Opinion ID: 1702165
Heading Depth: 1
Heading Rank: 6

Heading: Whether the UCC Exempts Merchants' Transaction from the Filing Requirements

Text: ¶ 23. Even if a party is covered by the filing requirement provisions of the UCC, it may be exempt from filing where an assignment (done or in conjunction with others) to the same assignee does not transfer a significant part of the outstanding accounts of the assignor. Miss.Code Ann. § 75-9-302(1)(e). The comment to the UCC explains the exception: The purpose of the subsection (1)(e) exemption is to save from ex post facto invalidation casual or isolated assignments: some accounts receivable statutes were so broadly drafted that all assignments, whatever their character or purpose, fell within their filing provisions. Under such statutes many assignments which no one would think of filing might have been subject to invalidation. The paragraph (1)(e) exemption goes to that type of assignment. Any person who regularly takes assignments of any debtor's accounts should file. Id. at cmt.5 (emphasis added). ¶ 24. In this issue of first impression for our Court, Merchants argues that even if we find that the UCC applies, it is exempt under Section 75-9-302(1)(e). We disagree. Schwegman Constructors' outstanding accounts receivable for the month ending June 30, 2001, totaled $1,274,117.95. Merchant's loans to Schwegman Constructors totaled $335,019.00, representing more than one quarter of Schwegman Constructors' total outstanding accounts receivable. This is by no means a casual or isolated assignment transferring an insignificant part of Schwegman Constructors' outstanding accounts receivable. Therefore, Merchants is not exempt from the filing requirement. Indeed, the comment counsels that a person in Merchants' position who regularly takes assignments of any debtor's accounts should file.