Printable Format84-9-503. Same; name of debtor. (a) Sufficiency of debtor's name. A financing statement sufficiently provides the name of the debtor:
(1) Except as otherwise provided in paragraph (3), if the debtor is a registered organization or the collateral is held in a trust that is a registered organization, only if the financing statement provides the name that is stated to be the registered organization's name on the public organic record most recently filed with, issued or enacted by the registered organization's jurisdiction of organization which purports to state, amend or restate the registered organization's name;
(2) subject to subsection (f), if the collateral is being administered by the personal representative of a decedent, only if the financing statement provides, as the name of the debtor, the name of the decedent and, in a separate part of the financing statement, indicates that the collateral is being administered by a personal representative;
(3) if the collateral is held in a trust that is not a registered organization, only if the financing statement:
(A) Provides, as the name of the debtor:
(i) If the organic record of the trust specifies a name for the trust, the name specified; or
(ii) if the organic record of the trust does not specify a name for the trust, the name of the settlor or testator; and
(B) in a separate part of the financing statement:
(i) If the name is provided in accordance with subparagraph (A)(i), indicates that the collateral is held in a trust; or
(ii) if the name is provided in accordance with subparagraph (A)(ii), provides additional information sufficient to distinguish the trust from other trusts having one or more of the same settlors or the same testator and indicates that the collateral is held in a trust, unless the additional information so indicates;
(4) subject to subsection (g), if the debtor is an individual to whom this state has issued a driver's license or identification card that has not expired, only if the financing statement provides the name of the individual which is indicated on the driver's license or identification card;
(5) if the debtor is an individual to whom paragraph (4) does not apply, only if the financing statement provides the individual name of the debtor or the surname and first personal name of the debtor;
(6) if the debtors are married debtors jointly engaged in business and it is unclear whether a partnership exists, the financing statement may be filed in the names of the individual debtors; and
(7) in other cases:
(A) If the debtor has a name, only if the financing statement provides the organizational name of the debtor; and
(B) if the debtor does not have a name, only if it provides the names of the partners, members, associates or other persons comprising the debtor, in a manner that each name provided would be sufficient if the person were the debtor.
(b) Additional debtor-related information. A financing statement that provides the name of the debtor in accordance with subsection (a) is not rendered ineffective by the absence of:
(1) A trade name or other name of the debtor; or
(2) unless required under subsection (a)(7)(B), names of partners, members, associates, or other persons comprising the debtor.
(c) Debtor's trade name insufficient. A financing statement that provides only the debtor's trade name does not sufficiently provide the name of the debtor.
(d) Representative capacity. Failure to indicate the representative capacity of a secured party or representative of a secured party does not affect the sufficiency of a financing statement.
(e) Multiple debtors and secured parties. A financing statement may provide the name of more than one debtor and the name of more than one secured party.
(f) Name of decedent. The name of the decedent is indicated on the order appointing the personal representative of the decedent issued by the court having jurisdiction over the collateral is sufficient as the "name of the decedent" under subsection (a)(2).
(g) Multiple drivers' licenses or identification cards. If this state has issued to an individual more than one driver's license or identification card of a kind described in subsection (a)(4), the one that was issued most recently is the one to which subsection (a)(4) refers.
(h) Definition. In this section, the "name of the settlor or testator" means:
(1) If the settlor is a registered organization, the name that is stated to be the settlor's name on the public organic record most recently filed with, issued or enacted by the settlor's jurisdiction of organization which purports to state, amend or restate the settlor's name; or
(2) in other cases, the name of the settlor or testator indicated in the trust's organic record.
History: L. 2000, ch. 142, § 74; L. 2012, ch. 84, § 11; July 1, 2013.
KANSAS COMMENT, 1996
The Kansas version of this section does not vary from the 1995 Official Text, and has not been amended since the code was adopted. The previous section sets forth the rules governing collection of third-party obligations, and this section authorizes physical repossession of tangible collateral. The creditor can achieve repossession in three ways: (1) the debtor can turn over the collateral voluntarily; (2) the creditor can use self-help to recover the collateral so long as there is no "breach of the peace;" and (3) the creditor can obtain the collateral "by action," i.e., a writ of replevin under K.S.A. 60-1005 or 60-1006.
The courts have held there is no constitutional prohibition against self-help repossession because seizure of the goods by the creditor alone (or through an agent) does not involve sufficient "state action" to trigger the Fourteenth Amendment. The Kansas case so holding is Benschoter v. First Nat'l Bank of Lawrence, 218 K. 144, 542 P.2d 1042 (1975). However, this does not mean that notice prior to repossession will not be required in some cases. For example, in Klingbiel v. Commercial Credit Corp., 439 F.2d 1303 (10th Cir. 1971) the secured party was held guilty of conversion because the security agreement appeared to require notice prior to repossession, and none was given. Similarly, a line of judicial decisions holds that the secured party may be liable for repossessing without prior notice after establishing a pattern of accepting late payments. See, e.g., Lee v. Wood Products Credit Union, 551 P.2d 446 (Ore. 1976). Finally, the Kansas Uniform Consumer Credit Code imposes a duty on the secured creditor to give notice of the consumer's right to cure a default caused by a missed installment; failure to give the statutory notice of right to cure triggers liability for attorney fees. K.S.A. 16a-5-110, 16a-5-111 and 16a-5-201(8). Moreover, failure to give the KUCCC notice of right to cure might well trigger liability in conversion, as well as the minimum civil penalty found in 84-9-507(1). See D.E.B. Adjustment Co. v. Cawthorne, 623 P.2d 82 (Colo. App. 1981).
Nothing in this section or elsewhere in Article 9 defines the term "breach of the peace." The courts are left with that job. It is important to avoid breach of the peace because of the possibility of tort, and possibly criminal charges, and punitive damages. The leading Kansas case is Benschoter v. First Nat'l Bank of Lawrence, supra, where the court held that "stealth" does not constitute a breach of the peace. On the other hand, there are cases holding that a secured creditor accompanied by the sheriff, leaving the impression that a court order has been issued when in fact it hasn't, is a breach of the peace because of the misrepresentation which is created. Stone Mach. Co. v. Kessler, 463 P.2d 651 (Wash. App. 1970). Entry into the debtor's premises has been considered a breach of the peace, but the secured party has fared better as it moves away from the debtor's home and garage to the driveway, yard, or the street. The KUCCC expressly provides that repossession must not involve entry into a dwelling or use of force for consumer repossessions. K.S.A. 16a-5-112. Many cases hold that a repossession over the objections of the debtor is a breach. A wise creditor will back off and get a writ of replevin rather than trying to repossess over active debtor or third-party protest. There are also numerous cases involving the "golden glove compartment," where the creditor repossesses a motor vehicle but fails to make sure that all the other personal property of the debtor has been removed. See generally White and Summers § 34-7.
The provisions in this section concerning assembly of collateral and rendering equipment unusable were not found in pre-UCC Kansas law. This can be a handy tool for the foreclosing creditor. The leading judicial decision illustrating the utility of the tool is Clark Equip. Co. v. Armstrong Equip. Co., 431 F.2d 54 (5th Cir. 1970), cert. denied 402 U.S. 909 (1971).
Once repossession has occurred (through replevin or self-help), the duty of the secured party to take reasonable care of the collateral under 84-9-207 arises, just as it does from the moment a pledgee takes possession of the collateral prior to default.
Revisor's Note:
Former section 84-9-503 was repealed by L. 2000, ch. 142, § 155 and the number reassigned to the current text.
Law Review and Bar Journal References:
U.C.C. remedies upon default of security agreement discussed in "Survey of Kansas Law: Secured Transactions," Gerald D. Haag, 21 K.L.R. 107, 114 (1972).
Constitutionality of self-help repossession discussed in "The New Kansas Consumer Legislation," Barkley Clark, 42 J.B.A.K. 147, 151 (1973).
Changes in repossession law under the UCCC discussed in "The New Kansas Consumer Legislation," Barkley Clark, 42 J.B.A.K. 147, 197 (1973).
"Summary Repossession, Replevin, and Foreclosure of Security Interests," Thomas V. Murray, 46 J.B.A.K. 93, 98, 100 (1977).
Applicability of implied waiver doctrine to article 9 transactions, "Uniform Commercial Code: Farm Creditor Protection," Brian McMahill, 18 W.L.J. 199 (1978).
"Survey of Kansas Law: Secured Transactions," J. Eugene Balloun, 27 K.L.R. 301, 303 (1979).
"Survey of Kansas Law: Secured Transactions," J. Eugene Balloun, 32 K.L.R. 351, 367 (1984).
"Is the Agricultural Security Interest Legally Healthy?" David A. Lander, 34 K.L.R. 505, 508, 512 (1986).
"Clear Title: A Buyer's Bonus, A Lender's Loss—Repeal of UCC § 9-307(1) Farm Products Exception by Food Security Act § 1324 [7 U.S.C. § 1631]," Mark V. Bodine, 26 W.L.J. 71, 74 (1986).
"Creditor Beware: From Default Through Deficiency Judgment," Wanda M. Temm, 60 J.K.B.A. No. 8, 17, 18, 19 (1991).
"Revised Article 9 in Kansas," Hon. John K. Pearson, 51 K.L.R. 769, 816, 819, 820, 821, 824 (2003).
CASE ANNOTATIONS
1. Self-help repossession provisions not violative of due process; no state action present; subrogation entitlement. Benschoter v. First National Bank of Lawrence, 218 Kan. 144, 145, 147, 148, 149, 150, 151, 152, 154, 155, 542 P.2d 1042.
2. Cited in holding enforceable lien existed between original parties; no action for damages for breach of contract when damage not a result of such breach. Kansas State Bank v. Overseas Motosport, Inc., 222 Kan. 26, 28, 29, 563 P.2d 414.
3. Voluntarily surrendered secured property not obtained through "legal process"; tax lien does not attach to buyer of same. Robbins-Leavenworth Floor Covering, Inc. v. Leavenworth Nat'l Bank & Trust Co., 229 Kan. 511, 514, 515, 516, 625 P.2d 494.
4. Secured creditor sale of collateral not in "commercially reasonable manner"; test; deficiency not barred. Westgate State Bank v. Clark, 231 Kan. 81, 86, 642 P.2d 961 (1982).
5. Where unperfected creditor had security interest in debtors' grain, creditor had repossession right over debtors. In Re Grey, 29 B.R. 286, 287, 291 (1983).
6. Upon default, secured party may proceed by action, or without judicial process if done without breach of peace, and thereafter dispose of collateral. Clark Jewelers v. Satterthwaite, 8 Kan. App. 2d 569, 572, 662 P.2d 1301 (1983).
7. Where second self-help repossession attempt occurs successfully without incident, totality of facts reveals no breach of peace. Wade v. Ford Motor Credit Co., 8 Kan. App. 2d 737, 741, 745, 668 P.2d 183 (1983).
8. Cited; no conflict between administrator's right to possession (59-1401) and secured creditor's right (59-1303) to self-help repossession. Parker v. Farmway Credit Union, 11 Kan. App. 2d 223, 225, 718 P.2d 643 (1986).
9. Absence of duty to give notice of default no authority for repossession by breaking and entering business premises. Riley State Bank v. Spillman, 242 Kan. 696, 701, 705, 750 P.2d 1024 (1988).
10. Sale of creditor's collateral at public auction after extensive advertising was "commercially reasonable"; debtor given adequate time to sell before sale. U.S. v. Cox, 731 F. Supp. 1023 (1990).
11. Debtor not entitled to possession of collateral even if he prevailed on wrongful possession claim against creditor. Clark v. Associates Commercial Corp., 820 F. Supp. 562, 563, 564 (1993).
12. Financing statement that identified debtor using informal name was not seriously misleading and perfected security interest. In re Kinderknect, 300 B.R. 47, 49 (2003).