Bannister Bank & Trust v. City Management Co. (In re AmerEco Environmental Services, Inc.)

138 B.R. 590, 1992 Bankr. LEXIS 450
CourtDistrict Court, W.D. Missouri
DecidedApril 6, 1992
DocketBankruptcy No. 90-40502-2-11; Adv. No. 91-4289-2-11
StatusPublished
Cited by7 cases

This text of 138 B.R. 590 (Bannister Bank & Trust v. City Management Co. (In re AmerEco Environmental Services, Inc.)) is published on Counsel Stack Legal Research, covering District Court, W.D. Missouri primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Bannister Bank & Trust v. City Management Co. (In re AmerEco Environmental Services, Inc.), 138 B.R. 590, 1992 Bankr. LEXIS 450 (W.D. Mo. 1992).

Opinion

MEMORANDUM OPINION

FRANK W. KOGER, Chief Judge.

The present action comes before the Court on plaintiff Bannister Bank’s declaratory judgment petition. Plaintiff asks this Court for a declaration of its rights, title and interest in certain equipment located at a facility owned by defendant City Management Company. The equipment in question had previously been leased by debtor AmerEco Environmental Services, [592]*592Inc. for use at that site. The Court has granted leave to intervene to Hazardous Waste Recovery, Inc. because they have purchased the rights to the equipment from plaintiff. The Court will also make a formal finding as to its jurisdiction in response to defendant’s Motion To Dismiss For Lack Of Jurisdiction.

The Court has jurisdiction to hear this matter under 28 U.S.C. § 1334 (1988) as a matter arising under Title 11. Additionally, the Court finds that, of the property that is in dispute, only the ladders and catwalks are property of the Intervenor by way of its purchase of equipment from plaintiff.

FACTS

The disputed equipment had been leased by debtor from U.S. Capital Corporation (“U.S. Capital”) for use in debtor’s operations. Lessor U.S. Capital sold its interest in the equipment lease to plaintiff Bannister Bank and executed an assignment of the lease. After debtor filed for bankruptcy protection, Bannister Bank’s Motion to Lift Stay was granted so that the bank could retake possession of the equipment. Hazardous Waste Recovery, Inc. (“HWR”) bought the leased equipment from Bannister Bank and has removed most of it from the premises. HWR has intervened in this action to protect its premises. HWR has intervened in this action to protect its interest in the equipment which remains at the facility and is the subject of this dispute. Defendant City Management Company (“CMC”) is the current owner of the real property upon which the disputed equipment is located by virtue of its purchase of debtor’s assets.

The dispute relates specifically to: (1) various starter switches used in conjunction with a “blender system”; (2) various ladders and catwalks used to gain access to several large storage tanks; and (3) a “filter plug” used in conjunction with the blender system.

There is no dispute that the blender system was covered by the equipment lease and is now owned by HWR. The starter switches are located in an electrical control box in a room containing other electrical service panels. Electrical wiring and conduit runs from the electrical panel to the blender system. The blender system itself has already been removed. Pictures entered into evidence show that the starter boxes are attached to a concrete block wall and the conduit running between the starter boxes and the blender system is also attached to the wall.

There is no dispute that the tanks to which the ladders and catwalks are attached were leased equipment which is now owned by HWR. The large liquid storage tanks have not yet been removed from the facility. Pictures show that the tanks sit upon concrete pads. The ladders and catwalks allow workers to gain access to the tanks. They are bolted to the concrete pads at the bottom and are welded to the tanks at the top.

As to the filter plug, it is clear that a filter plug is included in the list of equipment now owned by HWR and there is only one filter plug present at the facility. The problem is that the serial number of the filter plug which is present at the facility is different from the serial number which is on the equipment list.

JURISDICTION

The threshold question presented is whether or not the court has jurisdiction to hear this dispute. Defendant has moved to dismiss this action and argues that this court lacks jurisdiction because the property in question is no longer part of the bankruptcy estate and, since debtor is not a party to the dispute, resolution of the dispute will have no effect on administration of debtor’s estate.

The district courts have original jurisdiction of “all civil proceedings arising under title 11 or arising in or related to cases under title 11”. 28 U.S.C. § 1334 (1988). The “district court may provide that any or all cases under title 11 and any or all proceedings arising under title 11 or arising on or related to a case under title 11 shall be referred to the bankruptcy judges for the district”. 28 U.S.C. § 157 (1988). The District Court for the Western District [593]*593of Missouri has provided for an automatic reference of such bankruptcy cases to the bankruptcy judges as provided for in § 157. Therefore, this court has jurisdiction to hear any case that arises under Title 11 or arises in or is related to a case under Title 11.

Defendant’s argument fails to take into account the fact that resolution of this matter turns, at least in part, on the interpretation of two of this Court’s prior orders: (1) the order approving the sale of debtor’s assets to defendant CMC; and (2) the order granting plaintiff bank’s motion to lift stay and retake possession of the leased equipment. Resolution of the dispute requires reference back to prior orders of this Court rendered in core proceedings. Accordingly, this action is a core proceeding under 28 U.S.C. § 157(b)(2). That puts jurisdiction to hear the dispute squarely before the Bankruptcy Court.

DISCUSSION

Starter Switches

Plaintiff asks the Court to declare that the disputed starter switches are part and parcel of the blender system and, therefore, that plaintiff conveyed them to HWR as part of the equipment purchased by HWR. Defendant counters that the disputed switches are fixtures and are owned by defendant as owner of the real property where the switches are currently located.

The Court will decline plaintiff’s invitation to limit its finding to whether or not the switches are part of the blender system because such finding would not necessarily imply that they cannot be fixtures to the real estate separate and apart from the remainder of the system.

The Court does not construe its order of November 2, 1990 as authorizing plaintiff to remove any property which had become a fixture upon the real property. On November 2, 1990, this Court entered an Order (HWR Exhibit 4) which lifted the automatic stay and authorized plaintiff to remove the listed equipment from debtor’s facility. The blender system is among the pieces of equipment listed in that order. However, that order did not authorize plaintiff to remove any item to which it did not have good title and whenever an item becomes a fixture upon real property, title to that property passes to the owner of the real property. Marsh v. Spradling, 537 S.W.2d 402, 405 (Mo.1976).

Accordingly, the Court will address defendant’s claim that the disputed switches have become fixtures upon the real estate. Since defendant interposes the argument that the disputed pieces of equipment are fixtures, defendant must bear the burden of proving that claim.

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Cite This Page — Counsel Stack

Bluebook (online)
138 B.R. 590, 1992 Bankr. LEXIS 450, Counsel Stack Legal Research, https://law.counselstack.com/opinion/bannister-bank-trust-v-city-management-co-in-re-amereco-environmental-mowd-1992.