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In re Van Dorn

United States Bankruptcy Court, C.D. Illinois
Feb 16, 2005
In Bankruptcy Case No. 04-73070, Adversary No. 04-7180 (Bankr. C.D. Ill. Feb. 16, 2005)

Summary

holding that a metalpole barn, affixed to a concrete floor, with roofing and siding, was personal property subject to a lease and was not part of the real property whenthe parties agreement provided that it was personal property

Summary of this case from In re Hilling Lumber Co.

Opinion

In Bankruptcy Case No. 04-73070, Adversary No. 04-7180.

February 16, 2005


OPINION


This matter is before the Court on Debtors' Motion to Avoid Claim of Title and Right to Remove Building. The Motion relates to a pole barn situated on Debtors' property.

The material facts are not in dispute. On December 4, 2002, Debtors entered into a Lease Agreement with the Defendant, Bank and Trust Company, relative to the construction of a pole barn on Debtors' real estate. The pole barn was constructed; holes were dug for eighteen poles. The poles were connected with boards; roof trusses were mounted, and corrugated steel was nailed to the sides and the roof. A concrete floor was then poured.

On June 27, 2003, Defendant recorded a UCC Financing Statement for informational purposes only. The Financing Statement described the building and its location, stating that it was the subject of a lease transaction between the parties.

On July 12, 2004, Debtors filed their voluntary Chapter 7 petition in bankruptcy. Debtors now seek to avoid the claim of Defendant. Specifically Debtors claim that the Defendant has an unsecured claim against the Debtors because the pole barn has become a fixture on Debtors' real estate.

Under Illinois law, whether an item constitutes a fixture depends on the facts and circumstances of the case. Borrowman v. Howland, 119 Ill.App.3d 493, 499 (1983). Among the factors to be considered are the relationship of the parties, any agreement between the parties, the nature of the item's attachment to the realty, its adaption to and necessity for the purposes for which the premises are devoted, and whether it was intended that the item should be considered part of the realty. Id., 119 Ill.App.3d at 499. B. Kreisman Co. v. First Arlington National Bank, 91 Ill.App.3d 847, 852 (1980). Preëminence is given to the intention of the parties, with the other factors being primarily indications of intent. Crane Erectors and Riggers, Inc. v. LaSalle National bank, 125 Ill.App.3d 658, 662 (1984). Even fixtures are not real estate when the intent is for them to remain personal property.Hopwood v. Green, 310 Ill.App. 411, 416 (1941).

Moreover, the Illinois Supreme Court, in Chicago Alton Railroad Company v. Goodwin, 111 Ill. 273 (1884), upon deciding that certain railroad tracks were personalty, stated in dicta:

It does not necessarily and invariably follow that structures, or even buildings, placed by one person on the land of another become a part of the real estate. So a house erected upon the land of another, under an agreement that it shall belong to the builder, is personal property. [Citations omitted]. If a man erects a house upon the land of another with his consent, it will, if the builder has no title to the land, be the personal property of the builder. [Citations omitted]. And it will so remain, though the land owner convey the land, and the owner of the building convey that, if to different persons.

Id. at 281.

Paragraph 10 of the Lease Agreement between the parties states that "[l]essee covenants and agrees that the Building is, and at all times shall be and remain, personal property and at no time shall the Building become a fixture." Paragraph 15 of the Lease states in part that "[a]ll the Building shall remain personal property, notwithstanding that the Building or any part thereof may now be, or hereafter become, in any manner affixed or attached to any real property or any improvements thereon."

It is clear that the pole barn retained its character as personalty by virtue of the express and unequivocal agreement of the parties. Accordingly, Debtors' Motion to Avoid Claim of Title and Right to Remove Building be and is hereby denied.

This Opinion is to serve as Findings of Fact and Conclusions of Law pursuant to Rule 7052 of the Rules of Bankruptcy Procedure.

See written Order.


Summaries of

In re Van Dorn

United States Bankruptcy Court, C.D. Illinois
Feb 16, 2005
In Bankruptcy Case No. 04-73070, Adversary No. 04-7180 (Bankr. C.D. Ill. Feb. 16, 2005)

holding that a metalpole barn, affixed to a concrete floor, with roofing and siding, was personal property subject to a lease and was not part of the real property whenthe parties agreement provided that it was personal property

Summary of this case from In re Hilling Lumber Co.
Case details for

In re Van Dorn

Case Details

Full title:In Re KENNETH J. VAN DORN and AMY D. VAN DORN, Debtors. KENNETH J. VAN…

Court:United States Bankruptcy Court, C.D. Illinois

Date published: Feb 16, 2005

Citations

In Bankruptcy Case No. 04-73070, Adversary No. 04-7180 (Bankr. C.D. Ill. Feb. 16, 2005)

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