## Facts

- Farmer Kenneth Pierce borrowed $18,000 from Farm Bureau Bank (FBB) to buy a fertilizer spreader.
- Pierce signed a security agreement granting FBB a security interest in the fertilizer spreader as collateral.
- FBB filed a UCC-1 financing statement with the state filing office listing the debtor’s name as “Kenneth Pierce.”
- Pierce’s unexpired driver’s license listed his name as “Kenneth Ray Pierce.”
- Pierce later filed bankruptcy in the U.S. Bankruptcy Court for the Southern District of Georgia (the reported decision is captioned In re Preston).
- FBB filed a proof of claim asserting a perfected secured claim for $14,459.81 based on its security interest in the spreader.
- Pierce objected to FBB’s claim as secured, contending the financing statement did not correctly provide his name under the state’s version of U.C.C. § 9-503 because it omitted “Ray.”
- FBB responded that the financing statement was sufficient because “Kenneth Pierce” matched the signature on Pierce’s driver’s license, even if it did not match the license’s typed name.

## Issues

1. Whether a financing statement for an individual debtor sufficiently provides the debtor’s name under U.C.C. § 9-503(a)(4) when it omits the debtor’s middle name that appears on the debtor’s unexpired driver’s license.
2. If the financing statement does not satisfy § 9-503(a)(4), whether the debtor-name error is “seriously misleading” under U.C.C. § 9-506, leaving the security interest unperfected in bankruptcy.

## Decision

- The court sustained the debtor’s objection to FBB’s asserted secured status.
- The court held the financing statement did not satisfy U.C.C. § 9-503(a)(4) because it did not use the debtor’s name as shown on his unexpired driver’s license (“Kenneth Ray Pierce”).
- The court rejected FBB’s argument that the license signature (“Kenneth Pierce”) could substitute for the name shown on the license for purposes of § 9-503(a)(4).
- Because the financing statement failed to provide the debtor’s name as required by § 9-503, the filing was seriously misleading under U.C.C. § 9-506 and ineffective to perfect the security interest (and FBB did not establish that the statutory search-safe-harbor applied).
- FBB’s claim was treated as unsecured in the bankruptcy case.

## Legal Principles

- Under U.C.C. § 9-503(a)(4), when an individual debtor has an unexpired state-issued driver’s license, the financing statement sufficiently provides the debtor’s name only if it uses the name indicated on that license.
- A financing statement that does not provide the debtor’s name in the manner required by § 9-503 is seriously misleading under U.C.C. § 9-506, unless a search of the filing office records under the debtor’s correct name (using the office’s standard search logic) would disclose the filing.
- A secured party bears the risk of debtor-name errors in UCC filings; a middle-name omission can defeat perfection if it prevents the filing from being found through the filing office’s standard search process.
- In bankruptcy, an unperfected security interest is vulnerable to estate rights that defeat unperfected liens, so the creditor’s claim is not allowed as secured based on that unperfected interest.

## Conclusion

In In re Preston, the bankruptcy court ruled that Farm Bureau Bank’s financing statement listing the debtor as “Kenneth Pierce,” rather than the driver’s-license name “Kenneth Ray Pierce,” failed to satisfy U.C.C. § 9-503(a)(4) and was seriously misleading under § 9-506, leaving the bank’s security interest unperfected and its proof of claim unsecured.


In re Preston, 581 B.R. 912, 94 U.C.C. Rep. Serv. 2d 1031 (2018)