Case Name: The FIRST NATIONAL BANK AND TRUST COMPANY OF STILLWATER, Appellee, v. Bill G. McKOWN, individually and d/b/a McKOWN INDUSTRIES; McKown Construction Company, Inc.; Sandra E. McKown; Central Bank and Trust of Tulsa, formerly Republic Bank and Trust Company, Defendants, and Oklahoma Fixture Company, an Oklahoma corporation, Appellant
Court: Oklahoma Court of Civil Appeals
Jurisdiction: Oklahoma
Decision Date: 1993-09-21
Citations: 867 P.2d 1342
Docket Number: No. 79718
Parties: The FIRST NATIONAL BANK AND TRUST COMPANY OF STILLWATER, Appellee, v. Bill G. McKOWN, individually and d/b/a McKOWN INDUSTRIES; McKown Construction Company, Inc.; Sandra E. McKown; Central Bank and Trust of Tulsa, formerly Republic Bank and Trust Company, Defendants, and Oklahoma Fixture Company, an Oklahoma corporation, Appellant.
Judges: STUBBLEFIELD, J., concurs.
Reporter: Pacific Reporter 2d
Volume: 867
Pages: 1342–1351

Head Matter:
The FIRST NATIONAL BANK AND TRUST COMPANY OF STILLWATER, Appellee, v. Bill G. McKOWN, individually and d/b/a McKOWN INDUSTRIES; McKown Construction Company, Inc.; Sandra E. McKown; Central Bank and Trust of Tulsa, formerly Republic Bank and Trust Company, Defendants, and Oklahoma Fixture Company, an Oklahoma corporation, Appellant.
No. 79718.
Court of Appeals of Oklahoma, Division No. 4.
Sept. 21, 1993.
Certiorari Denied Dec. 23, 1993.
James R. Ryan, Conner & Winters, Tulsa, for appellant.
Dianne L. Smith, David R. Guthery, Guth-ery & Smith, Tulsa, for appellee.

Opinion:
TAYLOR, Presiding Judge.
In this appeal defendant Oklahoma Fixture Company ("OFIXCO") asks us to reverse the trial court's summary judgment in favor of plaintiff, The First National Bank and Trust Company of Stillwater, now Bancfirst ("Bank"). Bank claimed that OFIXCO paid certain contract proceeds to McKown Construction Co. ("McKown Construction") despite having notice that Bank's debtor, Bill G. McKown ("McKown"), had previously-pledged those proceeds as security for McKown's line of credit with Bank .
The trial court found that (1) there was no substantial controversy that an agreement existed between Bank and McKown that Bank have a security interest in the proceeds; and (2) an April 23, 1985, confirming letter from McKown to Bank was sufficient to meet Oklahoma statutory requirements for a security agreement. The court granted judgment against OFIXCO and McKown Construction for $159,128 in principal and more than $65,000 in prejudgment and post-judgment interest.
The record reveals that in July 1984 McKown signed a promissory note to Bank to be used as a line of credit. In April 1985, he met with Bank officer Elvis Howell to request an additional $100,000 draw on the line. McKown agreed to assign to Bank as additional collateral his contract rights under the McKown Construction/OFIXCO contract. McKown confirmed the agreement in his April 1985 letter to Howell, stating in part:
Per our conversation today, I am enclosing a copy of our draw applications to Oklahoma Fixture Company on the Shilitos-Rikes project to be use [sic] as collateral on our line of credit....
A copy of the draw request was attached to the letter, which was signed by McKown.
From April 23 to April 30, 1985, Bank disbursed approximately $72,709 to McKown. On May 1, 1985, Bank notified OFIXCO by letter of the transaction and that OFIXCO's payments should be sent to Bank made "payable jointly" to McKown Construction and Bank. Clarence Jones, an OFIXCO officer, signed a statement at the bottom of Bank's letter acknowledging receipt and agreeing to make payments as directed, and returned it to Bank.
On May 6, 1985, Bank forwarded to McKown copies of a form security agreement and two financing statements for signature. That letter included a copy of the notice to OFIXCO. McKown never signed or returned the forms. From May 7 to June 19, 1985, Bank disbursed another $253,000.
In his deposition McKown admitted his April 23 letter accurately described his conversation with Howell. McKown also testified that "subsequently . we had some turn of events that it wasn't advantageous for us to fulfill that agreement." He never notified the Bank of his change of mind. While McKown has never denied having an agreement with the Bank, he has denied making a written "assignment" of his contract rights. Some time after OFIXCO had returned the notice letter to Bank, Jones asked McKown whether OFIXCO could go ahead and pay the contract proceeds to the Bank as required by the letter. McKown told OFIXCO not to pay the Bank and indicated he would sue if OFIXCO did so; OFIXCO paid McKown Construction directly.
In its answer on file in the ease, OFIXCO claimed its consent was "fraudulently obtained" by Bank and of no effect. No specific acts of fraud were alleged or proved. In response to Bank's summary judgment motion, OFIXCO described the "sole issue" as being whether McKown signed a security agreement meeting the requirements of 12A O.S.1991 § 9-203(l)(a). OFIXCO also claimed that McKown's denial of a written assignment, Bank's forwarding of form documents to McKown, and the fact that Bank alleged an "oral agreement" with McKown in its petition in the case show no security agreement was intended. OFIXCO now alleges as error that factual issues exist regarding the parties' intent, and challenges the trial court's finding that McKown's April 23 letter is a sufficient writing under Article 9 of Oklahoma's Uniform Commercial Code, 12A O.S.1991 § 9-101 through 9-507.
When a summary judgment has been granted, an appellate court must examine the pleadings and evidentiary materials. If the record discloses either controverted material facts, or if the uncontroverted facts support legitimate inferences favoring the well-pled theory of the party against whom the judgment was granted, the judgment will be reversed. First Nat. Bank and Trust Co. v. Kissee, 859 P.2d 502 (Okla.1993); Northrip v. Montgomery Ward & Co., 529 P.2d 489 (Okla.1974); Perry v. Green, 468 P.2d 483 (CMa.1970). When the movant has shown there is no genuine issue as to a material fact, however, the opposing party cannot merely rely upon conjecture or suggest that "facts might exist" to justify trial. Kissee, 859 P.2d at 505. Summary judgment should be granted when it appears one party is entitled to judgment as a matter - of law. Flanders v. Crane Co., 693 P.2d 602 (Okla.1984).
Under 12A O.S.1991 § 9-102(1), Article 9 of the U.C.C. governs any transaction, "regardless of its form," intended to create a security interest in personal property. Under section 9-102(2), Article 9 applies to "security interests created by contract," including pledges and assignments. Requirements for an enforceable security interest are described in section 9-203(1):
[A] security interest is not enforceable against the debtor or third parties with respect to the collateral and does not attach unless:
(a) the collateral is in the possession of the secured party . or the debtor has signed a security agreement which contains a description of the collateral .;
(b) value has been given; and
(c) the debtor has rights in the collateral.
Section 9-318(3) governs notification to account debtors, such as OFIXCO, of assignments of accounts and contract rights . The Oklahoma Supreme Court has held section 9-318(3) "establishes a duty upon an account debtor" to pay the assignee upon the account debtor's receipt of notice of the assignment. American Bank of Commerce v. City of McAlester, 555 P.2d 581, 585 (Okla.1976). There, the court held defendant breached that duty when, after receiving notice, it failed to pay the assignee based on its erroneous belief the assignment was invalid. Id. at 586-87.
Here, the requirements of sections 9-203(1)(b) and (c) are not in dispute, nor does OFIXCO deny it received Bank's notice. Rather, OFIXCO asserts a factual dispute over the parties' intent and a legal dispute as to the sufficiency of McKown's April 1985 letter as a "security agreement" under section 9-203(1)(a).
Oklahoma law clearly looks to intent as controlling over form in creation of security interests. See 12A O.S.A. § 9-102, comment 1 (West 1963); Georgia-Pacific Corp. v. Lumber Prod. Co., 590 P.2d 661, '664-65 (Okla.1979). When the parties' intent and the terms of a contract are clear, however, construction and interpretation of the contract present a matter of law. See Cook v. Oklahoma Bd. of Pub. Affairs, 736 P.2d 140, 145 (Okla.1987); Gragg v. James, 452 P.2d 579, 587 (Okla.1969). Matters of law may be considered de novo by this court. Salve Regina College v. Russell, 499 U.S. 225, 231-32, 111 S.Ct. 1217, 1221, 113 L.Ed.2d 190 (1991).
Contrary to OFIXCO's suggestion, the facts relevant to determining intent in this case are not disputed, and OFIXCO's argument that the facts lend themselves to different reasonable interpretations is not substantiated by the proof. The facts lead to only one reasonable conclusion: McKown and the Bank agreed orally that the OFIXCO contract proceeds would stand as collateral for McKown's loan. This is the clear tenor of McKown's deposition testimony and of his April 1985 letter, which clearly evidences McKown's intent that the Bank immediately use the draws from the OFIXCO contract as collateral.
Bank's allegation in its petition of an oral assignment and McKown's denial of a formal written "assignment" do not raise doubt as to what the parties intended; rather, those items simply reflect what actually appears to have occurred. The fact that Bank later submitted form documents to McKown does not detract from the undisputed evidence of an agreement in fact between those parties previously, any more than does MeKown's later unilateral change of mind. We thus agree with the trial court that there is no substantial dispute that an agreement existed between the Bank and McKown.
The enforceability of the agreement requires us to examine 12A O.S.1991 § 9-203(1) and determine whether McKown's letter is sufficient as a security agreement as a matter of law.
The U.C.C. defines "security agreement" as "an agreement which creates or provides for a security interest." 12A O.S.1991 § 9-105(l)(i). Comment 1 to section 9-203 as originally enacted notes that although the agreement "[tjypically . will contain much more" the only formal requirements for an enforceable security interest are:
(a) a writing;
(b) the debtor's signature; and
(c) a description of the collateral or kinds of collateral.
12A O.S.A. § 9-203, comment 1 (West 1963).
Unfortunately, the parties do not cite and we do not find guidance from the Oklahoma Supreme Court directly on point. Cases from the federal courts, the Oklahoma Court of Appeals and other jurisdictions vary as to the degree of formality required.
The extremes are illustrated in the cases of In re Numeric Corp., 485 F.2d 1328 (1st Cir.1973) and In re Taylor Mobile Homes, Inc., 17 U.C.C.Rep.Serv. (Callaghan) 565, 1975 WL 22814 (Bankr.E.D.Mich.1975). In Numeric, the First Circuit found that a signed financing statement combined with a board of directors' resolution satisfied U.C.C. requirements. Interpreting a statutory provision identical to Oklahoma's, the court said:
[W]e have little difficulty concluding that a separate formal document entitled "security agreement" is not always necessary to satisfy the signed-writing requirement of § 9-203(1)_ The draftsmen of the U.C.C. ascribed two purposes to that requirement. One . was evidentiary, to prevent disputes as to precisely which items of property are covered . The second . is to serve as a Statute of Frauds, preventing the enforcement of claims based on wholly oral representations . A uniting or writings, regardless of label, which adequately describes the collateral, carries the signature of the debtor, and establishes that in fact a security interest was agreed upon, would satisfy both the formal requirements of the statute and the policies behind it.
Id. at 1331 (emphasis added) (citations omitted). See also Personal Jet, Inc. v. Callihan, 624 F.2d 562 (5th Cir.1980); Grover v. United California Bank (In re Nunnemaker Transp. Co., Inc.), 456 F.2d 28 (9th Cir.1972); and Wyhy Fed. Credit Union v. Burchett, 643 P.2d 471 (Wyo.1982).
The extreme 'on which OFIXCO relies is illustrated by In re Taylor Mobile Homes, where the bankruptcy judge refused to construe a financing statement and promissory note (which contained language indicating it was secured by certain collateral) as a security agreement. The court found the lender was "under the impression" that a security agreement had been signed; thus, the court held the bank had not intended for the note and financing statement to constitute the security agreement. 17 U.C.C.Rep.Serv. at 569.
The court in Taylor relied on a 1972 Tenth Circuit case, Mitchell v. Shepherd Mall State Bank, 458 F.2d 700 (10th Cir.1972) (interpreting Oklahoma law), in which the court concluded that an enforceable security agreement required language which "specifically creates or grants a security interest in the collateral described." Id. at 703. The appeals court recognized that there were no "magic words" needed to create the security interest, but that the instrument had to be worded so it "leads to the logical conclusion" that a security interest was intended. Id. In Pontchartrain State Bank v. Poulson, 684 F.2d 704 (10th Cir.1982), the court again interpreted Oklahoma law and again held that a promissory note which only vaguely described the collateral combined with a letter from the debtor's attorney were not sufficient. Significantly, however, the only reason given by the court for finding the letter insufficient was that it was signed by debt- or's counsel rather than by the debtor or its agent. Id. at 706-07. Presumably, the majority would have found the letter sufficient had the debtor himself signed; in fact, Judge Logan, in a concurring opinion (on other grounds) felt that debtor's counsel was an agent, and that counsel's signature fulfilled section 9-203(l)(a) requirements. Id. at 708.
Most recently, the Oklahoma City Division of the Court of Appeals held that two loan contracts were sufficient as security agreements even though they did not contain specific "words of grant." Economy Fin. Agency v. Stickney, 738 P.2d 1386, 1388 (Okla.Ct.App.1987). The contracts were signed by the debtor and contained language which described the collateral and stated the lender retained a security interest. The court noted the Tenth Circuit's holding in Shepherd Mall that "no magic words" of grant are required and held that "[t]he public policy of this state" as reflected in the U.C.C. "is to move away from archáic legalisms and reduce formal requirements to a bare minimum." Id.
Applying the foregoing to this case, we hold that McKown's letter is sufficient to stand as the writing required by 12A O.S. 1991 § 9-203(l)(a). The letter confirms that the parties conferred and agreed that the contract draws would be used as additional collateral; it explicitly describes the collateral; and it is signed by the debtor. Section 9-203 requires no more.
We do not here intend to condone haphazard and careless banking practices. OFIX-CO argues that public policy against such practices and the "inadvertent" creation of security interests precludes the letter from functioning as a security agreement. Though the argument is persuasive, it is misplaced here, where OFIXCO itself played a part in procuring the Bank's disbursement of proceeds. By signing and returning its consent to pay Bank as requested — even if by mistake — OFIXCO could only have reinforced Bank's understanding that its secured status was not in question. OFIXCO had several other potential remedies available to it — including but not limited to an interpleader action — besides simply paying McKown Construction without regard to Bank's claim. As such, it should not now be heard to complain that Bank's purported paperwork deficiency should somehow excuse OFIXCO's breach.
The trial court's judgment is AFFIRMED.
STUBBLEFIELD, J., concurs.
BRIGHTMIRE, J., dissents.
. Bank's foreclosure claims involving mortgages of real property held by Central Bank and Trust of Tulsa were settled by agreed journal entries of judgment filed in September 1987 and June 1988.
. In the trial court Jones submitted an affidavit explaining that he misunderstood what he was signing when he signed the letter and returned it to Bank.
. An account debtor may pay an assignor "until the account debtor receives notification that . payment is to be made to the assignee." However, "[i]f requested by the account debtor, the assignee must seasonably furnish reasonable proof that the assignment has been made, and unless he does so, the account debtor may pay the assignor." 12A O.S.1991 § 9-318(3). It is undisputed that OFIXCO never made such a request from Bank.
. Bank's claim that parol evidence is not admissible with regard to the April 1985 letter is misplaced in light of Bank's failure to object to the evidence in the trial court and Bank's own reliance upon such evidence in support of its motion.
. A final issue raised by OFIXCO — that determination of the effect of the McKown letter is worthy of a full trial with live witnesses, even though jury trial was waived — was not raised in the trial court, and shall not be heard now. See McMillan v. Lane Wood & Co., 361 P.2d 487 (Okla.1961); Ross v. Thompson, 174 Okla. 183, 50 P.2d 385 (1935). We note that Oklahoma law precludes a party resisting a motion for summary judgment from relying on evidence on appeal that was not before the trial court. Kissee, 859 P.2d at 505. OFIXCO named only one witness — • Bill McKown — in the pre-trial conference order in the case. OFIXCO submitted no affidavits by bank officers or other experts, nor did it submit the affidavit allowed by District Court Rule 13(d). Several years have passed since this case was filed, and there has been ample time for OFIXCO to build the evidence necessary to defend its case.