Bell-Tel Federal Credit Union v. Kalter

[PUBLISH]

IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT
________________________ FILED
U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
No. 01-10417 JUNE 07, 2002
________________________ THOMAS K. KAHN
D. C. Docket No. 00-00290-CV-ORL-06K CLERK

In Re:

THOMAS JOH KALTER,
DEBRA MARIE KALTER,

Debtors,
----------------------------------------------------------------------------------
BELL-TEL FEDERAL CREDIT UNION,

Plaintiff-Appellee,
versus

THOMAS JOH KALTER,
DEBRA MARIE KALTER,

Defendants-Appellants.
________________________

No. 01-13326
________________________

D. C. Docket No. 00-00396-CV-ORL-31

In Re:

MATTHEW J. CHIODO,

Debtor,
---------------------------------------------------------------------------------
TIDEWATER FINANCE COMPANY,

Plaintiff-Appellee,
versus

MATTHEW J. CHIODO,

Defendant-Appellant.
________________________

Appeals from the United States District Court
for the Middle District of Florida
_________________________
(June 7, 2002)

Before EDMONDSON, Chief Judge, HULL and MARCUS, Circuit Judges.

MARCUS, Circuit Judge:

These two cases have been consolidated on appeal because they raise the same

issue: whether, during bankruptcy proceedings, a debtor can compel a secured creditor

to turn over a vehicle repossessed before the debtor filed his bankruptcy petition.

Debtors-Appellants Thomas and Debra Kalter and Debtor-Appellant Matthew Chiodo

(“the Debtors”) argue that the district court erred in finding that their vehicles,

repossessed prepetition by Creditor-Appellee Bell-Tel Federal Credit Union and

Creditor-Appellee Tidewater Finance Company (“the Creditors”), respectively, were

not property of the Debtors’ bankruptcy estates at the time that the Debtors filed for

2
bankruptcy. After careful review of the record and the parties’ arguments, we find no

error and affirm both district court rulings.

I.

The relevant facts in each case are similar and straightforward. In the first case,

the Kalters signed a security agreement on October 3, 1996 pledging their 1997

Mitsubishi Galant vehicle as collateral to secure debts owed to Bell-Tel Federal Credit

Union (“Bell-Tel”). On March 30, 1999, Bell-Tel repossessed the Mitsubishi because

the Kalters were in default on the three loan balances secured by that vehicle.

The next day, the Kalters filed their Chapter 13 bankruptcy petition, and

verbally requested the return of the vehicle from Bell-Tel. On April 13, 1999, the

Kalters filed a motion for turnover of the vehicle, and a motion for sanctions against

Bell-Tel for failing to comply with the Bankruptcy Code’s automatic stay provisions.

The bankruptcy court held an emergency hearing on the motion for turnover, and,

working on the assumption that the repossessed vehicle was property of the Kalters’

bankruptcy estate, directed Bell-Tel to return the vehicle to the Kalters and directed

the Kalters to make adequate protection payments to Bell-Tel.

In a later evidentiary hearing, the bankruptcy court considered the pending

sanction motions. It found that Bell-Tel intentionally and willfully violated the

automatic stay by retaining the vehicle, thereby causing damage to the Kalters, in

3
terms of missed work, the cost of a replacement rental, and damage to the vehicle’s

fuel injectors. It thus entered judgment against Bell-Tel in the amount of $6,435.00.

Bell-Tel timely appealed this judgment to the district court. And, on December

14, 2000, the district court reversed the order of the bankruptcy court, finding in favor

of Bell-Tel and denying the Kalters’ motion for just damages and costs. See Bell-Tel

Fed. Credit Union v. Kalter (In re Kalter), 257 B.R. 93 (M.D. Fla. 2000). The Kalters

appealed the district court decision to this Court.

In the second case, Chiodo purchased a used 1998 Honda Civic from Scott

Clark Toyota on May 21, 1999. Scott Clark financed the purchase under a Simple

Interest Motor Honda Contract and Security Agreement, reserving a security interest

in the Honda as collateral for the unpaid purchase price. Scott Clark assigned the

contract to Tidewater Finance Company (“Tidewater”). Subsequently, Chiodo

defaulted on the contract, and Tidewater repossessed the Honda on October 14, 1999.

Thereafter, Tidewater gave Chiodo notice that it intended to sell the Honda at

a private sale pursuant to a notice of sale. The notice of sale notified Chiodo of his

right to demand a public sale or to redeem the Honda by paying the total outstanding

balance owed in full prior to the private sale.

Before Tidewater could sell the Honda, on October 29, 1999, Chiodo filed a

case under Chapter 13 of the Bankruptcy Code, and an automatic stay went into effect.

4
After filing for bankruptcy, Chiodo made an informal demand upon Tidewater for

turnover of the Honda. On November 3, 1999, Tidewater filed with the bankruptcy

court its motion to terminate or condition the automatic stay. Tidewater and Chiodo

then entered into an agreement that provided for turnover of the Honda to Chiodo for

use in his Chapter 13 reorganization, in exchange for adequate protection for

Tidewater’s interest in the Honda. Tidewater and Chiodo agreed, however, that each

party’s legal rights would be preserved, and that Tidewater would not be prejudiced

in its legal position by the voluntary surrender of the Honda to Chiodo pursuant to the

agreement. Chiodo then regained possession of the car.

On February 18, 2000, the bankruptcy court entered its Order denying

Tidewater’s motion for relief from stay. Tidewater timely appealed this decision to

the district court. On May 30, 2001, the district court, relying on its previous decision

in Kalter, entered judgment in favor of Tidewater, reversing the bankruptcy court’s

decision. Chiodo appealed the district court decision to this Court.

We consolidated the appeals of the Kalters and Chiodo.

II.

We review determinations of law, whether made by the bankruptcy court or by

the district court, under a de novo standard of review. See Lewis v. Charles R. Hall

Motors, Inc. (In re Lewis), 137 F.3d 1280, 1282 (11th Cir. 1998).

5
 Under the Bankruptcy Code, a court may order a third party to turn property in

its possession over to the debtor’s estate if, among other things, such property is

considered “property of the estate.” See 11 U.S.C. §§ 541 (defining “property of the

estate”), 542(a) (authorizing turnover). “Property of the estate” includes “all legal or

equitable interests of the debtor in property as of the commencement of the case.” 11

U.S.C. § 541(a)(1). In both cases on appeal, the district court reversed the bankruptcy

court’s determination that the vehicles, repossessed prior to the Debtors’ filings of

their bankruptcy petitions, were part of the Debtors’ bankruptcy estates.1 Thus, the

central question on appeal is whether the vehicles repossessed prepetition were in fact

property of the Debtors’ bankruptcy estates. We hold that the repossessed vehicles

were not property of the Debtors’ bankruptcy estates.

Whether a debtor’s interest constitutes “property of the estate” is a federal

question. See Lewis, 137 F.3d at 1283. Nonetheless, “the nature and existence of the

[debtor’s] right to property is determined by looking at state law.” Id. (quoting

Southtrust Bank of Ala. v. Thomas (In re Thomas), 883 F.2d 991, 995 (11th Cir.

1
The automatic stay provision of the Bankruptcy Code operates to enjoin a creditor from
attempting to possess or exercise control over property of a bankruptcy estate once a petition has
been filed. See 11 U.S.C. § 362. In Kalter, Bell-Tel refused to return the property to the Kalters,
and the bankruptcy court determined that in so doing, Bell-Tel violated the automatic stay, and
the court awarded damages to the Kalters. In Chiodo, however, Tidewater voluntarily returned
the vehicle to Chiodo, and the bankruptcy court simply denied Tidewater’s motion for relief
from the automatic stay. As a result, the bankruptcy court never awarded damages to Chiodo,
since Tidewater did not violate the automatic stay.

6
1989)). The Supreme Court laid out this principle squarely in Butner v. United States,

440 U.S. 48, 55, 99 S. Ct. 914, 918, 59 L. Ed. 2d 136 (1979), where it reasoned:

Property interests are created and defined by state law. Unless some
federal interest requires a different result, there is no reason why such
interests should be analyzed differently simply because an interested
party is involved in a bankruptcy proceeding. Uniform treatment of
property interests by both state and federal courts within a State serves
to reduce uncertainty, to discourage forum shopping, and to prevent a
party from receiving “a windfall merely by reason of the happenstance
of bankruptcy.”

Id. (quoting Lewis v. Manufs. Nat’l Bank, 364 U.S. 603, 609, 81 S. Ct. 347, 350, 5 L.

Ed. 2d 323 (1961)). We have had occasion to analyze the meaning of “property of the

estate” under Alabama state law, and have determined that in Alabama, a vehicle

repossessed prepetition does not qualify as part of the debtor’s estate. See Lewis, 137

F.3d at 1285. In the instant appeals, we must determine whether a vehicle repossessed

prepetition qualifies as “property of the estate” under Florida law.

The only possible sources of Florida law relating to the rights and obligations

of a secured creditor repossessing a vehicle are these: (1) the Florida Uniform

Commercial Code -- Secured Transactions (“Florida UCC”), Fla. Stat. §§ 679 et seq.;

and (2) the Florida Certificate of Title statute, Fla. Stat. §§ 319 et seq. Although the

Florida UCC does not dispose of the issue of the ownership interests in a repossessed

vehicle, the Florida Certificate of Title statute does, as it plainly recognizes that

7
ownership of a vehicle passes to secured creditors upon repossession. We discuss

both sources of Florida law in turn.

A. The Florida UCC

The Florida UCC is the substantive law in Florida that governs generally the

rights and obligations of debtors and secured creditors after repossession of collateral.

Under the statute, a secured party usually can take possession of its property upon

default without judicial process. See Fla. Stat. § 679.503.

After repossession, a secured party may dispose of or retain the property. If the

secured party chooses to “sell, lease or otherwise dispose of any or all of the

collateral,” the debtor has a right to any surplus made from the sale, and upon

disposition of the collateral, all of the debtor’s rights therein and the security interest

under which it is made are discharged. See Fla. Stat. § 679.504(1), (2), (4). If,

however, the secured party chooses to retain the property, the secured party must send

written notice of such proposal to the debtor. See Fla. Stat. § 679.505(2). The secured

party may retain the collateral unless the debtor objects in writing within 30 days from

the date of notification. See id. Upon an objection, the secured party must dispose

of the collateral in accordance with Fla. Stat. § 679.504. See id.

At any time before the secured party has disposed of or entered into a contract

to dispose of the collateral under § 679.504 or before the obligation has been

8
discharged under § 679.505(2), the debtor may redeem the collateral. See Fla. Stat.

§ 679.506. To do so, the debtor must tender fulfillment of all obligations secured by

the collateral as well as the expenses incurred by the secured party in preparing for the

disposition of the collateral. See id.

As this brief discussion illustrates, the Florida UCC grants a secured party the

right to repossess collateral, but contains no language addressing title, the transfer of

title, or the ownership of repossessed collateral. Instead, the statute is notably silent

on the issue of ownership, providing this Court with no guidance as to who owned the

Debtors’ vehicles upon repossession.

The Debtors in these appeals nonetheless argue that sections of the Florida UCC

can be construed to read that repossession does not transfer ownership from the debtor

to the creditor. We are not persuaded by their arguments.

First, the Debtors argue that § 679.207 of the Florida UCC, which requires a

secured party to take reasonable care of repossessed collateral, must evince the

legislature’s intent to maintain ownership with the debtor after repossession, because

otherwise, § 679.207 would have no reason to provide the debtor with a cause of

action for failure to use reasonable care after repossession. See In re Iferd, 225 B.R.

501, 502-03 (Bankr. N.D. Fla. 1998). On the contrary, there are many reasons the

Florida UCC imposes on a creditor the duty to reasonably care for repossessed

9
collateral. For one, imposition of this duty minimizes a debtor’s potential liability for

any deficiency resulting from the creditor’s disposition of the property. See Fla. Stat.

§ 679.504(2). In addition, this duty of reasonable care is consistent with a debtor’s

right to redeem the collateral, ensuring that the debtor may redeem the property in the

same condition it was in at repossession. See Fla. Stat. § 679.506. Finally, this duty

of reasonable care is indicative of the good faith requirement established in Fla. Stat.

§ 671.203 (requiring that “[e]very contract or duty within this code imposes an

obligation of good faith in its performance or enforcement”). We therefore do not

read § 679.207 as providing an answer to the basic question of whether the ownership

interest remains with the debtor or passes to the creditor on repossession.

Second, the Debtors argue that § 679.504 of the Florida UCC establishes that

ownership of repossessed collateral remains with the debtor, because it states that

when the secured party sells the collateral to a purchaser, “all of the debtor’s rights

therein” pass to the purchaser. See Turner v. DeKalb Bank (In re Turner), 209 B.R.

558, 566 (Bankr. N.D. Ala. 1997). Yet, the term “debtor” as defined in the statute

includes the owner of the collateral, even if he is not the person who owes payment

of the obligation secured; for this reason, § 679.504(4)’s language concerning the

rights of the “debtor” does not necessarily refer to the true debtor, and may encompass

10
either the debtor or the creditor in possession of the collateral.2 Plainly, this provision

does not signify, contrary to the Debtors’ reading, that the debtor retains ownership.3

2
Specifically, the Florida UCC defines “debtor,” in any of the sections dealing with
collateral, as “the owner of the collateral in any provision of the chapter dealing with the
collateral, [and/or] the obligor in any provision dealing with the obligation.” Fla. Stat. §
679.105(d); see also Fla. Stat. § 679.112, cmt. (noting that the “debtor” may be the owner of the
collateral even though he is not the person who owes payment or performance of the obligation
secured). As a result, when § 679.504(4) states that the rights of the “debtor” transfer to a
purchaser, it refers to the owner of the collateral, and this owner may be either the debtor or the
creditor in possession of the collateral.
3
We are also unpersuaded by the Debtors’ other arguments based on § 504. For example,
the fact that the statute uses the plural term “rights” instead of the singular term “right,” is not
significant since the debtor retains several rights besides the right to redeem, including the right
to surplus from, and the right to notice of, the sale of the collateral. Besides, because the word
“debtor” includes those who actually own the property and do not necessarily carry the
obligations thereto, the “rights” include the entire bundle of ownership rights.

Additionally, we are unpersuaded by any reliance on the UCC’s reference to a creditor’s
interest as a “security interest” or “lien,” rather than an “ownership.” Fla. Stat. §§ 679.207,
679.504(4). First, § 679.207 applies “when the secured party has possession of the collateral
before default, as a pledgee, and also when he has taken possession of the collateral after
default,” see § 679.207, cmt.; thus, the provision uses the generic term “security interest” to
apply to property that the creditor is simply holding in addition to property that it has
repossessed. Second, § 679.504(4) uses the terms to simultaneously clarify that any junior
interests are also extinguished when the senior creditor disposes of the collateral. Both
provisions apply when the debtor retains a right to redeem collateral in the creditor’s possession,
and the language impliedly recognizes that the creditor will not lose his security interest or lien,
even if it makes improper use of the collateral or the debtor chooses to redeem it. As a result,
this use of language in the statute fails to signify that the debtor continues to hold the ownership
interest in the collateral.

Finally, it is inconsequential that § 504 allows the creditor to purchase the property at a
public sale only under certain circumstances. These limits exist because of the debtor’s right to
redeem, which necessarily restricts the creditor’s ownership interest even if the creditor becomes
the owner of the collateral upon repossession. The right to redeem, however, is insufficient to
trigger ownership of the vehicle itself, as we discuss below.

11
 Third, the Debtors argue that the statutory right to redeem a repossessed vehicle

is somehow sufficient to pull the vehicle itself into the bankruptcy estate. It is true

that the Florida UCC replaces a debtor’s rights in a vehicle with a right to redeem that

vehicle and to recover damages if a creditor violates that right. See Fla. Stat. §§

679.506, 679.507. However, we have already determined under Alabama law that the

right to redeem a vehicle is an insufficient basis to render the vehicle itself “property

of the [debtor’s bankruptcy] estate.” Lewis, 137 F.3d at 1284. In Lewis, this Court

reasoned, “[i]n accordance with state law, one must take certain affirmative steps to

change the otherwise dormant right to redeem repossessed collateral into a meaningful

ownership interest. . . . [A debtor] had to ‘tender[] fulfillment of all [secured]

obligations’ plus expenses to exercise the estate’s right of redemption.” Id. (citing

Ala. Code § 7-9-506, which uses the same language as Fla. Stat. § 679.506). We

determined that Lewis’s proposed Chapter 13 plan, which tendered to the creditor

sixty-two cents on the dollar in return for the debtor’s continued use of the vehicle,

offered no indication that the estate had chosen to exercise its right of redemption, that

is, to fulfill the debtor’s secured obligation plus expenses in accordance with

Alabama’s statutory right of redemption.

12
 In the instant cases, the Debtors likewise have taken no steps to exercise their

rights to redeem.4 Thus, applying Lewis’s analysis of identical language in the

Alabama statute to the Florida UCC, in factual circumstances very much like Lewis,

we hold that the Debtors’ mere rights to redeem do not bring the vehicles into the

Debtors’ bankruptcy estates under Florida law. Indeed, not only do the various steps

required to redeem suggest that this right does not signify ownership, but the statute

itself recognizes a distinction between the two. The Florida UCC creates a category

of “general intangibles,” such as a right of redemption or a right to sue, see Fla. Stat.

§ 679.106, and separates general intangibles from “goods,” which include tangible

personal property such as a vehicle, see Fla. Stat. § 679.105(1)(h). This statutory

distinction between a right of redemption in collateral and the ownership of collateral

further confirms the conclusion that rights of redemption are wholly different from

ownership interests.

Fourth and finally, the Debtors rely on Joyner v. Ettlinger, 382 So. 2d 27, 30

4
At oral argument, the Kalters’ counsel asserted that both sets of Debtors “exercised their
rights of redemption,” but there is no support in the record or briefs for this contention. In order
to redeem repossessed collateral, a debtor must “tender[] fulfillment of all obligations secured by
the collateral as well as the expenses reasonably incurred by the secured party.” Fla. Stat. §
679.506. Yet the Debtors have not shown that they tendered the full amount of the debts, plus
reasonable expenses, to the Creditors. In Chiodo’s appellate briefs, the parties recognize that
Chiodo’s Chapter 13 plan does not even pay Tidewater the full amount of the claim. Similarly,
Bell-Tel noted in its reply brief before the district court that the Kalters’ Chapter 13 plan also
fails to pay Bell-Tel the full amount of the claim. Nothing to the contrary has been claimed by
the parties. On this record, we conclude that the Debtors have not exercised their rights to
redeem.

13
(Fla. Dist. Ct. App. 1980), to support the claim that under the UCC, a debtor’s

ownership in a vehicle is not divested until it either is sold to a third party under §

679.504, or is retained by a creditor under § 679.505(2).5 While Joyner does hold that

the superior interest holder did not become the owner of the collateral but rather

became a secured party in possession of collateral, the decision does not contain any

language regarding the status of a debtor’s ownership interest -- notably, it only

discusses the relationship between two secured creditors, and does not examine the

rights of a creditor vis-à-vis a debtor after repossession. This Florida court case does

not say, and cannot be read to say, that the debtor still owns the collateral while the

creditor in possession does not.

In short, based on the language of the Florida UCC, and the little case law

interpreting the statute, we are constrained to conclude that the Florida UCC does not

establish who owns the repossessed vehicles. We next look at the Florida Certificate

of Title statute to determine whether it speaks to the vehicles’ ownership.

B. The Florida Certificate of Title statute

5
In Joyner, two creditors were disputing their relative priorities in the same collateral.
The Florida court held that because the superior interest holder never gave notice to the junior
interest holder that it intended to retain the collateral in satisfaction of its interest, as Fla. Stat. §
679.505(2) requires, the superior interest holder did not have the right to full use of the collateral
as if it were an owner. See Joyner, 382 So. 2d at 30. Rather, the court held that the superior
interest holder had the right to possession of the collateral which must be exercised in
accordance with Fla. Stat. § 679.207, governing the rights and duties that exist when collateral is
in a secured party’s possession. See id.

14
 The Florida UCC establishes how a secured creditor may repossess and dispose

of any type of secured collateral upon a debtor’s default. Where a motor vehicle is the

collateral at issue, however, Florida has codified specific legislation regarding

ownership, title, and transfer, and we must look at the Florida Certificate of Title

statute to determine how it speaks to ownership of repossessed vehicles. See Tug

Allie-B, Inc. v. United States, 273 F.3d 936, 941 (11th Cir. 2001) (“[C]ourts generally

adhere to the principle that statutes relating to the same subject matter should be

construed harmoniously if possible, and if not, that more recent or specific statutes

should prevail over older or more general ones.”) (quoting Southern Natural Gas Co.

v. Land, Cullman County, 197 F.3d 1368, 1373 (11th Cir. 1999) (quotations and

citations omitted)). After reviewing the title statute, we are satisfied that its language

and Florida case precedent lead to the conclusion that ownership in fact passed to the

Creditors upon repossession.

The Florida statute generally provides that a certificate of title is required in

order to obtain marketable title to sell a vehicle. See Fla. Stat. § 319.22.6 If the

vehicle at issue has been repossessed or otherwise transferred by operation of law,

6
Fla. Stat. § 319.22 provides, in pertinent part:

Except as provided in §§ 319.21 and 319.28, a person acquiring a
motor vehicle . . . from the owner thereof . . . shall not acquire
marketable title to the motor vehicle . . . until he or she has issued
to him or her a certificate of title to the motor vehicle.

15
however, the statute provides an exception, allowing the party possessing the vehicle

to obtain a certificate of title from the Florida Department of Highway Safety and

Motor Vehicles (“Florida DMV”). See Fla. Stat. § 319.28(1)(a) (“In the event of a

transfer of ownership of a motor vehicle . . . by operation of law . . . whenever . . .

repossession is had . . ., the department may issue to the applicant a certificate of

title.”).7 In such a situation, the creditor may submit an affidavit announcing the

7
Fla. Stat. § 319.28, entitled “Transfer of ownership by operation of law,” provides:

In the event of a transfer of ownership of a motor vehicle or mobile home
by operation of law as upon inheritance, devise or bequest, order in
bankruptcy, insolvency, replevin, attachment, execution or other judicial
sale or whenever the engine of a motor vehicle is replaced by another
engine or whenever a motor vehicle is sold to satisfy storage or repair
charges or repossession is had upon default in performance of the terms of
a security agreement . . ., and upon the surrender of the prior certificate of
title or, when that is not possible, presentation of satisfactory proof to the
department of ownership and right of possession to such motor vehicle or
motor home, and upon payment of the fee prescribed by law and
presentation of an application for certificate of title, the department may
issue to the applicant a certificate of title thereto. . . .

Fla. Stat. § 319.28(1)(a) (emphases added). Section 319.28(2)(b) then provides:

In case of repossession of a motor vehicle or mobile home
pursuant to the terms of a security agreement or similar instrument,
an affidavit by the party to whom possession has passed stating
that the vehicle or mobile home was repossessed upon default in
the terms of the security agreement or other instrument shall be
considered satisfactory proof of ownership and right of possession.
At least 5 days prior to selling the repossessed vehicle, any
subsequent lienholder named in the last issued certificate of title
shall be sent notice of the repossession by certified mail, on a form
prescribed by the department. If such notice is given and no
written protest to the department is presented by a subsequent
lienholder within 15 days from the date on which the notice was

16
repossession as “proof of ownership.” Fla. Stat. § 319.28(2)(b). With this language,

the Florida Certificate of Title statute expressly recognizes that ownership transfers

upon repossession,8 see United States v. Carrell, 252 F.3d 1193, 1198 (11th Cir. 2001)

(“In statutory construction, ‘the plain meaning of the statute controls unless the

language is ambiguous or leads to absurd results.’”) (quoting United States v.

McLymont, 45 F.3d 400, 401 (11th Cir. 1995) (per curiam)), and we therefore hold

that the Debtors lost ownership of their vehicles upon repossession.

mailed, the certificate of title or the certificate of repossession shall
be issued showing no liens. If the former owner or any subsequent
lienholder files a written protest under oath within such 15-day
period, the department shall not issue the certificate of title or
certificate of repossession for 10 days thereafter. If within the
10-day period no injunction or other order of a court of competent
jurisdiction has been served on the department commanding it not
to deliver the certificate of title or certificate of repossession, the
department shall deliver the certificate of title or repossession to
the applicant or as may otherwise be directed in the application
showing no other liens than those shown in the application. Any
lienholder who has repossessed a vehicle in compliance with the
provisions of this section may apply to the tax collector's office or
to the department for a certificate of repossession or to the
department for a certificate of title pursuant to s. 319.323. Proof of
the required notice to subsequent lienholders shall be submitted
together with regular title fees. A lienholder to whom a certificate
of repossession has been issued may assign the certificate of title
to the subsequent owner . . . .

Fla. Stat. § 319.28(2)(b) (emphases added).
8
Indeed, the Florida DMV has interpreted Fla. Stat. § 319.28 as providing “for the
transfer of ownership of a motor vehicle by operation of law, to include repossession of a motor
vehicle for non-fulfillment of a contract,” as long as the secured creditor has possession of the
vehicle. See Florida Department of Highway Safety and Motor Vehicles, DMV Procedures
Manual, Procedure TL-23(I).

17
 The bankruptcy court in the Chiodo case interpreted the statute differently,

finding that “[t]itle does not transfer to a creditor immediately upon repossession,”

since “[n]umerous preliminary steps are required” before a creditor with a repossessed

vehicle can obtain a new certificate of title and conclude a sale of a car. We are

unconvinced.

First, under the statute, title typically transfers upon repossession unless

affirmative steps are taken to block the transfer of title (not the other way around, as

the bankruptcy court found). In fact, the statute lessens the steps a repossessor must

take to obtain title. See Fla. Stat. § 319.28(2)(b) (allowing an affidavit to constitute

proof of ownership). Moreover, filing a written protest does not prevent ownership

from passing as a matter of law; instead, a court order is required to prevent the

department from issuing a certificate of title to the creditor after repossession. See id.

In the normal course of events, then, title plainly transfers, unless and until the debtor

takes action.

Second, the statute specifically recognizes that a certificate of title is not even

necessary to sell a repossessed vehicle. Normally, one can own a vehicle in Florida

without having a certificate of title to it, but an owner cannot transfer ownership of a

vehicle to a third party until the certificate of title is in his name. See Fla. Stat §

319.22. There is an exception to this rule: Under Fla. Stat. § 319.28(2)(b), a

18
lienholder that has repossessed a vehicle need not obtain a certificate of title in its

name to transfer title, but instead can obtain a certificate of repossession from either

the tax collector or the Florida DMV. This streamlined process allows title transfer

to occur when the third party purchaser buys the car, so that the name on the title

changes directly from the debtor to the third party purchaser. Thus, based on the plain

language of this provision, allowing a creditor to transfer ownership without ever

being listed as the owner on the certificate of title, we conclude that the bankruptcy

court erred in holding that a creditor must be listed as the owner on the certificate of

title to become the vehicle’s actual owner.

Third, Florida courts have acknowledged that no certificate is necessary for

ownership; as a result, the fact that the Creditors did not obtain any certificates prior

to the bankruptcy filings is immaterial. Indeed, several Florida courts have held that

the certificate of title is merely evidence of ownership that may be refuted by other

evidence. See, e.g., Ragg v. Hurd, 60 So. 2d 673, 674 (Fla. 1952) (“There is nothing

in Chapter 319 to show that the Legislature intended that the provisions thereof

respecting the endorsement and transfer of certificates of title or registration upon sale

of a motor vehicle provide an exclusive method of transferring title to motor vehicles,

and we do not think the Legislature so intended.” (emphasis added)); Cooney v.

Jacksonville Trans. Auth., 530 So. 2d 421 (Fla. Dist. Ct. App. 1988) (recognizing that

19
factors other than title, such as who has the beneficial ownership of the car, may be

relied upon to determine actual ownership of the car, and in turn to determine who is

liable for the negligent operation of the car).

Furthermore, the method described in the Florida title statute is not the only

way to transfer title, as actual title may pass without changing the name registered

with the state. See, e.g., Bunting v. Daly’s, Inc., 528 So. 2d 106, 107 (Fla. Dist. Ct.

App. 1988) (“It has been settled law in this jurisdiction for many years . . . that the

failure of the purchaser to obtain the title certificate at the time of sale does not

prevent the passage of title from the seller to the buyer.”); Correria v. Orlando Bank

& Trust Co., 235 So. 2d 20 (Fla. Dist. Ct. App. 1970) (holding that a purchaser

acquired title although he did not receive a certificate). Under this Florida case law,

it is abundantly clear that a creditor can, contrary to the bankruptcy court’s

determination, own a vehicle without a certificate of title or a certificate of

repossession in its name.

The Debtors nonetheless argue that because the Creditors recognize that one can

own property without having marketable title to it, § 319.28 must concern only the

procedure to obtain marketable title, and cannot be relied on as the substantive law

governing ownership. Instead, the Debtors say, other substantive law, like the UCC,

should be consulted to determine when ownership transfers.

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 We remain unpersuaded. Although marketable title is only evidence of

ownership, § 319.28 squarely recognizes that an event of transfer of ownership is

repossession. See Fla. Stat. § 319.28(1)(a) (“In the event of the transfer of ownership

of a motor vehicle . . . whenever repossession is had upon default in performance of

the terms of a security agreement . . . and . . . when presentation of satisfactory proof

to the department of ownership . . . and upon payment of the fee . . . and presentation

of an application for certificate of title, the department may issue to the applicant a

certificate of title thereto.”). In fact, § 319.28(2)(b) states that: “In case of repossession

of a motor vehicle . . . pursuant to the terms of a security agreement . . ., an affidavit

by the party to whom possession has passed stating that the vehicle . . . was

repossessed upon default in the terms of the security agreement . . . shall be

considered satisfactory proof of ownership.” At a bare minimum, then, § 319.28

recognizes when ownership transfers, which in this circumstance is upon repossession.

Moreover, there is no other substantive law that establishes when ownership

transfers. The UCC recognizes repossession, but does not discuss who owns the

repossessed property and does not refer to title at all. Therefore, where no other

substantive law on the transfer of ownership exists, and § 319.28 recognizes

ownership transfer upon repossession, we rely on § 319.28 to speak to the issue.

Fourth, if the Florida legislature did not recognize repossession as one event

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that effects an ownership change before the Florida DMV issues a title, the inclusion

of repossession in the Fla. Stat. § 319.28 exception to § 319.22 would make no sense.9

This exception evinces an intention to carve repossession and other “transfers of

ownership by operation of law” out of the certificate of title requirement, signifying

that such transfers by themselves constitute changes of ownership.

In short, based on our review of the language of the statute, we reject the

bankruptcy court’s conclusion that a certificate of title is somehow required for the

Creditors to be deemed the “owners” of the repossessed vehicles.10 Not only is a

certificate of title unnecessary to establish ownership, but Chapter 319 explicitly

recognizes repossession as a transfer of ownership. Indeed, the plain language of the

9
The Debtors respond that § 319.28 functions only as a procedural protection for a
debtor’s ownership interest in a repossessed vehicle. Otherwise, they argue, if § 319.28 made a
secured creditor the owner upon repossession, the statute’s procedural protections for the
debtor’s post-repossession interest in the vehicle are rendered meaningless. Once again, we are
unpersuaded by the Debtors’ argument. The statute recognizes that the debtor retains a right to
redeem, established by the UCC, and the procedures simply implement the debtor’s right to
redeem in the title context. But, as we have noted already, the debtor’s right to redeem the
repossessed vehicle is insufficient to pull the vehicle itself into the debtor’s estate.
10
The Kalter district court also disagreed with the Chiodo bankruptcy court, albeit on
different grounds. The district court relied on: (1) § 319.28(2)(b)’s labeling of the debtor as the
“former owner” of the repossessed vehicle; and (2) Johnson v. Aetna, 472 So. 2d 859 (Fla. Dist.
Ct. App. 1985) (recognizing that a judgment of dissolution, conveying a vehicle to the wife
without officially transferring title, made the wife legal owner of the vehicle by operation of law
under Fla. Stat. § 319.28), to hold that ownership transfers upon repossession. While we agree
that these arguments buttress this conclusion, we find them unnecessary, since the language of
the statute plainly states that ownership transfers upon repossession. See, e.g., Frank v. Talcott,
692 F.2d 734, 737 (11th Cir. 1982) (recognizing that this Court may affirm a district court
decision on reasoning other than that relied on by the district court).

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statute even refers to an affidavit describing the repossession event as being “proof of

ownership.” Fla. Stat. § 319.28. Moreover, Florida case law holds that a certificate

of title is merely evidence of, and is not a requirement of, establishing ownership;

thus, the fact that the Creditors in these cases had not yet obtained certificates of title

or certificates of repossession is insignificant.11 We conclude, therefore, that Fla. Stat.

§ 319.28 recognizes that ownership passes when the creditor repossesses the vehicle.

Accordingly, we affirm the judgment of the district court in both cases, and

hold that the vehicles repossessed prepetition were not “property of the [Debtors’

bankruptcy] estate[s]” under § 541 of the Bankruptcy Code.

AFFIRMED.

11
It is also insignificant that the Creditors had not yet filed an affidavit as proof of
ownership in order to obtain the certificate of title. We find that the statute recognizes
ownership transfer upon repossession, not upon the filing of an application for a certificate or
upon the receipt of a certificate. As we reason above, the language of the statute compels this
conclusion, especially in situations such as these where the repossessions were never alleged to
be fraudulent.

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