Court Opinion

ID: 4675994
Source: CourtListenerOpinion
Date Created: 2021-04-09 14:06:41.722193+00
Date Added: 2024-06-11T08:03:29.962230
License: Public Domain

RENDERED: APRIL 2, 2021; 10:00 A.M.
                          TO BE PUBLISHED

              Commonwealth of Kentucky
                        Court of Appeals

                             NO. 2020-CA-0152-MR

STUART WAYNE WRIGHT                                              APPELLANT

                 APPEAL FROM BULLITT CIRCUIT COURT
v.               HONORABLE RODNEY BURRESS, JUDGE
                        ACTION NO. 19-CI-00326

FRANK L. MILLER                                                    APPELLEE

                                   OPINION
                                  AFFIRMING

                                  ** ** ** ** **

BEFORE: CLAYTON, CHIEF JUDGE; GOODWINE AND KRAMER,
JUDGES.

CLAYTON, CHIEF JUDGE: Appellant, Stuart Wayne Wright, appeals the Bullitt

Circuit Court’s order granting summary judgment to Appellee, Frank L. Miller.

For the following reasons, we affirm.
                                      BACKGROUND

               This case involves the ownership of a 1973 Glen house trailer with

Vehicle Identification Number SN26L204ES1906 (hereinafter, “manufactured

home”)1 located on real property owned by Wright. Miller has title to the

manufactured home, but Wright claims the manufactured home is affixed to his

real property and, thus, he owns it.

               The manufactured home at issue was made in 1973. It was then

transported to the real property at issue and placed on a foundation.

               In 2001, Phillip and Sara Squires purchased the real property and

acquired the title to the manufactured home. To finance the purchase, the Squires

obtained a mortgage in 2001 and again in 2003. Wright claims the Squires’

mortgages included the manufactured home because the mortgages included “all

improvements” on the property, while Miller claims the mortgages were silent as

to the inclusion of the manufactured home. Regardless, in 2012, the Squires failed

1
  Wright refers to the 1973 Glen house trailer as a “manufactured home,” while Miller refers to it
as a “house trailer.” A “manufactured home” refers to a dwelling built to conform to the
National Manufactured Housing Construction and Safety Standards Act of 1974, under which
the United States Department of Housing and Urban Development (HUD) promulgated certain
regulations. The 1973 Glen house trailer was built before the HUD regulations took effect.
However, the term “mobile home” (also referred to as a “house trailer”) has been replaced by the
term “manufactured home” under Kentucky law. See Kentucky Revised Statutes (KRS) 186.650
(amended, effective July 15, 1994, to substitute the term “manufactured home” for the term
“mobile home” in KRS Chapters 186 and 186A); see also 53A AM. JUR. 2D Mobile Homes and
Trailer Parks § 7, n.7 (2021) (citing 42 United States Code Annotated §§ 5401, et seq. as
amended by United States Public Law (Pub. L.) No. 96-399, § 308(c)(4) and Pub. L. No. 97-35,
§ 339B(c)).

                                               -2-
to make their mortgage payments and foreclosure proceedings were filed. As a

result, in 2013, the Master Commissioner sold the property to the Federal Home

Loan Mortgage Corporation (FHLMC).

               In August 2013, FHLMC sold the property to Wright. The purchase

contract between FHLMC and Wright specifically disclosed that, although a

manufactured home sat upon the property, FHLMC did not have title to it:

               [Wright] agrees and acknowledges that [FHLMC] has
               been unable to obtain title to the Home, and that evidence
               of title and title insurance, including an ALTA 7
               Endorsement,2 may not be available nor issued on the
               Home. Notwithstanding the foregoing, [Wright] is still
               desirous of purchasing the Property.

               Shortly after Wright purchased the property, on August 28, 2013, the

Squires obtained a duplicate certificate of title3 to the manufactured home from the

Kentucky Transportation Cabinet (KTC). Then, on September 3, 2013, the Squires

transferred that title and, thus, ownership of the manufactured home to Miller.

               Neither party mentions what, if anything, transpired between 2013

and 2019, when Wright filed the underlying action against Miller. However,

2
  “ALTA” stands for American Land Title Association. An ALTA 7 Endorsement is issued by a
title insurance company regarding whether a manufactured home situated on the insured land is
included in the policy definition of “land.”
3
  Pursuant to KRS 186A.245(1), “[i]f a certificate of title is lost, stolen, mutilated, or destroyed
or becomes illegible, the owner or legal representative of the owner named in the certificate shall
promptly make application to the county clerk for and may obtain a duplicate, upon furnishing
information satisfactory to the Department of Vehicle Regulation.”

                                                -3-
Wright’s complaint alleges that, even though he bought the real property, Miller

claimed he had a right to evict him from the manufactured home that sits upon that

real property. In his lawsuit, Wright requested the circuit court to quiet title to the

manufactured home.

             After answering discovery, Miller moved for summary judgment.

Miller claimed that a manufactured home remains personal property until

converted into real property using the statutory procedure set forth in KRS

186A.297. And, because the manufactured home was never converted to real

property, Miller argued he had title to the manufactured home and owned it as

personal property.

             On January 8, 2020, the circuit court granted summary judgment to

Miller. The circuit court held that Wright had not produced any evidence that the

previous owner of the manufactured home executed and filed an affidavit of

conversion to real estate with the county clerk as set forth in KRS 186A.297(1).

Therefore, the manufactured home remained personal property and did not transfer

to Wright when he purchased the real property.

             This appeal followed.

                             STANDARD OF REVIEW

             The standard of review for an appeal of a summary judgment is

“whether the trial court correctly found that there were no genuine issues as to any

                                          -4-
material fact and that the moving party was entitled to judgment as a matter of

law.” Scifres v. Kraft, 916 S.W.2d 779, 781 (Ky. App. 1996); Kentucky Rules of

Civil Procedure (CR) 56.03. The trial court must view the record “in a light most

favorable to the party opposing the motion for summary judgment and all doubts

are to be resolved in his favor.” Steelvest, Inc. v. Scansteel Service Center, Inc.,

807 S.W.2d 476, 480 (Ky. 1991). Further, “a party opposing a properly supported

summary judgment motion cannot defeat it without presenting at least some

affirmative evidence showing that there is a genuine issue of material fact for

trial.” Id. at 482. “An appellate court need not defer to the trial court’s decision on

summary judgment and will review the issue de novo because only legal questions

and no factual findings are involved.” Hallahan v. The Courier-Journal, 138
S.W.3d 699, 705 (Ky. App. 2004).

                                     ANALYSIS

             Manufactured homes and real property have a unique relationship. Is

the manufactured home part of the real property upon which it sits or is the

manufactured home personal property? If the manufactured home is personal

property, how does it become real property?

             Under Kentucky law, a manufactured home is considered personal

property, and its title is registered with the KTC in the same fashion as a car or a

boat. A manufactured home remains personal property unless it is transformed

                                          -5-
into part of the real property upon which it sits. So, if a person owns a parcel of

land and owns a manufactured home located on that land, she owns two separate

property interests: one in real property (the land) and the other in personal

property (the manufactured home). If this owner were to sell the land, title to the

manufactured home does not transfer to the new owner through the deed. The

manufactured home must first be converted into real property.

             Kentucky law provides the procedure for converting a manufactured

home into real property. Under KRS 186A.297(1), “the owner may execute and

file an affidavit of conversion to real estate with the county clerk of the county in

which the real estate is located.” In the affidavit, the owner “shall attest to the fact

that the home has been or will be permanently affixed to the real estate and be

accompanied by a surrender of the Kentucky certificate of title.” Id. Finally,

“[t]he county clerk shall file the affidavit of conversion to real estate in the

miscellaneous record book.” Id.

             Once the affidavit of conversion to real estate and the surrender of

title is filed, the manufactured home “shall be deemed” “as an improvement to the

real estate upon which it is located.” KRS 186A.297(2); see Bowling v.

Appalachian Federal Credit Union, 515 S.W.3d 686, 689 (Ky. App. 2017). The

property valuation administrator is furnished with a copy of the affidavit of

conversion to real estate “for inclusion in the real property tax rolls of the county.”

                                           -6-
KRS 186A.297(2). Notably, if any unreleased lien is displayed on the certificate

of title, the county clerk “shall not accept a surrender” of the title “unless it is

accompanied by a release of the lien.” Id.

             For his appeal, Wright claims the circuit court erred in granting

summary judgment to Miller because: (1) he has an ownership interest in the

manufactured home because it is a permanent fixture on the land he purchased; (2)

he should not have had to produce evidence that the manufactured home was

converted into real property; (3) he did not have an opportunity to fully conduct

discovery; and (4) the circuit court did not consider the “unclean hands doctrine.”

             For his first claim of error, Wright claims the manufactured home was

affixed to the property as early as 1995 because its title history reflects that Lillian

Parrish was the owner at that time and her “title status” was listed as “no title.”

Thus, he argues the manufactured home was already a fixture on the real property

by 1995 and when the Squires purchased the property in 2001, the deed transferred

both the manufactured home and the real property. Wright claims KRS

381.200(1), which provides that “[e]very deed, unless an exception is made

therein, shall be construed to include all buildings, privileges and appurtenances of

every kind attached to the lands therein conveyed[,]” supports his argument that

the Squires’ deed included the attached manufactured home. Moreover, Wright

asserts that the Squires’ mortgages must have included the manufactured home due

                                           -7-
to the amount of money they borrowed for the property and the Squires’ certificate

of title was meaningless. Finally, Wright contends that KRS 186A.297, which the

circuit court relied upon to hold that the manufactured home was never converted

to real property, does not control because it did not become effective until 2000,

which was after the manufactured home was already affixed to the land.

             In response, Miller argues the manufactured home was not converted

into real property under either KRS 186A.297 or the prior common law. The title

history reflects that the Squires acquired title to the manufactured home on June 8,

2001. They also had a duplicate title issued on August 28, 2013. This proves that

the manufactured home remained personal property with a title when the Squires

purchased the land in 2001 and after the foreclosure in 2013. Also, Miller

contends that the amount paid by the Squires does not prove that the manufactured

home was included in their mortgages. Finally, Miller claims the Squires’

mortgages were silent as to the manufactured home, which indicates it was not

included therein.

             As explained, simply because a manufactured home is located on real

property does not mean the manufactured home is a permanent fixture or part of

that real property. Unless the statutory procedure set forth in KRS 186A.297 is

followed, the manufactured home remains personal property and is separate from

the real property upon which it sits. Bowling, 515 S.W.3d at 688 (holding “a

                                         -8-
manufactured home may become ‘permanently affixed’ to real property if the

mandates of KRS 186A.297 are fulfilled.”). Until these steps are taken, case law

holds that the manufactured home remains personal property. Barnette v. Grizzly

Processing, LLC, 809 F. Supp. 2d 636, 649 (E.D. Ky. 2011) (holding owners had

not complied with KRS 186A.297, so manufactured home remained personal

property); Citizens Nat’l Bank of Jessamine County v. Washington Mut. Bank, 309
S.W.3d 792, 796 (Ky. App. 2010) (footnote omitted) (“There is no question that

Reynolds did not comply with the requirements of KRS 186A.297 and, therefore,

the manufactured home remains personal property.”).

               While Wright claims the manufactured home was converted into real

property before the Squires purchased the property in 2001, the active certificate of

title proves otherwise. By way of illustration, in the case of In re Starks, No. 10-

22108, 2011 WL 248521 (Bankr. E.D. Ky. Jan. 24, 2011), a federal bankruptcy

court sitting in Kentucky considered whether a manufactured home somehow lost

its character as personal property becoming either part of the real estate or a fixture

and subject to a mortgage. The court held that argument ignored the fact that an

active certificate of title existed for the manufactured home, which had not been

surrendered. Id. at *3-4. The court dismissed the argument that Kentucky’s

version of Article 9 of the Uniform Commercial Code4 rendered the manufactured

4
    See KRS 355.9-502.

                                          -9-
home a fixture subject to a mortgage because KRS 186A.297 provides the sole

method for converting a manufactured home to real estate. Id. at *3. Similarly, the

manufactured home at issue in this case did not lose its character as personal

property because an active certificate of title exists, which is held by Miller.

             Also, we conclude that Wright’s argument that KRS 186A.297 does

not apply because that statute was enacted in 2000 and after the manufactured

home was affixed to the real property is not supported by Kentucky case law. In

Hiers v. Bank One, West Virginia, Williamson, NA, 946 S.W.2d 196 (Ky. App.

1996), which was decided in 1996, the Court held that with respect to “any

property for which a certificate of title is required by KRS Chapter 186A, a

security interest in that property may be perfected or discharged only by a notation

in that vein on the certificate of title.” Id. at 198. Here, KRS Chapter 186A

required the manufactured home to have a title. KRS 186A.070(1) states that any

“state resident owner” of a manufactured home must obtain a certificate of title.

The title history evidence does not reflect any security interest against the

manufactured home, contrary to Wright’s argument that the manufactured home

was part of the real property that was foreclosed upon when the Squires defaulted

on their mortgages.

             Additionally, Wright admitted that his purchase contract with

FHLMC, which bought the property in the foreclosure sale, did not include title to

                                         -10-
the manufactured home. Attached to Wright’s response to summary judgment was

the purchase contract addendum. In that addendum, which Wright signed, he

acknowledged that FHLMC had been unable to obtain title to the manufactured

home located on the real property. Thus, Wright knew the title to the

manufactured home was not included in his purchase.

             Because Miller’s certificate of title established that the manufactured

home remained personal property, no genuine issue of material fact existed as to

the ownership of the manufactured home. At that point, the burden shifted to

Wright to present “at least some affirmative evidence” to avoid summary

judgment. Steelvest, 807 S.W.2d at 482. Because Wright was unable to produce

such evidence, we conclude that the circuit court did not err in granting summary

judgment to Miller.

             For Wright’s second claim of error, he argues that he should not have

had to produce evidence that the manufactured home had been previously

converted into real property. As stated above, once Miller demonstrated he had

title to the manufactured home, the burden did, indeed, shift to Wright to present

some evidence. Id. Moreover, the circuit court did not hold that Wright had to

produce evidence that the previous owner of the manufactured home executed and

filed an affidavit of conversion to real estate with the county clerk. Instead, the

                                         -11-
circuit court held that Wright had not produced any such evidence. The circuit

court did not err in this conclusion.

              For Wright’s third claim of error, he argues he did not have a full

opportunity to conduct discovery before the circuit court granted summary

judgment to Miller. Wright claims Miller objected and did not fully respond to the

discovery he propounded. If Miller had fully responded, Wright claims he would

have received the Squires’ certificate of title, a copy of any affidavit or application

of the Squires to get their duplicate title, and information regarding Miller’s

payment to the Squires for the manufactured home, which could question Miller’s

claim of valid title.

              In response, Miller claims that Wright never requested supplemental

discovery responses and never filed a motion to compel regarding the adequacy of

his responses. Miller further claims that Wright only asked for additional time for

discovery in his summary judgment response.

              We see no error. Wright does not allege that the circuit court refused

to grant him additional time to conduct discovery. Likewise, the record does not

reflect that Wright requested supplemental discovery or that Wright properly made

a motion to compel a ruling on any of Miller’s objections. “[T]he hope that

something will come to light in additional discovery is not enough to create a

                                         -12-
genuine issue of material fact.” Benningfield v. Pettit Environmental, Inc., 183
S.W.3d 567, 573 (Ky. App. 2005).

             The curtain must fall at some time upon the right of a
             litigant to make a showing that a genuine issue as to a
             material fact does exist. If this were not so, there could
             never be a summary judgment since “hope springs
             eternal in the human breast.” The hope or bare belief,
             like Mr. Micawber’s, that something will “turn up,”
             cannot be made basis for showing that a genuine issue as
             to a material fact exists.

Neal v. Welker, 426 S.W.2d 476, 479-80 (Ky. 1968) (internal citation omitted).

“‘Belief’ is not evidence and does not create an issue of material fact.” Humana of

Kentucky, Inc. v. Seitz, 796 S.W.2d 1, 3 (Ky. 1990). “A party’s subjective beliefs

about the nature of the evidence is not the sort of affirmative proof required to

avoid summary judgment.” Haugh v. City of Louisville, 242 S.W.3d 683, 686 (Ky.

App. 2007). Wright’s subjective belief that further discovery could have

questioned the validity of Miller’s title to the manufactured home does not create a

genuine issue of material fact to avoid summary judgment.

             For Wright’s final claim of error, he argues the circuit court erred by

not considering the “unclean hands doctrine.” Essentially, Wright claims the

Squires obtained the duplicate certificate of title to the manufactured home shortly

after he purchased the real property. Then, they immediately transferred that title

to Miller for an alleged nominal sum. He claims this amounted to unconscionable

conduct.

                                         -13-
             In response, Miller claims Wright never produced any evidence of

wrongdoing, let alone wrongdoing sufficient to invoke the “unclean hands

doctrine.” The Squires acquired title to the manufactured home in 2001, at the

time they purchased the real property, and they had a duplicate title issued on

August 23, 2013. Miller asserts that the Squires had the right to sell the

manufactured home to whomever they wanted for whatever amount. Moreover,

Miller claims the “unclean hands doctrine” is an equitable defense the circuit court

did not need to consider to decide Miller’s summary judgment motion.

             “Under the ‘unclean hands doctrine,’ a party is precluded from

judicial relief if that party ‘engaged in fraudulent, illegal, or unconscionable

conduct’ in connection ‘with the matter in litigation.’” Mullins v. Picklesimer, 317
S.W.3d 569, 577 (Ky. 2010) (quoting Suter v. Mazyck, 226 S.W.3d 837, 843 (Ky.

App. 2007)). A circuit court’s decision to invoke this equitable defense rests

within its sound discretion. Id.

             While Miller may have obtained title to the manufactured home for a

nominal sum and in a time frame that seems unfair or questionable to Wright, the

circuit court was within its discretion not to invoke the equitable defense of the

“unclean hands doctrine.”

                    Equity is only a supplement to the law for when
             there is no remedy at law. But it is a simple tenet that if
             there is a statute or case precedent or rule going a certain
             way, a trial court may not depart from it on the basis of

                                         -14-
            equity. Law trumps equity.

Bell v. Commonwealth, Cabinet for Health and Family Services, Dep’t for

Community Based Services., 423 S.W.3d 742, 747-48 (Ky. 2014) (emphasis in

original). Here, the circuit court made a ruling based on KRS 186A.297 and

Kentucky precedent. The circuit court was within its discretion not to consider the

“unclean hands doctrine” when it granted summary judgment to Miller.

                                 CONCLUSION

            For the foregoing reasons, we affirm the order granting summary

judgment to Miller.

            ALL CONCUR.

BRIEFS FOR APPELLANT:                     BRIEF FOR APPELLEE:

George R. Carter                          John R. Benz
Louisville, Kentucky                      Louisville, Kentucky

                                       -15-