In Re Grabowski

277 B.R. 388 (2002)

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Nature of the Case

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Facts

Ps were farmers, but they also operated a farm equipment business located at a different address. Ps have been engaged in farming at this location for the past 30 years. Beginning in 1993, they also owned and operated a John Deere farm equipment business at 12047 Highway 37, Benton, Illinois. P, Trenna, a certified public accountant, moved her accounting practice to the Benton dealership. Although the dealership was sold in 1999, P continues to conduct her accounting practice from the Benton location. Ps filed Chapter 11. The two defendants, Bank of America and South Pointe Bank disputed who had priority in three items of farm equipment owned by Ps. Ds had reached agreement about all the other equipment involved. Bank of America claims a prior security interest by virtue of a security agreement signed by Ps in December 1998. The Bank's financing statement, filed on December 31, 1998, identifies the debtors as 'Ronald and Trenna Grabowski' and lists their address as '12047 State Highway # 37, Benton, Illinois 62812.' The financing statement describes the Bank's collateral as All Inventory, Chattel Paper, Accounts, Equipment, and General Intangibles. South Pointe obtained a lien on the debtors' equipment in January 2000. South Pointe's financing statement, filed January 18, 2000, identifies the debtors as 'Ronald and Trenna Grabowski' at 'P.O. Box 38, Dubois, Illinois 62831' and describes South Pointe's collateral as JD 1995 9600 combine, JD 925 FLEX PLATFORM, JD 4630 TRACTOR, JD 630 DISK 28' 1998. South Pointe claims that Bank of America's financing statement, although prior in time, was insufficient to perfect the Bank's interest because it failed to place other lenders on notice of Bank of America's interest in the subject equipment. South notes that its financing statement contained the address of Ps' farm equipment business rather than that of Ps' home where their farming operation is located and, further, that it failed to mention any specific items of equipment or even make reference to 'farm equipment' or 'farm machinery.' South claims that a subsequent lender would reasonably conclude that Bank of America's intended security was the personal property of Ps' business rather than equipment used in Ps' farming operation.