Opinion ID: 1794638
Heading Depth: 2
Heading Rank: 2

Heading: Constitutionality as to Secured Parties.

Text: Conseco also argues that AMHTD is unconstitutional as applied to secured parties because it deprives the secured party of its security interest in the manufactured home without adequate notice, requires the secured party to pay rent owed by the homeowner merely to retain what is already a perfected security interest, gives the secured party insufficient time in which to respond to the notice, and impairs its security interest by leaving the debt in the name of the debtor while transferring ownership of the home to the landlord, thereby depriving it of the collateral necessary to protect its security interest or, at best, leaving it with a security interest that is not reflected on the title issued by the department of revenue. The attorney general, on behalf of the department of revenue, disagrees. The attorney general suggests that the trial court erroneously based its holding that AMHTD deprives secured parties of their security interests without adequate notice or other process on what may be the department of revenue's flawed interpretation of AMHTD rather than on the provisions of AMHTD itself. The disagreement of the parties on this issue results in part from their differing interpretations of whether and how the provisions set out in section 700.527.1 can be harmonized with those of section 700.525. Section 700.527.1 provides: If a person abandons a manufactured home on any real property owned by another who is renting such real property to the owner of the manufactured home, and such abandonment is without the consent of the owner of the real property, the owner of the real property may seek possession of and title to the manufactured home in accordance with the provisions of sections 700.525 to 700.541 subject to the interest of any party with a security interest in the manufactured home. Sec. 700.527.1 (emphasis provided). Section 700.530 further provides: The provisions of sections 700.525 to 700.539 shall not affect the right of a secured party to take possession of, and title to, a manufactured home pursuant to section 400.9-503, RSMo, section 700.386 or otherwise as allowed by contract or law. Sec. 700.530. Conseco argues that, although these sections appear to protect the secured party's interest in the home, that protection is rendered ambiguous or non-existent by section 700.535, which Conseco suggests extinguishes the secured party's interest in the home unless the secured party files a response within 30 days of receiving notice that the landlord has requested title be issued in its name. Section 700.535 states: 700.535. Owner of manufactured home may voluntarily relinquish claim or relinquish by failure to respond to notice right to reclaim, requirement. If the manufactured home is titled in Missouri, the valid owner of the manufactured home or the holder of a valid security interest therein may voluntarily relinquish any claim to the manufactured home by affirmatively declaring such relinquishment or by failing to respond to the notice required by section 700.531 within thirty days of the mailing or delivery of such notice by the director of revenue. Sec. 700.535 (emphasis provided). Certainly, serious constitutional issues would be raised were AMHTD construed to destroy a secured party's ability to retain a perfected security interest without adequate notice and other necessary process. But, for at least two reasons, this Court need not reach the issue whether this language must be given the broad interpretation suggested by Conseco, or whether it can instead be read in the context of the entire statutory scheme, including sections 700.527.1 and 700.530, to protect the perfected security interest of a secured party. See Silcox v. Silcox, 6 S.W.3d 899, 903 (Mo. banc 1999) (statute will be construed constitutionally if possible); See also Hagan v. Dir. of Revenue, 968 S.W.2d 704, 706 (Mo. banc 1998). First, just as the record at this juncture does not show that the Wrens or Conseco have standing to raise the constitutionality of the homeowner provisions of the relevant statutes, it does not show that Conseco has standing to raise these issues as to the department's application of these provisions to secured parties, for the department has denied Conseco's allegations that it has a security interest in the listed homes or that it has received inadequate notice and opportunity to be heard or that its security interest is not adequately reflected in the titles issued by the department. The trial court never reached the issues regarding the propriety of the department's implementation of the statute, instead proceeding directly to the constitutional claims of Conseco and finding the statute unconstitutionally deprives Conseco of notice and an opportunity to be heard and is unconstitutionally vague. The court should have addressed the standing and other preliminary factual issues on which Conseco's constitutional and statutory interpretation claims are based before reaching these constitutional issues. See Rodriguez v. Suzuki Motor Corp., 996 S.W.2d 47, 53-54 (Mo. banc 1999); State ex rel. Dir. of Revenue, State of Mo. v. Gabbert, 925 S.W.2d 838, 839 (Mo. banc 1996); State ex rel. Williams v. Marsh, 626 S.W.2d 223, 227 (Mo. banc 1982). Second, any determination by this Court that the portions of AMHTD dealing with secured parties such as Conseco are constitutional when considered alone necessarily would be rendered moot if the statute is unconstitutional as applied to homeowners, for the provisions of these statutes governing the rights of secured parties and those governing the rights of homeowners are inextricably intertwined. Section 1.140 provides that, where some of the provisions of a statute are struck down, the remaining provisions will be found to be severable: unless the court finds the valid provisions of the statute are so essentially and inseparably connected with, and so dependent upon, the void provision that it cannot be presumed the legislature would have enacted the valid provisions without the void one; or unless the court finds that the valid provisions, standing alone, are incomplete and are incapable of being executed in accordance with the legislative intent. Sec. 1.140. See Jefferson Sav. and Loan Ass'n v. Goldberg, 626 S.W.2d 640, 644 (Mo. banc 1982) (where portion of statute struck down, remainder cannot stand where it is too intertwined with stricken provision); Ryan v. Kirkpatrick, 669 S.W.2d 215, 219 (Mo. banc 1984) (applying section 1.140 to sever remaining portions of campaign finance act from provisions found to be unconstitutional). The provisions of AMHTD governing homeowners and secured parties are partially set out in the same and partially set out in different statutes, but the provisions of AMHTD concerning secured parties are so essentially and inseparably connected with, and so dependent on, the provisions regarding homeowners that it cannot be presumed the legislature would have enacted the former without the latter. And, the secured party provisions, standing alone, would be incomplete and incapable of being executed in accordance with legislative intent, in that, if the homeowner provisions are struck down, then there will be no transfer of title, and so the provisions of AMHTD as to secured parties will never come into play. For both of these reasons, the provisions as to secured parties cannot be given effect if those as to homeowners are struck down on remand. For the reasons set out above, this Court remands this case with directions to permit the director of revenue an opportunity to respond to and conduct discovery as to the allegations of the second amended petition made by the Wrens and for further proceedings in accordance with this opinion. WHITE, WOLFF, BENTON, and PRICE, JJ., concur. LIMBAUGH, C.J., concurs in separate opinion filed; TEITELMAN, J. concurs in opinion of LIMBAUGH, C.J.