Davis v. F.W. Financial Services, Inc.
Oregon Court of Appeals
317 P.3d 916 (2013)
- Written by Rich Walter, JD
Facts
Dryer Electric, Inc. (Dryer) put up its accounts receivable as collateral for a loan from F.W. Financial Services, Inc. (FWFS) (defendant). The security agreement gave FWFS a deferrable option to accelerate the loan in the event of default. The agreement stipulated that deferring acceleration would not waive FWFS’s right to accelerate the loan in the future. Dryer subsequently defaulted on the loan. Confident in Dryer’s ability to eventually make good on its debt, FWFS deferred accelerating the loan. A year later, Clif Davis (plaintiff) obtained a monetary judgment against Dryer on an unrelated matter. Davis executed the judgment by garnishing Dryer’s accounts receivable. Dryer’s financial woes continued, and the following year FWFS foreclosed on Dryer’s loan. FWFS learned of Davis’s judgment lien and demanded that Davis turn over the sums he had garnished. Davis refused this demand. Davis sued for a declaratory judgment that, under Oregon’s Uniform Commercial Code (UCC), Davis’s interest in Dryer’s accounts receivable was superior to that of FWFS. The trial court granted summary judgment for FWFS and held Davis liable for conversion. Davis appealed to the Oregon Court of Appeals.
Rule of Law
Issue
Holding and Reasoning (Haselton, C.J.)
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