Mesa, Feresi, and Hartley were members of The Livery, LLC (defendant). Mesa was ordered to pay off Feresi’s (plaintiff) mortgage pursuant to a divorce settlement. Mesa’s obligation to Feresi was to be secured by Mesa’s interest in the LLC, but Feresi failed to perfect the security interest. Mesa later borrowed money from Hartley without Feresi’s knowledge and secured the loan with his interest in the LLC. Hartley knew of Feresi’s pre-existing interest in the collateral but perfected his own interest without informing Feresi. The trial court ruled in favor of Feresi and the LLC appealed.