## Facts

- Individual debtors William T. Ryan and Eileen Ryan bought a bathtub with related coiling and attachments for installation in their residence.
- The Ryans paid a $300 deposit and financed the $3,966 balance through Wells Fargo Financial National Bank.
- The charge slip granted Wells Fargo a purchase-money security interest in the goods.
- The bathtub and related items were installed and incorporated into the home.
- Wells Fargo did not file a financing statement or fixture filing.
- The Ryans later filed a joint Chapter 13 petition and did not schedule Wells Fargo as a secured creditor.
- Wells Fargo filed a proof of claim for $5,179.43, asserting a partially secured claim based on “bath accessories” valued at $3,200.
- The Ryans objected to the claim’s secured status, arguing that without a fixture filing Wells Fargo held only an unsecured claim.

## Issues

1. Whether a bathtub installed in a debtor’s residence is an “ordinary building material” under N.Y. U.C.C. § 9-334(a) such that no Article 9 security interest can exist after incorporation into an improvement on land.
2. If not excluded by § 9-334(a), whether Wells Fargo held an automatically perfected PMSI in consumer goods despite not filing a financing statement or fixture filing.

## Decision

- The bankruptcy court overruled the Ryans’ objection to secured status.
- The court held the bathtub and related components were not “ordinary building materials” within N.Y. U.C.C. § 9-334(a).
- The court held Wells Fargo had a valid PMSI in consumer goods that attached and was automatically perfected upon attachment without any filing.
- Wells Fargo’s claim was allowed as secured up to the value of the bathtub and accessories, with any remainder treated as unsecured.

## Legal Principles

- Under N.Y. U.C.C. § 9-334(a), no Article 9 security interest exists in “ordinary building materials” once incorporated into an improvement on land.
- “Ordinary building materials” generally refers to materials that lose individual identity upon incorporation (e.g., lumber, nails, drywall), not distinct items that remain identifiable units after installation.
- A bathtub purchased for household use qualifies as “consumer goods” under Article 9.
- A PMSI in consumer goods is perfected automatically upon attachment, and filing is not required absent an applicable statutory exception.
- The classification and perfection of a creditor’s interest is determined by Article 9 rules, not by how the debtor schedules the claim in bankruptcy.

## Conclusion

Because the installed bathtub remained an identifiable consumer good rather than an ordinary building material, Article 9 permitted a continuing PMSI that was automatically perfected on attachment; therefore, Wells Fargo held an allowed secured claim up to the collateral’s value notwithstanding the absence of a fixture filing.


In re Ryan, 360 B.R. 50 (Bankr. W.D.N.Y. 2007)