In re De Los Angeles

101 B.R. 722, 1989 WL 76594
CourtUnited States Bankruptcy Court, E.D. Oklahoma
DecidedJuly 6, 1989
DocketBankruptcy No. 88-71272
StatusPublished
Cited by1 cases

This text of 101 B.R. 722 (In re De Los Angeles) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, E.D. Oklahoma primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re De Los Angeles, 101 B.R. 722, 1989 WL 76594 (Okla. 1989).

Opinion

ORDER

JAMES E. RYAN, Bankruptcy Judge.

On January 3,1989, this Court conducted a hearing with regard to the Trustee’s Motion for Authority to Sell Property Free and Clear of Liens (pursuant to 11 U.S.C. § 363) (Docket Entry # 12). An Objection to said Motion was filed by General Motors Acceptance Corporation (GMAC) (Docket Entry # 18).

Appearances at the hearing were entered by William Rutledge, Trustee, and Brian Rayment on behalf of GMAC.

As a result of the Status Conference conducted concomitantly with the hearing, a determination was made that the issue as referenced hereinbelow was entirely legal in nature and thus, the parties were afforded the opportunity to submit legal Briefs in support of their respective positions. All such Briefs were timely filed. In addition, the creditor, GMAC, filed a Motion for Summary Judgment on April 5,1989 (Docket Entry No. 49) and a Request for Hearing thereon on May 19, 1989 (Docket Entry No. 59) with regard to the identical issues to be resolved by this Order, and thus, final resolution of that Motion shall also be taken in this Order.

This Order is intended to entirely replace and clarify the Order entered by this Court on March 31, 1989 which was vacated by Order of this Court on April 11, 1989.

After review of the Briefs and the applicable law, this Court enters the following Findings of Fact in this core proceeding:

STATEMENT OF ISSUE

At issue in this case is whether creditor, GMAC, can offer parole evidence with regard to the date of execution of a security agreement on a particular automobile in derogation of the documentary evidence provided to this Court. This necessarily includes a determination as to whether the agreement between the parties was tantamount to a sales agreement or a lease.

FINDINGS OF FACT

1. On December 20, 1984, the Debtor entered into a lease agreement with GMAC whereby he agreed to lease a 1985 Mercedes 300D automobile for a term of 48 months.

2. In October, 1988, the Debtor and GMAC agreed that the vehicle would be purchased by the Debtor. Pursuant to this agreement, the sales price of the vehicle would be financed by GMAC which would retain a security interest in the vehicle.

3. This agreement between the parties was documented by:

(a) Retail Installment Contract, bearing the date of October 24, 1988;

(b) Lien Entry Form, bearing an execution date of October 24,1988, as well as the signature of the Debtor;

(c) Special Memorandum of Sale and Receipt for Payment, bearing a date of sale of October 24, 1988; and

(d) Assignment of Title reflecting the date of entry of the Lien Entry Form of October 24, 1988.

4. The Debtor filed his Petition seeking relief under Chapter 7 of the U.S. Bankruptcy Code on October 27, 1988.

5. The Assignment of Title bears the date of November 10,1988, reflecting when the authorized Motor Licensing Agent received the Lien Entry Form for rec-ordation. Said Lien Entry Form bears a receipt date by the Motor Licensing Agent of November 9, 1988.

6. GMAC contends that oral evidence provided by the Debtor as to the date of execution of the Security Agreement is both allowed and relevant to this Court’s determination as to whether a sales agreement or lease agreement existed between the parties at the time of the filing of the Petition. This determination will have an [724]*724effect on whether a lease or sales agreement was in effect at the filing of the Petition. Also, if a sales agreement results, the date of execution becomes important as to whether the creditor properly perfected its lien as required under the applicable Oklahoma Statutes.

7. .The Trustee argues that the documents and information stated thereon are clear and unequivocal and thus, any oral evidence to the contrary is impermissible and irrelevant.

8. GMAC has provided in its Motion for Summary Judgment an Affidavit executed by the Debtor which sets forth the essence of the oral testimony which GMAC wishes to have placed into the record and accepted by the Court in derogation of the written documents. Such Affidavit states, in pertinent part:

“3. In October, 1988, I requested that General Motors Acceptance Corporation sell to me the subject 1985 Mercedes 300D.
4. In late October, 1988, I received word from General Motors Acceptance Corporation that they had completed preparation of the documents relating to the sale of the Mercedes. I was advised that the Retail Installment Contract and Lien Entry Form would be mailed to the dealer in Muskogee for my review and execution.
5. On October 27, 1988, I caused the above styled and numbered bankruptcy case to be filed.
6. Within a week after the filing of the above styled and numbered bankruptcy, I visited the dealer in Muskogee, Oklahoma, and executed the Retail Installment Contract ... and the Lien Entry Form ...
7. I received a Memorandum and Bill of Sale and a title to the 1985 Mercedes after November 9, 1988....
8. At no time prior to the filing of the above styled and numbered bankruptcy proceeding did' I receive any written acknowledgment from General Motors Acceptance Corporation that GMAC was selling or would sell to me the subject 1985 Mercedes.”

Since GMAC prepared and provided the documents of sale as well as attempted to perfect their lien after execution, this Court imputes such a desire and willingness to sell upon GMAC.

CONCLUSIONS OF LAW

A. This Court acknowledges that the Debtor is willing to testify as to a date different from that which is placed on the Retail Installment Contract and other documents of sale, when he allegedly executed these documents. The effect of the allowance of said testimony would be to defeat the Trustee’s claim to the subject vehicle, since at best, a lease agreement rejected pre-Petition would be the asset inherited by the Trustee in this bankruptcy. In effect, GMAC urges that the parties may modify terms of an agreement, of which the execution date is one, at anytime so long as consent to said modification is bilateral. We do not dispute this position. See Pinewood Realty Limited Partnership v. United States, 617 F.2d 211, 215, 223 Ct.Cl. 98 (1980). However, since the Trustee super-cedes the rights of the Debtor as a party to the contract pursuant to 11 U.S.C. § 544, the original parties to the contract may not modify its terms, including the date of execution, without the consent of the Trustee. Thus, in spite of the admitted acquiescence of both parties to the modification, it shall not be allowed.

B. In addition, this Court evaluates the evidence as presented in GMAC’s Motion for Summary Judgment as it would evidence presented at a hearing on this issue. The sole substantive evidence which GMAC offers to this Court for consideration is an Affidavit from the Debtor, the content of which is set forth in detail hereinabove at Paragraph No. 8.

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101 B.R. 722, 1989 WL 76594, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-de-los-angeles-okeb-1989.