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General Electric Capital Commercial Automotive Finance, Inc. v. Spartan Motors, Ltd.

New York Appellate Division
246 A.D.2d 41, 675 N.Y.S.2d 626, 36 U.C.C. Rep. Serv. 2d 19 (1998)


General Electric Capital Commercial Automotive Finance, Inc. (GECC) (plaintiff) had a perfected security interest in the inventory of Spartan Motors, Ltd. (Spartan) (defendant). Spartan entered a financing agreement for General Motors Acceptance Corporation (GMAC) (defendant) to advance money to manufacturers and distributors on Spartan’s behalf for vehicles. Spartan gave GMAC a purchase-money security interest (PMSI) in the vehicles. GMAC filed the security agreement and notified GECC. Spartan purchased two Mercedes-Benzes. Days later, GMAC reimbursed Spartan, which was common. GECC sued Spartan, its principals, GMAC, and Mercedes-Benz of North America, Inc. (defendant) to recover money Spartan owed and determine the priority of liens. Spartan filed bankruptcy, and its creditors seized and liquidated its assets. GECC settled all claims but those related to the Mercedes. GECC moved for summary judgment, which was granted. The trial court held GECC’s security interest superior, because GMAC reimbursed Spartan after the purchase. GMAC appealed to the New York Supreme Court.

Rule of Law


Holding and Reasoning (Friedmann, J.)

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