SUN FIRST NATIONAL BANK OF ORLANDO, A NATIONAL BANKING ASSOCIATION, APPELLANT,
v.
RANDY MILLER, AS EXECUTIVE DIRECTOR OF THE DEPARTMENT OF REVENUE, STATE OF FLORIDA, APPELLEE
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Sun First National Bank appealed a judgment finding that the Florida Department of Revenue's tax lien on two motor vehicles was superior to the bank's security interest. The court affirmed, holding that because the Department became a lien creditor before the bank perfected its security interest, the tax lien takes priority under Florida's Uniform Commercial Code.
The Department of Revenue's lien is superior to Sun Bank's security interest. Although the Uniform Commercial Code governs secured transactions, it does not apply to statutory liens except in limited circumstances not present here. Under the UCC, any person becoming a lien creditor before perfection of a security interest takes priority, and the Department became a lien creditor before Sun Bank perfected its interest.
[1] A state's statutory tax lien is not governed by the Uniform Commercial Code's provisions on secured transactions, except as provided in UCC § 679.310.
[2] A security interest is perfected when the necessary actions are taken to have it noted on the certificate of title.
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Join FLexlaw to unlock all legal intelligence“any person becoming a lien creditor before the perfection of a security interest takes priority”
Establishes the controlling legal rule that lien creditor status acquired before perfection trumps an unperfected security interest
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Join FLexlaw to unlock all legal intelligenceGeorge Claing executed a security agreement with Sun Bank on February 15, 1978, granting the bank a security interest in two motor vehicles. Sun Bank …
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PER CURIAM.
This is an appeal of a final judgment which ruled that a lien of the Department of Revenue of the State of Florida (department) on two motor vehicles was superior to the security interest of appellant, Sun First National Bank of Orlando (Sun Bank). The judgment directed the proceeds from the sale of these two vehicles be paid first to the Department of Revenue and, if any money remained after satisfaction of the department’s claim, then to Sun Bank. We find that this ruling is correct and affirm.
George Claing executed a security agreement granting Sun Bank a security interest in two motor vehicles on February 15,1978. Sun Bank did not take any action to have this security interest noted on the certificates of title of these two vehicles until May 21,1979. On this date, Sun Bank filed the necessary papers with the Division of Motor Vehicles, thereby perfecting its security interest in the vehicles. Sec. 319.27, Fla.Stat. (1979); Sec. 679.302(4), Fla.Stat. (1977).
Meanwhile, on May 8, 1979, the Department of Revenue of the State of Florida filed a tax warrant against George Claing for unpaid taxes. Pursuant to law, instructions to levy and seize the two vehicles were delivered to the Sheriff of Orange County and the Sheriff seized the two vehicles on May 22,1979. The department then sought a declaratory judgment concerning the priorities of the parties’ rights in these two vehicles.
Sun Bank’s security interest in the two motor vehicles is governed by the provisions of Florida’s Uniform Commercial Code (UCC), Chapter 679, Florida Statutes. Sec. 679.102, Fla.Stat. (1977). Claing’s security agreement with Sun Bank gave the bank an unperfected security interest in the two vehicles which was superior to the rights of future purchasers or judgment creditors. Sec. 679.201, Fla.Stat. (1979). Sun Bank’s unperfected security interest was inferior to the later rights of a lien creditor. Sec. 679.301(l)(b), Fla.Stat. (1977).
The Department of Revenue acquired a statutory lien on the vehicles on May 8, 1979, when it filed a tax warrant with the clerk of the circuit court1 and delivered a writ of execution to the sheriff.2 Although the UCC contains provisions concerning the rights of lien creditors,3 section 679.102(2) says that Chapter 679 (Uniform Commercial Code — Secured Transactions) “does not apply to statutory liens except as provided in s. 679.310.” Section 679.310 concerns liens for services and materials performed upon certain goods subject to a security interest. It has no application to this case. Consequently, the provisions of the UCC do not apply to the state’s statutory tax lien.
However, the UCC provides that any person becoming a lien creditor before the perfection of a security interest takes priority. Sec. 679.301, Fla.Stat. (1977). Since the department became a lien creditor on May 8, 1979, and Sun Bank did not perfect its security interest in the two vehicles until May 21,1979, the trial court correctly found the lien of the department to be superior to that of Sun Bank.
AFFIRMED.
DAUKSCH, C. J., ORFINGER, J. and EVANS, VERNON W., Jr., Associate Judge, concur. . Sec. 212.15(3), Fla.Stat. (Supp. 1978).
. Love v. Williams,4 Fla. 126 (1850); Hawthorne v. Shepherd, 330 So. 2d 75 (Fla. 1st DCA 1976).
.Sec. 679.301, Fla.Stat.
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Walter E. Heller & Co. Se., Inc. v. Petition of B.W. Williams, Jr., 450 So. 2d 521 (Fla. 3d DCA 1984)…odge, Inc., 442 So. 2d 287 (Fla. 3d DCA 1983) (because Dept, failed to perfect, by warrant, its lien for sales taxes, it was a general creditor, with no prior claim on funds deposited in court registry); Sun First National Bank of Orlando v. Miller, 397 So. 2d 943 (Fla. 1st DCA 1981) (Dept. of Revenue, which became lien creditor of debtor before bank perfected its security interest in two vehicles of debtor, took priority under § 679.-310, Fla.Stat. (1977)). Furthermore, as for a lien created by state law, it…
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Dep't OF Revenue v. Potamkin Dodge, Inc., 442 So. 2d 287 (Fla. 3d DCA 1983)…due. § 212.-15(4), Fla.Stat. (1981); General Motors Acceptance Corp. v. Tom Norton Motor Co., 366 So. 2d 131 (Fla. 4th DCA 1979). The Department failed to follow this procedure and perfect its lien. Cf. Sun First National Bank of Orlando v. Miller, 397 So. 2d 943 (Fla. 5th DCA 1981) (properly perfected tax lien takes priority over subsequently filed security interest). Therefore, the Department has no prior claim on the funds deposited into the registry of the court. Section 212.10, Florida Statutes (1981),…
Authorities Cited
- Love v. Williams, 4 Fla. 126 (Fla. 1851)
- Bank OF Hawthorne v. Shepherd, 330 So. 2d 75 (Fla. 1st DCA 1976)