Corona Fruits & Veggies, Inc. v. Frozsun Foods, Inc.

A Mexican man named Armando Munoz Juarez subleased farmland from Corona Fruits & Veggies, Inc. (Corona Fruits) (plaintiff) to grow strawberries. Although the sublease, all the business and tax documents, and the man’s photo ID and green card listed the man’s full name, the man signed the sublease as Armando Munoz. Corona Fruits loaned money to the man, took a security interest in his assets, and filed financing statements listing his name as Armando Munoz. Subsequently, the man contracted with Frozsun Foods, Inc. (defendant) to sell processed strawberries. After searching the filing records under the last name Juarez, which returned no relevant results, Frozsun Foods took a security interest in the man’s assets and filing a financing statement listing his name as Armando Juarez. Thereafter, the man defaulted on his payment obligations to Corona Fruits. Accordingly, Corona Fruits took back the farmland, harvested the strawberry crop, and kept the proceeds. At that time, the man owed $230,482.52 to Corona Fruits and owed $19,648.52 to Frozsun Foods. The man filed for bankruptcy, and Corona Fruits and Frozsun Foods disputed which party had priority. Frozsun Foods argued that Corona Fruits had failed to perfect its security interest because the financing statements contained the wrong last name and were, therefore, seriously misleading. During proceedings, Corona Fruits’ account manager, who prepared its financing statements, testified that she may have made a mistake. Corona Fruits argued that the name requirement was governed by Mexican naming conventions for last names, which were the opposite of Anglo-American tradition. The trial court ruled that Frozsun Foods had the superior interest.