              ELECTRONIC CITATION: 2005 FED App. 0004P (6th Cir.)
                           File Name: 05b0004p.06

            BANKRUPTCY APPELLATE PANEL OF THE SIXTH CIRCUIT

In re: DANIEL W. CLUXTON,             )
                                      )
                Debtor.               )
_____________________________________ )
                                      )
DANIEL W. CLUXTON,                    )
                                      )
                Debtor-Appellant,     )
                                      )
       v.                             )                No. 04-8028
                                      )
FIFTH THIRD BANK, ET AL.,             )
                                      )
                Appellees.            )
_____________________________________ )

                    Appeal from the United States Bankruptcy Court
           for the Southern District of Ohio, Western Division, at Cincinnati.
                                     No. 02-17602.

                               Argued: February 2, 2005

                           Decided and Filed: May 19, 2005

     Before: COOPER, GREGG, and LATTA, Bankruptcy Appellate Panel Judges.

                               ____________________

                                      COUNSEL

ARGUED: David A. Kruer, DEARFIELD, KRUER & WARREN, Portsmouth, Ohio, for
Appellant. John L. Day, Jr., WELTMAN, WEINBERG & REIS, Cincinnati, Ohio, Francis J.
DiCesare, Cincinnati, Ohio, for Appellees. ON BRIEF: David A. Kruer, DEARFIELD,
KRUER & WARREN, Portsmouth, Ohio, for Appellant. John L. Day, Jr., WELTMAN,
WEINBERG & REIS, Cincinnati, Ohio, Francis J. DiCesare, Cincinnati, Ohio, for Appellees.
                                ____________________

                                      OPINION
                                ____________________

      JAMES D. GREGG, Bankruptcy Appellate Panel Judge. In this case, the bankruptcy
court denied confirmation of the Debtor’s chapter 13 plan. The bankruptcy court found that
the Debtor’s proposed “cramdown” of the debt on his mobile home violated the anti-
modification provisions of § 1322(b)(2) because the court found that the mobile home is
part of the real property. Daniel W. Cluxton, the “Debtor,” has appealed arguing that the
mobile home is personal property. For the reasons that follow, the Panel AFFIRMS the
bankruptcy court.


                                 I.   ISSUE ON APPEAL
      The issue on appeal is whether the mobile home constitutes “real property that is
the Debtor’s principal residence” such that the chapter 13 plan being proposed by the
Debtor violates the anti-modification provisions of 11 U.S.C. § 1322(b)(2).1


                    II.   JURISDICTION AND STANDARD OF REVIEW
      The Panel has jurisdiction under 28 U.S.C. § 158(a)(1), which allows district courts,
and this Panel, under § 158(b), to review interlocutory orders of bankruptcy courts. On
October 26, 2004, the Trustee and Debtor filed a joint statement requesting leave to
appeal. The Panel granted permission to the Debtor to bring this appeal.
      Conclusions of law are reviewed de novo. See Nicholson v. Isaacman (In re
Isaacman), 26 F.3d 629, 631 (6th Cir. 1994). “De novo review requires the Panel to review
questions of law independent of the bankruptcy court’s determination.”         First Union
Mortgage Corp. v. Eubanks (In re Eubanks), 219 B.R. 468, 469 (B.A.P. 6th Cir. 1998)
(citation omitted). The determination whether a plan provision violates the Bankruptcy
Code is a legal conclusion reviewed de novo.


                                       III.   FACTS

      1
        The Bankruptcy Code is contained in 11 U.S.C. §§ 101-1330. Unless stated to the
contrary, all future statutory references are to the Bankruptcy Code, e.g., “§ ____.”
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       In May 1999, the original owners of the Debtor’s mobile home surrendered the
certificate of title of the mobile home to the Adams County auditor so that the mobile home
could be sold with real property to the Debtor. The Debtor financed his purchase through
a loan from Fifth Third Bank, granting a mortgage on the property and mobile home. From
the time that the Debtor purchased the mobile home and the real property, both have been
taxed as real estate.
       The Debtor asserts that the mobile home is personal property because it is not
affixed to the real property. The mobile home sits on sixteen by sixteen inch block piers
with wood wedges between the piers and a steel frame. Each pier rests upon concrete
pads buried four inches below the soil rather than sixteen inches beneath the frost line as
required by state regulations. The vinyl skirting that came with the mobile home from the
manufacturer has been replaced by concrete blocks stacked around the base, some
without mortar. The block skirting does not support any weight and appears to have been
installed only for cosmetic purposes. Plumbing, electricity and a septic system have all
been connected to the mobile home.           The record on appeal discloses no other
improvements.


                                   IV.    DISCUSSION
       Section 1322(b)(2) provides:
              (b) Subject to subsections (a) and (c) of this section, the plan
              may–
                   (2) modify the rights of holders of secured claims, other
              than a claim secured only by a security interest in real property
              that is the debtor’s principal residence, or of holders of
              unsecured claims, or leave unaffected the rights of holders of
              any class of claims[.]

In Nobelman v. American Sav. Bank, 508 U.S. 324, 113 S. Ct. 2106 (1993), the Supreme
Court ruled that a Chapter 13 debtor may not use § 506(a) to strip down those types of
mortgages covered by § 1322(b)(2).
                                             A.
       Pursuant to Ohio law, a mobile home may become part of real property. Ohio law
requires the owners of mobile homes to pay real estate taxes rather than personal property




                                             -3-
taxes when, among other things, “[t]he home is affixed to a permanent foundation.” Ohio
Rev. Code § 4503.06(B). More specifically,
       [A]n owner of a manufactured or mobile home that will be taxed as real
       property pursuant to division (B) of section 4503.06 of the Revised Code
       shall surrender the certificate of title to the auditor of the county containing
       the taxing district in which the home is located.

Ohio Rev. Code § 4505.11(H)(1).
       The Debtor does not dispute that his mobile home was treated as part of the real
property according to these statutes. Nor does he dispute that when he obtained the loan
to buy the property and mobile home, it was treated as such by the bank and that he
granted a mortgage which encumbered the mobile home and the real property. Rather, the
Debtor asserts that the county auditor erred by allowing the mobile home to be treated as
part of the real property because it was not affixed to the real property in the manner
required by the statute.
       The bankruptcy court determined that based upon the Ohio statute, the Debtor’s
mobile home is part of the real estate. In In re Kroskie, 315 F.3d 644 (6th Cir. 2003), the
Sixth Circuit Court of Appeals conducted a similar analysis under Michigan law. The Sixth
Circuit noted “the general rule that a security interest in a fixture can be perfected through
a properly recorded mortgage on real estate does not govern where, as here, there is a
specific statute dealing with mobile home security interests.” Id. at 647. The Sixth Circuit
also quoted In re Bencker, 122 B.R. 506, 511 (Bankr. W.D. Mich. 1990) “[T]he specific
provisions of [the] Mobile Home Commission Act dictate how legal ownership is transferred,
and it governs over the more general provisions of the Uniform Commercial Code.”
Kroskie, 315 F.3d at 647.
       In the present case, the mobile home lost its status as personal property when the
original owners surrendered the certificate of title to the county auditor and the mobile
home began to be treated as real property. The Ohio statute provides that once the
certificate of title is surrendered and the mobile home becomes part of the real property,
the only way the mobile home can regain its status as personal property is with the consent
of any secured parties. See Ohio Rev. Code § 4505.11(H)(4). Moreover, Ohio courts have
held that a failure to precisely follow the statute by a county auditor does not negate the




                                             -4-
mobile home becoming part of the real property by operation of law. See Synder v.
Hawkins, 2004 WL 4882 (Ohio Ct. App. Jan. 9, 2004).
       In the present case, the original owners represented that the mobile home was
affixed to a permanent foundation and surrendered the certificate of title to the county
auditor. The Debtor sought and received a mortgage because the mobile home was part
of the real property. Accordingly, the Panel holds that the mobile home became part of the
real property by operation of the statute. This rationale, standing alone, justifies affirmance
of the bankruptcy court’s ruling.
                                              B.
       Additionally, the bankruptcy court carefully considered the traditional fixture analysis,
set forth in Teaff v. Hewitt, 1 Ohio St. 511 (1853), and also determined that the mobile
home was affixed to the real property.        Teaff discusses the common law standard
governing the determination of when personal property becomes a fixture:

       1st. Actual annexation to the realty, or something appurtenant thereto.
       2d. Appropriation to the use or purpose of that part of the realty with which
       it is connected.
       3d. The intention of the party making the annexation, to make the article a
       permanent accession to the freehold–this intention being inferred from the
       nature of the article affixed, the relation and situation of the party making the
       annexation, the structure and mode of annexation, and the purpose or use
       for which the annexation has been made.

Id. at 530 (emphasis in original). Ohio courts have recognized a relaxation of the fixture

test in other contexts. See Cleveland Elec. Illum. Co. v. Cont’l Express, 733 N.E.2d 328

(Ohio Ct. of Common Pleas 1999) (utility pole and attached equipment); Masheter v.

Boehm, 295 N.E.2d 917 (Ohio App. 1973), rev’d on other grounds, 307 N.E.2d 533 (Ohio

1974) (machinery used to manufacture steel parts).

       The bankruptcy court analyzed the three prongs of the common law test. First,

although it might be slight, the mobile home is attached to the property, via the electrical

and plumbing. Second, there was a clear adaptation of the mobile home to the use and

enjoyment of the realty. The court noted that the realty would be of little or no use to the


                                              -5-
Debtor in the absence of the mobile home, and the Debtor would need to replace it with

another or similar structure if it were removed. Third, the original owners evidenced an

intention to annex the mobile home to the real property when they submitted the certificate

of title to the county auditor, thereby causing it to be taxed as real property. Further, the

Debtor also evidenced an intention for the mobile home to be treated as part of the real

property when he applied for and obtained a mortgage on the mobile home and the real

property. The bankruptcy court found that the mobile home took on such a character as

to inform other persons that the Debtor intended to make it a permanent part of the real

property.

       The three prongs of the Teaff analysis are met. The bankruptcy court also correctly

determined that the mobile home is real property under Ohio common law.



                                    V.   CONCLUSION

       The decision of the bankruptcy court is AFFIRMED.




                                             -6-
