The Debtor owns a 2012 Clayton mobile home which she acquired approximately 507 days prior to filing bankruptcy. Arguing that the Hanging Paragraph of 11 U.S.C. § 1325(a)(5) allowed the cram-down of any thing of value other than a motor vehicle acquired for personal use within one year, the Debtor proposed a value of $33,134. Triad Financial Services did not object to the value, but instead argued that the federal definition from of a motor vehicle 49 U.S.C. § 30102(a)(7) used in the Hanging Paragraph was ambiguous and that accordingly the definition of motor vehicles under North Carolina law, which can include mobile homes, should instead apply, thereby requiring that the mobile home be obtained more than 910 days prior to the filing of the bankruptcy to be subject to cram-down.
Starting from the principle that exceptions to the plain meaning rule for interpreting statures are “exceptionally rare,” and apply only when:
(1) whether the plain meaning is at odds with the intentions of its drafters; or
(2) when the literal application of the statutory language at issue results in an outcome that can be characterized as absurd.
The bankruptcy court then turned to
There are two parts to the definition in § 30102(a)(7) which has two criteria:
(1) the vehicle must be either “driven or drawn by mechanical power,” and
(2) the vehicle must have been “manufactured primarily for use on public streets, roads, and highways….” (Emphasis added.)
While Triad argued that § 30102(a)(7) implicitly includes mobile homes by clearly referencing vehicles drawn by mechanical power, the bankruptcy court, relying on In re Nunnery, No. 11-80267, 2011 WL 4712083, at *5 (Bankr. M.D.N.C. Aug. 17, 2011), found that mobile homes were not "primarily" manufactured for that purpose, but instead as a permanent shelter. Accordingly, the objection to confirmation by Triad was overruled and the cram-down allowed.
Following in In re Greene, 360 B.R. 34 (Bankr. N.D.N.Y. 2007), perhaps the most important part of this decision is that in applying the Hanging Paragraph "any ambiguity should be resolved in favor of the debtor...." This presumption should apply throughout this limitation, including for deciding whether, for example, a motor vehicle was acquired for the personal use of the debtor. Further, in this case, as Triad was only able to assert the approximate date when the mobile home was acquired that failure to provide evidence could arguably be fatal to sheltering under the protections of the Hanging Paragraph.
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