Court Opinion

ID: 35545
Source: CourtListenerOpinion
Date Created: 2010-04-25 19:29:39+00
Date Added: 2024-06-11T14:56:22.000942
License: Public Domain

United States Court of Appeals
                                                                Fifth Circuit
                                                             F I L E D
               IN THE UNITED STATES COURT OF APPEALS          June 17, 2004

                       FOR THE FIFTH CIRCUIT             Charles R. Fulbruge III
                                                                 Clerk

                           No. 03-50833
                         Summary Calendar

IN THE MATTER OF: LINDA M. CAMARENO,

                                                    Debtor.
WORRY FREE SERVICES, INC,

                                                    Appellant,

                              versus

LINDA M CAMARENO,

                                                    Appellee.

                       --------------------
          Appeal from the United States District Court
                for the Western District of Texas
                      USDC No. SA-03-CV-198
                       --------------------

Before HIGGINBOTHAM, DAVIS, and PRADO, Circuit Judges.

PER CURIAM:*

     Worry Free Services, Inc., appeals from a bankruptcy court’s

order granting Camareno’s motion to avoid Worry Free’s lien, and

the district court’s subsequent affirmance.    Worry Free asserted

to the courts below that the air conditioning and heating system

(“the system”) sold to Camareno and installed in her home was

personalty, as opposed to a fixture, making its UCC-1 financing

     *
        Pursuant to 5TH CIR. R. 47.5, the court has determined that
this opinion should not be published and is not precedent except
under the limited circumstances set forth in 5TH CIR. R. 47.5.4.
                            No. 03-50833
                                 -2-

statement filed with Texas’s Secretary of State sufficient to

qualify Worry Free as a secured creditor.       The district court

found that the system was a fixture subject to Chapter 53 of the

Texas Property Code and that Worry Free’s UCC-1 filing was

insufficient.    Worry Free contends on appeal that the courts

below clearly erred in finding the system to be a fixture and in

applying Chapter 53 of Texas’s Property Code.       We disagree and

affirm.

     We review the lower court’s findings of fact for clear

error.1    A court’s findings of fact are clearly erroneous when

they are “implausible based upon the entirety of the record or

the reviewing court is left with the definite and firm conviction

that a mistake has been committed.”2    We review the lower court’s

legal conclusions de novo.3

     The lower courts did not clearly err by concluding that the

system was a fixture.    Section 9.313 provides that “goods are

‘fixtures’ when they become so related to particular real estate

that an interest in them arises under the real estate law of the

state.”4    The Texas Supreme Court explained that,

     1
       Kona Tech. Corp. v. S. Pac. Transp. Co., 225 F.3d 595, 601
(5th Cir. 2000).
     2
       N.A.A.C.P. v. Fordice, 252 F.3d 361, 365 (5th Cir. 2001)
(internal quotation marks omitted).
     3
         Kona, 225 F.3d at 601.
     4
         Tex. Bus. & Com. Code § 9.313(a)(1).
                          No. 03-50833
                               -3-

     [w]hether a chattel attached to permanent improvements
     has become a part thereof depends on the intention with
     which the fixture is annexed or put into position, and
     this intention is to be inferred from the nature of the
     article affixed, the relation and situation of the party
     making the annexation and the policy of the law in
     relation thereto, the structure and mode of the
     annexation, and the purpose or use for which the
     annexation is made.

Given that the system was installed in Camareno’s home, could not

easily be removed, and that reasonable buyers and sellers of the

system would expect it to be a permanent improvement to the

house, we find no clear error in categorizing the system as a

fixture.5

     Given that the system was a fixture incorporated into

Camareno’s home, Worry Free was required to proceed under Chapter

53 of Texas’s Property Code.   The Uniform Commercial Code (“UCC”)

applies, except as otherwise provided, to “a transaction

(regardless of its form) which is intended to create a security

interest in personal property or fixtures.”6   Section 9.104

describes which transactions are excluded from Article 9's reach,

and the relevant exclusion here provides that the chapter does

not apply “to a lien given by statute or other rule of law for

     5
       See, e.g., Carter v. Straus-Frank Co., 297 S.W.2d 195, 197
(Tex. Civ. App.–Texarkana 1956, no writ) (finding an installed air
conditioning system to be a fixture).
     6
       Tex. Bus. & Com. Code § 9.102(a)(1). The transaction at
issue occurred before the new version of the UCC took effect, and
the parties agree that the former version applies to this case.
All references and citations are to the former Article 9.
                                No. 03-50833
                                     -4-

services or materials.”7        Chapter 53 of the Texas Property Code

is one such statute; it governs mechanic’s, contractor’s, or

materialmen’s liens, and provides that a person is entitled to a

lien if he furnishes materials for construction or repair of a

house, building or improvement.8        “Material” is defined as “the

material, machinery, fixtures, or tools incorporated into the

work.”9      To claim a lien under Chapter 53, a person “must file an

affidavit with the county clerk of the county in which the

property is located,” and the affidavit must contain specific

information.10     Worry Free did not follow these procedures and

therefore cannot claim secured status.

      Worry Free asserts that its failure to make a fixture filing

is not fatal because it has a contractual security interest in

the system, and Article 9 states that “this Chapter applies to

security interests created by contract.”11       Therefore, Worry Free

contends that its contractual security interest is valid despite

its lack of any fixture filing under Chapter 53 or Article 9.

      This argument ignores the mandate of Article 9 and Chapter

53.   In addition to requiring fixture filings to describe the

property and be filed in the County Clerk’s office of the country

      7
           Id. at § 9.104(3).
      8
           Tex. Prop. Code § 53.021(a)(1)(A).
      9
           Id. at § 53.001(4)(A).
      10
           Id. at §§ 53.052(a), 53.054(a)(1)-(7).
      11
           Tex. Bus. & Com. Code § 9.102(b).
                               No. 03-50833
                                    -5-

where a mortgage of the property would be filed, Article 9

specifically excludes from its coverage liens “given by statute

or other rule of law for services or materials.”12    Here, the

lower courts found the system to be a fixture incorporated into

Camareno’s home; as such, it falls within Chapter 53's coverage

and Worry Free was required to follow its mandate.13    It did not

do so, and now has no basis for secured creditor status.

     Finally, Worry Free asserts that the lower courts erred in

finding that it held no constitutional lien.    This argument was

not properly presented to the bankruptcy court, and we may not

consider it on appeal.14

     AFFIRMED.

     12
          Id. at § 9.104(3).
     13
       Schumann v. Jenkins, 40 S.W.2d 214, 214 (Tex. Civ. App.–San
Antonio, writ ref.); In re Riordan, 238 F. Supp. 5, 6 (E.D. Tex.
1965).
     14
          In re Ginther Trusts, 238 F.3d 686, 689 (5th Cir. 2001).