In Washington, when a secured party has a perfected security interest in collateral, and that collateral is sold to a buyer who is not a buyer in the ordinary course of business, the buyer takes the collateral subject to the perfected security interest. This is governed by Washington’s adoption of Article 9 of the Uniform Commercial Code. Specifically, RCW 62A.9A-317(b) states that a security interest is subordinate to the rights of a buyer of goods who gives value and receives delivery of the collateral without knowledge of the security interest and before it is perfected. However, this protection does not extend to buyers who are not in the ordinary course of business or who have knowledge of the security interest. In the scenario presented, the sale of the specialized industrial equipment by Pacific Manufacturing to Coastal Construction is not a sale in the ordinary course of business, as Coastal Construction is aware of the security interest held by Rainier Bank. Therefore, Rainier Bank’s perfected security interest in the equipment continues to attach to the collateral even after the sale to Coastal Construction. The bank’s prior perfection provides it with priority over subsequent transferees of the collateral, absent specific statutory exceptions that do not apply here.

Under Washington’s Uniform Commercial Code Article 9, when a secured party has a perfected security interest in collateral and the debtor defaults, the secured party generally has the right to repossess the collateral. This right is subject to certain limitations, particularly concerning breaches of the peace. A breach of the peace is a violation of public order that can be committed by an individual or a group. In the context of secured transactions, it refers to actions by the secured party or their agent that disturb the public peace during repossession. Washington case law, interpreting UCC § 9-609, emphasizes that a secured party cannot use force, threats, or unlawful entry into a dwelling to repossess collateral. For instance, entering a locked garage without permission or employing excessive force would constitute a breach of the peace. However, simply entering an unlocked premises or repossessing from a public area without causing a disturbance is typically permissible. The key is to avoid actions that would likely provoke violence or alarm the public. Therefore, if the secured party’s agent enters the debtor’s unlocked barn to repossess a tractor without causing any disturbance or using force, it would not be considered a breach of the peace under Washington law. The absence of force, threats, or unauthorized entry into a dwelling are critical factors.

This scenario delves into the concept of perfection of a security interest in collateral that is subject to a certificate of title, specifically focusing on motor vehicles within Washington State. Under Article 9 of the Uniform Commercial Code, as adopted in Washington, a security interest in a vehicle that requires a certificate of title is generally perfected by notation on the certificate of title itself, rather than by filing a financing statement under UCC § 9-303 and § 9-311(a). The Washington State Department of Licensing is the designated authority for maintaining these certificates. Therefore, for a lender to establish a continuously perfected security interest in a vehicle that is subject to a certificate of title in Washington, the lender must ensure the security interest is noted on the certificate of title. This process supersedes the general filing requirements of Article 9 for most tangible personal property. Failure to have the security interest noted on the certificate of title means the security interest is unperfected, or its perfection has lapsed, leaving it vulnerable to claims by other creditors and potentially the buyer in the ordinary course of business. The question tests the understanding that the exclusive method for perfecting a security interest in such collateral in Washington is through the title notation process mandated by state law, which aligns with the principles of UCC § 9-303 concerning perfection in states requiring certificates of title.

The core issue here is determining the proper place to file a financing statement to perfect a security interest in a deposit account that is not held by the debtor at a bank located in Washington. Article 9 of the Uniform Commercial Code, as adopted in Washington (RCW 62A.9A), generally requires perfection of a security interest in a deposit account by control. However, when the deposit account is not located in Washington, and the debtor is located in Washington, the place of filing is governed by RCW 62A.9A-307 and RCW 62A.9A-301. RCW 62A.9A-307(1) states that the location of the debtor dictates the law governing perfection and priority of a security interest in deposit accounts. The debtor, “Evergreen Innovations LLC,” is located in Washington, as its chief executive office is situated there. Therefore, the law of Washington governs. Under RCW 62A.9A-301(1)(a), for deposit accounts, the secured party must have control. Control is achieved when the secured party is the bank itself, or if the secured party agrees with the bank that the bank will follow the secured party’s instructions without further consent by the debtor. Since Evergreen Innovations LLC maintains its deposit account at “Pacific Trust Bank,” which is located in Oregon, and Evergreen Innovations LLC is located in Washington, Washington law applies to perfection. To perfect a security interest in a deposit account not held by the debtor at a bank in Washington, where the debtor is located in Washington, perfection is achieved through control. The financing statement is not the primary method of perfection for deposit accounts; control is. Therefore, the secured party must obtain control of the deposit account.

The scenario involves a dispute over collateral priority between a purchase money security interest (PMSI) holder and a prior perfected security interest holder. Under Washington’s UCC Article 9, a PMSI in inventory generally has priority over a conflicting security interest in the same inventory if certain conditions are met. Specifically, for inventory, the PMSI holder must have perfected its security interest when the debtor received possession of the inventory and must have given an authenticated notification to any other secured party whose security interest is known to the PMSI holder or who has filed a financing statement covering the goods in question. The notification must state that the PMSI holder expects to acquire a PMSI in inventory of that kind and must describe or identify the inventory. This notification is effective for five years. In this case, Pacific Bank had a prior perfected security interest in all of Alpha Corp’s inventory. Zenith Corp acquired a PMSI in new inventory delivered to Alpha Corp. Zenith Corp perfected its security interest and provided written notification to Pacific Bank prior to Alpha Corp receiving possession of the new inventory. Therefore, Zenith Corp’s PMSI in the new inventory has priority over Pacific Bank’s earlier perfected security interest in the same collateral. The priority rules for inventory are distinct from those for equipment or other types of collateral, emphasizing the need for timely notification to preserve PMSI priority in constantly changing inventory. The notification requirement is crucial for ensuring that prior secured parties are aware of the existence of a PMSI in subsequently acquired inventory.

The scenario involves a purchase money security interest (PMSI) in inventory. Under Washington’s version of UCC Article 9, a PMSI in inventory is perfected when the secured party has possession or control of the collateral and has filed a financing statement. However, for a PMSI in inventory to have priority over a prior perfected security interest in the same inventory, the secured party must also give notification to any other secured party who has previously filed a financing statement covering the goods. This notification must be sent before the debtor receives possession of the inventory. The notification must state that the PMSI lender expects to acquire a PMSI in inventory of the debtor and must describe the inventory and the debtor. If these requirements are met, the PMSI lender will have priority. In this case, Lumina Corp has a prior perfected security interest in all of “Evergreen Electronics'” inventory. Nova Financial provides a PMSI loan for new inventory. To gain priority, Nova Financial must file its financing statement and notify Lumina Corp of its intent to acquire a PMSI in Evergreen Electronics’ inventory. The notification must be sent before Evergreen Electronics receives the inventory. The question asks about the timing of Nova Financial’s notification for priority. The correct timing is before the debtor receives possession of the inventory.

In Washington State, the perfection of a security interest in accounts is generally achieved by filing a financing statement in the appropriate jurisdiction. However, there is an exception for “new value” granted to a debtor in exchange for an interest in a specifically identified account, provided that the secured party also takes possession or control of the account proceeds. This exception, often referred to as the “isolated account” rule or a limited perfection exception, allows for temporary perfection without filing under specific circumstances. The core of this exception hinges on the debtor’s ability to grant a security interest in a specific account and the secured party’s actions to secure that interest beyond mere agreement. The secured party must take action that provides notice to potential third-party creditors. For an account that is not part of a larger pool of accounts, and where the secured party has taken possession or control of the proceeds of that specific account, perfection without filing is possible. This scenario tests the understanding of the scope of perfection requirements for accounts under Article 9, particularly the nuances of exceptions to the general filing rule. The key elements are the specific identification of the account, the granting of a security interest, and the secured party’s actions to gain control or possession of the proceeds.

The core issue here revolves around the perfection of a security interest in accounts receivable. Under Washington’s version of UCC Article 9, a security interest in accounts is generally perfected by filing a financing statement. However, there is a significant exception: a security interest in accounts that constitutes a “sale of accounts” is treated differently. While the UCC generally governs both secured transactions and sales of accounts, the perfection rules can differ. Specifically, under UCC § 9-309(2), a security interest in a sale of accounts, general intangibles, or chattel paper that taken all together, does not transfer a significant part of the outstanding accounts, general intangibles, or chattel paper of the seller or other assignor is automatically perfected. This is often referred to as the “casual or isolated sale” exception for perfection. In this scenario, the transfer of all of the outstanding accounts of “Coastal Ventures LLC” to “Pacific Capital Corp.” represents a significant portion, if not all, of Coastal Ventures’ accounts. Therefore, the perfection of Pacific Capital Corp.’s security interest is not automatic. To achieve perfection, Pacific Capital Corp. would need to file a financing statement in accordance with UCC § 9-310(1). Without such a filing, Pacific Capital Corp.’s security interest in the accounts would be unperfected against a subsequent lien creditor, such as the IRS in this case, which can levy upon the collateral. The filing of a tax lien by the IRS creates a statutory lien, and an unperfected security interest is subordinate to a lien creditor’s rights. Therefore, the IRS’s lien would generally take priority over Pacific Capital Corp.’s unperfected security interest in the accounts.

The core issue in this scenario revolves around the perfection of a security interest in accounts, specifically those arising from the sale of goods by a manufacturer in Washington State. Under Washington’s UCC Article 9, a security interest in accounts is generally perfected by filing a financing statement in the jurisdiction where the debtor is located. The debtor, “Pacific Widgets Inc.,” is located in Washington State. The collateral is accounts arising from the sale of goods. While a security interest in goods themselves might involve different perfection rules depending on whether they are inventory, equipment, etc., the security interest here is in the *accounts* generated from those sales. Washington’s UCC § 9-307(a) dictates that the law of the jurisdiction where the debtor is located governs perfection and priority of a security interest in a deposit account, letter-of-credit right, or chattel paper, or an account, general intangible, or other general type of collateral, except as otherwise provided in RCW 62A.9A-316. For accounts, the general rule in RCW 62A.9A-307(e) states that the law of the jurisdiction where the debtor is located governs perfection and priority. Since Pacific Widgets Inc. is located in Washington, the filing of the financing statement in Washington is the correct method to perfect the security interest in the accounts. A filing in California, where the buyer is located, would be incorrect for perfecting a security interest in accounts of a Washington-domiciled debtor. Similarly, possession is not a method for perfecting a security interest in accounts. Therefore, the financing statement filed in Washington provides the proper notice and establishes the secured party’s perfected status against subsequent creditors and purchasers.

The core issue here revolves around the priority of security interests when collateral is transferred. Under Washington’s Article 9, specifically RCW 62A.9A-316, a secured party’s rights and obligations continue when a debtor’s location or the location of collateral changes. However, when collateral is transferred to a buyer who is a buyer in ordinary course of business (BIOC) and the collateral is located in a different jurisdiction than originally perfected, the secured party must reperfect within a certain timeframe to maintain priority. In this scenario, Aurora Bank perfected its security interest in the specialized manufacturing equipment by filing in Washington, where the debtor, Cascade Innovations, was located. The equipment was then sold to a BIOC, Rainier Manufacturing, which is located in Oregon. Under RCW 62A.9A-316(a), a security interest perfected in one jurisdiction remains perfected for a period of four months after the collateral is moved to another jurisdiction, or until perfection ceases under the law of the original jurisdiction, whichever occurs first. Rainier Manufacturing purchased the equipment while it was still in Washington. However, the key is that Rainier Manufacturing is located in Oregon, and the equipment’s new location is Oregon. Aurora Bank’s perfection in Washington is effective against Rainier Manufacturing for four months after the equipment was moved to Oregon. Rainier Manufacturing then sold the equipment to Summit Industries in California. For Aurora Bank to maintain its priority against subsequent purchasers or secured parties in Oregon, it needed to file a new financing statement in Oregon within that four-month grace period. Since Aurora Bank failed to file in Oregon within four months of the equipment’s relocation to Oregon, its security interest became unperfected in Oregon. When Summit Industries, located in California, subsequently obtained a purchase money security interest (PMSI) in the same equipment and perfected it by filing in California, its perfected PMSI would generally have priority over an unperfected security interest. Washington Article 9 rules, particularly RCW 62A.9A-316(d), state that if a security interest becomes unperfected upon removal of collateral to another jurisdiction, it is generally subordinate to a perfected security interest that attaches after the original perfection has ceased. Even though Summit Industries is in California, the critical failure was Aurora Bank’s lack of reperfection in Oregon, the jurisdiction where the collateral was located and where Rainier Manufacturing (the buyer from Aurora’s debtor) was situated. Therefore, Aurora Bank’s security interest is subordinate to Summit Industries’ perfected PMSI. The initial perfection in Washington is relevant, but the failure to reperfect in Oregon, the jurisdiction to which the collateral was moved and where the buyer was located, is determinative. The four-month rule under RCW 62A.9A-316(a) is the critical period for maintaining perfection.

In Washington state, as governed by Revised Code of Washington (RCW) Chapter 62A.9A, the perfection of a security interest in a deposit account is achieved by control. Control over a deposit account is established when the secured party is the bank in which the deposit account is maintained, or when the secured party obtains the agreement of the bank in which the deposit account is maintained to comply with instructions from the secured party directing disposition of the funds in the account. RCW 62A.9A-104 outlines the methods for obtaining control over deposit accounts. A security agreement alone, without control, is insufficient to perfect a security interest in a deposit account against a competing claimant. Therefore, while a security agreement is necessary to create the security interest, it is the attainment of control that perfects it for priority purposes under Article 9. The filing of a financing statement is generally not effective to perfect a security interest in a deposit account, as it is an exclusive method of perfection for deposit accounts. The scenario describes a security agreement and a financing statement but omits the crucial element of control. Without control, the security interest remains unperfected against third parties who may have a superior claim, such as a buyer of the account or a lien creditor.

The core issue in this scenario revolves around the perfection of a security interest in a deposit account, which is a specific type of collateral under Article 9 of the Uniform Commercial Code. Washington, like most states, follows the UCC framework. Perfection in deposit accounts is generally achieved through control, as defined in UCC § 9-104. Control is established when the secured party is the bank in which the deposit account is maintained, or when the debtor has agreed in writing that the bank will comply with the secured party’s instructions concerning the balance of the deposit account. UCC § 9-312(b) states that a security interest in a deposit account as original collateral can only be perfected by control. Filing a financing statement is explicitly not sufficient for perfection of a security interest in a deposit account. Therefore, even though Bank of the Cascades filed a UCC-1 financing statement, this action does not perfect their security interest in the specific deposit account held at Bank of the Cascades. The security interest remains unperfected with respect to that deposit account. The filing of the UCC-1 would be effective for other types of collateral, such as inventory or equipment, but not for the deposit account itself. The question tests the specific rule for perfection of security interests in deposit accounts, which requires control and explicitly excludes filing as a method of perfection.

The core issue here is determining the priority of security interests when a debtor’s collateral is transferred. Under Washington’s Article 9, a buyer of goods takes the collateral free of a security interest if the buyer is a buyer in ordinary course of business (BIOC) and the secured party authorized the sale. A BIOC is generally defined as a person who buys goods in good faith, without knowledge that the sale violates the rights of the secured party, and from a person in the business of selling goods of that kind. RCW 62A.1-201(9). Here, “Artisan’s Alley” is a retailer that sells furniture, which is the type of collateral in question. “Bespoke Furnishings” is a customer who purchased a dining set from Artisan’s Alley. There is no indication that Bespoke Furnishings had knowledge that the sale violated any security interest held by “Capital Creditors Inc.” Therefore, Bespoke Furnishings likely qualifies as a BIOC. Furthermore, the security agreement between Artisan’s Alley and Capital Creditors Inc. likely contains a clause permitting Artisan’s Alley to sell inventory in the ordinary course of business, which is a common practice for retailers. If such authorization exists, either explicitly or implicitly through the nature of the business and the secured party’s conduct, then the buyer takes free of the security interest. Even without explicit authorization, a BIOC generally takes free of a security interest created by the seller, unless the buyer has knowledge of the security interest. Since Capital Creditors Inc. perfected its security interest by filing, this perfection would typically give notice to potential buyers. However, the BIOC exception overrides this notice if the buyer meets the definition and the sale is authorized. The key is the authorization of sale, which is presumed for inventory sold by a merchant in the ordinary course of business unless otherwise specified or indicated by the secured party’s actions. Without evidence that Capital Creditors Inc. took steps to prevent such sales or that Bespoke Furnishings had knowledge of the security interest, the sale to Bespoke Furnishings is likely free of Capital Creditors Inc.’s security interest.

In Washington State, under Article 9 of the Uniform Commercial Code, a security interest in fixtures is perfected by filing a fixture filing. A fixture filing is a financing statement that indicates it is to be filed in the real property records and contains a description of the real property sufficient to identify it. Such a filing must be made in the office designated for the recording of mortgages on the real property. The perfection of a security interest in fixtures is governed by RCW 62A.9A-501 and RCW 62A.9A-502. RCW 62A.9A-515(d) specifies the duration of a fixture filing, which is generally twenty years from the date of filing, unlike a standard UCC financing statement which is typically five years. This longer duration reflects the permanent nature of fixtures and the real property recording system. Therefore, a fixture filing remains effective for twenty years.

The core issue here revolves around the perfection of a security interest in deposit accounts under Washington’s version of UCC Article 9. Washington law, specifically RCW 62A.9A-312(b), states that a security interest in a deposit account can only be perfected by control. Control is defined in RCW 62A.9A-104. For a bank that is the depositary bank, control is achieved when the bank becomes the customer of the account with respect to the deposit account. In this scenario, Rainier Bank is the depositary bank and has entered into a control agreement with Evergreen Corp. The control agreement explicitly grants Rainier Bank “sole dominion and control” over the deposit account. This agreement effectively makes Rainier Bank the customer with respect to that account, satisfying the control requirement for perfection under RCW 62A.9A-104(a)(1). Therefore, Rainier Bank’s security interest is perfected. The question of whether the security interest is unperfected is incorrect because control has been established. The argument that perfection requires filing is incorrect as deposit accounts are explicitly excluded from the general filing rules for perfection under RCW 62A.9A-310(b)(2), which mandates control for perfection. The notion that perfection is achieved automatically upon attachment is also incorrect; while attachment is necessary, it does not equate to perfection for deposit accounts.

The scenario involves a purchase money security interest (PMSI) in inventory. Under Washington’s UCC Article 9, a secured party claiming a PMSI in inventory must satisfy specific perfection requirements. The core principle is that to gain priority over other secured parties and buyers, the PMSI holder must perfect its security interest. For inventory, this generally requires filing a financing statement and, crucially, giving notice to any existing secured parties whose security interests cover the same collateral. Washington’s UCC § 9-324 outlines the rules for PMSI priority. Specifically, for inventory, the PMSI holder must file its financing statement before the debtor receives possession of the inventory, and the PMSI holder must have given the requisite notification to any prior secured party. The notification must state that the PMSI holder expects to acquire a PMSI in inventory of the debtor, describing the inventory and the secured party. This notification is effective for five years. In this case, while Aurora Corp. has a PMSI, their failure to provide the required notification to Pacific Bank, which had a prior perfected security interest in all of the debtor’s inventory, means Aurora Corp.’s PMSI will not have priority over Pacific Bank’s claim to the inventory. The filing alone is insufficient for inventory PMSI priority against a prior perfected secured party without the proper notification. Therefore, Pacific Bank retains its priority.

The question concerns the perfection of a security interest in deposit accounts under Washington’s Article 9. Perfection in deposit accounts is generally achieved exclusively by control, as outlined in Revised Article 9. Control is established when the secured party is the bank in which the deposit account is maintained, or when the secured party obtains the agreement of the bank and the debtor that the bank will comply with instructions directing disposition of the funds without the bank’s further consent. Alternatively, control can be obtained by becoming the beneficiary of a certificated deposit account, but this is less common for typical deposit accounts. Washington’s UCC § 9-312(b) specifically states that a security interest in deposit accounts can only be perfected by control. While filing is the general method for perfecting security interests in most personal property, it is explicitly excluded as a method for deposit accounts. Possession is also not a recognized method for perfecting a security interest in a deposit account. Therefore, the only legally recognized method for a secured party to perfect a security interest in a deposit account, other than being the depositary bank itself, is through control.

The core issue here is determining the priority of security interests when a debtor defaults on multiple secured loans. In Washington, as under Article 9 of the UCC, the general rule for priority among secured parties is based on the time of filing a financing statement or the time of perfection, whichever occurs first, provided that the security interest has attached. However, there are exceptions. For purchase money security interests (PMSIs) in inventory, perfection must occur before the debtor receives possession of the inventory, and the secured party must provide notice to any other secured party who has filed a financing statement covering the same collateral. In this scenario, Pacific Bank perfected its security interest in all of Algae Innovations’ inventory by filing a financing statement on January 15th. This establishes Pacific Bank’s priority as to all inventory received by Algae Innovations after that date, assuming attachment occurred. GreenGrowth Capital, on the other hand, has a PMSI in the specific bioreactors and the algae cultivated within them. For GreenGrowth Capital’s PMSI to have priority over Pacific Bank’s prior perfected security interest in after-acquired inventory, GreenGrowth Capital must have satisfied the PMSI perfection requirements for inventory. Specifically, its security interest must have attached and been perfected when the debtor received possession of the collateral, and it must have sent an authenticated notification to Pacific Bank, which had filed a financing statement covering the inventory, before the debtor received possession of the collateral. The question states GreenGrowth Capital perfected its PMSI on February 1st. This perfection occurred after Pacific Bank had already perfected its security interest in all of Algae Innovations’ inventory. Furthermore, the notification requirement for a PMSI in inventory is crucial. Without proof that GreenGrowth Capital notified Pacific Bank before Algae Innovations received the specific bioreactors and algae, its PMSI in that inventory will not have priority over Pacific Bank’s earlier perfected security interest. Therefore, Pacific Bank’s security interest, perfected on January 15th, has priority over GreenGrowth Capital’s security interest perfected on February 1st, as GreenGrowth Capital failed to meet the notification requirements for a PMSI in inventory to gain superpriority over a prior perfected security interest.

The core issue here revolves around the perfection of a security interest in a deposit account held by a debtor in Washington State. Under Revised Article 9 of the Uniform Commercial Code, as adopted in Washington (RCW Chapter 62A.9A), a security interest in a deposit account can only be perfected by the secured party taking control of the account. Control is defined in RCW 62A.9A-104. For a bank where the deposit account is maintained, control is achieved by becoming the “bank” in relation to the account, typically through a deposit account control agreement (DACA). If the secured party is not the bank where the account is held, control is achieved by either: (1) the bank agreeing to comply with the secured party’s instructions regarding the account without further consent by the debtor (an authenticated security agreement with the bank is required), or (2) the secured party becoming the depositary bank itself. In this scenario, Pacific Bank is the secured party and holds a perfected security interest in the deposit account. The debtor, Evergreen Enterprises, has its account at Coastal Bank. Pacific Bank’s perfection is established by having a DACA with Coastal Bank, which ensures Pacific Bank has control. When Evergreen Enterprises defaults, Pacific Bank can exercise its rights against the deposit account. However, if Evergreen Enterprises were to move its deposit account to another bank, say Harbor Bank, and Pacific Bank did not obtain a new DACA with Harbor Bank, its perfection in the deposit account at Harbor Bank would lapse. The question is about the status of perfection *after* the move. A security interest in a deposit account is perfected when control is obtained. If the depositary bank changes, and the secured party does not establish control with the new bank, the perfection lapses 20 days after the change of the location of the deposit account, or the period provided by Washington law for the perfection of security interests in the new depositary bank’s jurisdiction, whichever is longer, unless the security interest is perfected in the new jurisdiction before the expiration of that period. In this case, Pacific Bank has control through a DACA with Coastal Bank. When the account is moved to Harbor Bank, Pacific Bank loses control unless it establishes control with Harbor Bank. Without a new DACA with Harbor Bank, Pacific Bank’s perfection in the deposit account at Harbor Bank will lapse 20 days after the account is moved, or upon the expiration of any longer period allowed by Washington law for perfection in the new jurisdiction. The critical point is that control is the exclusive method of perfection for deposit accounts.

The core issue here revolves around the priority of security interests when a buyer of goods in the ordinary course of business purchases collateral from a seller who has granted a security interest in that collateral to a secured party. Under Washington’s version of UCC Article 9, specifically RCW 62A.9A-320, a buyer in the ordinary course of business (BIOC) generally takes free of a security interest created by their seller, even if the security interest is perfected and the buyer knows of its existence, unless the buyer also knows that the sale is in violation of the security agreement. The scenario describes “Coastal Ventures,” a fishing vessel supplier, which financed its inventory of fishing nets for sale to commercial fishermen. “Harbor Haulers,” a commercial fishing company, purchased nets from Coastal Ventures. Harbor Haulers is a buyer in the ordinary course of business because it purchased goods in good faith, without knowledge that the sale was in violation of the security agreement, from a person in the business of selling goods of that kind. Coastal Ventures’ security interest in the nets attached when Harbor Haulers acquired rights in the goods. However, Harbor Haulers’ status as a BIOC, absent knowledge of a violation of the security agreement, allows it to take the nets free and clear of Coastal Ventures’ security interest. Therefore, Coastal Ventures cannot repossess the nets from Harbor Haulers. The perfection of Coastal Ventures’ security interest is relevant to priority disputes with other creditors of Coastal Ventures or with subsequent purchasers who are not BIOC, but it does not defeat the rights of a BIOC in this context. The fact that Harbor Haulers might have seen the financing statement filed by Coastal Ventures is irrelevant to its BIOC status if it did not know the sale itself was in violation of the security agreement.

The core issue here revolves around the perfection of a security interest in accounts that are subject to a specific federal statute governing their assignment. Under Washington’s UCC Article 9, particularly Revised Section 9-311(a)(1) and its Official Comment 4, a security interest in a right to payment for goods sold or leased, or services rendered, which is subject to a statute of the United States that expressly governs the creation, perfection, priority, or enforcement of security interests in that right, is governed by that statute. The Federal Assignment of Claims Act (31 U.S.C. § 3727 et seq.) governs the assignment of claims against the United States government. While Article 9 generally requires filing a financing statement to perfect a security interest in accounts, when such accounts are subject to a federal statute like the Assignment of Claims Act, that federal statute’s requirements for perfection will preempt Article 9’s filing requirements. The Act requires that assignments of claims against the United States be in writing, executed by the assignor, and acknowledged by a notary public or judge. It also mandates that the assignment and all powers of attorney relating to it be filed with the agency concerned, the Comptroller General, and the Secretary of the Treasury. Therefore, a lender seeking to perfect a security interest in accounts that constitute claims against the United States must comply with the Assignment of Claims Act, not the UCC filing provisions for accounts. The UCC filing remains relevant for accounts not subject to such a federal statute, but in this specific scenario, federal law controls perfection.

The core issue in this scenario revolves around the perfection of a security interest in a vehicle that is subject to a certificate of title. Under Washington’s version of UCC Article 9, specifically RCW 46.12.095, a security interest in a vehicle that requires a certificate of title is generally perfected by notation on the certificate of title itself, rather than by filing a financing statement under RCW 46.9-310. The lender, Pacific Trust Bank, filed a financing statement with the Washington Secretary of State. However, this method is generally insufficient for perfecting a security interest in a titled vehicle. The perfection must occur by complying with the certificate of title statutes. Since the vehicle is titled in Washington, the proper method of perfection would have been to ensure Pacific Trust Bank’s lien was noted on the certificate of title. Because this was not done, and the vehicle was subsequently sold to a buyer in the ordinary course of business from the dealership, the buyer takes the vehicle free of Pacific Trust Bank’s unperfected security interest. The dealership, as a merchant that deals in goods of that kind, is a buyer in the ordinary course of business. The sale to the dealership is a sale from a seller who is a merchant dealing in goods of that kind. Therefore, the dealership, as a buyer in the ordinary course of business, takes free of any security interest created by the seller (the original debtor, Ms. Albright), even if the security interest was perfected, unless the buyer has actual knowledge of the security interest or the security interest is noted on the certificate of title. In this case, the security interest was not properly perfected by notation on the certificate of title, making it unperfected. An unperfected security interest is subordinate to the rights of a buyer in the ordinary course of business. Thus, the dealership’s acquisition of the vehicle is not subject to Pacific Trust Bank’s security interest.

The core issue here is determining the proper place for filing a financing statement to perfect a security interest in a limited liability company’s (LLC) membership interests when the LLC is formed in Washington state and the debtor is also located in Washington. Under Revised Article 9 of the Uniform Commercial Code, as adopted in Washington, the location of the debtor generally dictates the proper filing location for perfection of security interests in general intangibles, which includes LLC membership interests. Specifically, RCW 62A.9A-301 and RCW 62A.9A-307 establish that the location of the debtor is paramount. For an LLC, the debtor’s location is its chief executive office. Since the LLC is formed in Washington and its chief executive office is stated to be in Washington, the financing statement must be filed in the Washington Secretary of State’s office. Filing in the county of the LLC’s formation or the county where its principal office is located would be ineffective for perfection against a buyer of the membership interest that receives delivery of the certificate, or against a competing secured party who perfects by control, if the filing is not made at the state level. The UCC distinguishes between perfection by filing and perfection by control. For LLC membership interests, perfection can be achieved through filing a financing statement with the Secretary of State, or by obtaining control of the membership interest. However, the question specifically asks about perfection via filing. Therefore, the correct filing location for a security interest in Washington LLC membership interests, where the debtor’s chief executive office is also in Washington, is with the Washington Secretary of State.

In Washington state, under Revised Article 9 of the Uniform Commercial Code, a secured party’s rights upon a debtor’s default are significantly impacted by the perfection status of their security interest. When a debtor defaults on a loan secured by inventory, and the secured party has a properly perfected security interest in that inventory, the secured party has the right to take possession of the collateral. This right is often referred to as repossession. However, the method of repossession must be commercially reasonable and must not breach the peace. If the secured party chooses to dispose of the collateral, they must do so in a commercially reasonable manner, providing notice to the debtor and any other secured parties of record. The proceeds from the disposition are then applied first to the expenses of repossession and disposition, then to the satisfaction of the secured obligation. Any surplus is returned to the debtor, and any deficiency is typically owed by the debtor. The question hinges on the secured party’s ability to enforce their rights against the collateral. The existence of a perfected security interest grants the secured party priority over unperfected secured parties and most unsecured creditors. Therefore, upon default, the secured party can take possession of the inventory without judicial process if it can be done without breaching the peace. They can then sell or otherwise dispose of the collateral. The other options are incorrect because a deficiency judgment requires a sale and a determination of the remaining debt, not just possession. Similarly, seeking a writ of replevin is a judicial remedy, which is generally not required if possession can be obtained peaceably without judicial intervention. Foreclosure on real property is irrelevant as the collateral is inventory, which is personal property.

The core issue here revolves around the perfection of a security interest in a deposit account, specifically in the context of Washington’s adoption of Revised Article 9 of the UCC. Under Revised Article 9, a security interest in a deposit account can only be perfected by control. Control is achieved in several ways, including when the secured party is the bank with which the deposit account is maintained. Alternatively, control is established if the debtor has agreed that the bank will comply with instructions from the secured party concerning the balance of the deposit account, or if the secured party becomes the owner of the deposit account. In this scenario, the deposit account is held at “Northwest Bank,” and the security agreement grants “Pacific Lending” a security interest in this account. Crucially, Pacific Lending is also the bank where the deposit account is held. Therefore, Pacific Lending has obtained control over the deposit account by virtue of being the depositary bank. This perfection is effective against third-party claims, including subsequent purchasers and lien creditors, without the need for filing a financing statement. Filing a financing statement is generally the method for perfecting security interests in most types of collateral, but it is explicitly excluded as a method of perfection for deposit accounts under UCC § 9-312(b)(1) and Washington’s codified version in RCW 62A.9A-312(b)(1). The security agreement itself is valid between the debtor and secured party, but perfection is what provides priority against third parties. Since Pacific Lending has control, its security interest is perfected and has priority.

The question concerns the priority of security interests in a mixed collateral situation under Washington’s Article 9. Specifically, it probes the application of the “all obligations” clause in a security agreement when new collateral is acquired after the initial filing. Under Revised Article 9, a security interest generally continues in collateral even if it is sold, exchanged, or otherwise disposed of, and it can also extend to proceeds. Furthermore, a security interest can cover after-acquired collateral if the security agreement expressly so provides, which is common practice. The critical element here is whether the security interest automatically attaches to the new collateral (the specialized milling machine) simply because it was acquired by the debtor. Attachment requires value given, the debtor having rights in the collateral, and a security agreement authenticated by the debtor that reasonably describes the collateral. Assuming these elements are met for the milling machine, the question then turns to priority. The initial filing by Rainier Bank perfected its security interest in all of the debtor’s equipment, including after-acquired equipment. When the debtor acquired the milling machine, Rainier Bank’s perfected security interest attached to it. Therefore, Rainier Bank has a perfected security interest in the milling machine. Northwest Credit Union’s later filing is also perfected. In a contest between two perfected security interests in the same collateral, priority is generally determined by the order of filing or perfection, whichever occurs first. Since Rainier Bank’s interest was perfected by filing before Northwest Credit Union’s interest attached and was perfected, Rainier Bank has priority. The fact that the milling machine is a different type of equipment than the original collateral does not alter this priority rule for after-acquired property when the after-acquired property clause is sufficiently broad.

The core issue in this scenario revolves around the perfection of a security interest in a vehicle titled in Washington State, specifically concerning the interplay between Article 9 of the Uniform Commercial Code (UCC) and Washington’s Certificate of Title Act. Washington’s Certificate of Title Act, particularly RCW 46.12.095, dictates that a security interest in a vehicle for which a certificate of title is required is perfected by notation on the certificate of title. This method supersedes the general filing requirements of UCC § 9-310(a) for such collateral. In this case, “SecureAuto Finance” filed a UCC-1 financing statement with the Washington Secretary of State. This is the standard method for perfecting security interests in many types of personal property under Article 9. However, for motor vehicles, the UCC explicitly defers to state certificate of title laws for perfection. SecureAuto Finance’s failure to ensure the security interest was noted on the certificate of title means their security interest is unperfected with respect to the vehicle. “Reliable Rentals LLC,” by obtaining possession of the vehicle and filing a UCC-1 financing statement covering “all goods and equipment,” has a properly perfected security interest in the vehicle, assuming their filing was otherwise compliant and the vehicle falls within the scope of their general security agreement. Because Reliable Rentals LLC’s security interest is perfected and SecureAuto Finance’s is not, Reliable Rentals LLC has priority. The UCC § 9-317(a)(2) rule states that an unperfected security interest is subordinate to the rights of a person that becomes a buyer of the collateral or obtains a security interest in the collateral without knowledge of the unperfected security interest and for value. Here, Reliable Rentals LLC’s perfection establishes their superior right.

The question revolves around the perfection of a security interest in a deposit account, which is a specific type of collateral under Article 9 of the Uniform Commercial Code (UCC). Washington, like other states, has adopted Article 9. UCC § 9-312(b) specifies that a security interest in a deposit account can only be perfected by control. Control over a deposit account is defined in UCC § 9-104. There are three ways to obtain control: (1) becoming the bank’s customer with respect to the deposit account; (2) by agreement with the bank, the bank agrees to comply with instructions from the secured party directing disposition of the funds in the deposit account without further consent from the debtor; or (3) by the secured party becoming the assignee of the deposit account. In this scenario, the secured party, “Puget Sound Lending,” has obtained a security interest in the deposit account held by “Cascadia Holdings LLC” at “Evergreen Bank.” Puget Sound Lending has filed a financing statement, which is generally the method for perfecting security interests in most types of collateral. However, for deposit accounts, filing is insufficient for perfection. While Puget Sound Lending has a perfected security interest in other collateral of Cascadia Holdings LLC, the deposit account requires a different perfection method. Since Puget Sound Lending has not become the customer of Evergreen Bank with respect to the account, nor has it entered into a control agreement with Evergreen Bank, nor has it become the assignee of the deposit account, its security interest in the deposit account remains unperfected. Therefore, if a competing claim arises, such as from a bankruptcy trustee or another secured party who has obtained control, Puget Sound Lending’s unperfected security interest would be subordinate. The filing of a financing statement, while effective for other collateral, does not grant perfection for deposit accounts. The core principle is that perfection in deposit accounts is achieved exclusively through control.

Under Washington’s version of UCC Article 9, the priority of security interests in collateral is generally determined by the order of filing a financing statement or possession of the collateral. However, specific rules apply to certain types of collateral. For inventory, a buyer in the ordinary course of business takes free of a security interest created by the seller even though the security interest is perfected and even though the buyer knows of its existence, unless the buyer knows that the sale is in ordinary course of the disposition of all or a substantial part of the seller’s inventory. In this scenario, the security interest in the inventory was perfected by filing. The purchaser, “Artisan Goods Inc.,” is a buyer in the ordinary course of business because it purchased the handcrafted furniture in the ordinary course from a merchant dealing in goods of that kind. Even though Artisan Goods Inc. knew about the security interest held by “Capital Finance LLC,” this knowledge alone does not prevent it from taking free of the security interest. The critical factor is whether Artisan Goods Inc. knew that the sale of the furniture was in the ordinary course of the disposition of all or a substantial part of “Creative Furnishings LLC’s” inventory. Since the facts do not indicate that Artisan Goods Inc. had this knowledge, and it is a buyer in the ordinary course of business, its interest in the purchased inventory is superior to Capital Finance LLC’s security interest. Therefore, Artisan Goods Inc. takes the inventory free of Capital Finance LLC’s security interest.

The question revolves around the priority of security interests when a debtor defaults and multiple secured parties have claims to the same collateral. In this scenario, Sterling Bank has a perfected purchase money security interest (PMSI) in the specialized manufacturing equipment. A PMSI generally has priority over other security interests in the same collateral if it is perfected within a specific timeframe. Washington’s UCC Article 9, consistent with the Uniform Commercial Code, provides that a PMSI in equipment is perfected when the financing statement is filed, and in many cases, this perfection is retroactive to the date of attachment if filed within twenty days of the debtor receiving possession of the collateral. Sterling Bank filed its financing statement on May 1st, which was within the statutory period following the delivery of the equipment to Apex Manufacturing on April 15th. Zenith Corp. has a prior perfected security interest in all of Apex Manufacturing’s present and after-acquired inventory, including raw materials. However, the specialized manufacturing equipment, while used in production, is a distinct category of collateral from raw materials or finished goods that constitute inventory. A PMSI in equipment typically takes priority over a previously perfected security interest in after-acquired inventory if the equipment is not considered part of that inventory for the purposes of the after-acquired property clause, or if the PMSI was perfected before the equipment became commingled or integrated into the inventory production process in a way that defeats its distinct PMSI status. Given Sterling Bank’s PMSI in the equipment and its timely perfection, it will generally have priority over Zenith Corp.’s blanket lien on inventory concerning that specific equipment, assuming the equipment itself is not classified as inventory under the terms of Zenith’s security agreement and UCC definitions. The key is the nature of the collateral and the perfection of the PMSI.