## Facts

- Connie L. Reguli purchased a 1986 BMW in April 1990 using money borrowed from her daughter, Iona Senecal, and the parties documented the loan.
- In June 1990, Reguli submitted a Tennessee application for certificate of title that identified no lienholders and certified that no liens existed other than those listed.
- In July 1990, the Tennessee Motor Vehicle Division issued a certificate of title listing Reguli as owner and reflecting no liens.
- In January 1991, Keep Fresh Filters, Inc. sued Reguli to collect on a note; Reguli received service of process.
- After being sued, Reguli and Senecal applied for a new title showing Senecal as lienholder, but the Division disapproved the request due to improper documentation.
- In March 1991, Keep Fresh obtained a default judgment for $12,460.39 plus post-judgment interest.
- In May 1991, Keep Fresh recorded the judgment, obtained a writ of execution, and the sheriff levied on and seized the BMW.
- After the levy, Reguli and Senecal supplied documentation; the Division issued a new title noting Senecal’s lien and stating it related back to the earlier application date.
- The sheriff’s office returned the vehicle based on the new title.
- Keep Fresh filed a declaratory judgment action seeking a ruling that its execution lien had priority over Senecal’s claimed security interest; the trial court granted partial summary judgment for Keep Fresh, and Reguli and Senecal appealed.

## Issues

1. Whether a judgment creditor’s execution lien obtained by sheriff’s levy on a motor vehicle has priority over a security interest that was not noted on the certificate of title until after the levy.
2. Whether the Motor Vehicle Division’s “relation back” notation on a later-issued title can retroactively defeat a previously attached execution lien.
3. Whether Tennessee’s certificate-of-title perfection scheme for motor vehicle liens displaces Article 9 filing rules for purposes of priority against third parties.

## Decision

- The Court of Appeals of Tennessee affirmed the partial summary judgment for Keep Fresh.
- Keep Fresh’s execution lien, perfected by levy, had priority over Senecal’s security interest because Senecal’s lien was not properly perfected on the certificate of title at the time of levy.
- The Division’s later-issued title purporting to relate the lien back to the application date could not impair the judgment creditor’s already attached execution lien.

## Legal Principles

- In Tennessee, perfection of a security interest in a motor vehicle generally requires compliance with the certificate-of-title statutes, including notation of the lien on the vehicle’s certificate of title, rather than Article 9 filing.
- A judgment creditor obtains an execution lien on personal property when a writ of execution is levied by the sheriff, and that lien can take priority over an unperfected or later-perfected security interest.
- An administrative “relation back” designation on a later-issued certificate of title cannot retroactively divest or subordinate a judgment creditor’s execution lien that had already attached through levy.

## Conclusion

The court held that a lienholder who fails to perfect a motor-vehicle security interest by timely notation on the certificate of title cannot use a later title correction and administrative “relation back” to defeat a judgment creditor’s execution lien that attached upon the sheriff’s levy.


Keep Fresh Filters, Inc. v. Reguli, 888 S.W.2d 437 (Tenn. Ct. App. 1994)