## Facts

- InterAmerican Car Rental, Inc. (InterAmerican) operated a car-rental business and financed its vehicle fleet through multiple lenders.
- In 2002, InterAmerican defaulted on several loans, and competing secured creditors sought to enforce their claims against InterAmerican’s vehicles.
- Florida’s motor-vehicle title statute (Chapter 319) generally requires a creditor to perfect a security interest in a vehicle by noting the lien on the vehicle’s certificate of title and filing a sworn statement of lien.
- Peninsula Bank and Ocean Bank, two of InterAmerican’s creditors, perfected their security interests by noting their liens on the vehicles’ certificates of title and filing the required sworn statements under Chapter 319.
- Union Planters Bank, N.A. (Union) did not note its liens on the vehicle titles. Instead, Union filed UCC-1 financing statements under Article 9 and filed them earlier than Peninsula’s and Ocean’s later actions on the certificates of title.
- Union argued it qualified for an exception under Fla. Stat. § 679.3111 (2002), which allows perfection by filing for certain vehicles held as inventory for sale by a debtor “in the business of selling” goods of that kind.
- Union relied on evidence that InterAmerican sold roughly 4,000 used rental cars per year and derived 60–70% of its revenue from those sales, contending InterAmerican was effectively in the business of selling used cars.
- Peninsula and Ocean disputed that a rental company becomes a vehicle seller (or dealer) for perfection purposes merely because it regularly disposes of retired fleet vehicles.
- The trial court rejected Union’s inventory/seller argument, granted summary judgment for Peninsula and Ocean, and determined Union’s security interest was not perfected as required for motor vehicles.
- Union appealed the summary judgment to Florida’s Third District Court of Appeal.

## Issues

1. Whether InterAmerican, a car-rental company that sold large numbers of retired fleet vehicles, was “in the business of selling” vehicles such that Union could perfect by filing a UCC-1 financing statement under Fla. Stat. § 679.3111 (2002).
2. Whether Florida’s certificate-of-title perfection requirements in Chapter 319 governed perfection and priority for InterAmerican’s vehicles, making title notation (and related filings) necessary for a secured creditor to obtain priority.
3. Whether Union’s earlier UCC-1 filings could defeat the claims of creditors who later perfected by complying with Chapter 319.

## Decision

- The appellate court affirmed the trial court’s judgment in favor of Peninsula Bank and Ocean Bank.
- The court held that Union’s UCC-1 filings did not perfect its security interests in the vehicles because the applicable method of perfection was controlled by Florida’s certificate-of-title statute, Chapter 319.
- The court rejected Union’s argument that InterAmerican’s volume of vehicle sales brought it within the Fla. Stat. § 679.3111 exception for inventory held for sale by a debtor in the business of selling goods of that kind.
- Because Peninsula and Ocean perfected their liens by complying with Chapter 319, their security interests had priority over Union’s unperfected interests.

## Legal Principles

- For most motor vehicles in Florida, perfection and priority of a security interest are governed by the certificate-of-title statute (Chapter 319), which requires lien notation on the certificate of title and associated statutory filings.
- Article 9 filing (a UCC-1 financing statement) does not perfect a security interest in a titled motor vehicle when the certificate-of-title statute supplies the exclusive perfection method.
- The Article 9 exception that permits perfection by filing for vehicles held as inventory applies only when the debtor is truly in the business of selling goods of that kind; routine disposition of used equipment or fleet assets does not, by itself, satisfy that standard.
- Priority turns on proper perfection under the governing statute for the collateral type; an earlier UCC-1 filing does not create priority if Article 9 filing is not an effective perfection method for the vehicles at issue.

## Conclusion

Union Planters Bank, N.A. v. Peninsula Bank holds that a lender to a car-rental company cannot perfect a security interest in the company’s vehicles merely by filing UCC-1 financing statements when Florida’s certificate-of-title statute requires lien notation on the vehicle titles; because InterAmerican’s sales of retired rental cars did not make it a business “in the business of selling” vehicles for the inventory exception, the creditors who perfected through Chapter 319 had priority.


Union Planters Bank, N.A. v. Peninsula Bank, 897 So. 2d 499, 56 U.C.C. Rep. Serv. 2d 356 (2005)