Ford Motor Credit Co. v. Partee

514 So. 2d 640, 5 U.C.C. Rep. Serv. 2d (West) 1451, 1987 La. App. LEXIS 10554
Louisiana Court of Appeal·Decided October 28, 1987·No. 18599-CA·Published·Cited by 5 cases

Opinion

514 So.2d 640 (1987)

FORD MOTOR CREDIT COMPANY, Plaintiff-Appellee,
v.
Woodrow PARTEE, Defendant-Appellant.

No. 18599-CA.

Court of Appeal of Louisiana, Second Circuit.

October 28, 1987.

*641 Weiner, Weiss, Madison & Howell by Mark Tatum, Shreveport, for intervenor-appellant Dixie Truck, Inc.

Patricia N. Miramon, Bossier City, curator ad hoc for Woodrow Partee.

Blanchard, Walker, O'Quin & Roberts by John T. Cox, Jr., Shreveport, for plaintiff-appellee.

Cook, Yancey, King & Galloway by Edwin L. Blewer, Jr., Shreveport, for appearer-appellee Don Hathaway-Sheriff of Caddo Parish.

Before JASPER E. JONES, NORRIS and LINDSAY, JJ.

LINDSAY, Judge.

The intervenor in this suit, Dixie Trucks, Inc. (Dixie), the holder of a repairman's privilege, has appealed the decision of the trial court which held that the security interest of the plaintiff, Ford Motor Credit Company (FMCC), on a large truck, outranks the repairman's privilege held by Dixie. We affirm.

BACKGROUND FACTS

The defendant, Woodrow Partee, an Ohio resident, purchased a 1978 Ford CLT 9000 truck from Tri-State Ford Truck Sales, Inc. in Ohio on January 20, 1984. The contract created a security interest in the vehicle in favor of FMCC. On February 27, 1984, Partee entered into a substitution agreement *642 (chattel mortgage) with FMCC whereby a different truck was substituted for the truck Partee had first purchased. The substituted vehicle, a 1979 Ford CLT 9000 with the vehicle identification number X989VEG9898, is the vehicle currently at issue in this suit. The substituted vehicle and FMCC's security interest were properly recorded in Ohio and duly noted on the Ohio certificate of title.

Partee subsequently leased the 1979 Ford CTL truck to Eddie J. Payne. Without the knowledge or consent of FMCC, Payne took the truck to Texas. Payne applied for a Texas registration on June 11, 1985 and registered the truck in order to obtain Texas license plates. He then began using the truck to haul freight for Mustang Transportation, Inc., a corporation headquartered in Dallas, Texas.

The record does not reflect the date of the lease from Partee to Payne. The record is also silent as to the specific date the truck left the state of Ohio or even whether the truck was intended to be permanently removed from Ohio.

On October 18, 1985, Payne was driving the truck through Shreveport, Louisiana, when the vehicle became disabled. Payne called Dixie Trucks, Inc. and Don Hale, Dixie's service manager, went to inspect the truck. It was determined that the truck would have to be towed to Dixie's shop and completely overhauled. The truck had run out of oil and the bearings had locked up. Thus, very extensive damage was done to the engine. After receiving an estimate of the cost of repair, Payne gave permission for Dixie to proceed with those repairs. In January of 1986, after Dixie had ceased working on the vehicle because Payne had failed to make a deposit on the cost of the repairs, Dixie received calls from FMCC concerning the truck and its location. FMCC first learned that the truck was in Louisiana on January 31, 1986. FMCC was told by Partee that the truck was in Louisiana and that the truck required such extensive repairs that it was no longer economically practical for Partee to continue making payments on the mortgage covering the truck.

On February 11, 1986, Dixie filed suit for over $20,000 to enforce its repairman's privilege for repairs to the truck. Dixie obtained a writ of sequestration and the truck was seized by the sheriff. The truck was left with Dixie as keeper. On March 7, 1986, FMCC filed suit for the $11,417.40 owed by Partee on the Ohio chattel mortgage. FMCC also obtained a writ of sequestration and the truck was again seized, and was taken from Dixie's custody to be held by the sheriff.

Dixie and FMCC both claimed to have the superior lien. In order to expedite the resolution of the legal issues presented, Dixie intervened in FMCC's suit against Partee. Dixie and FMCC subsequently agreed that a quick resolution of the ranking question was in the best interest of both parties. Accordingly, a hearing was scheduled to resolve the issue.

Following the hearing, the trial court ruled that FMCC's privilege was superior to that of Dixie. On July 24, 1986, Dixie filed a devolutive appeal, apparently not wanting to spend additional funds on a bond to support a suspensive appeal. Dixie claimed that the trial court erred in finding that FMCC's privilege outranked Dixie's privilege.

The truck was sold at sheriff's sale on August 27, 1986. The proceeds from the sale were disbursed in accordance with the trial court judgment. The proceeds of the sale were insufficient to fully satisfy the debt owed to FMCC. Therefore, Dixie received no funds from the sale.

On September 11, 1986, FMCC filed in this court a motion to dismiss Dixie's appeal as moot because the truck had been sold. On September 18, 1986, this court denied the motion. Plaintiff was allowed to supplement the record and on October 9, 1986, we denied plaintiff's application to reconsider the motion to dismiss the appeal.

The case was argued on appeal and on April 1, 1987 an opinion was rendered finding that because the Louisiana Court had only quasi in rem jurisdiction by virtue of the seizure of the truck and because the truck was sold, jurisdiction was lost, 505 So.2d 919.

*643 Dixie's petition for rehearing was denied and Dixie applied for writs to the Louisiana Supreme Court. On July 1, 1987, that court granted writs, reversed our judgment, reinstated the appeal, and remanded the case for briefing, argument and decision on the merits, 508 So.2d 810.

The parties rebriefed the case and raised essentially the same issues argued in the original appeal, including the argument that because the truck had been sold, the issue of entitlement to the proceeds is moot. Based upon the reversal by the Louisiana Supreme Court of our previous opinion, we must necessarily conclude that this argument, raised by FMCC, is without merit.

In its consideration of the merits of this case, the trial court found that, under Louisiana law, there was no requirement to re-record a previously recorded foreign security interest on a motor vehicle and, therefore, FMCC's chattel mortgage, recorded in the state of Ohio and noted on the Ohio Motor Vehicle Certificate of Title, primed Dixie's privilege.

Dixie has set forth numerous assignments of error, essentially arguing that the trial court erred in finding that FMCC's mortgage and privilege on the truck outranked Dixie's repairman's privilege. For the following reasons, we affirm the decision of the trial court.

DISCUSSION

Dixie's privilege is based upon LSA-R.S. 9:4501 which provides that any person operating a garage or place where motor vehicles or other machinery are repaired has a privilege upon the vehicle for the cost of repairs, parts or labor. However, LSA-R.S. 9:4502 provides that a repairman's privilege is not effective against several other interests, including a previously recorded chattel mortgage.

It is Dixie's contention that the foreign security interest held by FMCC under Ohio law was not perfected in Louisiana nor did it remain perfected under the laws of Ohio after the truck was removed from that state. Dixie argues that because FMCC's chattel mortgage was not recorded in Louisiana and was no longer perfected under the law of Ohio, it was outranked by Dixie's repairman's privilege.

LSA-R.S.

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Ford Motor Credit Co. v. Partee, 514 So. 2d 640, 5 U.C.C. Rep. Serv. 2d (West) 1451, 1987 La. App. LEXIS 10554 (La. Ct. App. 1987).

514 So. 2d 640 (Ford Motor Credit Co. v. Partee) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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