NOT RECOMMENDED F OR F ULL-TEXT PUBLICATION F ile Nam e: 13a0413n.06 No. 12-4174 UNITED STAT ES COURT OF AP P EALS F OR THE S IXTH CIRCUIT

I n re: JAMES A. W AL L I NGF ORD, Debtor, MEL ODY WAL L I

NGF ORD, Debtor

J AMES A. WAL L I

NGF ORD, Plaintiff-Appellee , MEL ODY F . WAL L I

NGF ORD, Plaintiff-Appellee ,
v. GREEN TREE SERVI CI NG, L L C, Def endant- Appellant. ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ON APPEAL FROM THE UNI TED STATES DI STRI CT COURT FOR T HE SOUTHERN DI STRI CT OF OHI O

OPI NI ON

Be fore : MERRI TT, SUHRHEI NRI CH, and DON AL D, Circuit J udg es. BERNICE BO UIE DONALD, Circ uit Jud ge. The Wallingf ords own a mobile home in Ohio, along with the land that it sits on. For purposes of the anti-modificat i o n p ro v i s ion encompa ssed in 11 U.S.C. § 1322(b)( 2), we are now asked whether that home constitutes “re al proper ty .” We conc lude that it does not, and AF F IRM the dec ision of the district court.No. 12-4174

In re W allingfor d, et al.

I

. I n 1998, J ames and Melody Wallingford purcha sed land located at 8045 Yocke y Road in Geor g etown, Ohio. As part of the dea l, they

also boug ht a mobile home to sit atop the land. This p u rcha se was financ ed throug h a loan provided by Homes R Us. To secur e the l o an , t h e Wallingfords executed an open-e nded mortg ag e on the land that al s o cover ed the purcha se of the mobile home. The Wallingfords ag ree d to repa y principal in the amount of $98,016.80, with an interest rate of 7.71% per y ear . Gre en Tree Servicing , L L C assumed both the note to the mobile home and the 1 mortg ag e to the re al prope rty , cross-c ollatera liz ing the lien and the mortg ag e, re spectively

. On April 1, 2011, the Wallingfords filed a petition for bankruptc y , seeking relief under Chapter 13 of the bankruptc y code. $94,877.11 rema ined unpaid on the note held by Gre en Tree at the time of filing. The Wallingfords filed a Debtors’ Plan that called for a cra mdown on their mobile home; in doing so, they asser ted t h at the home was persona l proper ty

. Gre en Tree objected, counter ing tha t the mobile home was re al prope rty and thus not subject to cra mdown. About five months late r, the bankruptc y court he ld a conf irmation hear ing. A t this time, it beca me appar ent that the Wallingfords never surre ndere d the title to their mobile home. Despite this, the b an k ru ptcy court sustained Gre en Tree ’s objection by rea soning that a common-law fix ture analy sis compelled a c onclusion that the mobile home was r eal pr operty

.

The district cour

t and the par

ties listed the interest ra te as 7.1% pe r annum, but the Tr uth 1 in L ending Act disclosure s indicate a n interest ra te of 7.71% pe r y ear . - 2 -No. 12-4174

In re W allingfor d, et al.

The Wallingfords lodge d an appea l with the district court, contending that the bankruptc y court err ed in concluding that the mobile hom e wa s rea l proper ty

. The district court ag ree d with their contention and concluded that a mobi le hom e mus t be a ff i x ed t o a permanent foundation on the land—with the home’s title surre ndere d to the local cler k of co u rt

— fo r it to become rea l proper ty

. I t confirme d the Wallingfords’ proposed Chapter 13 plan. Gre en Tree filed a timely notice of appe al. I I

. When w e revie w an appea l that orig inates in the bankr uptcy courts, we look dir ectly to the bankruptc y court’s decision, instead of evalua ting the wisdom of the district court’s decision. In re Alfes , 709 F.3d 631, 636 (6th Cir. 2013). But this does not preve nt us fr om pay ing heed to the district court’s rea soning; rathe r, we are simply unobliga ted to defe r to it. See In re Quality Stores, Inc. , 693 F.3d 605, 609 (6th Cir. 2012). Fa ctual finding s made by the bankruptc y court are revie wed for clea r err or, while conclusions of law are revie wed de novo . In re W icke r , 702 F.3d 874 (6th Cir. 2012). A debto r seeking Chapter 13 relief has t he opti on of m odify ing, or “cr amming down,” the

secur ed interest of the cre ditor to rec eive court approva l for a reor g anization plan. See 11 U.S.C. § 1325(a) (5). Whil e the bankruptc y court may “modify the rig hts of holders of secur ed claims,” it may not modify “a claim secur ed only by a secur ity interest in rea l proper ty that is the debtor’s principal residenc e.” Id. § 1322(b)( 2). Despite the bankruptc y code’ s voluminous list of definitions, there is

no definition for the term “re al proper ty .” See generally § 101. We are , there fore , compelled to look

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In re W allingfor d, et al.

to state law for the term’s meaning

. See Giant Eagle, Inc. v. Phar-Mor, Inc. , 528 F.3d 455, 459 (6th Cir. 2008). This leave s us with the quandar y of which state law to examine. Whil e Gre en Tree asks us to adopt the rea soning of prior bankruptc y appellate panel decisio n s t hat discussed the Ohio

co m m o n -law fix ture analy sis, our consideration of this appea l must beg in with the questio n o f whether In re Re inhardt , 563 F.3d 558 (6th Cir. 2009) , controls the outcome of this c ase as circ uit prec edent. We conc lude that it does. Much like the matter b ef o re us, Reinhardt dealt with the anti-modification provision of § 1322(b)( 2). Id. at 561. The case also involved a parc el of rea l proper ty in Ohio, on which a mobile home had stood—the lender had a secur ity interest in both the rea l pr operty and the mobile home. Id. at 560. Attempting to cast the secur ity interest in the rea l pr operty as the dispositi ve fac tor, the

cre ditor contende d that there was no need to look to state law to deter mine whether the antimodification provision should apply

. Id. at 562. We declined to adopt this proposition beca use the cre ditor’s rea ding of § 1322(b)( 2) was an untenable one. See id. at 563 (obser ving that the lender ’s rea ding of the statute require d the adjustment of its wording , there by “show[ing] the er ro r of its interpre tation”). As a result, we decla red that it was proper for a bankruptc y court to l o o k to state law to deter mine whether the mobile home qualified as rea l p roper ty , as that question rema ined unanswe red by the bankruptc y code. See id. But, prior to doing so, we identified the provision of Ohio law that would otherwise deter mine the outcome of the case if the cre ditor’s arg ument on appea l was unsucce ssful. We looked

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In re W allingfor d, et al.

to a state law fra

mework that was, and rema ins, straig htforwa rd: acc ording to section 5701.02(B )(2) of the Ohio Revised Code, “a mobile home is g ener ally co n sidered persona l proper ty , and only become s rea l pr operty if (1) ‘ the home is aff ix ed to a pe rmane nt f

oundation and is loc ated on land owned by the owner of the home,’ and (2) ‘the cer tificate for the mobile home has been inactivated by the cler k of the c ourt of common plea s that issued it.’” Id. at 561-62 (quoting Ohio Rev. Code § 5701.02(B )(2) ) (i nterna l modifications omitted). We ultimately aff irmed the decision of the bankruptc y

court by rely ing upon this statute. As the district court noted in the prese nt matter, Gre en Tree ’s attempt to avoid modification is a futile one if section 5701.02(B )(2) is dispositive—the Wallingfords never had the title to their mobile home “inac tivated” by surre ndering it. Recog nizi ng this dead end, Gre en Tree instead seeks to rationalize the validi ty of t he bankr uptcy court’s decision by rely

ing upon two ear lier decisions from this circ uit’s bankruptc y appellate panels, In re Cluxton , 327 B.R. 6 1 2 , 6 14 (6th Cir. BA P 2005), and In re Davis , 386 B.R. 182 (6th Cir. BA P 2008), to sug g est that section 5701.02(B )(2) is not the only

means by

which the r eal pr operty

deter mination can be ma de under Ohio law. But our decision in Reinhardt is the law of this circ uit, and we are obliga ted to follow it. See United States v. Humphrey , 2 8 7 F. 3 d 4 2 2 , 452 (6th Cir. 2002) (“I t is axiom atic that a court of ap p ea l s m ust follow the prec edent of prior panels within its own circ uit.”). Whil e the Reinhar d t court touched upon Cluxton and Davis , it did not enter tain the possibili ty that the common-law fix ture analy sis, standing alone, could deter m ine whether a mobile home was rea l proper ty for purposes of the anti-modificati on provision. This sug g ests that the Reinhardt court impliedly

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In re W allingfor d, et al. reje cted the dic hotomous (or more a ccur ately , open-e nded) a pproac h that Gre en Tre e now asks us to a dopt—one wher e the common-law fix ture analy sis c an substitut e for the conjunctive, two- part test provided by

section 5701.02(B )(2)

. Gre en Tree attempts to diminis h the rele vance of Reinhardt by noting that the state-law rea l proper ty deter mination was uncontested in t hat case —both parties stipulated that section 5701.02(B )(2) should g overn if the lender ’s arg uments ultimately proved to be unavailing

. See Reinhardt , 563 F.3d at 562 (“V ander bilt does not contest the bankruptc y court’s finding that the mobile home is persona l proper ty under Ohio law.”)

. That is not, howeve r, the standard that we use to measure the prec edential value of our prior observa tions of law. Whil e, at times, it may be difficult to discern a holding, see Metropolitan Hosp. v. U.S. Dep’ t of Health and Human Servs. , --- F.3d

--- -, 2013 WL 1223307, at *10 (6th Cir. Mar. 27, 2013) (published decision), one exis ts when

our deter mination of a matter of law is “pivotal to [a] decision.” United States v. Hardin , 539 F.3d 404, 438 (6th Cir. 2008) (B atche lder, J ., concur ring in part and dissenting in part) (quoting Bla ck’s L aw Dictionary , 8th ed. 2004). I n Reinhardt , our decision to aff irm the bankruptc y court ultimately pivoted on the Ohio statute—there fore , our re liance on tha t law has pre cede ntial value. Finally , we note that Gre en Tree ’s char acte rization of Reinhardt as a mere rec og nition of “how Ohio’s tax code classifies a mobile home for tax purposes” is a bit misleading and too narr ow in sc ope. ( See Appellant’s Br

. at 18.) Our decision in Reinhardt does more than just that—it uses that rec o gn i t i o n as a means for deter mining when and whether a mobile home is protec ted from

cra mdown. I n rely ing u p o n the Ohio tax statute, we did indeed observe that “an Ohio citizen’s obli gat i o n t o p ay taxes on his or her unattache d mobile home as persona l proper ty is completely - 6 -No. 12-4174

In re W allingfor d, et al. unrela ted to how a fede ral bankruptc y court would trea t that same mobile home in deter m i ning whether to allow a cra

mdown.” Reinhardt , 563 F.3d at 564. Contex t, howeve r, matters—we made that observa tion only to express that our decision to rely upon that particula r provision of state law for bankruptc y purposes maintained t h e h ar mony betwee n Ohio’s tax code and the fede ral bankruptc y code. See id. (“F irst, compliance with both the fede ral bankruptc y statute and the Ohio tax s tatute is possible . . . .”). He nce, G ree n Tree ’s ar g ument in this reg ard is unava iling. I I I

. To say the least, decisions from the Ohio cour ts on this i ssue have not served a s models of clar ity

. Some Ohio courts have di sreg arde d—or at the very l east, diminis hed—the importance of the surre nder require ment and have primarily relied upon a traditional common-law fix ture analy sis to deter mine whether a mobile home is rea l proper ty

. S ee , e. g . , R i cke tt v. Ohio Real Estate Appraiser Bd. , No. 07AP-667, 2008 WL 2553043, at *7 (Ohio C t

. Ap p . J u n e 26, 2008). But the orig in of this trend appea rs to be our own bankruptc y courts, particularl y the Cluxton court. The Cluxton court, in turn, relied on Snyder v. Hawkins , No. 03-CA-007, 2004 WL 48882 (Ohio Ct. App. J an. 9, 2004), to come to the conclusion that “Ohio courts have held that a failure to prec isely follow the statute [by failing to sur rende r the title]

. . . does not ne g ate the mobile home bec oming pa rt of the re al prope rty

by opera tion of law.” In re Cl uxton , 327 B.R. at 615; see also Ricke tt , 2008 WL 2553043, at *7 (c iting In re Cluxton , 327 B.R. at 615)

. Snyder , howeve r, has no such holding. The case was decide d on res judicata g rounds, with the propriety of fore closure proce eding s alre ady stipulated to by the parties, th u s being uncha l l en gea ble throug h a collater al attack. Snyder , 2004 WL 48882, at *5. I ndeed, the Snyder - 7 -No. 12-4174

In re W allingfor d, et al. court cited an opinion by the Ohio Attorney Gene ral whic h rec og nized the surrende r of title as the final step to complete the transition from persona lty to rea lty —if there is no surre nder, then the transfor mation to rea lty rema ins incomplete beca use t h e p ro p erty has not crosse d the requisite threshold of aff

ix ation. See id. ; see also 1993 Ohio Op. Att’y Gen. No. 2-385 (“[T]he owner must

surre nder the cer

tificate of title to a manufac tured home a ny time that a county auditor deter mines that the home has be en alter ed suff iciently to classify

it as rea l property .”). Other Ohio case law reinfor ces the importance of requiring the surre nder of title prior to the

rec og nition of a mobile home as rea l pr operty

. I n Benne r v. Hammond , 673 N.E.2d 205 (Ohio Ct. App. 1996), the Ohio Court of Appea ls wre stled with the question of how to discern whether a trailer is mobile or perma

nently aff ix ed for purposes of a restric tive covena nt. The deciding fac tor was the

owner ’s c er t i fi ca t ion that a home will not be moved—i.e., surre nder of title. See id. at 209. This conclusion was compelled by the fac t that “almost any home i s m o v ea b l e, and there fore it is

unrea sonable to harp on the possibili ty that a manufa cture d home may be moved.” Id. Given these considerations, it seems imprudent to endorse an interpre tation of Ohio law that allows the commonlaw fixture analy sis, standing a lone, to g overn the outcome of a case involving the cr amdown of a mobile home. There must be more—and the Reinhardt fra mework pr ovides it. I V. Seeing no rea son to deviate from our decision in Reinhardt , we conclude that the Wallingfords’ failure to surre nder the t i t l e t o their mobile home is dispositi ve in this matter: the home is persona l proper

ty under Ohio law and thus subject to cra mdown. Acc ording ly , the decision of the district cour

t is AF F IRMED. - 8 -