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In re Heien

United States District Court, E.D. Missouri, Eastern Division

March 16, 2015

In re: SCOTT HEIEN and GINA MARIE HEIEN, Debtors.
v.
GINA MARIE HEIEN, Appellee/Debtor AUTOCENTERS ST. CHARLES, LLC, Appellant/Plaintiff,

For AutoCenters St. Charles, LLC, Appellant: Lori R. Koch, LEAD ATTORNEY, GOFFSTEIN AND RASKAS, St. Louis, MO.

For Scott Heien, Gina Marie Heien, Appellees: Jeffrey L. Ringling, LEAD ATTORNEY, ROSENTHAL AND RINGLING, P.C., Bridgeton, MO.

Page 902

MEMORANDUM AND ORDER

Jean C. Hamilton, UNITED STATES DISTRICT JUDGE.

This matter is before the Court on Appellant/Creditor AutoCenters St. Charles, LLC's (" AutoCenters" ) appeal from a bankruptcy court[1] order denying AutoCenter's Motion for Relief from the Automatic Stay or in the Alternative for Abandonment of Property. The appeal has been fully briefed and is ready for disposition.

BACKGROUND

Debtor/Appellee Gina Heien " filed a Voluntary Joint Petition for relief under Chapter 13 of the Bankruptcy Code with her husband, Scott Heien, on September 4, 2014." (Bankruptcy Order, ECF No. 4-1, at A-33). On August 27, eight days prior to filing her bankruptcy petition, Heien bought a 2012 Hyundai Santa Fe from AutoCenters. Id. at A-32. This purchase is at the center of the dispute between Heien and AutoCenters.

The Bankruptcy Court determined that Heien signed only two documents at the time she purchased the Sante Fe: a Retail Buyers Order and a Retail Installment Contract. Id. at A-32, A-33. These two documents, according to the Bankruptcy Court, set forth the whole of the agreement between Heien and AutoCenters, and the sale supposedly was completed when Heien signed them. See id. Heien was, under this version of events, the owner of the Sante Fe when she took possession that day.[2] The Santa Fe therefore became part of the bankruptcy estate and was protected under the Bankruptcy Code from any recovery action by AutoCenters. Id. at A-34, A-36.

AutoCenters claimed during the Bankruptcy Court proceedings that Heien also signed a third document, the Bailment Contract, on August 27. Id. at A-33. According to AutoCenters, the Bailment Contract was part of the sales contract even it though it lists a different date, September 5, than the other two documents. Id . The Bailment Contract states in part:

Buyer(s) understand(s) and agree(s) that the purchase of the vehicle from Dealer is conditional pending credit approval of Buyer(s) financing and completion of the sales transaction. Delivery of said vehicle by Dealer hereby made to Buyer(s) solely as a convenience to Buyer(s) . . . Until completion of the sales transaction said vehicle remains the property of the Dealer.

Id. (quoting Bailment Contract). In other words, the Bailment Contract purported to make completion of the sale conditional on Heien obtaining financing. It also purported to retain AutoCenters' ownership interest in the Santa Fe despite the fact that Heien had taken possession of the car. This purported ownership interest was the main basis on which AutoCenters sought relief from the automatic stay. Id.

The Bankruptcy Court denied AutoCenters' motion for relief from stay after holding a hearing at which both sides presented testimonial evidence. Id. at A-32, A-36. In so ruling, it found that any attempt

Page 903

by AutoCenters to reserve title after delivery was invalid under Mo. Rev. Stat. § 400.2-401(1). Id. at A-35. It also discredited the Bailment Contract because the Bailment Contract " is dated September 5, 2014 which is one day after Debtor's Chapter 13 case was commenced and therefore, does not assist this Court in determining Debtor's interest in the Vehicle at the time ...


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