## Facts

- Judith K. Baker bought a 2000 Oldsmobile Alero in New Mexico, financing the purchase through Primus Financial Services.
- Primus perfected its security interest by being listed as lienholder on the New Mexico certificate of title.
- Baker later moved to Wisconsin and registered the vehicle there, but she did not obtain a Wisconsin certificate of title; the New Mexico title remained effective.
- Baker filed for Chapter 7 bankruptcy in Wisconsin, and Claire Ann Resop was appointed as trustee.
- The trustee sued to avoid Primus’s lien under 11 U.S.C. § 544(a), arguing that Wisconsin law required Primus to reperfect in Wisconsin within four months after Baker’s relocation.

## Issues

1. Whether a lien perfected by notation on another state’s certificate of title must be reperfected in Wisconsin within four months of the debtor’s move to remain perfected against a Chapter 7 trustee.
2. Whether the certificate-of-title choice-of-law rule for titled goods displaces the general debtor-location and relocation grace-period rules under revised UCC Article 9 as adopted in Wisconsin.

## Decision

- The Seventh Circuit affirmed the district court’s affirmance of the bankruptcy court.
- Primus was not required to reperfect in Wisconsin because the vehicle remained covered by an effective New Mexico certificate of title.
- The trustee could not avoid Primus’s lien under § 544(a) because the lien remained perfected under the governing state law.

## Legal Principles

- For goods covered by a certificate of title, perfection and priority are governed by the law of the jurisdiction that issued the certificate, so long as the goods remain covered by that certificate.
- The general UCC Article 9 rule tying perfection to the debtor’s location, including any relocation-based grace period for reperfection, yields to the specific certificate-of-title rule for titled vehicles.
- A bankruptcy trustee’s § 544(a) strong-arm power avoids only liens that are unperfected (or defectively perfected) under applicable nonbankruptcy law; it does not defeat a lien that remains perfected under the governing choice-of-law rule.
- Cross-references in statutory schemes do not, without more, create ambiguity; courts apply the controlling provisions as written.

## Conclusion

The court held that a motor-vehicle lien noted on an out-of-state certificate of title remains perfected after the debtor moves, so long as the original certificate stays in effect; therefore, the Chapter 7 trustee could not avoid the lien for lack of Wisconsin reperfection.


In re Baker, 430 F.3d 858 (7th Cir. 2005)