In Re Troupe

340 B.R. 86 (2006)

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Nature of the Case

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Facts

Troupe (debtors) purchased the tractor from D's dealer on or about July 13, 2001. The debtors lived on a 10-acre tract of land in Colorado. The debtors applied for credit with Deere and submitted a credit application dated July 2, 2001. Robert was employed in a management position with an automotive company earning a gross salary of $4,500 per month. Dawn was employed as a professional auto body estimator earning a gross income of $36,000 per year. The debtors wanted to purchase a tractor to be used to fill irrigation ditches on their land. They wanted the tractor to be small enough to go through the gate of a horse stall. Dawn said they wanted to use the tractor for moving dirt, hay and snow. At the top of the first page of the executed security agreement, there were boxes labeled 'Personal' and 'Commercial,' respectively. An 'x' was placed in the box labeled 'Personal,' while the 'Commercial' box was left blank. The security agreement contained the following provision on the first page: 'Unless I otherwise certify below, this is a consumer credit transaction, and the Goods will be used primarily for personal, family or household purposes.' (bold type on security agreement). The security agreement also contained on the first page a conspicuous rectangular box running the entire width of the printed page within which appeared the following: 'COMMERCIAL PURPOSE AFFIDAVIT. I/We being first duly sworn, affirm and represent to Seller and its assignees that this is a commercial credit transaction, as the Goods listed above will be used by the undersigned in his/her/its business primarily for commercial purposes and will not be used primarily for personal, family or household use. The signature lines for this space were blank. The debtors boarded horses and raised cattle and pigs on their acreage. This activity was done while they were working at their full-time jobs. The debtors' tax returns took a deduction for depreciation on the tractor. The tax returns reflected that the tractor was used 100 percent for business. Their tax returns for each of the above years showed a substantial loss from ranching. The debtors represented that their actual use and intended use of the tractor was for the business purpose of farming and ranching. They testified that the tractor was used 90 percent of the time for personal purposes and 10 percent for business. They considered personal use as being work performed on the homestead as opposed to work done to make a living. Both parties filed cross-motions for summary judgment.