Paddock, LLC v. Bennett (In Re Bennett)

Summary

In this Chapter 13 bankruptcy case, the Eighth Circuit held that a manufactured home was personal property under Iowa’s common-law fixture test, not real property, and therefore the anti-modification provision of 11 U.S.C. § 1322(b)(2) did not bar bifurcation of the creditor’s secured claim under § 506(a)(1). The court applied clear-error review to the bankruptcy court’s factual findings that the home sat on piers and blocks, could be removed without substantial loss, and that the ground lease did not show an intent to make the home a permanent accession. The ruling affirms that state law governs whether a manufactured home is real or personal property for purposes of the anti-modification exception, and that the creditor bears the burden of proving the exception applies.

Holdings

1. The manufactured home is personal property, not a fixture, because the bankruptcy court's factual findings that it sits on piers and blocks, can be removed without substantial loss, and the intent was not to make it a permanent accession, are not clearly erroneous.

Questions Presented

1. Whether the bankruptcy court erred in finding that the manufactured home was personal property under Iowa law, and thus not subject to the anti-modification provision of 11 U.S.C. § 1322(b)(2).

Disposition

affirmed