Volume 5, Issue 4 (Fall 2009)
Introduction
Welcome to the Fall 2009 Newsletter of First American’s UCC Division. Again, we hope this Newsletter is a useful source of information for your lending or legal pursuits. As always, we solicit your advice on topics you would like us to explore. As in most of our Newsletters, after this introduction, we will review recent cases, on topics other than Personal Property Secured Transactions that were covered in our last Newsletter. If you missed that issue, you can retrieve Volume 5, Issue 3 here. We want to thank again our good friend Steven O. Weise of Proskauer Rose LLP, Los Angeles office, and his co-authors, Teresa Wilton Harmon of Sidley Austin LLP, Chicago, and Lynn A. Soukup of Pillsbury Winthrop Shaw Pittman LLP, Washington D.C., for supplying the case summaries. The case summaries were part of their presentation to the Spring Meeting of the Business Law Section of the American Bar Association titled 2008 Commercial Law Developments.
We also include for your review a copy of the Report of the UCC Committee of the State Bar of California Re: Possible Amendments to Uniform Commercial Code Article 9 Individual Name Provisions. This Report has been approved by the Executive Committee of the Business Law Section of The State Bar of California and was delivered to the Uniform Law Commission to aid in their deliberations concerning possible revisions to Article 9. As many of you may know, there has been extensive debate over the solving of a perceived problem concerning the appropriate methodology of dealing with individual debtor names in UCC Financing Statement filings. At one “extreme” are those who would prefer to do nothing under the theory of “do no harm.” There are those at the other extreme who prefer to established a drastically different priority system for the “correctness” of individual names. Among the “priority” type suggestions is the “Only If” approach that says that it the individual debtor has a valid driver’s license, the name on the driver’s license alone is sufficient as the debtor name.
The problem with priority oriented approaches is that they favor the filer to the extreme detriment of the searcher, overturning Article 9’s well crafted balancing act between two innocent parties. Further, the priority oriented approaches require extraordinary revisions to Article 9 and bring into play the concern of “unintended consequences.”
