Appeal from the United States District Court for the Western District of Pennsylvania - Erie, (D.C. Civil No. 84-298).
Before: ADAMS, GIBBONS and WEIS, Circuit Judges.
R. Perrin Baker, a Chapter 13 trustee, appeals from a final order of the district court granting the appellee, Union Bank and Trust Company, relief from the automatic stay provision of the Bankruptcy Code 11 U.S.C. § 362 (1982), and dismissing his counterclaim in which he had sought to avoid the appellee's lien as a preference. Because the district court and the bankruptcy court incorrectly concluded that the "contemporaneous exchange" exception to avoidance of preferential transfers. 11 U.S.C. § 547(c)(1)(1982), applied to this case, we reverse.
The facts have been stipulated by the parties. On February 9, 1984 Thomas and Judy Tressler (debtors) purchased an automobile with the proceeds of a loan obtained from the Appellee bank. The debtors signed a note for $10,343.87 excluding interest, and a security agreement which granted the bank a security interest in the automobile. On the same day the debtors took possession of the car. On February 13, 1984 the dealer mailed the necessary title and security documents to P.A.A. Services, Inc., a company which provides title transfer services. P.A.A. apparently received the documentation on February 17, 1984, and some time thereafter forwarded the material to the Pennsylvania Department of Transportation. The Department issued a certificate of title on February 27, 1984, listing the Appellee Bank as the lienor. On May 3, 1984 the debtors filed a Chapter 13 petition in bankruptcy. The Bank moved for relief from automatic stay, relying on its security interest. The trustee filed a counterclaim seeking to avoid the bank's security interest as a preference under 11 U.S.C. § 547(b). The parties stipulated that the security interest is avoidable under § 547(b) unless the exceptions set forth in 11 U.S.C. § 547(c)(1) or § 547(c)(3) apply. The bankruptcy court determined that the "contemporaneous exchange" exception applied and granted relief from the automatic stay. On December 21, 1984 the district court affirmed the bankruptcy court's ruling, and adopted its rationale. The trustee appealed.
In accordance with the parties' stipulation to the avoidability of the transfer under § 547(b) absent the applicability of either the § 547(c)(3) "purchase money security interest" exception or the § 547(c)(1) "contemporaneous exchange" exception, we turn to applicability of those exceptions to the instant case.
In 11 U.S.C. § 547(c)(3) Congress set forth the requirements which must be met if the grant of a purchase money security interest within 90 days of the filing of a petition in bankruptcy is to be shielded from avoidance under § 547(b). Section 547(c)(3) provides:
(c) The trustee may not avoid under this section a transfer --
(3) of a security interest in property acquired by the debtor --
(A) to the extent such security interests secures new value that was --
(i) given at or after the signing of a security agreement that contains a description of ...