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#2259 signed 8-6-96

IN THE UNITED STATES BANKRUPTCY COURT

FOR THE DISTRICT OF KANSAS











In Re:

JERRY DUANE EDWARDS,

JANET CHRISTINA EDWARDS,

DEBTOR(S).

NO. 95-40017-13

CHAPTER 13

FARMERS AND DROVERS BANK,

PLAINTIFF(S),

v.

HOWARD'S, INC.,

HALSTEAD BANK,

JERRY DUANE EDWARDS,

JANET CHRISTINA EDWARDS,

DEFENDANT(S).

ADV. NO. 96-7021

MEMORANDUM OF DECISION

This proceeding is before the Court for resolution of the priority of conflicting security interests. Plaintiff Farmers and Drovers Bank (Farmers) appears by counsel Robert L. Baer and Susan L. Mauch. Defendants Howards, Inc., and Halstead Bank (collectively, the defendants) appear by counsel Dennis E. Shay. The Court has reviewed the relevant pleadings and is now ready to rule.

Farmers and the defendants claim competing security interests in a Massey-Ferguson Model 750 combine and apparently in a header used with the combine. The parties agree Farmers earlier-filed financing statement would give it priority over the defendants if the description of collateral contained in the statement is sufficient to satisfy the requirements of the Kansas Uniform Commercial Code. Farmers's financing statement covered, among other things, "all equipment of Debtor," then owned or later acquired. In attacking that description of collateral, the defendants rely on First National Bank v. Barr (In Re Werth), 443 F.Supp. 738 (D.Kan.1977) ("all equipment" insufficient description), along with two Tenth Circuit decisions which it relied on, Johnson v. First National Bank (In re Fuqua), 461 F.2d 1186 (10th Cir. 1972) (applying Kansas law; "all personal property" insufficient), and Household Finance Corp. v. Kopel (In re Lehner), 427 F.2d 357 (10th Cir. 1970) (accepts district court's view of Colorado law as not clearly wrong; affirms holding "consumer goods" insufficient).

After Werth was decided, however, the Kansas legislature amended K.S.A. 84-9-402(1) to provide (as it still does) in pertinent part: "A statement of collateral in a financing statement is adequate if it generally identifies goods by one or more of the classifications listed in K.S.A. 84-9-109, or generally identifies other collateral by one or more of the following classifications: fixtures, documents, instruments, general intangibles, chattel paper or accounts." 1978 Kan.Sess.Laws, Ch. 438, §1; see K.S.A. 1995 Supp. 84-9-402(1) for complete version of current statute. Since its adoption in 1965, K.S.A. 84-9-109(2) has listed and defined "equipment" for purposes of Article 9 of the Kansas UCC, so "all equipment" is an adequate description under 84-9-402(1). The 1983 Kansas Comment to K.S.A. 84-9-402 declares that the 1978 amendment was intended to overrule Werth. K.S.A. 84-9-109(1) lists and defines "consumer goods," so Lehner would not be applicable in Kansas either. Fuqua may still be good law because "personal property" is not listed in either 84-9-109 or 84-9-402. Some years ago, this Court ruled the 1978 amendment to K.S.A. 84-9-402(1) applied retrospectively to financing statements filed before Werth was decided. Coats State Bank v. Grey (In re Grey), 29 B.R. 286 (Bankr.D.Kan. 1983). In sum, the defendants' argument is based on completely outdated case law and must fail.

Farmers's financing statement satisfies the collateral description requirement found in K.S.A. 1995 Supp. 84-9-402(1), so it covered the debtors' combine and header. Farmers has asked in its brief for certain other relief that it may be entitled to as a result of this ruling, but the parties' stipulation and the defendants' brief do not make clear that any questions beyond the sufficiency of the collateral description were being submitted for decision. If there are no other issues that would affect Farmers's request, the parties should submit an agreed judgment based on this ruling. If there are other issues, they should inform the Court how they wish to proceed to get them resolved.

IT IS SO ORDERED.

Dated at Topeka, Kansas, this _____ day of August, 1996.













__________________________________

JAMES A. PUSATERI

CHIEF BANKRUPTCY JUDGE

 

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