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Nelson v. John Deer Credit (In re Troupe) - 340 B.R. 86 (Bankr. W.D. Okla. 2006)


Consumer goods are goods that are used or bought for use primarily for personal, family or household purposes.


Plaintiff Chapter 7 Trustee filed an adversary proceeding against defendant creditor John Deere Credit a/k/a Deere & Company (hereinafter, “Deere”) seeking to avoid Deere’s security interest in a tractor pursuant to Sections 544  , 549 and 550 of the Bankruptcy Code. The Trustee contended that Deere's admission that it failed to file a financing statement rendered Deere's purchase money security interest unperfected. The Trustee asserted that the tractor was used and intended to be used for business, rather than personal, purposes and thus was not consumer goods under Article 9 of the UCC. Deere maintained that the debtors' primary intended and actual use of the tractor was for personal, family and household purposes and hence was consumer goods, therefore, Deere’s security interest was perfected even though it did not file a financing statement. 


Was the debtor’s tractor a consumer good under Article 9 of the Uniform Commercial Code?




According to the Bankruptcy Court, a debtor who made representations in a security agreement regarding the intended use of the collateral should be bound by those representations, and because of representations in the security agreement regarding the debtors' intended personal use of the tractor, the Court concluded that the tractor is consumer goods and that Deere had a perfected security interest in the tractor. Accordingly, creditor Deere's motion for summary judgment was granted, and the Trustee's motion for summary judgment was denied.

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