Court Opinion

ID: 4639548
Source: CourtListenerOpinion
Date Created: 2020-12-04 14:09:37.774076+00
Date Added: 2024-06-11T07:58:57.925757
License: Public Domain

Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
12/04/2020 08:09 AM CST

                                                           - 198 -
                               Nebraska Supreme Court Advance Sheets
                                        307 Nebraska Reports
                                        FIRST STATE BANK NEB. v. MP NEXLEVEL
                                                   Cite as 307 Neb. 198

                                First State Bank Nebraska, appellant,
                                    v. MP Nexlevel, LLC, appellee.
                                                      ___ N.W.2d ___

                                          Filed September 18, 2020.   No. S-19-543.

                 1. Summary Judgment: Appeal and Error. An appellate court will affirm
                    a lower court’s grant of summary judgment if the pleadings and admit-
                    ted evidence show that there is no genuine issue as to any material facts
                    or as to the ultimate inferences that may be drawn from those facts and
                    that the moving party is entitled to judgment as a matter of law.
                 2. ____: ____. In reviewing a summary judgment, an appellate court views
                    the evidence in the light most favorable to the party against whom the
                    judgment was granted and gives that party the benefit of all reasonable
                    inferences deducible from the evidence.
                 3. Statutes: Appeal and Error. Statutory interpretation presents a ques-
                    tion of law, for which an appellate court has an obligation to reach an
                    independent conclusion irrespective of the decision made by the court
                    below.
                 4. Uniform Commercial Code: Secured Transactions: Security
                    Interests. Article 9 of the Uniform Commercial Code, as adopted by
                    Nebraska, provides a comprehensive scheme for the regulation of secu-
                    rity interests.
                 5. Uniform Commercial Code: Secured Transactions. Article 9 of the
                    Uniform Commercial Code, in part, applies to both a sale of certain
                    payment rights—accounts, chattel paper, intangibles, and promissory
                    notes—and the grant of an interest in specified payment rights to secure
                    an obligation.
                 6. Uniform Commercial Code: Secured Transactions: Debtors and
                    Creditors. In the case of a debtor granting a party payment rights to
                    secure an obligation, part 6 of article 9 of the Uniform Commercial
                    Code provides enforcement rights of the secured party in the event of
                    a default by the debtor, as well as certain limitations on the exercise of
                    those rights for the protection of the defaulting debtors, other creditors,
                    and other affected persons.
                                    - 199 -
            Nebraska Supreme Court Advance Sheets
                     307 Nebraska Reports
                FIRST STATE BANK NEB. v. MP NEXLEVEL
                           Cite as 307 Neb. 198

 7. ____: ____: ____. Part 4 of article 9 of the Uniform Commercial Code
    primarily addresses the rights and duties of account debtors and other
    persons obligated on collateral who are not, themselves, parties to a
    secured transaction.
 8. Statutes: Appeal and Error. In construing a statute, statutory language
    is to be given its plain and ordinary meaning, and an appellate court will
    not resort to interpretation to ascertain the meaning of statutory words
    which are plain, direct, and unambiguous.
 9. Statutes: Legislature: Intent. Components of a series or collection of
    statutes pertaining to a certain subject matter are in pari materia and
    should be conjunctively considered and construed to determine the
    intent of the Legislature, so that different provisions are consistent, har-
    monious, and sensible.
10. Uniform Commercial Code: Statutes. While official comments to the
    Uniform Commercial Code, as adopted by Nebraska, are not binding,
    they are persuasive in matters of statutory interpretation.
11. Uniform Commercial Code: Secured Transactions: Assignments:
    Words and Phrases. Unless there is a good reason for the definition of
    “assignment” to apply more narrowly in a given context, “assignment”
    under article 9 of the Uniform Commercial Code includes both an out-
    right transfer of ownership and a contingent transfer for security.
12. ____: ____: ____: ____. The determination of whether a sale or grant of
    an interest amounts to an “assignment” as used in a given statute under
    article 9 of the Uniform Commercial Code depends upon the context of
    the statute and the interest given.
13. Uniform Commercial Code: Secured Transactions: Security
    Interests: Assignments: Words and Phrases. “Assignment” and its
    derivatives under Neb. U.C.C. § 9-406(a) (Reissue 2001 & Cum. Supp.
    2018) apply to presently exercisable security interests.
14. Uniform Commercial Code: Secured Transactions: Notice. Whether
    a notice is sufficient under Neb. U.C.C. § 9-406(a) (Reissue 2001 &
    Cum. Supp. 2018) depends upon the facts of each case.
15. Uniform Commercial Code: Secured Transactions: Assignments:
    Notice. In order to be sufficient under Neb. U.C.C. § 9-406(a) and (b)(1)
    (Reissue 2001 & Cum. Supp. 2018), a notice has to reasonably identify
    the rights assigned and demand payment to the assignee.
16. Uniform Commercial Code: Secured Transactions: Notice. A reason-
    able identification need not identify the right to payment with specific-
    ity, and “magic words” are not required for a notice under Neb. U.C.C.
    § 9-406(a) (Reissue 2001 & Cum. Supp. 2018) to be effective.
17. Uniform Commercial Code: Secured Transactions: Debtors and
    Creditors. Neb. U.C.C. § 9-406(a) (Reissue 2001 & Cum. Supp. 2018)
    can modify an account debtor’s obligations under its agreement with
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              Nebraska Supreme Court Advance Sheets
                       307 Nebraska Reports
                  FIRST STATE BANK NEB. v. MP NEXLEVEL
                             Cite as 307 Neb. 198

       the debtor if certain criteria are met, and Neb. U.C.C. § 9-607(a)(3)
       (Reissue 2001 & Cum. Supp. 2018) permits the secured party to enforce
       the account debtor’s obligations.
18.    Uniform Commercial Code: Secured Transactions. Default under
       article 9 of the Uniform Commercial Code is not contingent on an adju-
       dication or agreement.
19.    ____: ____. Article 9 of the Uniform Commercial Code leaves to the
       agreement of the parties the circumstances giving rise to a default;
       default is whatever the security agreement says it is.
20.    ____: ____. Under Neb. U.C.C. § 9-607(a)(3) (Reissue 2001 & Cum.
       Supp. 2018), it is unnecessary for a secured party to first become the
       owner of the collateral pursuant to a disposition or acceptance.
21.    ____: ____. Under Neb. U.C.C. § 9-607(a)(3) (Reissue 2001 & Cum.
       Supp. 2018), a secured party may collect and enforce obligations
       included in collateral in its capacity as a secured party.
22.    Standing: Jurisdiction: Parties. Standing refers to whether a party had,
       at the commencement of the litigation, a personal stake in the outcome
       of the litigation that would warrant a court’s or tribunal’s exercising its
       jurisdiction and remedial powers on the party’s behalf.
23.    Standing: Words and Phrases. Standing involves a real interest in the
       cause of action, meaning some legal or equitable right, title, or interest
       in the subject matter of the controversy.
24.    Standing: Claims: Parties. To have standing, a litigant must assert the
       litigant’s own rights and interests, and cannot rest a claim on the legal
       rights or interests of third parties.

  Appeal from the District Court for Lancaster County:
Susan I. Strong, Judge. Reversed and remanded for further
proceedings.
  Brandon R. Tomjack and Nicholas A. Buda, of Baird Holm,
L.L.P., for appellant.
      Michael S. Degan, of Kutak Rock, L.L.P., for appellee.
   Anthony Schutz for amicus curiae Commercial Law Amicus
Initiative.
  Robert J. Hallstrom and Gerald M. Stilmock, of Brandt,
Horan, Hallstrom & Stilmock, for amicus curiae Nebraska
Bankers Association, Inc.
                              - 201 -
         Nebraska Supreme Court Advance Sheets
                  307 Nebraska Reports
             FIRST STATE BANK NEB. v. MP NEXLEVEL
                        Cite as 307 Neb. 198

  Heavican, C.J., Cassel, Funke, Papik, and Freudenberg, JJ.
   Funke, J.
   First State Bank Nebraska (First State) challenges the district
court’s order dismissing its claims against MP Nexlevel, LLC.
MP Nexlevel contracted to pay Husker Underground Utilities
& Construction, LLC (Husker Underground), for certain con-
struction services. First State held a security interest in Husker
Underground’s accounts due to separate loan agreements.
When Husker Underground failed to meet its loan obligations,
First State sought direct payment of MP Nexlevel’s obligations
under the contract by sending MP Nexlevel notices of Husker
Underground’s default. Despite the notices, MP Nexlevel con-
tinued to submit its payments to Husker Underground, and
First State brought suit against MP Nexlevel for performance
under the contract.
   First State challenges the district court’s finding that it
lacked standing because it was not a party to the contract, Neb.
U.C.C. § 9-607(a) (Reissue 2001 & Cum. Supp. 2018) did not
authorize it to enforce MP Nexlevel’s obligations under the
contract, and Neb. U.C.C. § 9-406(a) (Reissue 2001 & Cum.
Supp. 2018) did not apply, because First State held a security
interest rather than an assignment of Husker Underground’s
rights to payment under the contract. For the reasons set
forth herein, we reverse the judgment of the district court and
remand this matter for further proceedings consistent with
this opinion.
                       BACKGROUND
   First State is a domestic bank chartered by and registered
in the State of Nebraska. MP Nexlevel is a Minnesota lim-
ited liability company performing excavation, trenching, and
other services for Nebraska customers as well as customers in
other states.
   In January 2018, MP Nexlevel and Husker Underground
entered into a subcontract agreement whereby Husker Under­
ground promised to perform certain construction services.
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         Nebraska Supreme Court Advance Sheets
                  307 Nebraska Reports
             FIRST STATE BANK NEB. v. MP NEXLEVEL
                        Cite as 307 Neb. 198

As Husker Underground performed these services, it would
submit invoices to MP Nexlevel for payment. MP Nexlevel
was generally required to pay these amounts within 45 days
of approval. Husker Underground performed these services
throughout 2018. First State was not a party to the subcontract
or any other agreement between MP Nexlevel and Husker
Underground.
   Between May and June 2016, First State loaned money to
Husker Underground pursuant to various promissory notes and
agreements. These agreements included a May promissory note
executed in the original principal amount of $50,000, a June
promissory note in the original principal amount of $635,500,
and a May business manager agreement with business and
professionals in which First State agreed, in part, to purchase
certain accounts receivable from Husker Underground. Husker
Underground secured these agreements by granting First State
a security interest in virtually all of its assets, including its
accounts and accounts receivable. First State filed three financ-
ing statements with the Nebraska Secretary of State to perfect
these security interests. MP Nexlevel was not a party to any
agreement between First State and Husker Underground and
had no actual knowledge of the two parties’ relationship.
   Husker Underground failed to make payments to First State
when due, including failing to pay the May note in full upon
maturity. As such, in August 2018, First State filed a lawsuit
against Husker Underground, alleging Husker Underground
was in default under the agreements and seeking a judgment
for the payment of the remaining obligations. On January 23,
2019, the district court entered a stipulated order, signed by
Husker Underground representatives, granting summary judg-
ment in favor of First State.
   Prior to filing suit against Husker Underground, First State
sent three notices to MP Nexlevel in May, July, and August
2018. These notices alleged that Husker Underground had
defaulted on loans from First State, that Husker Underground
had granted First State a security interest in its accounts, and
that Husker Underground assigned First State its rights to
                              - 203 -
          Nebraska Supreme Court Advance Sheets
                   307 Nebraska Reports
             FIRST STATE BANK NEB. v. MP NEXLEVEL
                        Cite as 307 Neb. 198

receive payments from MP Nexlevel as a result of its default.
The notices directed MP Nexlevel to pay all amounts owed
on Husker Underground’s accounts to First State directly and
warned that failure to do so could result in adverse conse-
quences for MP Nexlevel. Attached was a copy of a Uniform
Commercial Code (UCC) financing statement identifying the
security interest in Husker Underground’s accounts.
   Once MP Nexlevel received the May 2018 notice, it con-
tacted representatives at First State and Husker Underground.
As to the communication with First State, affidavits offered by
the parties alleged slightly varying facts as to MP Nexlevel’s
representations on whether it would comply with the notice’s
directions. Pat Carlson, an MP Nexlevel accounting supervisor,
stated that he telephoned Miranda Hobelman, of First State,
      in order to gather additional information, including the
      amount [First State] claimed it was owed by Husker
      Underground. I informed [Hobelman] that [MP Nexlevel]
      would review and decide the matter after due consider-
      ation of [MP Nexlevel’s] legal rights and responsibilities,
      if any, to [First State] and Husker Underground.
Hobelman, First State’s general counsel and a senior vice presi-
dent, stated:
         . . . I received a telephone call from . . . Carlson
      with MP Nex[l]evel who[] acknowledged receipt of
      [First State’s] May Notice and otherwise stated that MP
      Nexlevel would be cooperating with the Notice and send-
      ing payments on the Accounts directly to [First State].
      After our call, I sent . . . Carlson two emails . . . follow-
      ing-up our conversation confirming that [MP Nexlevel]
      would send [First State] all funds owed to Husker
      Underground on the Accounts.
   The first email Hobelman referenced in her affidavit apolo-
gized for missing Carlson’s initial call and stated, “Please
make the checks payable to First State . . . as requested in the
letter.” The second email thanked Carlson for calling back,
explaining, “As we discussed, please send funds owed to
Husker Underground to First State . . . until the total of funds
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         Nebraska Supreme Court Advance Sheets
                  307 Nebraska Reports
             FIRST STATE BANK NEB. v. MP NEXLEVEL
                        Cite as 307 Neb. 198

sent equals $1,033,242.30. The funds will be credited to Husker
Underground’s loans at First State.”
   As to MP Nexlevel’s communication with Husker
Underground, Carlson asserted that Husker Underground dis-
puted the claim that it assigned its rights to receive MP
Nexlevel payments to First State. Husker Underground, instead,
demanded MP Nexlevel continue to make the payments to it
under terms of the subcontract agreement. Carlson claimed
that Husker Underground never directed MP Nexlevel to make
payments to First State, that MP Nexlevel was never provided
an assignment of Husker Underground’s rights to payment
under the subcontract, that MP Nexlevel was not notified of a
judgment in favor of First State against Husker Underground,
and that MP Nexlevel was not provided copies of the notes or
agreement between First State and Husker Underground. As
such, MP Nexlevel continued making its payments directly to
Husker Underground. MP Nexlevel’s discovery responses show
MP Nexlevel made payments totaling $412,302.59 to Husker
Underground after receiving the May 2018 notice. There are no
outstanding invoices of Husker Underground for MP Nexlevel
to pay.
   In August 2018, 6 days after bringing suit against Husker
Underground, First State filed a complaint against MP Nexlevel
and, thereafter, filed a motion for summary judgment. First
State alleged that because Husker Underground was in default
of the notes and agreement and First State had a security
interest in Husker Underground’s accounts receivable, it had
a right to enforce this security interest and foreclose upon
the same pursuant to §§ 9-406(a) and 9-607(a). First State
further alleged that once First State sent its May 2018 notice
to MP Nexlevel, MP Nexlevel could discharge its obligations
under the subcontract only by paying the invoiced amounts
directly to First State. First State claimed that because MP
Nexlevel continued paying the invoiced amounts to Husker
Underground, MP Nexlevel breached its obligations under the
subcontract, and that First State is entitled to payment of the
delinquent amounts.
                             - 205 -
         Nebraska Supreme Court Advance Sheets
                  307 Nebraska Reports
             FIRST STATE BANK NEB. v. MP NEXLEVEL
                        Cite as 307 Neb. 198

   MP Nexlevel resisted First State’s motion and filed a cross-
motion for summary judgment. MP Nexlevel argued First State
lacked standing to enforce the subcontract agreement, because
there was no contractual relationship between First State and
MP Nexlevel. Although MP Nexlevel received the notices,
MP Nexlevel argued it properly continued to pay Husker
Underground, because Husker Underground contested First
State’s assertions and there was insufficient documentation that
Husker Underground’s rights to payment under the subcontract
were assigned to First State.
   The district court overruled First State’s motion for summary
judgment and granted MP Nexlevel’s cross-motion, dismiss-
ing the case with prejudice. First, the court held that § 9-607
does not give rise to a claim by a secured creditor against an
account debtor where the debtor is not in default and has not
otherwise agreed. As such, because the record demonstrated
that Husker Underground denied being in default at the time of
First State’s notices and First State did not obtain its judgment
against Husker Underground until January 23, 2019, First State
did not have a cognizable claim against MP Nexlevel under
§ 9-607 for MP Nexlevel’s performance under the subcontract.
Additionally, the court determined that § 9-406(a) required
receipt of notification of assignment in order to obligate the
account debtor to pay the assignee and that an assignment is
not the same as a secured interest. Because First State failed to
adduce any evidence establishing Husker Underground made
an assignment to First State, First State did not have author-
ity under § 9-406(a) to demand MP Nexlevel to make the
subcontract payments directly to it. As such, the court found
First State lacked standing to pursue its claims for breach of
the subcontract.
                 ASSIGNMENTS OF ERROR
   First State assigns, restated, that the district court erred
by (1) failing to find genuine issues of material fact existed,
(2) finding Husker Underground was not in default at the
time MP Nexlevel received the notices, (3) failing to find
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            Nebraska Supreme Court Advance Sheets
                     307 Nebraska Reports
                FIRST STATE BANK NEB. v. MP NEXLEVEL
                           Cite as 307 Neb. 198

MP Nexlevel’s motion was deficient by not filing an annotated
statement of disputed facts, (4) admitting Carlson’s affidavit,
(5) holding an “assignment” under § 9-406 does not include a
“security interest,” and (6) granting MP Nexlevel’s motion for
summary judgment.
                  STANDARD OF REVIEW
   [1] An appellate court will affirm a lower court’s grant of
summary judgment if the pleadings and admitted evidence
show that there is no genuine issue as to any material facts
or as to the ultimate inferences that may be drawn from those
facts and that the moving party is entitled to judgment as a
matter of law. 1
   [2] In reviewing a summary judgment, an appellate court
views the evidence in the light most favorable to the party
against whom the judgment was granted and gives that
party the benefit of all reasonable inferences deducible from
the evidence. 2
   [3] Statutory interpretation presents a question of law, for
which an appellate court has an obligation to reach an inde-
pendent conclusion irrespective of the decision made by the
court below. 3
                            ANALYSIS
               Evidence and Finding of Husker
                   Underground’s Default
   As an initial matter, several of First State’s assignments claim
MP Nexlevel presented evidence that Husker Underground was
not in default at the time of First State’s notices. First State
claims this evidence and the court’s finding that default had
not occurred contradicted First State’s allegations and evidence
of Husker Underground’s earlier default. On this basis, First
1
    JB & Assocs. v. Nebraska Cancer Coalition, 303 Neb. 855, 932 N.W.2d 71
    (2019).
2
Id.
3
 Id.
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         Nebraska Supreme Court Advance Sheets
                  307 Nebraska Reports
             FIRST STATE BANK NEB. v. MP NEXLEVEL
                        Cite as 307 Neb. 198

State contends that it was reversible error for MP Nexlevel to
fail to file an annotated statement of disputed facts. Further,
First State contends that the court erred in admitting Carlson’s
affidavit, finding Husker Underground was not in default at the
time of the notice, and finding there were no genuine issues of
material fact.
   First State misstates MP Nexlevel’s allegations and the
court’s findings. Contrary to First State’s contention, MP
Nexlevel did not contest that Husker Underground was in
default of its loan obligations at the time of the notices.
Instead, MP Nexlevel explained that at the time of the notices,
Husker Underground disputed First State’s claim that it was in
default. MP Nexlevel, and Carlson’s affidavit, made no allega-
tion that the default had not actually occurred.
   Additionally, the court made no findings that Husker
Underground was not in default at the time of the notices.
To the contrary, the court specifically found that “Husker
Underground defaulted on its obligations owed to [First State]
under the Businessmanager[] Agreement and Notes by fail-
ing to make payments to [First State] when due and failing to
pay the May Note in full upon maturity.” The court’s basis for
granting MP Nexlevel’s motion for summary judgment was
that the default was disputed at the time of the notices and not
on the basis that the default did not occur.
   Accordingly, First State’s assignments premised on this
proposition are without merit, and we turn to First State’s
assignments regarding its authority to seek and enforce pay-
ment of Husker Underground’s account against MP Nexlevel
after Husker Underground failed in its loan obligations to
First State.
                       Article 9 of UCC
   Husker Underground’s agreements with First State imposed
various financial obligations which Husker Underground
secured by granting First State a security interest in virtually
all of its assets, including its accounts and accounts receiv-
able. These accounts included an agreement between Husker
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            Nebraska Supreme Court Advance Sheets
                     307 Nebraska Reports
                FIRST STATE BANK NEB. v. MP NEXLEVEL
                           Cite as 307 Neb. 198

Underground and MP Nexlevel where Husker Underground
would provide certain services in exchange for payment from
MP Nexlevel. As discussed above, it is undisputed that Husker
Underground failed to meet its obligations to First State. This
case arises from First State’s attempt to enforce the security
agreement after Husker Underground’s failure to meet its obli-
gations and hinges on whether First State could demand MP
Nexlevel comply with the terms of the security agreements
when Husker Underground had disputed it was in default.
   [4,5] Article 9 of the UCC, as adopted by Nebraska, pro-
vides a comprehensive scheme for the regulation of secu-
rity interests. 4 Article 9, in part, applies to both a sale of
certain payment rights—accounts, chattel paper, intangibles,
and promissory notes—and the grant of an interest in speci-
fied payment rights to secure an obligation. 5 Under article 9,
a “secured party” includes, among others, either a person in
whose favor a security interest is created or provided for under
a security agreement or a person to which payment rights have
been sold; a “debtor” includes a person having an interest in
the collateral other than a security interest or other lien and a
seller of payment rights; and an “account debtor” is a person
obligated on an account, chattel paper, or general intangible
subject to the payment rights sold or granted. 6
   [6] In the case of a debtor granting a party payment rights
to secure an obligation, part 6 of article 9 provides enforce-
ment rights of the secured party in the event of a default by the
debtor, as well as certain limitations on the exercise of those
rights for the protection of the defaulting debtors, other credi-
tors, and other affected persons. 7 Section 9-607(a) states, in
relevant part:
4
    See Neb. U.C.C. § 9-101, comment 1 (Reissue 2001 & Cum. Supp. 2018).
5
    Neb. U.C.C. § 9-109 (Reissue 2001).
6
    Neb. U.C.C. § 9-102(3), (28), (73) (Reissue 2001 & Cum. Supp. 2018).
7
    See Neb. U.C.C. § 9-601, comment 2 (Reissue 2001 & Cum. Supp. 2018).
                                  - 209 -
            Nebraska Supreme Court Advance Sheets
                     307 Nebraska Reports
                FIRST STATE BANK NEB. v. MP NEXLEVEL
                           Cite as 307 Neb. 198

       If so agreed, and in any event after default, a secured
       party:
          (1) may notify an account debtor or other person
       obligated on collateral to make payment or otherwise
       render performance to or for the benefit of the secured
       party; [and]
          ....
          (3) may enforce the obligations of an account debtor
       or other person obligated on collateral and exercise the
       rights of the debtor with respect to the obligation of the
       account debtor or other person obligated on collateral to
       make payment or otherwise render performance to the
       debtor, and with respect to any property that secures the
       obligations of the account debtor or other person obli-
       gated on the collateral.
    Section 9-607 addresses a secured party’s rights in relation
to the debtor to collect a specified payment right. However,
this section “does not determine whether an account debtor
. . . owes a duty to a secured party.” 8
    [7] Part 4 of article 9 primarily addresses the rights and
duties of account debtors and other persons obligated on collat-
eral who are not, themselves, parties to a secured transaction. 9
As part of these duties, § 9-406(a) provides:
          . . . [A]n account debtor on an account, chattel paper,
       or a payment intangible may discharge its obligation by
       paying the assignor until, but not after, the account debtor
       receives a notification, authenticated by the assignor
       or the assignee, that the amount due or to become due
       has been assigned and that payment is to be made
       to the assignee. After receipt of the notification, the
       account debtor may discharge its obligation by paying
       the assignee and may not discharge the obligation by
       paying the assignor.
8
    § 9-607(e).
9
    See Neb. U.C.C. § 9-401, comment 2 (Reissue 2001).
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             Nebraska Supreme Court Advance Sheets
                      307 Nebraska Reports
                  FIRST STATE BANK NEB. v. MP NEXLEVEL
                             Cite as 307 Neb. 198

   In other words, prior to receiving notice otherwise,
account debtors may discharge their obligations by paying
the “assignor.” However, once an account debtor receives
notification of a transfer authenticated from the “assignor” or
the “assignee” and receives instruction to pay the “assignee,”
§ 9-406(a) mandates that an account debtor must comply and
may only discharge their account obligations by paying the
“assignee.”
                 Assignment Under § 9-406(a)
   The district court interpreted the use of “assignor” and
“assignee” in § 9-406(a) to impose no duty upon an account
debtor in those instances where there has been a granting of a
security interest. We disagree.
   [8-10] In construing a statute, statutory language is to be
given its plain and ordinary meaning, and an appellate court
will not resort to interpretation to ascertain the meaning of
statutory words which are plain, direct, and unambiguous. 10
Components of a series or collection of statutes pertaining to
a certain subject matter are in pari materia and should be con-
junctively considered and construed to determine the intent of
the Legislature, so that different provisions are consistent, har-
monious, and sensible. 11 While official comments to the UCC,
as adopted by Nebraska, are not binding, they are persuasive in
matters of statutory interpretation. 12
   [11] Unless there is a good reason for the definition of
“assignment” to apply more narrowly in a given context,
“assignment” under article 9 includes both an outright transfer
of ownership and a contingent transfer for security. 13 Comment
10
     State v. Galvan, 305 Neb. 513, 941 N.W.2d 183 (2020).
11
Id.
12
     Blue Valley Co-op v. National Farmers Org., 257 Neb. 751, 600 N.W.2d
786 (1999), disapproved on other grounds, Weyh v. Gottsch, 303 Neb.
280, 929 N.W.2d 40 (2019). See, also, Fjellin ex rel. Leonard Van Liew v.
     Penning, 41 F. Supp. 3d 775 (D. Neb. 2014).
13
     See §§ 9-102, comment 26, and 9-109.
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             Nebraska Supreme Court Advance Sheets
                      307 Nebraska Reports
                 FIRST STATE BANK NEB. v. MP NEXLEVEL
                            Cite as 307 Neb. 198

26 of § 9-102 explains that article 9 uses “assignment” in
numerous provisions but that it and its derivatives are not
defined by the UCC. Comment 26 of § 9-102 states that “[t]his
article generally follows common usage by using the terms
‘assignment’ and ‘assign’ to refer to transfers of rights to pay-
ment, claims, and liens and other security interests” and that
“[d]epending on the context, [‘assignment’] may refer to the
assignment or transfer of an outright ownership interest or to
the assignment or transfer of a limited interest, such as a secu-
rity interest.” We find no convincing justification for limiting
the use of “assignment” in the context of § 9-406(a) when there
is a presently exercisable security interest.
   Indeed, comment 5 of § 9-406 indicates that the draft-
ers intended “assignment” to include contingent transfers for
security. In discussing certain types of assignments, comment
5 identifies “assignment of an account (whether outright or to
secure an obligation)” and “assignments of rights to payment
as security and other assignments of rights to payment such as
accounts and chattel paper.” 14 Comment 5 additionally includes
an example hypothetical involving a security interest which
applies § 9-406.
   Other sections of article 9 support a reading of “assign-
ments” to include both outright transfers of ownership and
contingent transfers for security. For instance, Neb. U.C.C.
§ 9-209 (Reissue 2001) imposes a duty on an account debtor
to free up collateral when there is no longer any outstand-
ing “secured obligation” or commitment to give value in the
future. In establishing that a “secured party” has a duty upon
demand from the “debtor” to release the account debtor from
any further obligation to the secured party, § 9-209 identifies
the account debtor as one that “has received notification of
an assignment to the secured party as assignee under section
9-406(a).” 15 Section 9-209(c) specifies that this section does
14
     § 9-406, comment 5 (emphasis supplied).
15
     § 9-209(b) (emphasis supplied).
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                  FIRST STATE BANK NEB. v. MP NEXLEVEL
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not apply to assignments from the sale of accounts, chattel
paper, or payment intangibles. Accordingly, by the language of
§ 9-209, that section supports the conclusion that “assignment”
under § 9-406 includes those transfers which provide interests
in specified payment rights to secure obligations.
   Utilizing the current language of article 9, the U.S. District
Court for the District of Arizona analyzed Arizona’s version of
§ 9-406(a). 16 The court noted holdings by previous courts that
notification of a security interest in the amount due is the same
as notification that the amount due has been assigned and con-
cluded that under Arizona’s statute, there is “‘no meaningful
difference between a security interest and an assignment.’” 17
   Similarly, Colorado’s Arapahoe County District Court in
Garber v. TouchStar Software Corp 18 found that the UCC
makes “‘no distinction between a party with a security inter-
est in a debtor’s accounts receivable and a party who is an
assignee of a debtor’s accounts receivable.’” Several additional
courts have also analyzed security agreements as assignments
under the current article 9 version. 19
   In applying previous versions of article 9, other jurisdictions
have determined there is no meaningful difference between an
“assignment” and a “security interest” under the UCC. The
Eighth Circuit in In re Apex Oil Co. 20 held that “notice of a
security interest constitutes notice of an assignment for pur-
poses of security under Article 9,” explaining that “[w]e see
no meaningful difference between a security interest and an
16
     ARA Inc. v. City of Glendale, 360 F. Supp. 3d 957 (D. Ariz. 2019).
17
Id. at 967.
18
     Garber v. TouchStar Software Corp, No. 2009 CV1189, 2011 WL
12526062 at *4 (Colo. Dist. Nov. 10, 2011).
19
     See, Lake City Bank v. R.T. Milord Co., No. 18 C 7159, 2019 WL 1897068
     (N.D. Ill. Apr. 29, 2019); Magnolia Financial Group v. Antos, 310 F. Supp.
3d 764 (E.D. La. 2018); ImagePoint, Inc. v. JPMorgan Chase Bank, Nat.,
     27 F. Supp. 3d 494 (S.D.N.Y. 2014); Swift Energy Operating v. Plemco-
     South, 157 So. 3d 1154 (La. App. 2015).
20
     In re Apex Oil Co., 975 F.2d 1365, 1369, 1370 (8th Cir. 1992).
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                 FIRST STATE BANK NEB. v. MP NEXLEVEL
                            Cite as 307 Neb. 198

assignment for purposes of security[ and i]n fact, they appear
to be the same thing under Article 9.” Similarly, the Supreme
Court of Maine held that “[e]ven though Article 9 usually
refers to a creditor with a security interest as a ‘secured party,’
a secured party with a security interest in accounts is the
‘assignee’ under [Maine’s secured transactions statute].” 21 The
U.S. Bankruptcy Court for the Eastern District of Tennessee
also held that “‘assignee’ under [the Tennessee UCC] includes
a secured party with a security interest in accounts or gen-
eral intangibles.” 22
   MP Nexlevel cites IIG Capital LLC v. Archipelago, L.L.C. 23
for the proposition that the use of the assignment derivatives in
§ 9-406 apply only to transfers of ownership and not contingent
transfers for security. Specifically, MP Nexlevel quotes:
         Plaintiff also argues that a secured party with a secu-
      rity interest is the equivalent of an assignee for pur-
      poses of UCC 9-406. However, the cases plaintiff cites
      for this proposition do not support it. The cited cases
      deal with a distinct section of the UCC (former UCC
      9-318 [1]), which provided that unless otherwise agreed,
      the rights of an assignee are subject to the terms of
      the original contract between the account debtor and
      assignor, including any defenses authorized therein . . . .
      While these cases treat assignees and holders of security
      interests similarly for purposes of holding them subject
      to defenses available to the original account debtors,
      they provide no authority to treat plaintiff’s security
      interest as an assignment for collection purposes under
      UCC 9-406. 24
21
     Maine Farmers Exch. v. Farm Credit of Maine, 789 A.2d 85, 88 n.7 (Me.
     2002).
22
     In re Otha C. Jean & Associates, Inc., 152 B.R. 219, 223 (E.D. Tenn.
     1993).
23
     IIG Capital LLC v. Archipelago, L.L.C., 36 A.D.3d 401, 829 N.Y.S.2d 10
     (2007).
24
Id. at 404, 829 N.Y.S.2d at 3.
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                 FIRST STATE BANK NEB. v. MP NEXLEVEL
                            Cite as 307 Neb. 198

   In IIG Capital LLC, the secured party’s interest was con-
tingent upon an event of default but none was alleged. 25 The
court dismissed the secured party’s claim, stating that “plain-
tiff’s right to collect on the collateral is expressly conditioned
on an event of default, and no such default is alleged in the
complaint.” 26 Its statement evaluating whether a security inter-
est was an assignment was dicta.
   [12] Also, the security interest in IIG Capital LLC is distin-
guishable from the one in our review. Contrary to the security
interest held by First State, the security interest in IIG Capital
LLC was not alleged to be presently exercisable at the time
of the notice, because it was contingent on the occurrence
of an event that had not been alleged. 27 As stated above,
the determination of whether a sale or grant of an interest
amounts to an assignment as used in a given statute depends
upon the context of the statute and the interest given. 28 Here,
First State’s security interest was presently exercisable due to
Husker Underground’s breach. Such context is distinct from a
presently nonexercisable security interest which is contingent
on the occurrence of a given event and which contingent event
is not alleged to have occurred.
   [13] In consideration of all of the above, we hold that
“assignment” and its derivatives under § 9-406(a) apply to
presently exercisable security interests.

              Sufficiency of § 9-406(a) Notice
  We next address whether First State’s notification and
authentication was sufficient to impose the § 9-406(a) duty
upon MP Nexlevel to discharge its obligations on its Husker
Underground agreement by paying First State.
25
     See id.
26
 Id.
27
     See id.
28
     See § 9-102, comment 26.
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                 FIRST STATE BANK NEB. v. MP NEXLEVEL
                            Cite as 307 Neb. 198

   [14-16] Whether a notice is sufficient depends upon the
facts of each case. 29 In order to be sufficient, the notice has to
reasonably identify the rights assigned and demand payment to
the assignee. 30 A reasonable identification need not identify the
right to payment with specificity, and “magic words” are not
required for a notice to be effective. 31
   Here, First State provided sufficient notice of its currently
exercisable security interest in Husker Underground’s account
with MP Nexlevel. In its notices, First State identified itself,
disclosed its agreements with Husker Underground which
showed that Husker Underground had granted it a security
interest in its accounts, and alleged Husker Underground had
breached its loan obligations under those agreements. The
notices directed MP Nexlevel to pay all amounts owed on
Husker Underground’s accounts directly to First State and
warned that failure to do so could result in adverse conse-
quences for MP Nexlevel. First State authenticated the security
interest by attaching a copy of a UCC financing statement
identifying the security interest.
   The allegation that Husker Underground contested its breach
at the time of First State’s notices does not change the facts
that Husker Underground had breached its obligations to
First State, that First State notified MP Nexlevel of Husker
Underground’s breach and of its security interest, that First
State provided documentation of that security interest, and that
First State directed MP Nexlevel to pay all amounts owed on
Husker Underground’s accounts to First State, directly warning
that failure to do so could result in adverse consequences for
MP Nexlevel.
   If MP Nexlevel was uncertain whether the breach occurred
due to Husker Underground’s representations, § 9-406(c) pro-
vides a means for MP Nexlevel to obtain additional proof
29
     See ARA Inc., supra note 16.
30
     § 9-406(a) and (b)(1).
31
     See § 9-406, comment 3. See, also, ARA Inc., supra note 16.
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             FIRST STATE BANK NEB. v. MP NEXLEVEL
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of First State’s present authority to collect on the collateral.
Section 9-406(c) states: “[I]f requested by the account debtor,
an assignee shall seasonably furnish reasonable proof that the
assignment has been made,” and “[u]nless the assignee com-
plies, the account debtor may discharge its obligation by paying
the assignor, even if the account debtor has received a notifica-
tion under [§ 9-406(a)].” As discussed above, an “assignment”
and its derivatives under § 9-406 include presently exercisable
security interests. Accordingly, if MP Nexlevel had reason
to doubt that First State held a presently exercisable security
interest to MP Nexlevel’s accounts with Husker Underground,
§ 9-406(c) allows MP Nexlevel to request additional “reason-
able proof” of such assignment, which First State would be
required to “seasonably furnish.”
   We find First State’s notices were sufficient to reason-
ably identify that First State had a presently exercisable
security interest on Husker Underground’s account with MP
Nexlevel, provide authentication of that security interest, and
demand MP Nexlevel perform its obligations on its agreement
with Husker Underground by paying First State. As such,
§ 9-406(a) required that MP Nexlevel could discharge its obli-
gations only by paying First State and not by paying Husker
Underground. This is contrary to MP Nexlevel’s assertion
that it was entitled to the defense of discharge in that it fully
performed and paid Husker Underground the obligated money
because, as described in § 9-406(a), after receiving the notice,
MP Nexlevel could discharge its obligation only by paying
First State. Because MP Nexlevel continued paying Husker
Underground and failed to pay First State, it breached its con-
tractual obligations.
                 Default Under § 9-607(a)
   In order to exercise its authority under § 9-607(a)(3) to
enforce MP Nexlevel’s obligations, § 9-607(a) conditions this
authority by stating that “[i]f so agreed, and in any event
after default.” The district court seemingly interpreted this
language as requiring that should a default be contested, the
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                  FIRST STATE BANK NEB. v. MP NEXLEVEL
                             Cite as 307 Neb. 198

default occurs when it is adjudicated or the parties agree. The
district court based its holding on § 9-607(e)’s statement that
“[t]his section does not determine whether an account debtor
. . . owes a duty to a secured party” and its finding that requir-
ing an account debtor to determine whether a breach actually
occurred imposes an additional duty upon the account debtor to
the secured party. 32
    [17] As acknowledged above, § 9-607 does not impose a
duty upon an account debtor. However, § 9-406(a) modifies
an account debtor’s obligations under its agreement with the
debtor if certain criteria are met and § 9-607(a)(3) permits the
secured party to enforce the account debtor’s obligations. 33 A
secured party’s exercise of its § 9-607(a)(3) authority against
the account debtor is not the imposition of a duty upon the
account debtor but the enforcement of existing duties.
    [18,19] Additionally, § 9-607(a) limits its application only to
“after default” and default is not contingent on an adjudication
or agreement. Article 9 leaves to the agreement of the parties
the circumstances giving rise to a default; default is whatever
the security agreement says it is. 34
    Here, the agreements between Husker Underground and
First State all provide that default includes failure to make
payments to First State when due. It is presently uncontested
that Husker Underground had failed to make these payments
when First State sent MP Nexlevel the notices. Although
Husker Underground initially disputed its default and the
matter had to be adjudicated, the date of default does not

32
     See ImagePoint, Inc., supra note 19.
33
     See, e.g., Agri-Best Holdings v. Atlanta Cattle Exchange, 812 F. Supp.
2d 898 (N.D. Ill. 2011); Reading Co-Op. Bank v. Suffolk Const. Co., 464
Mass. 543, 984 N.E.2d 776 (2013); Greenfield Commercial Credit, L.L.C.
     v. Catlettsburg Refining, L.L.C., No. Civ. A. 03-3391, 2007 WL 97068
     (E.D. La. Jan. 9, 2007); Garber, supra note 18.
34
     See § 9-607, comment 3. See, also, First Nat. Bank of Black Hills v. Beug,
     400 N.W.2d 893 (S.D. 1987).
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change simply because Husker Underground had previously
challenged it.
   If MP Nexlevel did not have sufficient information to deter-
mine whether the default occurred and First State was presently
authorized to collect on the collateral, it could have requested
additional proof from First State pursuant to § 9-406(c) as
discussed above. And, if First State did not comply, § 9-406(a)
would not have imposed an additional duty, MP Nexlevel
would be able to continue discharging its obligations by pay-
ing Husker Underground, and § 9-607(a) would not grant First
State the authority to bring an action to enforce an obliga-
tion to pay it directly. Because MP Nexlevel did not request
such additional proof and the notice under § 9-406(a) was
sufficient, MP Nexlevel had a duty under § 9-406(a) to pay
First State directly to discharge its contractual obligations and
§ 9-607(a)(3) provided First State the authority to step into
Husker Underground’s place and enforce MP Nexlevel’s obli-
gations as adjusted by operation of § 9-406(a).
   We conclude that the district court erred in its requirement
that should a debtor contest that a default occurred at the time
of the § 9-406(a) notice, the default under § 9-607(a) to allow
the secured party to enforce an account debtor’s obligation to
pay it directly does not occur until the default is adjudicated
or the parties otherwise agree. Instead, the default occurs when
determined by the security agreement—in this case, when
Husker Underground failed to make timely payments. If the
debtor contests the default, the account debtor is authorized to
exercise its authority under § 9-406(e) to acquire more proof
of the secured party’s presently exercisable security interest.
If the account debtor does not seek additional proof or if the
secured party provides adequate proof, § 9-406(a) imposes a
duty upon the account debtor to discharge its obligations by
paying the secured party and the secured party can enforce
those obligations under § 9-607(a)(3). The date of default
relevant to § 9-607(a) remains as determined by the secu-
rity agreement.
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                 FIRST STATE BANK NEB. v. MP NEXLEVEL
                            Cite as 307 Neb. 198

                            Standing
   [20,21] For completeness, MP Nexlevel claims that First
State lacked standing to bring this action, because First State
was not in privity of contract and §§ 9-406 and 9-607 do not
provide private rights of action. However, First State did not
bring claims for violations of §§ 9-406 and 9-607, but instead
brought claims for breach of contract and account stated. First
State’s reliance on §§ 9-406 and 9-607 was merely for the
purpose of placing itself in the position to enforce Husker
Underground’s agreement with MP Nexlevel as adjusted by
operation of § 9-406(a) so as to require payment be sent to
First State. Under § 9-607(a)(3), it is unnecessary for a secured
party to first become the owner of the collateral pursuant to a
disposition or acceptance. 35 A secured party may collect and
enforce obligations included in collateral in its capacity as a
secured party. 36
   [22-24] Standing refers to whether a party had, at the com-
mencement of the litigation, a personal stake in the outcome of
the litigation that would warrant a court’s or tribunal’s exercis-
ing its jurisdiction and remedial powers on the party’s behalf. 37
Standing involves a real interest in the cause of action, mean-
ing some legal or equitable right, title, or interest in the subject
matter of the controversy. 38 To have standing, a litigant must
assert the litigant’s own rights and interests, and cannot rest a
claim on the legal rights or interests of third parties. 39
   First State was authorized by its security agreements with
Husker Underground and § 9-607(a)(3) to step into Husker
Underground’s place to enforce MP Nexlevel’s contractual
obligations. Further, § 9-406(a) imposes a duty upon MP
35
     See § 9-607, comment 6.
36
     See id. See, also, Agri-Best Holdings, supra note 33.
37
     Applied Underwriters v. S.E.B. Servs. of New York, 297 Neb. 246, 898
N.W.2d 366 (2017).
38
Id.
39
Id.
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Nexlevel to discharge its obligation by paying First State and
prevents MP Nexlevel from claiming it satisfied its contractual
obligations by paying Husker Underground. As a result, First
State had standing to bring its claims against MP Nexlevel.
                          CONCLUSION
   The district court erred in granting MP Nexlevel summary
judgment and dismissing First State’s complaint. First State
was authorized by § 9-607(a)(1) to notify Husker Underground,
as the account debtor obligated under the collateral, to make
payment for its benefit due to Husker Underground’s default.
Section 9-406(a) applies to presently exercisable security
interests, and because First State’s notice and authentication
were sufficient, § 9-406(a) imposed a duty on MP Nexlevel
to discharge its obligations under its agreement with Husker
Underground by paying directly to First State. When MP
Nexlevel continued paying to Husker Underground and failed
to pay directly to First State, MP Nexlevel breached its
obligations and First State was authorized by § 9-607(a)(3)
to step into Husker Underground’s place and enforce MP
Nexlevel’s contractual obligations as adjusted by operation of
§ 9-406(a). After having received notice of First State’s claim,
MP Nexlevel could have protected itself from liability by the
very simple expedient of either demanding further proof (if it
doubted the truth of First State’s claims) or making the pay-
ments jointly to Husker Underground and First State. Because
MP Nexlevel failed to do so, we must reverse the district
court’s order granting summary judgment in favor of MP
Nexlevel and dismissing First State’s complaint. We remand
this matter to the district court for further proceedings consist­
ent with this opinion.
                                 Reversed and remanded for
                                 further proceedings.
   Miller-Lerman and Stacy, JJ., not participating.