Review Case entitled Pankratz Implement Company v. Citizens National Bank. Using IRAC, determine who you think should have prevailed in this case.

CASE 23.2 STATE COURT CASE Filing a Financing Statement Pankratz Implement Company v. Citizens National Bank 130 P.3d 57, Web 2006 Kan. Lexis 141 (2006) Supreme Court of Kansas "Thus, Pankratz' financing statement using the mis- name of the debtor, "Roger House," rather than the cor- spelled name of the debtor, while prior in time, was seri- rect name of the debtor. "Rodger House." One year later, ously misleading, ..." House obtained a loan from Citizens National Bank -Davis, Justice (CNB). House gave a security interest to CNB by pledg ing all equipment that he owned and that he may own in the future as collateral for the loan. CNB filed a financing Facts statement with the Kansas secretary of state using the cor- Rodger House purchased a tractor on credit from Pankratz rect name of the debtor, "Rodger House." Implement Company. House signed a note and security Several years later, while still owing money to Pankratz agreement that made the tractor collateral for the repay- and CNB, House filed for bankruptcy. Pankratz filed ment of the debt. The creditor filed a financing statement a lawsuit in Kansas trial court to recover the tractor. with the Kansas secretary of state using the misspelled CNB challenged the claim, alleging that it should be (case continues)permitted to recover the tractor. The trial court found it is particularly important to require exactness in the that Pankratz's misspelling of the debtor's first name on name used, the debtor's legal name. We conclude that its financing statement was a minor error and granted Pankratz' filed financing statement was "seriously summary judgment to Pankratz. The court of appeals misleading." held that Pankratz's misspelling of House's first name was seriously misleading and held in favor of CNB. Pankratz Decision appealed. The Supreme Court of Kansas held that the misspelling of Issue the debtor's name misled creditors and was therefore inef- Is Pankratz's filing of the financing statement under the fectual in giving CNB notice of Pankratz's security inter- wrong first name of the debtor seriously misleading? est in the tractor. The supreme court affirmed the court of appeals judgment in CNB's favor. Language of the Court Because the primary purpose of a financing statement is to provide notice to third parties that the creditor Ethics Questions has an interest in the debtor's property and the financ Did either party act unethically in this case? Or was this a ing statements are indexed under the debtor's name, legitimate legal dispute