Court Opinion

ID: 9553954
Source: CourtListenerOpinion
Date Created: 2023-08-07 19:38:01.451759+00
Date Added: 2024-06-11T15:32:41.165092
License: Public Domain

*3WARREN, P. J.
This case involves a dispute under the Uniform Commercial Code between a lien creditor and the holder of a perfected security interest in future advances over their relative priorities in the debtor’s property. Plaintiff recovered a judgment against defendant A. Roger Pease, which Pease appealed.1 Pease gave Stoel, Rives, Boley, Jones & Grey (Stoel Rives), the law firm that represented him on the appeal of the judgment, a security interest in his accounts at several brokerages to secure payment of its fees.2 He did not file an undertaking to stay enforcement of the judgment during the appeal, see ORS 19.040(l)(a), and plaintiff subsequently garnished his accounts at those brokerages, thereby becoming a lien creditor under ORS 79.3010(3). Stoel Rives asserted that its prior perfected security interest in the accounts entitled it to priority over the liens created by the garnishments. Plaintiff appeals from an order of the trial court sustaining Stoel Rives’ claim of priority.3 We affirm.
Stoel Rives began representing Pease after the trial court entered judgment against him. Its first action on his behalf was to file post-trial motions; it also agreed to represent him on an appeal to this court. Stoel Rives billed Pease monthly and expected him to “pay all obligations when due.”
The question is whether plaintiff, as a lien creditor, has priority in those accounts over Stoel Rives’ claims, under the pledge agreement, for fees that Pease incurred after the service of the garnishments. The trial court held that Stoel Rives is entitled to priority for all future services that it renders to Pease on the appeal to this court. It based that decision on ORS 79.3010(4), which provides:
“A person who becomes a lien creditor while a security interest is perfected takes subject to the security interest *4only to the extent that it secures advances made before the person becomes a lien creditor or within 45 days thereafter or made without knowledge of the lien or pursuant to a commitment entered into without knowledge of the lien.”
The parties’ arguments concerning the validity of the trial court’s order require the determination of two things: (1) whether Stoel Rives’ provision of legal services is an “advance” as the statute uses the term; and (2) whether it provided those services “pursuant to a commitment.” Stoel Rives will satisfy the statutory criteria for priority for future advances only if we decide both issues in its favor. Cases.fr om this and other jurisdictions do not resolve these questions, and the Official Comments to the Uniform Commercial Code are not helpful.
The first question is whether Stoel Rives’ legal services constitute “advances.” In this case, unlike most cases involving these issues, Stoel Rives advanced services, not money. Relying on Dick Warner Cargo Handling v. Aetna Business Credit, 746 F2d 126, 130-32 (2d Cir 1984), plaintiff argues that those services are “nonadvances” that do not meet the statutory criteria for priority. However, Dick Warner involved legal services that were part of the secured party’s expenses of collecting the underlying debt. In this case, the legal services are the subject of the debt and are the primary obligation secured. Unlike the “nonadvances” discussed in Dick Warner, they are not collateral to the main purpose of the security agreement. That case does not provide a basis for holding that the fees in this case are not advances.
Plaintiff also points out that ORS 79.2040(3) provides that an obligation covered by a security agreement may include “future advances or other value” whether or not the advances or value are given pursuant to commitment. It argues that the distinction between future “advances” and future “value” shows that the two concepts are not the same. It suggests that an “advance” refers to some value that enriches the debtor’s estate, while “value” refers to things provided that do not enrich the estate. Legal services, plaintiff argues, drain the debtor’s estate, especially when, as in this case, their purpose is simply to delay the collection of a legitimate obligation that has been reduced to judgment.
*5One obvious problem with plaintiffs argument is the necessary assumption that Pease’s appeal was bound to fail. If the appeal had been successful, it would have produced substantial benefit to Pease’s estate. We decline to hold that an agreement to secure the payment of fees for legal services is an “advance” only if those services ultimately achieve the desired result. Even if plaintiffs distinction between “advances” that benefit an estate and “value” that drains it has any merit, that distinction must apply to the purpose of the advance, not to its result.4 The purpose of these legal fees was to benefit Pease and his estate; they therefore fall on the “advance” side of plaintiffs proposed distinction.
Plaintiff has thus failed to provide an interpretation of ORS 79.3010(4) that would exclude Stoel Rives’ fees for the future legal services that it would perform on the appeal after the creation of and perfection of the security interest.5 We construe the statute to cover those fees, because the normal legal meaning of “advances” leads to that result.6 That meaning includes “[t]o pay money or render other value before it is due; to furnish something before an equivalent is received * * *. [T]o furnish on credit or before goods are delivered or *6work done.” Black’s Law Dictionary 52, (6th ed 1990) (emphasis supplied). This definition does not limit an advance to providing money but includes other kinds of value, thus suggesting that the use of both terms in ORS 79.2040(3) does not make them mutually exclusive. Indeed, that statute seems to be primarily directed to emphasizing that a security agreement may include a broad variety of things, not to creating technical distinctions among those things. The reference in the dictionary definition to “work done” indicates that “other value” includes services. We therefore hold that Stoel Rives has a security interest in future advances under ORS 79.3010(4).
We turn to whether the fees that Stoel Rives incurred after the garnishments were advanced “pursuant to a commitment,” which is necessary for its security interest to take priority over plaintiff s garnishment. ORS 79.1050(1)(k) provides that an advance is made “pursuant to commitment”
“if the secured party has bound the secured party to make it, whether or not a subsequent event of default or other event not within the control of the secured party has relieved or may relieve the secured party from the obligation.”
Plaintiff argues that Stoel Rives was not obligated to continue to provide legal services to Pease throughout the appeal but could have withdrawn as his attorneys at any time. As a result, plaintiff says, an event within Stoel Rives’ control could have relieved it of the obligation. Even if plaintiffs understanding of the attorney-client relationship is correct, withdrawal would have required an order of this court. See ORAP 8.10(1). Plaintiff recognizes that fact but appears to assume that the grounds for withdrawal are so broad that this court would have granted a petition to withdraw almost as a matter of course.
Plaintiff misses the point of the statute. The question is whether Stoel Rives could relieve itself of the obligation to make future advances by an action that is “within the control of the secured party”; if it could not, any future advance would be made “pursuant to commitment.” Because Stoel Rives could not withdraw without this court’s permission, withdrawal was not within Stoel Rives’ control. Speculation *7as to how easy or difficult it would have been to get that permission is simply irrelevant.
Plaintiff has not shown that the trial court erred when it held that the pledge agreement gave Stoel Rives priority over a subsequent lien creditor for its future legal services to Pease on the appeal. We therefore affirm the trial court’s decision.
Affirmed.

 We subsequently affirmed the judgment against Pease. Boers v. Payline Systems, Inc., 141 Or App 238, 918 P2d 432 (1996).

 The pledge was also intended to secure Stoel Rives’ fees in case Pease decided to file a bankruptcy petition. Stoel Rives does not challenge the trial court’s determination that it does not have priority over plaintiff for those fees.

 The order is appealable as a final order affecting a substantial right, made after judgment. ORS 19.010(2)(c).

 We would not, for instance, hold that a lender would lose its security interest for future advances if those advances enabled the borrower to launch a venture that failed so disastrously that it rendered the borrower penniless.

 Plaintiff and the dissent recognize that Stoel Rives is entitled to priority for services that it actually performed before plaintiffs liens attached. That recognition may implicitly concede that Stoel Rives’ services were advances under ORS 79.3010(4), as the statute uses the term “advances” to refer both to things provided before a conflicting lien attaches and things provided afterwards. Stoel Rives could have priority for its previous services, thus, only if they were “advances” under the statute.

 The dissent fails to recognize that ORS 79.3010(4) gives priority to a secured creditor over a lien creditor to the extent that the secured creditor makes advances pursuant to a commitment entered into without knowledge of the lien. The question is when the secured creditor committed itself to make the advances, not when the debtor is required to pay for them. The secured creditor is a future advances lender entitled to priority over a subsequent lien creditor when it does not make the advances at the time of the creation of the security interest but, rather, commits itself at that time to make advances in the future. The time when the debtor becomes obligated to pay for the advances has nothing to do with the secured creditor’s status as a future advances lender or with its priority over a lien creditor.
The dissent also fails to recognize that Stoel Rives made the advances at the time that it rendered legal services, not at the later date when it billed for them and when payment became due. Thus, under the dissent’s own analysis, Stoel Rives’ services were future advances.