United States Bankruptcy Appellate Panel
               For the Eighth Circuit
        ___________________________


                     No. 14-6045
        ___________________________


     In re: Daniel Neale Gess; Amy Lea Garza


               lllllllllllllllllllllDebtors


              ------------------------------


       Daniel Neale Gess; Amy Lea Garza


        lllllllllllllllllllllDebtors - Appellants


                           v.


      Randolph Brooks Federal Credit Union


        lllllllllllllllllllllCreditor - Appellee
                   ____________


   Appeal from United States Bankruptcy Court
    for the District of Minnesota - Minneapolis
                                  ____________



                           Submitted: February 17, 2015
                               Filed: March 18, 2015
                                  ____________



Before FEDERMAN, Chief Judge, SALADINO and NAIL, Bankruptcy Judges.

                                  ____________


FEDERMAN, Chief Judge


      Daniel Neale Gess and Amy Lea Garza (the “Debtors”) appeal from the
Order of the Bankruptcy Court1 granting the Randolph Brooks Federal Credit
Union relief from the automatic stay with regard to a vehicle. For the reasons that
follow, the Order is AFFIRMED.


                           FACTUAL BACKGROUND
      The Debtors filed a joint Chapter 7 bankruptcy petition, pro se, on July 30,
2014.2 Randolph Brooks Federal Credit Union filed a Motion for Relief from Stay
regarding a 2008 Chrysler Town & Country van, which had been owned by Debtor
Daniel Gess’ father, but was in the Debtors’ possession. The Debtors opposed the
Motion. The Bankruptcy Court granted the Motion, and the Debtors appeal.

      1
        The Honorable Robert J. Kressel, United States Bankruptcy Judge for the
District of Minnesota.
      2
          Debtor Amy Lea Garza has since been dismissed from the bankruptcy case.
                                           2
                           STANDARD OF REVIEW
      A decision to grant or deny a motion for relief from the automatic stay
      is within the discretion of the bankruptcy court and is reviewed for an
      abuse of discretion. An abuse of discretion will be found if the court’s
      judgment was based on clearly erroneous factual findings or on
      erroneous legal conclusions. In its application, the abuse of discretion
      standard is nearly indistinguishable from the clearly erroneous
      standard.3



                                     DISCUSSION
      Section 362(a) of the Bankruptcy Code generally provides for an automatic
stay against taking any action against property of the estate once a bankruptcy
petition is filed. Section 362(d) provides for relief from the automatic stay, as
relevant here:


      (d) On request of a party in interest and after notice and a hearing, the
      court shall grant relief from the stay provided under subsection (a) of
      this section, such as by terminating, annulling, modifying, or
      conditioning such stay—

             (1) for cause, including the lack of adequate protection of an
             interest in property of such party in interest; [or]

             (2) with respect to a stay of an act against property under
             subsection (a) of this section, if—

                   (A) the debtor does not have an equity in such property;
                   and


      3
        In re Crossroads Ford, Inc., 449 B.R. 366, 367 (B.A.P. 8th Cir. 2011)
(citations omitted).
                                             3
                     (B) such property is not necessary to an effective
                     reorganization.4


The Credit Union, as the moving party, bore the burden of proof on the issue of
whether there was equity in the vehicle, but the Debtors bore the burden of proof
on all other issues under § 362(d).5


      The Bankruptcy Court granted relief under both subparagraphs (1) and (2),
for reasons stated on the record at the conclusion of the hearing on the Motion.
The Debtors appear to make three primary arguments as to why the stay should not
have been lifted: that they do not have an ownership interest in the vehicle; that
the Credit Union’s lien is no good or is not enforceable against them; and that the
Credit Union’s interest is adequately protected because the van is insured.


      The first issue is whether the van is property of the bankruptcy estate subject
to the automatic stay. The Debtors asserted, and appear to continue to assert, that
because the Credit Union failed to establish “color of title,” they had no ownership
interest in the van. Indeed, the Bankruptcy Court found, and the Debtors do not
dispute, that the Certificate of Title on the van lists Debtor Daniel Gess’ father,
Neale Walter Gess, as the sole owner. As the Bankruptcy Court noted, if that had
been the end of the inquiry, the Credit Union would not have needed relief from
the stay in order to repossess the van in the first place.




      4
          11 U.S.C. § 362(d).
      5
          11 U.S.C. § 362(g).
                                               4
      However, § 541 of the Bankruptcy Code broadly defines property of the
estate to include “all legal or equitable interests of the debtor in property as of the
commencement of the case.”6 By the time the Debtors filed their bankruptcy case,
Neale Gess had passed away and Debtor Daniel Gess was the sole designee under
his will, which the Debtors had submitted to the Court. As a result, the Bankruptcy
Court found that Debtor Daniel Gess had at least an equitable interest in the van,
which interest was property of the estate. Therefore, the Credit Union was correct
in seeking relief from the stay before exercising its rights as to the van. We see no
clear error in that holding.


      Next, the Debtors assert that the Credit Union does not have a perfected
security interest in the van, or that the loan cannot be enforced against them. They
submitted to the Court voluminous documentation detailing a pre-bankruptcy
dispute with the Credit Union in making the loan to Neale Gess. However, as the
Bankruptcy Court held, the Credit Union’s interest was evidenced by a Security
Agreement signed by Neale Gess, and the lien was noted on the Certificate of
Title. The Certificate of Title was issued in Texas. Texas law provides that,
except for motor vehicles being held as inventory, “a person may perfect a security
interest in a motor vehicle that is the subject of a first or subsequent sale only by
recording the security interest on the certificate of title as provided by this
chapter.”7 The fact that Neale Gess is now deceased, and that the Debtors may not
be personally liable on the loan, does not affect the Credit Union’s security interest
in the van. The Bankruptcy Court did not clearly err in finding that the Credit
Union had a perfected security interest in the van.

      6
          11 U.S.C. § 541(a)(1).
      7
          Tex. Transp. Code § 501.111 (2012).
                                              5
      The Debtors next assert that the Credit Union’s interest is adequately
protected because they produced evidence that it is insured. Insurance on a vehicle
is, indeed, necessary to adequately protect a secured creditor’s interest in it.
However, “[t]he concept of adequate protection is derived from the property
interest protections found in the Fifth Amendment.”8 “The purpose of adequate
protection is to guard the secured creditor’s interest from a decline in the value of
the collateralized property.”9    Because vehicles depreciate in value relatively
quickly through use, cash payments, in addition to insurance, are typically required
to adequately protect the creditor. The Credit Union established that the loan was
in default at the time it filed its Motion for Relief from the Stay and, as discussed
below, that there was no equity cushion to protect against decline in value.
Because the Credit Union established that its interest was not adequately protected,
the Bankruptcy Court did not clearly err in holding that cause existed to lift the
stay under § 362(d)(1).10


      Finally, the Debtors assert that relief from the stay was not warranted under
§ 362(d)(2). However, the Credit Union demonstrated that the amount owed on
the loan was $12,095.03, and the Debtors conceded that the value was $4,137.

      8
        In re Panther Mountain Land Dev., LLC, 438 B.R. 169, 189 (Bankr. E.D.
Ark. 2010 (citing U.S. Const. Amend. V; additional citations omitted). See also
LNC Investments, Inc. v. First Fidelity Bank, 247 B.R. 38, 44 (S.D. N.Y. 2000)
(citations omitted).
      9
        Id. (citing 11 U.S.C. § 361; United Sav. Ass’n v. Timbers of Inwood Forest
Assocs., Ltd., 484 U.S. 365, 370, 108 S.Ct. 626, 98 L.Ed.2d 740 (1988); additional
citations omitted).
      10
          In re Martens, 331 B.R. 395, 398 (B.A.P. 8th Cir. 2005) (“A creditor is
entitled to relief from the stay if the debtor is not making mortgage payments, and
if there is insufficient equity in the property to adequately protect the creditor.”)
(citations omitted).
                                              6
Since the lien was valid, as discussed above, and the value of the van was less than
the amount owed on the loan, there clearly was no equity. Further, the Debtors
concede that the van is not needed for an effective reorganization because this is a
Chapter 7 case.11 As a result, the Court did not clearly err in granting relief from
the stay under § 362(d)(2).


      ACCORDINGLY, the Order of the Bankruptcy Court granting Randolph
Brooks Federal Credit Union’s Motion for Relief from Stay is AFFIRMED.
                                ______________________




      11
          Id. (“This is a Chapter 7 liquidating bankruptcy case, therefore, by
definition, the property is not necessary for an effective reorganization, which
satisfies § 362(d)(2)(B).”).
                                             7
