Opinion ID: 2188372
Heading Depth: 1
Heading Rank: 2

Heading: Units as Fixtures

Text: 11 M.R.S.A. § 9-313(1)(a) (1964 & Supp.1991) provides that [g]oods are `fixtures' when they become so related to particular real estate that an interest in them arises under real estate law. That interest arises when the property is (1) physically annexed to the real estate, (2) adapted to the use to which the real estate is put, that is, the personal and real property are united in the carrying out of a common purpose, and (3) annexed with the intent to make it part of the realty. Boothbay Harbor Condominiums, Inc. v. Department of Transp., 382 A.2d 848, 854 (Me.1978) (citing Bangor-Hydro Elec. Co. v. Johnson, 226 A.2d 371, 378 (Me.1967)). The evidence compels a conclusion that, under the first prong of the three-part fixture test, the units were physically annexed to the real estate. The heating and air-conditioning units were installed when the Inn was under construction and are part of the walls of the building. The units are attached by bolts and although they could be removed, their removal would create a large hole in the walls of each room. See Roderick v. Sanborn, 106 Me. 159, 162, 76 A. 263 (1909) (property need not be permanently fastened to realty to be physically annexed). As to the second prong of the test, it is undisputed that the units, although they are catalogue items and not specially made for the Grand Beach Inn, were adapted to the use of the real estate as the Grand Beach Inn. The real estate was designed and built as an inn to accommodate overnight guests. The heating and air-conditioning units help create a liveable atmosphere for those guests by providing heat and cooling to the rooms. The personal and real property, therefore, are united in the carrying out of a common enterprise. See Bangor-Hydro, 226 A.2d at 376. The fact that the units are catalogue items, and not custom-made, does not preclude them from being fixtures. The intent of the person annexing the personal property to the real estate is the third and most important of the three prongs of the fixture test. Bangor-Hydro, 226 A.2d at 377. LBG contends that summary judgment was improperly granted to Key Bank because the agreements between DiBiase and LBG granted to LBG a purchase money security interest in the units and expressly stated that the units would remain personal property and therefore demonstrated DiBiase's intent that the units remain personal property. We disagree. In determining the intent of the parties as to whether a chattel annexed to real estate becomes a fixture, it is not the hidden subjective intent of the person making the annexation that must be considered but rather the intention which the law deduces from such external facts as the structure and mode of attachment, the purpose and use for which the annexation has been made and the relation and use of the party making it. Bangor-Hydro, 226 A.2d at 378. The agreement DiBiase made with LBG to have the heating and air-conditioning units remain personal property cannot be considered against Key Bank on the fixtures issue because Key Bank was not a party to those agreements and was unaware of them. Vorsec Co. v. Gilkey, 132 Me. 311, 314, 170 A. 722 (1934); Gaunt v. Allen Lane Co., 128 Me. 41, 46, 145 A. 255 (1929). The objective manifestation of intent in this case, as evidenced by the physical annexation of the units to the walls of the building and their adaption to the use of the real estate as an inn, leaves no genuine dispute that the units are fixtures and part of the Grand Beach Inn real estate.