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Priority of Security Interests

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The legalese used in the opinion made the decision almost incomprehensible, and would have made Bryan Garner throw a fit.  But, the Supreme Court of the Virgin Islands nevertheless got it right in Cornelius v. Bank of Nova Scotia, 2017 WL 3412202, at *6–8 (V.I., 2017), when it held that an unperfected lender who erroneously filed a termination statement still held… Read More

In Ford Motor Credit Company v. First National Bank of Crossett, 2016 WL 4916829, at *5–8 (Ark.App., 2016), the Arkansas Court of Appeal held that a RISC assignee's security interest was superior to that of a floorplan finance company's. FNBC acknowledges that a buyer in the ordinary course of business takes free of any underlying security interest created by the seller,… Read More

In Mahdavi v. NextGear Capital, Inc., 2015 WL 1526538 (E.D. Va. 2015), Judge Buchanan found that a triable issue of fact existed as to whether a floorplan lender’s security interest was superior to a buyer-in-the-ordinary-course’s interest. Courts have used a variety of factors to determine if someone is a buyer in the ordinary course of business including where the sale… Read More

In La Gar Marketing, Inc. v. W. Finance & Lease, Inc., 2012 WL 4898785 (Ohio App. 9 Dist. 2012), the Ohio Court of Appeal found in favor of a commercial lender as against a bona-fide consumer purchaser of a vehicle under Ohio law.  The Court of Appeal relied on precedent finding dealer’s floor plan lender’s security interest superior to a… Read More

In Los Angeles Federal Credit Union v. Madatyan (2012) 2012 WL 4830255, the customer purchased a 2000 Bentley, financed by his credit union.   The RISC required the customer to insure the car against collision damage and name the credit union as a loss payee.  The car was damaged.  The customer's repair shop estimated repair costs at $39,000.  The insurer paid… Read More

In New v. CitiFinancial Auto Credit, Inc., 2011 WL 3503128 (M.D.Ala. 2011), Judge Watkins found that a consumer’s delivery of a vehicle to a dealer on consignment extinguished the consumer’s ownership interest in the vehicle, depriving the consumer of any rights to the vehicle – or against the consumer’s finance company – when the consignment dealer failed to pay off… Read More

In Tolbert v. Automotive Finance Corporation, --- S.W.3d ----, 2011 WL 1842723 (Mo. App. W.D. 2011), the Missouri Court of Appeals upheld an automobile floorplan finance company’s claim against a subsequent consumer purchaser’s claim to a vehicle, where the selling dealer bounced its check to the floorplanner for the vehicle. The Court engaged in little to no UCC analysis, but… Read More

In Fariba v. Dealer Services Corp., 2009 WL 3191538 (2009), the California Court of Appeal for the Fourth District held that a floorplan lender's security interest was subordinate to an automobile wholesaler's ownership interest because, under consignment law, the floorplan lender knew that the defunct dealer dealt in consignment sales.  The facts were as follows: Plaintiff Behyar Fariba is an automobile… Read More