Hergert v. Bank of the W. (In re Hergert) - 275 B.R. 58 (Bankr. D. Idaho 2002)

Rule:

As Idaho Code § 28-9-507 official cmt. 4 makes clear, post-filing changes that render a financing statement inaccurate -- and even seriously misleading -- do not render that financing statement ineffective.

Facts:

The Bank of the West acquired the assets of Pacific One Bank by way of a merger, which included two commercial loans with debtors, secured under an agricultural security agreement and two commercial security agreements. The Bank of the West also acquired a consumer loan with debtors secured by an interest in debtors' manufactured home. In connection with the agricultural security agreement, and to perfect the security interest granted thereunder, Pacific filed a UCC-1F financing statement. In connection with the Commercial Security Agreements, and to perfect the security interests described therein, Pacific filed a UCC-1 financing statement, and obtained notation of its lien on certificates of title to several vehicles. Both the UCC-1 and the Title identified the secured party as "Pacific One Bank" with a mailing address of P.O. Box 40108, Portland, Oregon, 97240 (the "Portland Address"). The UCC-1 listed an additional address of P.O. Box 9344, Nampa, Idaho 83652-9344 (the "Nampa Address") as the address to which the Secretary of State should return its "acknowledgment" copy of the filing. The UCC-1F also identified "Pacific One Bank" as the secured party, with the Nampa Address shown as the address of the secured party. The Bank of the West did not amend the secured party’s named or address in any of the aforementioned documents. The debtors filed the present adversary seeking a declaration that the security interests of the Bank of the West were unperfected, and that any claim based thereon be deemed unsecured.

Issue:

Did the Bank of the West have a perfected security interests over certain properties of the debtors?

Answer:

Yes.

Conclusion:

As to the validity of the Bank of the West’s security interests, the court held that so long as a new lien was not being created, once the third-party bank's lien was perfected under Idaho Code § 49-510(1), it was not necessary for the bank to re-perfect. As to the commercial loans, the change in the secured party's name from the third-party bank's name to the bank's name was not a name error of the sort to be seriously misleading. Further, Idaho Code. § 28-9-511 did not require an amendment of the financing statement to reflect a succession in interest such as by merger, but instead addressed the question as one of the actor's authority. Finally, the errors in name or address on the form filed for perfecting the security interests could not be viewed as rendering the filing of that statement ineffective to perfect the security interest in farm products as of its effective date.