Steven Light bought a $55,050 wedding ring for his wife, Sherri Light, on credit from Royal Jewelers, Inc., a store in Fargo, North Dakota. The receipt granted Royal a security interest in the ring. Later, Royal assigned its interest to GRB Financial Corp. Steven and GRB signed a modification agreement changing the repayment terms. An attached exhibit listed the items pledged as security for the modification including the ring. Steven did not separately sign the exhibit.

A year later, Steven died. Royal and GRB filed a suit in North Dakota state court against Sherri, alleging that GRB had a valid security interest in the ring. Sherri cited UCC 9-203, under which there is an enforceable interest only if "the debtor has authenticated a security agreement that provides a description of the collateral." Sherri argued that the modification agreement did not "properly authenticate" the description of the collateral, including the ring, because Steven had not signed the attached exhibit. The court issued a judgment in GRB's favor. Sherri appealed.

Issue:Was GRB's security interest in the ring valid and enforceable?

Decision:Yes. The North Dakota Supreme Court affirmed the lower court's judgment.

Questions to answer:

1. Do you agree or disagree with the decision that was made by the courts? Why or why not?
2. Why do you think Sherri felt that she was able to appeal? Was her decision impractical? Why?
3. What implications do you think his death should have since he gave Sherri the ring as a gift? Should she still be responsible to pay the remaining balance?
4. Discuss the ethical implications that you believe are at play with this case.