Florida/Georgia Personal Injury & Workers Compensation

...provision: A financing statement substantially complying with the requirements [of Section 679.5031] is effective, even if it has minor errors or omissions, unless the errors or omissions make the financing statement seriously misleading. Fla. Stat. § 679.5061(1) (the "Safe Harbor provision")....

...An error is minor, and the financing statement effective to perfect a creditor's security interest, "[i]f a search of the records of the filing office under the debtor's correct name, using the filing office's standard search logic, if any, would disclose" the creditor's financing statement. Fla. Stat. § 679.5061(2)....

...or by the trade name in which it did business rather than its corporate name was not seriously misleading.). Perfect Financing Statements Under Revised Article 9 A primary purpose of revised section 9-506 of the UCC, adopted in Florida as Fla. Stat. § 679.5061, [10] was to replace the former reasonableness standard with a clearer standard based on the computerized search logic of the filing office....

...Enacted to clarify the sufficiency of debtors' names in financing statements, the revision was "designed to discourage the fanatical and impossibly refined reading of statutory requirements in which courts occasionally have indulged themselves." Fla. Stat. § 679.5061 cmt....

..."Adding a reasonableness requirement would inevitably result in a situation where courts would have to delve into a host of case by case factual issues that were never contemplated by the legislative, and indeed, would require the courts to effectively rewrite the Safe Harbor Provision [Fla. Stat. § 679.5061] in a manner that conflicts with the plain language." (Klein Resp....

...Since it is undisputed that Klein's financing statement did not appear in the search result when the Debtor's correct name was input, the financing statement is seriously misleading and summary judgment in the Trustee's favor is appropriate. Although I have found that Fla. Stat. § 679.5061 is unambiguous, and that there is no implicit or explicit obligation of a searcher to go beyond the search result, I feel compelled to address what I view as Klein's incredible argument that the Florida statute unambiguously requires a se...

...itrary, that includes statutory guidance for simplifying the search, while allowing for "minor" errors. Accordingly, if I am incorrect, and in fact, the Florida search result includes more than the initial page displayed, then, in order to interpret section 679.5061 so as to avoid an absurd result, I would be compelled alternatively to hold, as did Chief Judge Glenn, that there is a reasonable limit to the search, which I find is no more than one page "previous" or "next" from the initial result screen....

...NOTES [1] On October 1, 2001, Florida privatized its UCC filing office and designated the Florida Secured Transaction Registry as the office in which to file a financing statement to perfect a security interest. Fla. Stat.§ 679.5011. [2] Fla. Stat. § 679.5031 [3] Fla. Stat. § 679.5061 [4] Klein conceded in his response that he is not entitled to a priority claim and therefore that issue is resolved in the Trustee's favor....

...d rights in the collateral. (2) If the difference between the name of the original debtor and that of the new debtor causes a filed financing statement that is effective under subsection (1) to be seriously misleading under the standard set forth in s. 679.5061: (a) The financing statement is effective to perfect a security interest in collateral acquired by the new debtor before, and within 4 months after, the new debtor becomes bound under s....

...erence between the name Summit Staffing and the name Summit Staffing of Polk County, Inc. causes the financing statement to be seriously misleading. The standard for determining whether the financing statement is seriously misleading is set forth in § 679.5061. 679.5061 Effect of errors or omissions (1) A financing statement substantially complying with the requirements of this part is effective, even if it has minor errors or omissions, unless the errors or omissions make the financing statement seriously misleading....

...ver, since the listing is an alphabetical listing, it is conceivable that one could use the "Previous" command to go back to the beginning of the alphabetical list. The purpose of the UCC filing system is to provide public notice of UCC filings, and section 679.5061(3) is reflective of this purpose....

...e multiple searches using variations on the debtor's name. Revised Article 9 rejects the duty of a searcher to search using any names *355 other than the name of the debtor indicated on the public record of the debtor's jurisdiction of organization. Section 679.5061(3) exempts an erroneous filing from being seriously misleading only if it would be disclosed in a "search of the records of the filing office under the debtor's correct name....

...esults of the search. If a reasonably diligent searcher would find the erroneous financing statement among the results of a proper search, then notice of the financing statement has been provided. Such a financing statement meets the requirements of section 679.5061(3) and is not seriously misleading....

...In considering our certified questions, the Florida Supreme Court found dispositive a threshold issue that we did not expressly address: “Is the filing office’s use of a ‘standard search logic’ neces- sary to trigger the safe harbor protection of section 679.5061(3)?” 1944 Beach Boulevard, LLC v....

...USCA11 Case: 21-11742 Date Filed: 09/29/2022 Page: 3 of 12 21-11742 Opinion of the Court 3 name the debtor as required by Florida law is ‘seriously misleading’ under Florida Statute § 679.5061(2) and therefore ineffective.” Id. We therefore hold that Live Oak did not perfect its security interest in 1944 Beach Boulevard, LLC’s, assets because the two UCC-1 Financing Statements filed with the Florida Secured Trans- action Registry (the “Registry”) were “seriously misleading” under Florida Statute § 679.5061(2), as the Registry does not implement a “standard search logic” necessary to trigger the safe harbor excep- tion set forth in Florida Statute § 679.5061(3)....

...21-11742 listed in the articles of organization filed with the Florida Secretary of State.” Id. Beach Boulevard filed a complaint asserting that Live Oak’s UCC-1 financing statements were “seriously misleading” under Florida Statute § 679.5061(2) and therefore ineffective to perfect Live Oak’s security interest. Id. at 750–51. The parties eventually cross-moved for summary judgment, and the bankruptcy judge granted summary judgment for Live Oak, concluding that Live Oak’s financing statements fell under the “safe harbor” of Florida Statute § 679.5061(3) “because the Registry’s standard search logic discloses the Financing Statements on the page immediately pre- ceding the initial page on the Registry’s website.” Id....

...description of the collateral covered by the financing statement,” id. (quoting Fla. Stat. § 679.5021(1)). USCA11 Case: 21-11742 Date Filed: 09/29/2022 Page: 6 of 12 6 Opinion of the Court 21-11742 Florida Statute § 679.5061 concerns the “[e]ffect of errors or omissions” in financing statements....

...section states that a financing statement may contain minor errors or omissions and remain effective to perfect a security interest, un- less the error or omission renders the financing statement ‘seri- ously misleading.’” 1944 Beach II, 2022 WL 3650803, at *3 (quoting § 679.5061(1)). The second and third subsections of the statute, in turn, define “seriously misleading” as it relates to errors or admis- sions in naming the debtor. Id. Section 679.5061(2) “creates a zero- USCA11 Case: 21-11742 Date Filed: 09/29/2022 Page: 7 of 12 21-11742 Opinion of the Court 7 tolerance rule, under which a financing statement that fails to name the debtor as directed in [Florida Statute § 679.5031(1)] is ‘seriously misleading.’” 2 Id. And section 679.5061(3) creates a “safe harbor exception” to subsection (2)’s zero-tolerance rule providing that a financing statement with errors or omissions in naming a debtor “will still be effective to perfect a security interest so long as ‘a search of the records of the filing office under the debtor's correct name, using the filing office's standard search logic, if any, would disclose’ the financing statement.” Id. at *4 (quoting § 679.5061(3)). Turning to this case, Beach Boulevard and Live Oak disagree as to whether Live Oak’s financing statements fell under the safe harbor exception in section 679.5061(3)....

...would resolve the split, we certified these three questions to that court: (1) Is the “search of the records of the filing office un- der the debtor’s correct name, using the filing office's standard search logic,” as provided for by Florida Stat- ute § 679.5061(3), limited to or otherwise satisfied by the initial page of twenty names displayed to the user of the Registry's search function? (2) If not, does that search consist of all names in the filing office's databa...

...USCA11 Case: 21-11742 Date Filed: 09/29/2022 Page: 9 of 12 21-11742 Opinion of the Court 9 “Is the filing office's use of a ‘standard search logic’ necessary to trigger the safe harbor protection of section 679.5061(3)?” 3 1944 Beach II, 2022 WL 3650803, at *1. And reading the language of section 679.5061(3), the court concluded “yes.” Id. After analyzing the relevant statutory text, the Florida Su- preme Court also explained that section 679.5061(3) “does not de- fine the scope of the search of the filing office’s records that is nec- essary to determine whether the safe harbor applies,” i.e., did not explain what “standard search logic” means in the context of the statute....

...ctions industry, which requires the search to identify specific hits, if any,” and held that “the search option offered by the Registry, which re- turns the entire index, is not a ‘standard search logic.’” Id. at *5. The court held that “section 679.5061(3) provides one way and one way only to search the filing office’s records for purposes of deter- mining whether the safe harbor applies to a financing statement that incorrectly names a debtor—i.e., ‘using the filing office’s stand- ard search logic, if any.’” Id. As a result, the court explained that “[b]ecause the Registry lacks a ‘standard search logic,’ the search contemplated by section 679.5061(3) is impossible, which means that filers are left with the zero-tolerance rule of section 679.5061(2).” Id....

...21-11742 Opinion of the Court 11 Supreme Court, since the Registry currently does not implement a “standard search logic,” it is impossible to conduct a search neces- sary to qualify for the safe harbor exception contained in section 679.5061(3). Id. Thus, section 679.5061(2)’s zero-tolerance rule ap- plies....

...As previously noted, Live Oak’s filing statements identify Beach Boulevard as “1944 Beach Blvd., LLC,” instead of its legal name, “1944 Beach Boulevard, LLC,” listed in its articles of organ- ization filed with the Florida Secretary of State. 1944 Beach I, 20 F.4th at 750. Under section 679.5061(2), Live Oak’s financing state- ments are “seriously misleading” because they “fail[] sufficiently to provide the name of the debtor in accordance with [section] 679.5031(1),” and are therefore ineffective to perfect a security in- terest in Beach Boulevard’s assets under Florida law....

...Florida and New York both provide that "A financing statement substantially complying with the requirements of this part is effective, even if it has minor errors or omissions, unless the errors or omissions make the financing statement seriously misleading." Fla. Stat. § 679.5061(1); N.Y.U.C.C....

...rd search logic, if any, would disclose a financing statement that fails sufficiently to provide the name of the debtor in accordance with [UCC section 9-503], the name provided does not make the financing statement seriously misleading." Fla. Stat. § 679.5061(3); N.Y.U.C.C....

...9. New York's version of Revised Article 9, NY UCC § 9-101 et seq., was effective July 1, 2001. Florida's version of Revised Article 9, Fla. Stat. § 679.1011 et seq., was effective January 1, 2002. [5] The corresponding statute under Florida law, § 679.5061....

...standard search logic, if any, would disclose a financing statement that fails sufficiently to provide the name of the debtor in accordance with s. 679.5031(1), the name provided does not make the financing statement seriously misleading. Fla. Stat. § 679.5061....

...In Florida, a creditor’s financing statement that does not list the debtor’s correct name is, as a matter of statutory prescription, “seriously mislead- ing” and therefore ineffective to perfect the creditor’s security in- terest. Fla. Stat. § 679.5061(2). There is no dispute that Live Oak’s financing statements did not list Beach Boulevard’s correct name. Florida Statute § 679.5061(3), however, establishes a safe harbor for defective financing statements, and whether Live Oak perfected its USCA11 Case: 21-11742 Date Filed: 12/10/2021 Page: 3 of 22 21-11742 Opinion of the Court...

...Summit Staffing Polk County, Inc., 305 B.R. 347 (Bankr. M.D. Fla. 2003), and In re John’s Bean Farm of Homestead, Inc., 378 B.R. 385 (Bankr. S.D. Fla. 2007), the bankruptcy court determined that Live Oak’s financing statements fell “within the Safe Harbor provision of Fla. Stat. Section 679.5061(1) because the Registry’s standard search logic discloses the Financing Statements on the page imme- diately preceding the initial page on the Registry’s website.” The bankruptcy court therefore concluded that the financing sta...

...Id. § 679.5021(1). A financing statement that substantially complies with the statutory requirements “is effective, even if it has minor errors or omissions, unless the errors or omissions make the financing state- ment seriously misleading.” Id. § 679.5061(1)....

...As it relates to the debtor name requirement, Florida law expressly provides that “a financing statement that fails sufficiently to provide the name of the debtor in accordance with [Florida law] is seriously misleading” and therefore ineffective to perfect a security interest. Id. § 679.5061(2). In the case of Beach Boulevard, an LLC organized under Florida law, the debtor’s name listed on a financing statement is sufficient “only if the financing statement provides the name that USCA11 Case: 21-11742 Date...

...ard search logic, if any, would disclose a financing statement that fails sufficiently to provide the name of the debtor in accordance with [the statute], the name provided does not make the financing state- ment seriously misleading. Id. § 679.5061(3)....

...ticle 9’s Public Records, 2007 B.Y.U. L. Rev. 111, 124 (2007)). Un- surprisingly, this flexible, fact-intensive standard “created extensive litigation and fragmented or contradictory decisions.” Id. When Florida adopted revised § 9-506 of the UCC, as Flor- ida Statute § 679.5061, the Florida Legislature abrogated the judi- cially-created “reasonably diligent searcher” standard. Looking at the plain language of section 679.5061, the rule is clear: a financing statement with the debtor’s incorrect legal name is effective only if USCA11 Case: 21-11742 Date Filed: 12/10/2021 Page: 11 of 22 21-11742 Opinion of the Court...

...name and the Registry’s standard search logic produces that financing state- ment. If the financing statement with the debtor’s incorrect name is not produced after this search, then the financing statement is ineffective as a matter of law. Id. § 679.5061(2)–(3). As noted by two bankruptcy courts, Florida’s adoption of this revision to Article 9 of the UCC puts the burden on the filing creditor to include the debtor’s correct legal name in its financing statement and removes the burden from searchers to conduct mul- tiple searches....

...between the name of the original debtor and the name of the new debtor causes the financing statements to be seriously misleading. Id. § 679.508(2). The statute provides that “seriously misleading” means the same standard set forth in Florida Statute § 679.5061, the statute at issue here. USCA11 Case: 21-11742 Date Filed: 12/10/2021 Page: 16 of 22 16 Opinion of the Court 21-11742 the revisions to Article 9 do not entirely remove the duty imposed on a searcher to be reasonably diligent.” Id....

...USCA11 Case: 21-11742 Date Filed: 12/10/2021 Page: 18 of 22 18 Opinion of the Court 21-11742 with the debtor’s incorrect legal name. Id. at 355. Thus, we are confronted with a fairly well-defined split over whether section 679.5061(3) establishes a bright-line rule or a more flexible, reason- ableness-based regime. The statutory reference to “standard search logic” means that the relevant “search” is limited to the results generated by use of that search logic....

...in- put by the user with the names listed in the database and the sub- sequent display of a single page listing the twenty names most closely matching the search name. The court in In re John’s Bean Farm concluded that the “search” as used in section 679.5061(3) is limited to those twenty names—and only those twenty names— for purposes of the safe harbor. On the other hand, it is also undisputed that a search using the Registry’s search logic merely takes the user to a given point in the Registry database based on the debtor name input for the search....

...o back to the beginning of the alphabetical list,” the court in In re Summit Staffing con- cluded that there is a “reasonableness” component, which “devel- ops at some point,” to the user’s obligation to review the search conducted under section 679.5061(3)....

...As the court in In re John’s Bean Farm noted, this reasonableness qualifier to a search conducted pursuant to section 679.0581(3) is not found in the statutory text. 378 B.R. at 395. All of this is to say that the existing case law contains two competing interpretations of what “search” means for purposes of the section 679.5061(3) safe harbor....

...stitution and Florida Rule of Appellate Procedure 9.150 3: (1) Is the “search of the records of the filing office un- der the debtor’s correct name, using the filing of- fice’s standard search logic,” as provided for by Florida Statute § 679.5061(3), limited to or other- wise satisfied by the initial page of twenty names displayed to the user of the Registry’s search func- tion? (2) If not, does that search consist of all names in the...

...Eleventh Circuit that are determinative of a cause pending in that court and for which there appears to be no controlling precedent. We have jurisdiction. See art. V, § 3(b)(6), Fla. Const. The certified questions concern the interpretation of section 679.5061(3), Florida Statutes (2021), which creates a safe harbor for financing statements that are otherwise ineffective to perfect a security interest because they fail to correctly name the debtor as required by Florida law....

...The safe harbor applies when a financing statement that fails to correctly name the debtor is disclosed by “a search of the records of the filing office under the debtor’s correct name, using the filing office’s standard search logic, if any.” § 679.5061(3)....

...2021). However, as explained below, we find dispositive a threshold question that was not expressly addressed or certified by the Eleventh Circuit, namely: “Is the filing office’s use of a ‘standard search logic’ necessary to trigger the safe harbor protection of section 679.5061(3)?” Reading section 679.5061 in its entirety, our answer is yes....

...Transaction Registry, does not employ a “standard search logic,” we hold that the safe harbor cannot apply, which means that a financing statement that fails to correctly name the debtor as required by Florida law is “seriously misleading” and therefore ineffective. § 679.5061(2)....

...Beach Boulevard filed a complaint in the bankruptcy court, which asserted that Live Oak’s financing statements failed to correctly name the debtor as required by Florida law, making the statements “seriously misleading” within the meaning of section 679.5061(2) and therefore ineffective to perfect Live Oak’s security interest. See In re NRP Lease Holdings, 20 F.4th at 750. Seeking the statutory safe harbor protection provided by section 679.5061(3) for financing statements that would otherwise be ineffective for failing to correctly name the debtor, see § 679.5061(2), Live Oak asserted in its answer to Beach Boulevard’s complaint the affirmative defense that “its financing statements substantially complied with Florida law and that abbreviating ‘Boulevard’ to ‘Blvd.’ was a minor err...

...Eleventh Circuit. In re NRP Lease Holdings, 20 F.4th at 752. On appeal, the Eleventh Circuit identified “two competing interpretations” in the case law regarding the scope of the search that is necessary to determine whether the safe harbor of section 679.5061(3) applies....

...rtified to this Court the following questions: (1) Is the “search of the records of the filing office under the debtor’s correct name, using the filing office’s standard search logic,” as provided for by Florida Statute § 679.5061(3), limited to or otherwise satisfied by the initial page of twenty names displayed to the user of the Registry’s search function? (2) If not, does that search consist of all names in the filing office’s database,...

...ues of statutory interpretation concerning the scope of the search necessary to determine whether a financing statement that would otherwise be ineffective because it fails to correctly name the debtor falls within the safe harbor established by section 679.5061(3)....

...the time it was issued.’ ” Ham v. Portfolio Recovery Assocs., LLC, 308 So. 3d 942, 947 (Fla. 2020) (quoting Antonin Scalia & Bryan A. Garner, Reading Law: The Interpretation of Legal Texts 33 (2012)). Thus, we begin with the statute’s text. The three subsections of section 679.5061 relevant to the certified questions read as follows: (1) A financing statement substantially complying with the requirements of this part is effective, even if it has minor errors or omissions, unless the errors...

...ncing statement that fails sufficiently to provide the name of the debtor in accordance with s. 679.5031(1), the name provided does not make the financing statement seriously misleading. -8- § 679.5061(1)-(3).1 The first subsection states that a financing statement may contain minor errors or omissions and remain effective to perfect a security interest, unless the error or omission renders the financing statement “seriously misleading.” § 679.5061(1)....

...contain errors or omissions in naming the debtor. See Fla. Virtual Sch. v. K12, Inc., 148 So. 3d 97, 102 (Fla. 2014) (explaining that “a specific statute will control over a general statute”). For financing statements that fail to correctly name the debtor, section 679.5061(2), does two things. First, the subsection creates a zero-tolerance rule, under which a financing statement that fails to name the debtor as directed in section 679.5031(1), Florida 1. The only other provision of section 679.5061 is subsection (4), which addresses a situation not at issue here. -9- Statutes (2021), is “seriously misleading” and therefore ineffective. § 679.5061(2)....

...jurisdiction of organization that purports to state, amend, or restate the registered organization’s name.” Second, subsection (2) also carves out an exception to its zero-tolerance rule—the safe harbor of subsection (3). The safe harbor exception codified in section 679.5061(3) provides that a financing statement with errors or omissions in naming the debtor will still be effective to perfect a security interest so long as “a search of the records of the filing office under the debtor’s correct name, using the filing office’s standard search logic, if any, would disclose” the financing statement. § 679.5061(3). As evinced by the Eleventh Circuit’s certified questions, section 679.5061(3) does not define the scope of the search of the - 10 - filing office’s records that is necessary to determine whether the safe harbor applies....

...2016) (opining that the search option offered by Florida’s Registry “should not be considered a ‘standard search logic’ ” because “the system does not yield particular ‘hits’ ”). In certifying its questions concerning the proper scope of the search required to determine whether the safe harbor of section 679.5061(3) applies, the Eleventh Circuit recognized these problems with the Registry’s current search option, see In re NRP Lease Holdings, 20 F.4th at 756-57, but it nevertheless determined that the Registry employs a “standard search logic,” see, e.g., id....

...the secured transactions industry, which requires the search to identify specific hits, if any, and hold that under this definition the search option offered by the Registry, which returns the entire index, is not a “standard search logic.” Moreover, because we read section 679.5061(2)-(3) as conditioning the safe harbor’s application on the ability to search the Registry’s records using a “standard search logic,” it is unnecessary for us to address the Eleventh Circuit’s certified questions. Instead, we hold that section 679.5061(3) provides one way and one way only to search the filing office’s records for purposes of determining whether the safe harbor applies to a financing statement that incorrectly names a debtor— i.e., “using the filing office’s standard search logic, if any.” Because the Registry lacks a “standard search logic,” the search contemplated by section 679.5061(3) is impossible, which means that filers are left with the zero-tolerance rule of section 679.5061(2). - 14 -  This interpretation is further bolstered by reading section 679.5061(2)-(3) together with section 679.5031(1), which plainly places the burden to correctly name the debtor on the filer of a financing statement....

...2005) (“The doctrine of in pari materia is a principle of statutory construction that requires that statutes relating to the same subject or object be construed together to harmonize the statutes and to give effect to the Legislature’s intent.”). By interpreting section 679.5061(2)-(3) as being intolerant of any errors or omissions in naming the debtor—no matter how minor—unless and until the Registry implements a “standard search logic” necessary to determine whether the safe harbor applies, we faithfully adhere to the text of section 679.5061(2)-(3), keep the burden on the filer consistent with section 679.5031(1), and avoid imposing requirements on the searcher that are not specified in the statute. CONCLUSION The Eleventh Circuit’s certified questions ask us to define the scope of the search required to determine whether a financing statement that fails to correctly name the debtor is nevertheless - 15 - deemed effective under the safe harbor of section 679.5061(3). However, because we hold that the Florida Secured Transaction Registry’s failure to employ a “standard search logic” precludes the safe harbor from applying in the first instance, we find it unnecessary to reach the certified questions. Unless and until the Registry employs a standard search logic, under the zero-tolerance rule of section 679.5061(2), any financing statement that fails to correctly name the debtor as required by section 679.5031(1) is “seriously misleading” and therefore ineffective. Having explained why our interpretation of section 679.5061 makes it unnecessary to reach the certified questions, we return this case to the United States Court of Appeals for the Eleventh Circuit. It is so ordered. MUÑIZ, C.J., and CANADY, POLSTON, LABARGA, COURIEL, and GROSSHANS,...