GA Code § 11-9-506 (2021)
2021 Georgia Code|Title 11 - Commercial Code|Article 9 - Secured Transactions|Part 5 - Filing|§ 11-9-506. Effect of Errors or Omissions

  Minor errors and omissions. A financing statement substantially satisfying the requirements of this part is effective, even if it has minor errors or omissions, unless the errors or omissions make the financing statement seriously misleading.   Financing statement seriously misleading. Except as otherwise provided in subsection (c) of this Code section, a financing statement that fails sufficiently to provide the name of the debtor in accordance with subsection (a) of Code Section 11-9-503 is seriously misleading.   Financing statement not seriously misleading. If a search of the records of the filing office under the debtor's correct name, using the filing office's standard search logic, if any, would disclose a financing statement that fails sufficiently to provide the name of the debtor in accordance with subsection (a) of Code Section 11-9-503, the name provided does not make the financing statement seriously misleading.   "Debtor's correct name." For purposes of subsection (b) of Code Section 11-9-508, the "debtor's correct name" as used in subsection (c) of this Code section means the correct name of the new debtor.     (Code 1981, §11-9-506, enacted by Ga. L. 2001, p. 362, § 1.)   Law reviews.   - For article discussing Uniform Commercial Code provisions establishing a security interest in fixtures as a means of protecting sellers, see 16 Mercer L. Rev. 404 (1965). For article discussing the Uniform Commercial Code provisions regarding the sufficiency of "The Description of Collateral in Security Agreements and Financing Statements," see 28 Mercer L. Rev. 611 (1977). For article, "The Revisions to Article IX of the Uniform Commercial Code," see 15 Ga. St. B.J. 120 (1977). For article, "Fixture Financing Under Georgia's New Article 9," see 16 Ga. St. B.J. 110 (1980). For article, "H.B. 712: New Requirements for Financing Statements and Continuation Statements Filed in Georgia," see 22 Ga. St. B.J. 6 (1985). For article, "H.B. 1364: Revised Requirements for Financing Statements and Continuation Statements Filed in Georgia," see 23 Ga. St. B.J. 50 (1986). For annual survey of law of real property, see 38 Mercer L. Rev. 319 (1986). For annual survey article on commercial law, see 50 Mercer L. Rev. 193 (1998). For comment on United States v. Crittenden, 563, F.2d 678 (5th Cir. 1977), appearing below, see 12 Ga. L. Rev. 692 (1977).   JUDICIAL DECISIONS   Editor's notes.   - In the light of the similarity of the provisions, decisions under former Article 9 are included in the annotations for this Code section. For a table of comparable provisions, see the table at the beginning of the Article.   Listing name of debtor's farm, not debtor's name.   - Erroneously listing name of debtor's purported farm, rather than debtor's name, on security agreement is seriously misleading to subsequent creditors, and, as such, renders creditor's security interest in property so listed unperfected. Citizens Bank v. Ansley, 467 F. Supp. 51 (M.D. Ga.), aff'd, 604 F.2d 669 (5th Cir. 1979) (decided under former Code Section 11-9-402).   Mistake in name of debtor.    - Where a search of the county records did not reveal a financing statement due to a mistake in the name of the debtor shown on the financing statement, the security interest in the funds relating to the financing statement was not perfected, and the money was awarded to a judgment creditor in an interpleader action. Receivables Purchasing Co. v. R & R Directional Drilling, L.L.C., 263 Ga. App. 649, 588 S.E.2d 831 (2003).    Because an attorney who handled a closing in the capacity of an escrow agent for the client's business had no actual or constructive notice of a creditor's security interest in the business due to the improper filing pursuant to O.C.G.A. §§ 11-9-502,11-9-503, and11-9-506, because the debtor's name was not properly listed and the interest was accordingly not perfected, claims as to conversion of the business closing proceeds failed. All Bus. Corp. v. Choi, 280 Ga. App. 618, 634 S.E.2d 400 (2006).    Bank failed to provide in the bank's Financing Statement the name indicated on the debtor's driver's license as required by O.C.G.A. § 11-9-503(a)(4). Therefore, the bank's Financing Statement was seriously misleading under O.C.G.A. § 11-9-506(b). Pierce v. Farm Bureau Bank (In re Pierce), 581 Bankr. 912 (Bankr. S.D. Ga. 2018).    Financing statement was seriously misleading, and thus was legally ineffective due to the defendant's failure to sufficiently provide the correct name of the debtor in compliance with O.C.G.A. § 11-9-506(a)-(b), and further, the safe harbor provision under O.C.G.A. § 11-9-506(c) did not apply. Scarver v. Silverline Servs. (In re Wastetech, LLC), 605 Bankr. 264 (Bankr. N.D. Ga. 2019).   Defendant's financing statement was seriously misleading, making the financing statement ineffective, because the debtor's name on the financing statement was seriously misleading, and a search done with the filing office's standard search logic would not have disclosed the defendant's financing statement. AgGeorgia Farm Credit, ACA v. Wynn (In re Wynn), Bankr. (Bankr. M.D. Ga. Apr. 2, 2021).   Erroneous listing of agent, rather than owner.   - Financing statement which erroneously listed the agent of the owner of rented land upon which secured crops were grown, rather than listing the actual owner, was not seriously misleading, and was therefore effective. United States v. Georgia Vegetables Co., 123 Bankr. 456 (M.D. Ga. 1990) (decided under former Code Section 11-9-402).    Creditor's filing of financing statements under debtor's trade name only  rather than under the debtor's legal, corporate name was seriously misleading and insufficient to perfect a security interest, where potential creditors would have been misled due to the name by which the debtor was listed in the financing statements. United States Cylinders, Inc. v. Vital Breathing Prods., Inc., 98 Bankr. 97 (Bankr. N.D. Ga. 1988) (decided under former Code Section 11-9-402).   Failure to file amended financing statement.   - Where creditor failed to file an amended financing statement reflecting debtor's name change, its original filing was not effective to perfect a security interest in collateral acquired by debtor more than four months after it changed its name. Pettigrew v. Consultants United, Inc. (In re Specialcare, Inc.), 209 Bankr. 13 (Bankr. N.D. Ga. 1997).   First lienholder still protected despite error in financing statement.    - Even assuming a financing statement became seriously misleading due to a change in the debtor's name after dissolution of the corporation, the first lienholder was still protected as to collateral acquired through that time and up to four months thereafter. Western Auto Supply Co. v. McKenzie, 227 Ga. App. 477, 489 S.E.2d 537 (1997).   Transfer of collateral.   - Where the financing statement was effective when it named "King's Tuft" as the debtor but the collateral was subsequently transferred to "Cohutta Mills," the statement became seriously misleading: because the two names were completely dissimilar, a searcher of "Cohutta Mills'" interests would not be alerted to inquire into "King's Tuft's" interests. Jones v. Small Bus. Admin. (In re Cohutta Mills, Inc.), 108 Bankr. 815 (N.D. Ga. 1989) (decided under former Code Section 11-9-402).   Filing continuation statement.   - Upon the lapse of a seriously misleading, though partially effective, financing statement, the secured party, acting in good faith, must file a continuation statement under the new debtor's name if it wishes to sustain its perfected status. Jones v. Small Bus. Admin. (In re Cohutta Mills, Inc.), 108 Bankr. 815 (N.D. Ga. 1989) (decided under former Code Section 11-9-402).   Question of fact as to whether financing statement seriously misleading.    - In a suit involving the defendant defaulting on loans secured by property that was allegedly tortuously converted by sale, the grant of summary judgment to the plaintiff was reversed, in part, because an issue of material fact remained as to whether the financing statement was valid as to the name provided on the financing statement and whether the incorrect name made the statement seriously misleading. Rebel Auction Co. v. Citizens Bank, 343 Ga. App. 81, 805 S.E.2d 913 (2017).   RESEARCH REFERENCES   Am. Jur. 2d.   - 68A Am. Jur. 2d, Secured Transactions, §§ 32, 192 et seq., 310, 311, 329 et seq., 352-354, 365, 395.   C.J.S.   - 76 C.J.S., Records, § 4.   U.L.A.   - Uniform Commercial Code (U.L.A.) § 9-506.   ALR.    - What amounts to a conditional sale, 17 A.L.R. 1421; 43 A.L.R. 1247; 92 A.L.R. 304; 175 A.L.R. 1366.    Violation of statute as to form of, or terms to be included in, conditional sale contract, as invalidating entire transaction or merely its effect to reserve title in vendor, 144 A.L.R. 1103.   Priority as between federal tax lien and mortgage to secure future advances or expenditures by mortgagee, 90 A.L.R.2d 1179.   Sufficiency of description of crops under UCC §§ 9-203(1)(b) and 9-402(1), 67 A.L.R.3d 308; 100 A.L.R.3d 10; 100 A.L.R.3d 940.   Sufficiency of designation of debtor or secured party in security agreement or financing statement under UCC § 9-402, 99 A.L.R.3d 478.   Sufficiency of address of debtor in financing statement required by UCC § 9-402(1), 99 A.L.R.3d 807.   Sufficiency of address of secured party in financing statement required under UCC § 9-402(1), 99 A.L.R.3d 1080.   Effectiveness of original financing statement under UCC Article 9 after change in debtor's name, identity, or business structure, 99 A.L.R.3d 1194.   Sufficiency of secured party's signature on financing statement or security agreement under UCC § 9-402, 100 A.L.R.3d 390.   Sufficiency of debtor's signature on security agreement or financing statement under UCC §§ 9-203 and 9-402, 3 A.L.R.4th 502.   Sufficiency and effectiveness of designation of debtor in financing statement under Uniform Commercial Code §§ 9-503 and 9-506 (revised 2000), 28 A.L.R.6th 461.