Risk Management Blog

This week we’re looking at a case study we recently encountered involving County Filings. It helps to demonstrate that even in today’s e-connected world there are still many instances for which there is no substitute for experience and the personal touch. Check it out below as told by Daniel Silverburg, our County Services Manager.

We received a request to file a UCC-1 in Riverside County, CA, and with Riverside County also being the debtor, by one of our corporate reseller clients. We always start by reviewing recordings for any obvious recording issues and in this case we found that the legal description attached to the UCC was not a clear copy and would likely be rejected.

We notified the client and they asked if the document needed legal descriptions or if addresses were sufficient. Since it is up to each county to decide what they consider a ‘sufficient’ description, I asked our searcher to show the UCC-1 to the recorder and ask if the document was acceptable with the attached legal description, and if not could we replace it with addresses and APNs instead. The recorder said that the legal description was not clear enough to record and that addresses and APNs would be acceptable. However, the supervisor that reviewed the UCC-1 said that the county would not accept a UCC with Riverside County as the debtor. The searcher asked the supervisor to explain why the document would not be accepted but did not receive a clear response, such as a statute or other reason the supervisor would not accept it. She just said no.

Once we received a clean copy of addresses & APNs to attach to the UCC, I then asked the searchers to show the document to the supervisor again and see if it would record. Once again the supervisor said she would not accept a UCC-1 with Riverside county showing as the debtor. I immediately called her while she still had the copy in hand to review with her.

I know from experience that UCC’s are often used in an attempt to cause fraud. These UCCs stand out because they are not worded like normal UCCs. For example they may reference the U.S. Constitution or list the property owner as both a debtor and secured party. I also see the long growing trend to have recording clerks be vigilant against fraud, and to be very aware of any suspicious looking documents.

Knowing that, and that there were no obvious legal reasons for the county to reject this document, I next Googled the debtor, the secured party and a few keywords in the collateral description and found a site saying that the county was leasing solar panels from Bank of America (the secured party) to be installed in 14 government centers throughout the county. Armed with that information, I called the recording supervisor back, who was holding a copy of the UCC and expecting my call, and I pointed out the collateral, the secured party and what I learned about the county leasing solar panels.

That did the trick.

Once the supervisor understood the purpose of why we were attempting to file a UCC with the county as a debtor she had no problem accepting it for recording. By understanding the specifics of the situation, and by reaching out with the personal touch, I managed to get it accepted in a two minute phone call.

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