Opinion ID: 1979782
Heading Depth: 1
Heading Rank: 1

Heading: Perfection by prefiling a financing statement.

Text: There is no dispute that chapter 554 applies to these transactions, that both parties have attached security interests in the same collateral, and that DACC's security interest is a PMSI. See Iowa Code §§ 554.1201(37), .9102, .9107(a), .9203. The issue here is perfection. In this case an effective financing statement must have been filed by DACC to perfect its PMSI, and thus receive priority over SGFI's claim to the collateral. See Iowa Code §§ 554.9302(1), (2), .9303(1), .9312(4). Section 554.9402(1) sets forth the requirements of a financing statement, and then provides it may be filed before a security agreement is made or a security interest otherwise attaches. A. SGFI argues DACC did not perfect its PMSI because the first financing statement was terminated with the signing of the second installment contract by LFI, the debtor, and the implement company, the secured party. It claims support for this argument in section 554.9404(1), which requires a secured party, upon demand and when there is no outstanding secured obligation, to send the debtor a termination statement stating that he no longer claims a security interest under the financing statement. We agree with the trial court that section 554.9404(1) is inapplicable to the facts here: LFI made no demand for a termination statement from DACC, none was filed, and, as the trial court found, there was an outstanding secured obligation at the time of the signing of the second contract. B. SGFI alternatively argues DACC did not perfect its PMSI because the first financing statement was filed forty-four days before the signing of the second installment contract. Relying on other provisions in chapter 554 with express time limitations, it suggests that a limitation period of twenty-one days, before attachment of a security interest, is implied in section 554.9402(1). The short answer to this argument is that a court may not add words to a statute. In re Clay, 246 N.W.2d 263, 265 (1976). As the trial court succinctly stated: Section 554.9402(1) [contains] no time limitation. The meaning of the word before is not ambiguous; if a specific time limitation was meant to apply, [the legislature] would have provided one. See Iowa R.App.P. 14(f)(13). We conclude that under the circumstances the trial court did not err in determining the PMSI held by DACC was properly perfected by the first financing statement.