On February 2, 2017, attorney Peter Brackney and the Brackney Law Office, PLLC obtained a summary judgment ruling for its client, a chapter 7 bankruptcy trustee, in Palmer v. Paul Miller Ford, Inc. (In re Lainhart), Bankr. E.D. Ky. (Feb. 2, 2017).
The adversary proceeding was filed in the U.S. Bankruptcy Court for the Eastern District of Kentucky. The Trustee sought the title to a truck that had been sold pre-bankruptcy to the debtor by the defendant car dealership.
The car dealership acquired the used vehicle as a trade-in and subsequently sold the vehicle to the debtor. Under Kentucky’s comprehensive automated motor vehicle registration and titling system, the Court found that the Debtor became the owner of the truck when he drove off the lot with possession of the vehicle.
Under section 541 of the Bankruptcy Code, the vehicle then became part of the debtor’s bankruptcy estate when the debtor subsequently filed for bankruptcy.
The car dealership unsuccessfully argued that a 1995 case controlled, but the Court disagreed and ruled against the dealership’s cross-motion for summary judgment.
A link to the opinion is below.
Lainhart Opinion – PDF