First Financial Bank, N.A., v. GE Commercial Distribution Finance Corp.

First Financial Bank, N.A. (First Bank) (plaintiff) loaned money to Lakota Watersports, Inc. (Lakota) and perfected a security interest in nearly all Lakota’s assets on February 2, 2005. Subsequently, Lakota borrowed money from GE Commercial Distribution Finance Corp. (GE) (defendant) to purchase more inventory. Prior to executing the financing agreement with Lakota, GE sent a notification of its purchase-money security interest (PMSI) in inventory to Lakota’s existing creditors, including First Bank, as required by Ohio law. Then GE and Lakota executed an agreement in which GE provided additional funds for Lakota’s acquisition of inventory in exchange for certain collateral. GE filed a financing statement on November 30, 2006. Lakota increased its inventory with the additional funds, including the purchase of three boats. However, Lakota eventually defaulted on its loans with GE and First Bank. On August 27, 2010, Lakota gave GE possession of the three boats. When GE notified Lakota’s existing creditors that it would liquidate the three boats, First Bank demanded that GE turn over the proceeds from the sale. GE refused, and First Bank filed suit seeking either the boats or the proceeds from the sale. First Bank asserted that its security interest was entitled to priority, claiming that GE’s PMSI notification was not properly authenticated because the notice was not signed. However, Ohio law did not require authentication by signature. The notice (1) was on GE letterhead, (2) with GE’s name and address, (3) described the collateral as new and used boats and various other types of marine products, and (4) was sent by certified mail with return receipt requested. First Bank also claimed GE’s description of the collateral was insufficient. First Bank and GE both sought summary judgment.