Florida/Georgia Personal Injury & Workers Compensation

...n ideal creditor, possessed with every right and power that state law confers on its most favored creditor who has acquired a lien by legal or equitable proceedings. 4 Collier on Bankruptcy (15th ed.) ¶ 544.02. As defined by § 2-326 of the U.C.C., § 672.326(2) and (3), Florida Statutes, goods delivered primarily for resale, as were the rugs in this instance, are deemed to be "on sale or return." As long as the goods remain in the consignee's possession, they remain subject to the consignee's...

...permitting Heller recovery of the value of certain property converted by Georgia Pacific in the amount of $11,321.00 plus interest. The issue for our review is whether the total business relation involving these parties and a bankrupt entity was a transaction encompassed within the Florida Uniform Commercial Code, Section 672.326, Florida Statutes....

...s such constituted conversion. Plaintiff argues that either the transaction constituted a consignment intended as security within the meaning of Section 671.201(37), Florida Statutes, or was a sale or return transaction governed by the provisions of Section 672.326, Florida Statutes, which in pertinent part provides that: "(3) Where goods are delivered to a person for sale and such person maintains a place of business at which he deals in goods of the kind involved, under a name other than the n...

...ansactions (Chapter 679)." Defendant contends that the transaction was not a consignment intended as security. Defendant further contends that the paper products consigned to Bill Amos were not delivered "for sale" and that as such the provisions of Section 672.326(3), Florida Statutes, are inapplicable....

...In the Riviana Foods case, the United States District Court, For the Middle District of Florida, granted Riviana's motion for summary judgment in an unpublished opinion. The Court determined that the transaction between Riviana and Bill Amos was not a deemed sale or return under Section 672.326(3), Florida Statutes....

...See Brown, U.C.C. Section 2-326(3): Creditor Protection in the Deemed Sale or Return Transaction, 32 Case Western Reserve Law Review 904. This Court does not agree with the decision reached in the Riviana case. The legislative history with respect to Section 672.326(3), Florida Statutes, indicates that a consignee's creditors are to be protected from secret reservations in ostensible ownership situations. Official Comment 2, Section 672.326, Florida Statutes. Section 672.326(3), Florida Statutes, was enacted for the purpose of protecting the creditors of a merchant who is the apparent owner of goods located at the place of business of the merchant....

...Just as in Vonins, Bill Amos was providing a component part of the total sales transaction, for which it was paid a percentage of the overall consideration. *672 The consignment of paper goods by Defendant to Bill Amos was to facilitate sales transactions and was thus "for sale" within the meaning of Section 672.326(3), Florida Statutes....

...The Trustee further asserts that the six vehicles at issue were consigned by the Defendants to the Debtor. The Trustee contends that because the Defendants did not properly perfect *412 their consignment interests by complying with the requirements set forth in Fla. Stat. § 672.326, the Debtor held the consigned Corvettes "sale or return," thereby subjecting the vehicles to the claims of the Debtor's creditors....

...Finally, regarding the orally consigned vehicles, the last issue is whether the Statute of Frauds renders the oral consignment agreements unenforceable. A. The vehicles were delivered to the Debtor. At trial, the Defendants argued that the Florida consignment statute, Fla. Stat. § 672.326, does not apply because the Corvettes were never delivered to the Debtor. Section 672.326(1) states, "Unless otherwise agreed, if delivered goods may be returned by the buyer even though they conform to the contract, the transaction is either a `sale on approval' or a `sale or return.'" Fla. Stat. 672.326(1). Defendants argue that because they retained the title certificates to the Corvettes, they did not physically deliver the vehicles to the Debtor, and therefore, Section 672.326 does not apply....

...Once the Defendants physically delivered the Corvettes to the Debtor, and the Debtor placed the Corvettes into its inventory, a consignment relationship was created between the Debtor and the Defendants. This consignment interest is governed by Fla. Stat. § 672.326. B. The consigned vehicles are assets of the estate. Consignments are governed by Florida Statute § 672.326, which adopts Articles 2 and 9 of the UCC. UCC § 2-326(1). This provision recognizes two types of consignments. In a "sale on approval" transaction, the consignor delivers goods to the consignee primarily for use. Fla. Stat. 672.326(1)(a)....

...Goods held on approval are not subject to the claims of the consignee's creditors until acceptance, and the consignor need not take any action to protect its interest in the goods. On the other hand, in a "sale or return" consignment, the consignor delivers goods to the consignee primarily for resale. Fla. Stat. 672.326(1)(b)....

...See In re New York Diamond & Jewelry Exchange, Inc., 26 B.R. 32 (Bankr.S.D.Fla.1982). *414 With regard to consigned goods, there is a presumption that goods are held by the debtor "sale or return;" therefore, the goods are subject to the claims of the debtor's creditors. Fla. Stat. § 672.326(3)....

...on conducting the business is generally known by his or her creditors to be substantially engaged in selling the goods of others, or (iii) he or she complied with the filing provisions of the chapter on secured transactions (Chapter 679). Fla. Stat. § 672.326(3)(a) through (c)....

...Similarly, plaintiff concedes and I find that it is not entitled to reclamation under § 672.702, Florida Statutes (U.C.C. § 2-702). Plaintiff also concedes and I find that the delivery of the identifiable silver bars to the debtor was not a consignment sale under the provisions of § 672.326, Florida Statutes (U.C.C....

...However, as explained below, that agreement did not protect defendant because defendant has failed to meet any of the three conditions imposed by U.C.C. § 2-326(3). State law is dispositive in deciding whether title passed to the debtor under the consignment contract and U.C.C. § 2-326 ( Fla.Stat. § 672.326) is controlling in this instance....

...The only issue, therefore, is whether appellees Kathy Engler and Judith Hirsch sufficiently proved that Splendid Swan's suppliers had a superior interest as to one-half of the removed property such that these appellees were entitled to an offset in fixing their liability for damages sustained by Lynch. We look to section 672.326, Florida Statutes (1991), for guidance in resolving this issue under the peculiar facts of this case. This statute applies to a consignment of goods and provides that goods delivered primarily for resale, as appears to be the case here, are subject to the claims of a buyer's creditor while in the buyer's possession. § 672.326(2). In order to prevail over a creditor's claim, however, the supplier of the goods must comply with section 672.326(3) by providing some form of public notice of a retained interest in the goods....

...1st DCA 1983). As the court noted in Georgia-Pacific, the legislative history of the statute "indicates that a consignee's creditors are to be protected from secret reservations in ostensible ownership situations." 440 So.2d at 669. Thus, "[s]ection 672.326(3), Florida Statutes, was enacted for the purpose of protecting creditors of a merchant who is the apparent owner of goods located at the place of business of the merchant." 440 So.2d at 669....

...one-half of the removed property. Other than the conclusory, unsubstantiated testimony of appellees Kathy Engler and Judith Hirsch, there is nothing in the record indicating that these suppliers ever gave the statutorily required public notice under section 672.326(3) of any retained interest in this property either prior to the commencement of the lease or prior to the property being placed on the leased premises....

...(1879). The statute assumed its present form in 1906. Gen.Stat. 1906, § 2237. It has remained unchanged to the present time. [6] Such notice may consist of compliance "with the filing provisions of the chapter on secured transactions (chapter 679)." § 672.326(3)(c)....

...orm Commercial Code, [14] and is determined by state law. In re Grubbs Constr. Co., 306 B.R. 372, 375 (Bankr.M.D.Fla.2004). The Florida Uniform Commercial Code consignment and entrustment statutes are controlling. Consignment sales are governed by §§ 672.326, et seq., of the Florida Uniform *284 Commercial Code. The Seller's transfer of the Boat to the Debtor and the subsequent sale to Koetter constitutes a consignment sale pursuant to § 672.326 of the Florida Uniform Commercial Code....

...Even assuming, but not admitting, that the legend referred to may operate as an effective tool to convert a commercial invoice into an consignment agreement, such agreement can only be valid against creditors of the so-called consignee unless the person making delivery complies with the provisions of § 672.326(3) of the Florida Statutes which provides that the consignor “(a) complies with an applicable law providing for a consignor’s interest or the like to be evidenced by a sign or (b) establishes that the person conducting the business is...

...ansactions (Chapter 679).” There is nothing in this record to show that Magic Tilt complied with the applicable law providing for a consignor’s interest evidenced by a sign, or with the alternative available to a consignor under subclause (a) of § 672.326(3) Fla.Stat. This leaves for consideration whether or not Magic Tilt has established a compliance with the criteria set forth in either § 672.326(3)(b) or (c)....