In re: : Judith K. Baker

In the
United States Court of Appeals
For the Seventh Circuit
____________
No. 05-1580
I N RE :
J UDITH K. B AKER ,
Debtor.
A PPEAL OF :
C LAIRE A NN R ESOP
____________
Appeal from the United States District Court
for the Western District of Wisconsin.
No. 04 C 779—Barbara B. Crabb, Chief Judge.
____________
A RGUED S EPTEMBER 12, 2005—D ECIDED D ECEMBER 6, 2005
____________
Before C OFFEY , E ASTERBROOK , and E VANS , Circuit
Judges.
E VANS , Circuit Judge. In 2001, Judith K. Baker pur-
chased a 2000 Oldsmobile Alero. Financing was provided by
Primus Financial Services, and the State of New Mexico
issued a certificate of title listing Primus as the lienholder.
Soon after the deal was made, Baker moved to Wisconsin.
Although she registered her vehicle in Wisconsin after the
move, Baker never obtained a Wisconsin certificate of title.
The New Mexico certificate of title, however, remained in
place.
In 2004, some 3 years after her move to Wisconsin, Baker
filed a Chapter 7 petition in the bankruptcy court. Claire

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2 No. 05-1580
Ann Resop was appointed trustee of Baker’s bankruptcy
estate. As bankruptcy trustee, Resop enjoys “strongarm”
powers and may seek to avoid unperfected liens, assert a
superior interest in assets, and distribute the value of those
assets to other creditors. See 11 U.S.C. § 103(a); 11 U.S.C.
§ 544(a). This means she could, for example, challenge the
validity of the lien Primus holds on Baker’s vehicle, seek to
gain control over it, sell it, and use the funds it yields to pay
off general creditors to whom Baker owes money. That is
what the trustee wanted to do in this case, but her efforts
were thwarted by both the bankruptcy court and the district
court. Today we resolve her appeal from the final judgment
of the district court.
This appeal requires that we interpret several Wiscon-
sin statutes. Under her reading of these statutes, the
trustee argues that within 4 months of Baker’s move to
Wisconsin, Primus was required to reperfect its security
interest in her vehicle there. Since Primus did not do so, the
trustee believes that Primus’s lien may be avoided.
Primus counters that this argument misreads Wisconsin
law and that it had no duty to reperfect its interest sim-
ply because Baker moved herself and her vehicle to a
different state but neglected to apply for a new title when
she got there. Under Wisconsin law, Primus argues, the lien
recorded on the New Mexico title remained valid.
The bankruptcy court examined the relevant statutes and
agreed with Primus, as did the district court on appeal.
There are no disputed facts, so our review is de novo. Matter
of Seibert, 914 F.2d 102, 105 (7th Cir. 1990).
Our starting point is the Wisconsin motor vehicle code.
Wis. Stat. § 342.19(6) provides: “If a vehicle is subject to
a security interest when brought into this state, § 409.316
states the rules which apply to determine the validity
and perfection of the security interest in this state.”

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No. 05-1580 3
1 Section 409.305(3), which deals with investment property, is not
relevant here.
In turn, § 409.316, which is part of the state’s codification
of the Uniform Commercial Code, tells us in relevant
portion: “A security interest perfected pursuant to the
law of the jurisdiction designated in § 409.301(1) or
409.305(3) remains perfected until the earliest of: . . . (b)
The expiration of 4 months after a change of the debtor’s
location to another jurisdiction.” § 409.316(1). Finally, we
consult § 409.301(1), 1 which instructs us that “while a
debtor is located in a jurisdiction, the local law of that
jurisdiction governs perfection, the effect of perfection or
nonperfection, and the priority of a security interest in
collateral.”
The trustee urges us to stop here and conclude that
Primus’s security interest in the vehicle became unperfected
when Baker moved to Wisconsin and 4 months passed
without Primus doing anything to reperfect its interest. And
that might be a reasonable reading were it not for the fact
that, as the district court explained, § 409.301(1) cannot be
read without reference to the limiting language in the
introduction to § 409.301. That limiting language tells us
that the subsections provide the rules governing perfection
“[e]xcept as otherwise provided in §§ 409.303 to 409.306.”
(Emphasis added.)
And so, turning to § 409.303, as the statutory guide-
posts tell us we must, we find the reason why the trustee’s
attempt to avoid the lien must fail. Section 409.303 provides
the relevant law on the perfection and priority of security
interests for “goods covered by a certificate of title.” Specifi-
cally, § 409.303(3) states: “The local law of the jurisdiction
under whose certificate of title the goods are covered
governs perfection, the effect of perfection or nonperfection,
and the priority of a security interest in goods covered by a

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4 No. 05-1580
certificate of title from the time the goods become covered
by the certificate of title until the goods cease to be covered
by the certificate of title.” In nonlawyer speak, the 4-month
period for reperfection provided by § 409.316(1)(b) does not
apply to titled goods. Under Wisconsin law, as long as the
New Mexico title continued in force, it was sufficient to
protect Primus’s interest.
The trustee offers several arguments why she believes
this conclusion is incorrect. Essentially, she reasons that
any trip that begins at § 342.19(6), proceeds to § 409.316,
but ultimately ends up at § 409.303, could only be the result
of a wrong turn at § 409.301.
First, she argues that since § 409.316(1) refers only to
§ 409.301(1), we must read § 409.301(1) in isolation and
ignore the limiting language found directly above it in
§ 409.301. But logic dictates that we cannot read a sub-
section outside the context provided by the statute’s
main body. The language of § 409.301(1) itself underscores
this dependency, as it begins, “Except as otherwise provided
in this section . . . .” Moreover, the UCC comments to §
409.301 explain that the “general rule” stated in subsection
(1)—that the law of the debtor’s location governs perfection
of security interests—“does not apply to goods covered by a
certificate of title.” § 409.301 UCC cmt. 5.
The trustee also reiterates an argument she made in the
district court, that tracing the proper result here to
§ 409.303 would render § 342.19(6) “meaningless.” She
reasons that since § 342.19(6) is part of the state’s vehi-
cle code and is thus a more “specific” statute, we must
assume that the legislature intended it to have some
effect independent of the rules of perfection found in the
state’s UCC, which are more “general” law. Canons of
statutory construction discourage an interpretation that
would render a statute meaningless and usually require
that a “specific” statute prevail over a “general” one.

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No. 05-1580 5
But, as Chief District Judge Crabb explained, the result
here does not in fact render § 342.19(6) meaningless.
Section 342.19(6) refers to § 409.316 as a whole. The
references that ultimately lead us in this case to § 409.303
stem from § 409.316(1). Under different circumstances,
other subsections of § 409.316 would operate. For ex-
ample, had Baker applied for a Wisconsin title, as she
should have done when she relocated to the state and
registered her vehicle there, see Wis. Stat. § 342.05(1), this
matter would be governed by § 409.316(4), which applies to
goods covered by certificate of title from Wisconsin.
Moreover, a court resorts to canons of statutory con-
struction only when statutes are in conflict and the court
cannot find an answer in the plain meaning of statutory
language. In this case, it is possible to determine the status
of Baker’s Oldsmobile by tracing our way through plain
statutory language, as two judges did below. Cross-refer-
ences and limiting language may be narrative annoyances
to the reader, but they do not, without more, make laws
ambiguous. While it may be possible that the relationship
between Wisconsin’s motor vehicle code and its commercial
code could be made a bit more straightforward, a court’s
role is to apply the legislature’s statutory scheme, not to
improve upon it. See In re Platter, 140 F.3d 676, 681 (7th
Cir. 1998). We do not find any internal inconsistencies or
absurdities in the operation of these statutes. See United
States v. Aerts, 121 F.3d 277, 280 (7th Cir. 1997). Thus, we
may not infer, as the trustee urges, that the legislature did
not intend “motor vehicles [to] simply be tossed in with all
other titled goods under § 409.303.”
Indeed, it is the trustee’s interpretation that would yield
an absurd result. The rule that a security interest must
be reperfected within 4 months after a debtor moves to a
new jurisdiction makes sense in the context of untitled
goods. But it is unreasonable to suggest that a lienholder’s
interest can become undone simply because an owner

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6 No. 05-1580
neglects her duty to apply for a new title when she changes
states. Finance companies do not title vehicles, owners do.
Had Baker retitled her vehicle in Wisconsin, Primus
would have had to reperfect when its interest be-
came unperfected under New Mexico law. Wis. Stat.
§ 409.316(4). But we know of no authority for the notion,
suggested by the trustee at oral argument, that a secured
creditor is obligated to keep track of the domiciles of its
debtors. An important function of a title is to record a
secured creditor’s interest, regardless of where the pay-
ments come from, or where the debtor and vehicle may
roam. In this case, the New Mexico title is the only rec-
ord available, and the Wisconsin statutes yield the sens-
ible result that, under that valid title, the creditor’s interest
remains perfected. The judgment of the district court is
A FFIRMED .
A true Copy:
Teste:
________________________________
Clerk of the United States Court of
Appeals for the Seventh Circuit
USCA-02-C-0072—12-6-05

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