In re Preston

Because Dewey Dennis Preston (debtor) had the same first and last name as his father, he typically held himself out as D. Dennis Preston to avoid confusion. His Kansas driver’s license showed his name as Preston D Dennis. In 2015 and 2016, Preston purchased two items of farm machinery from CNH Industrial Capital of America, LLC (CNH) (creditor), each time financing the purchase through CNH, with CNH taking a purchase-money security interest in the purchased machinery as collateral for Preston’s payment obligation. For each security interest, CNH filed a UCC-1 financing statement with the secretary of state to perfect the interest. Both financing statements listed the debtor’s name as Preston D.Dennis, with Preston in the box for the debtor’s surname and D.Dennis in the box for the debtor’s first name. The box for the debtor’s middle name was left blank. When Preston later filed for Chapter 12 bankruptcy, his proposed plan of reorganization treated CNH’s claim as an unperfected claim. Preston argued such treatment was proper because CNH’s financing statements did not use the name on Preston’s driver’s license. Further, searching the filing office’s records using Preston’s full name or the name on his driver’s license did not lead to CNH’s financing statements. Preston therefore argued that the financing statements were seriously misleading and were ineffective to perfect CNH’s security interests. CNH objected to Preston’s reorganization plan, arguing that the financing statements were sufficient to perfect its security interests. The bankruptcy court considered the parties’ arguments.