Bluxome Street Associates v. Fireman's Fund Insurance Company
Court of Appeal of California
206 Cal. App. 3d 1149 (1988)
After Woods won a legal-malpractice settlement, he granted a security interest in the proceeds to his law firm, Flynn (defendant), which filed a UCC financing statement to perfect the lien. Multiple creditors, including Haas and Fireman's Fund (defendants), also claimed liens on the same settlement funds, and the trial court ranked Flynn's lien as having priority after paying other claims first; Haas and Fireman's Fund appealed, arguing that UCC Article 9 does not cover non-commercial tort-claim proceeds, so Flynn's UCC filing never actually perfected its lien and their own liens should rank higher.
Whether a creditor's filing of a financing statement may perfect a security interest under state law when perfection of that interest is not governed by the Uniform Commercial Code.