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While 810 ILCS 5/9-402 (1999) and 810 ILCS 5/9-9-503 (2001) both do not specify how a debtor's name should be determined, it is clear that neither requires that a financing statement contain the debtor's legal name, much less provides a legal definition of what would constitute a debtor's legal name.
Mr. and Mrs. Miller opened a personal banking account with the State Bank of Arthur ("Bank") on or about February 25, 1995, in the name of Bennie A. Miller ("Miller") and Debbie A. Miller. The Millers subsequently purchased Power Plus, a lawn equipment business based in Arthur, Illinois. During the period from January 2, 1999 until the time of this lawsuit, the Millers executed and delivered five promissory notes with different principal amounts to the Bank in which they promised to pay the Bank the note amounts plus interest. The Millers also executed and delivered five commercial security agreements and one mortgage as security for the notes; the commercial security agreements gave the Bank a security interest in most of the Millers' business assets. All of the loan documents were signed by Mr. Miller as "Bennie A. Miller." The Bank filed a UCC1 financing statement on January 7, 1999, and the statement identified the debtors as "Bennie A. Miller" and "Debbie A. Miller." Mr. Miller signed the financing statement as "Bennie A. Miller." Timely continuations of the original financing statement were filed on September 5, 2003, and July 21, 2008. At trial, Mr. Miller testified that he has gone by the name "Bennie Miller" for much of his adult life, and that he is generally known by this name in the community. "Bennie A. Miller" is also the name listed on his unexpired driver's license, his Social Security card, the deed to the Millers' home, his federal income tax returns, the signature card he signed when the Millers opened their original account with the bank in 1995, all of the loan documents with the Bank, a Capital One credit card account, and the bill of sale from the purchase of the Power Plus business. In contrast, "Ben Miller" is the name listed on Mr. Miller's birth certificate, on a letter from another creditor, on two proofs of claim filed by Mr. Miller's accountant and his doctor, and on his American Express account.
On December 22, 2010, the Millers filed for Chapter 13 bankruptcy and listed the Bank as a secured creditor. On June 17, 2011, the Millers filed an adversary proceeding against the Bank to avoid the Bank's security interest. The Millers argued that the Bank incorrectly identified Mr. Miller on its financing statement, as governed by Article 9 of the Uniform Commercial Code (UCC), as adopted by the Illinois Legislature, by listing the name, "Bennie A. Miller," and thereby failed to perfect its security interest. Following an evidentiary hearing, the Bankruptcy Court filed a written Opinion and Order in which it ruled in favor of the Millers. The Millers were thus allowed to avoid the Bank's lien on Mr. Miller's one-half interest in the business assets.
Is the Bank’s use of “Bennie A. Miller” on the financing statement sufficient for the security interest to be perfected?
Because Article 9 does not require the financing statement provide the debtor's "legal name" on the financing statement, but instead only use a name that is not seriously misleading, the use of the name "Bennie A. Miller" on the financing statement was sufficient for the financing statement to be effective. This was the name used on Miller's driver's license, Social Security card, and federal income tax returns, among other official documents. Further, even if this court were to find that Article 9 requires a debtor's legal name, which, as discussed above, it does not, the requirement would still be met for three reasons. First, to the extent that Miller relies on cases creating a "legal name" requirement, as discussed above, those cases either do not specifically require that a debtor's "legal name" can only be defined by his or her birth certificate, or in fact allow the debtor's driver's license or Social Security card as one form of evidence of his or her "legal name". Second, prior to July 1, 2010, an individual in Illinois could change his legal name "without resort to any legal proceedings, and for all purposes the name thus assumed will constitute his legal name just as much as if he had borne it from birth." The Illinois legislature made common law name changes invalid if assumed on or after July 1, 2010. However, Miller assumed the legal name "Bennie A. Miller" prior to this date. "Bennie A. Miller" is the name on his driver's license, his social security card, the deed to the Millers' home, his federal income tax returns, his Capital One credit card, and the bill of sale for the Millers' business. Additionally, Miller testified that he has gone by this name and that the community knows him by this name. Thus, even if this court were to assume that § 9-503 required a debtor's "legal" name, Miller had lawfully assumed the "legal" name "Bennie A. Miller" at the time the note was signed. Third, non-UCC Illinois law defines the term "legal name." Both the Illinois Vehicle Code and the Illinois Identification Card Act define a "legal name" as the "full given name and surname of an individual as recorded at birth, recorded at marriage, or deemed as the correct legal name for use in reporting income by the Social Security administration or the name as otherwise established through legal action that appears on the associated official document presented to the Secretary of State." By analogy, and because the Illinois UCC statutes do not directly define "legal name", if this court were to assume that a "legal" name is required, "Bennie A. Miller" is the name listed on an official document presented to the Secretary of State (his driver's license), making it a cognizable "legal" name under non-UCC Illinois law.
Here, Miller provided a name that he used regularly for many years and that was listed on several official and personal documents. When a search was performed on that name, "Bennie A. Miller", five of the six secured creditors that filed financing statements showed up in the database. Because (1) there is no requirement pursuant to statutory, regulatory, or judge-made law that a "legal name" be used on a financing form; (2) no requirement that a birth certificate is a more reliable or valid source of an individual's current name than his or her driver's license and Social Security card; and (3) the great majority of the creditors did in fact identify Debtor as "Bennie A. Miller", and, more to the point, would have been able to find any prior filing under that name, it is clearly erroneous to posit that the name "Bennie A. Miller" either fails to provide sufficiently the name of the debtor or is misleading. Furthermore, the policy behind the secured transactions article of the UCC is to ensure certainty for creditors and provide notice of security interests to third parties. The Bank was the first creditor to file on January 7, 1999. GE Commercial Distribution Finance filed on February 18, 1999, American Honda Finance filed on December 27, 2000, Textron Financial filed on November 15, 2001, and Red Iron Acceptance filed on February 9, 2010. If any financing statement were to have a name that was seriously misleading, it should have been the filing for Crader Equipment, which filed on January 11, 2010 using the name "Ben Miller" and would hypothetically have been the only creditor that could not be found by the other creditors or by subsequent potential creditors. In fact, were this court to affirm, it would implicitly rule that the other five of the six creditors, which did use the name "Bennie A. Miller", had improperly filed financing statements.