## Facts

- A debtor bought a vehicle using a lender’s purchase-money loan and took possession the same day.
- Under Colorado’s vehicle titling system, the lender perfected its lien by filing with the appropriate titling authority 19 days after the debtor took possession.
- The debtor filed a Chapter 7 petition 12 days after the purchase and before the lender filed to perfect.
- The Chapter 7 trustee asserted avoidance and priority rights under 11 U.S.C. § 544(a) as a hypothetical judicial lien creditor as of the petition date.
- The trustee contended the lien was unperfected at filing, the trustee’s hypothetical lien had priority, and post-petition perfection violated the automatic stay.
- The lender argued that Colorado’s UCC grants a PMSI priority if perfected within 20 days of delivery and that 11 U.S.C. § 546(b) preserves that priority against intervening rights, including the trustee’s.

## Issues

1. Whether 11 U.S.C. § 546(b), incorporating Colorado’s 20-day PMSI perfection rule, gives a post-petition but timely perfected PMSI priority over a trustee’s 11 U.S.C. § 544(a) hypothetical judicial lien arising at the petition date.
2. Whether post-petition perfection within the state-law PMSI grace period is barred by the automatic stay under 11 U.S.C. § 362.

## Decision

- The Tenth Circuit reversed the judgments for the trustee.
- The court held the lender’s PMSI, perfected within Colorado’s 20-day period, had priority over the trustee’s § 544(a) hypothetical lien notwithstanding the bankruptcy filing occurring before perfection.
- The court held the act of post-petition perfection within the state-law period did not violate the automatic stay because § 546(b) limits the trustee’s avoiding powers where state law makes perfection effective against earlier-acquired rights.
- The case was remanded for further proceedings consistent with these rulings.

## Legal Principles

- A trustee’s strong-arm powers under 11 U.S.C. § 544(a) are limited by 11 U.S.C. § 546(b)(1) when generally applicable nonbankruptcy law permits perfection to be effective against entities that acquire rights before perfection.
- Under Colorado’s UCC, a PMSI perfected within 20 days after the debtor receives delivery takes priority over interests arising between attachment and perfection, including a lien status deemed to arise at the petition date.
- A state motor-vehicle titling statute may govern the method of perfection without displacing UCC priority and relation-back rules for a timely perfected PMSI.
- Post-petition perfection that is effective under § 546(b) is not treated as an automatic-stay violation when it implements a state-law grace period recognized by the Bankruptcy Code.

## Conclusion

The court held that a creditor who perfects a vehicle PMSI within Colorado’s 20-day period retains priority over a bankruptcy trustee’s § 544(a) hypothetical lien even if perfection occurs after the petition is filed, and that such timely post-petition perfection does not violate the automatic stay.


In re Roser, 613 F.3d 1240 (10th Cir. 2010)