## Facts

- Rodger House bought a tractor from Pankratz Implement Company and granted Pankratz a security interest documented under his correct name, “Rodger House.”
- The filed financing statement (filed by an assignee) misspelled the debtor’s first name as “Roger House.”
- Citizens National Bank later took a security interest in House’s equipment and filed its financing statement using House’s correct legal name, “Rodger House.”
- After House filed Chapter 7 bankruptcy, Pankratz sought a declaratory judgment that its security interest in the tractor had priority over the bank’s interest.
- The priority dispute turned on whether the financing statement using “Roger House” sufficiently provided the debtor’s name under Kansas Revised Article 9 and whether the error was “seriously misleading” given the filing office’s standard search logic.

## Issues

1. Whether a financing statement that misspells an individual debtor’s first name satisfies Kansas’s requirement that a financing statement provide the debtor’s name.
2. Whether a misnamed financing statement is “seriously misleading” as a matter of law when a search under the debtor’s correct legal name, using the filing office’s standard search logic, does not disclose the filing.
3. Whether the filing office’s standard search logic is the controlling measure for the “seriously misleading” exception.

## Decision

- The Kansas Supreme Court affirmed the Court of Appeals and reversed the district court’s summary judgment for Pankratz.
- The court held that, for an individual debtor, the financing statement must use the debtor’s legal name to be sufficient.
- A financing statement that fails to sufficiently provide the debtor’s name is seriously misleading as a matter of law unless the statutory search-based exception applies.
- The filing office’s official standard search logic is the only relevant search for determining whether the exception applies.
- Because a standard-logic search under “Rodger House” did not reveal the filing under “Roger House,” Pankratz’s financing statement was ineffective to perfect against the bank, and the bank’s properly filed interest had priority.

## Legal Principles

- A financing statement must sufficiently provide the debtor’s name; for individual debtors, sufficiency requires use of the individual’s legal name.
- A financing statement that fails to sufficiently provide the debtor’s name is “seriously misleading” as a matter of law, subject only to the statutory search-based exception.
- The search-based exception applies only if a search under the debtor’s correct name, using the filing office’s standard search logic, would disclose the financing statement.
- Revised Article 9 allocates the risk of naming and filing errors to the secured party filer; subsequent creditors may rely on one standard search under the correct legal name.

## Conclusion

The court held that misspelling an individual debtor’s legal name in a financing statement defeats perfection against later creditors when the filing cannot be found by the filing office’s standard search logic under the debtor’s correct name, giving priority to the later creditor that filed under the correct legal name.


Pankratz Implement Co. v. Citizens Nat’l Bank, 130 P.3d 57 (Kan. 2006)