeboro address. Specifically, Yamaha must prove that Perry Hollow intended to deceive it when pr oviding t he Wolfeboro address. We are not convincedthat providing a valid mailing address, instead of a physical address, constitutes an intentionally false-13-

representation. Therefore, insofar as this action was not brought under 11 U.S.C. § 523(a), and absent a showing of fraud, we decline to extend Field ’s justifiable reliance standard to this matter. See In re Perry Hollow Mgmt. Co. , 260 B.R. at 62 (stating that no
case has applied Fieldto a suit avoiding a security interest under 11 U.S.C. § 544). D. Yamaha's Motion to Stay the Sale Pending Appeal Yamaha argues t hat it was entitled to a stay of the golf carts' sale pe ndin g appeal, pursuant to Bankruptcy Rule 6004(g). Rule 6004(g) states that "[a]n order authorizing the use, sale, or lease of property other than cash collateral is stayed until the expiration of 10 days after entry of t he or der, unless the court orders otherwise ." Fed. R. Bankr. P. 60 04(g) (Supp. 2001) (emphasis supplied). Yamaha complains that the bankru ptcy court erredin waiving the ten-day period and ordering the immediate sale of the golf carts. Although Rule 6004(g) provid es for a ten-day stay, it also clearly states that the court can order otherwise. The Advisory Committee notes on Rule 6004(g) expressly state that "[t]he court may, in its discretion, order that Rule 6004(g) is not applicable so that the property may be used, sold, or leased immediately . . . ." The court held an evidentiary hearing on the Trustee's motion to sell the golf carts and waive the automatic stay. The Trustee presented as factual bases for the waiver that the sale price was reasonable, the buyer was ready to complete the sale the next day,-14-

and the present owner of the golf club intended to charge for the carts' continued storage. Yamaha did not contest these facts. See In re Perry Hollow Mgmt. Co. , 260 B.R. at 65. Accordingly, because
we find that the bankruptcy court properly acted within its discretion, we affirm its decision to waive the stay. III. Conclusion For the foregoing reasons, the distr ict court’s judgment is affirmed .