IN THE UNTIED STATES BANKRUPTCY COURT
FOR THE NORTHERN DISTRICT OF CALIFORNIA
DENNIS and JENNIE BRAZER,
dba STAGECOACH AUTO WHOLESALE, No. 1-87-01023
v. A.P. No. 1-87-0152
DENNIS and JENNIE BRAZER, dba
STAGECOACH AUTO WHOLESALE,
Memorandum of Decision
The facts or this matter are undisputed. Plaintiff Redwood Chevrolet is a new and used car dealership.
Between May 5, 1987, and June 5, 1987, it delivered twelve used cars to debtor and defendant Dennis
Brazer, who operated a used car dealership. Brazer agreed to give Redwood a security interest in the
vehicles, and that title would not pass until the vehicles were paid for. Redwood retained the pink slip and
registration documents, but did not file a financing statement with the Secretary of State. The debtors
filed their bankruptcy petition on June 12, 1987.
California Vehicle Code section 5907 provides that the validity and perfection of a security interest in
a vehicle held in a dealer's inventory is governed exclusively by the Uniform Commercial Code. Section
9302(3)(b) of the Commercial Code requires that a financing statement be filed to perfect a security
interest in a vehicle during any period in which it is inventory. Redwood's security interest is therefore
unperfected and avoidable pursuant to section 544 of the Bankruptcy Code. The result is the same if
Redwood argues that it retained ownership and only consigned the vehicles to Brazer. Cal.Com.Code sec.
Even though the instant motion for summary judgment was brought by Redwood, the Court may grant
summary judgment in favor of the debtors. Portsmouth Square v. Stockholders Protective Comm.
Cir.1985) 770 F.2d 866. Accordingly, this action will be dismissed and Redwood take nothing by its
complaint. Counsel for the debtors shall submit an appropriate form of judgment.
Dated: February 12, 1988 _____________________