In re Miller

Mr. Bennie A. Miller and Mrs. Debbie A. Miller (debtors) opened a bank account with State Bank of Authur (State Bank) (creditor) in Illinois. The Millers also purchased a business selling lawn equipment. From 1999 to 2012, the Millers executed loan documents, five promissory notes, five commercial security agreements, one mortgage, and one financing statement with State Bank. Mr. Miller signed all these documents and the signature card to open the bank account in the name of Bennie A. Miller. Bennie A. Miller was also the name listed on Mr. Miller’s driver’s license, Social Security card, federal income taxes, personal home deed, and the bill of sale for the lawn-equipment business. State Bank listed Bennie A. Miller on its financing statement. However, when the Millers filed a Chapter 13 bankruptcy, they sought to avoid State Bank’s security interest by alleging that the bank’s interest was unperfected because it listed Bennie A. Miller on the financing statement rather than Ben Miller, the name on Mr. Miller’s birth certificate. The bankruptcy court held in favor of the Millers, which left the State Bank perfected only in Mrs. Miller’s one-half interest of the Millers’ business assets. The bankruptcy court reasoned that Illinois required a debtor’s legal name on a financing statement, and the legal name is the name on a birth certificate. Mr. Miller’s birth certificate showed Ben Miller, and a search using Ben Miller did not display any financing statements. Therefore, the financing statement was seriously misleading. In fact, Illinois law only required a debtor’s name, not a legal name, on a financing statement. Also, a search under the name Bennie A. Miller displayed five of six financial statements. State Bank appealed.