Northwest Business Finance, LLC v. Able Contractor, Inc.
383 P.3d 1074
Wash. Ct. App.2016Background
- Northwest Business Finance (assignee) provided factoring to Able Contractors (assignor) and filed a UCC financing statement and sent assignment notices in 2007–2008.
- A 2008 security agreement limited Northwest’s purchase to "acceptable accounts" identified by separate written assignments; Northwest retained discretion which accounts to buy.
- For a 2012 Tumwater job, Able submitted multiple invoices to Western (account debtor); some invoices bore stickers/assignment notices directing payment to Northwest, others did not. Western paid $81,000 on three invoices directly to Able.
- Able defaulted and Northwest sued Western to recover the $81,000; Able defaulted in the litigation and a jury ultimately found for Western.
- Northwest appealed only the trial court’s denial of its motion for summary judgment, arguing that its financing statement and notices required Western to pay all sums owed to Able to Northwest.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether appellate review of denial of summary judgment is available after trial | Northwest: denial raised a pure legal issue (statutory interpretation) so appellate review is proper despite trial verdict | Western: trial superseded the summary judgment ruling, barring review | Court: appellate review allowed because the question is one of substantive law; review de novo |
| Whether financing statement and general assignment notice required Western to pay all amounts owed to Able to Northwest | Northwest: UCC financing statement + prior assignment notices sufficiently notified Western that all accounts were assigned, so Western had to pay Northwest for the unpaid invoices | Western: its course of dealing and the invoice-specific stickers limited required payments to invoices that specifically identified assignment to Northwest | Court: RCW 62A.9A-406(a) requires notification that reasonably identifies the assigned amount; blanket/unspecific notices (or financing statements) are insufficient to obligate debtor to pay assignee for particular invoices |
| Scope/effect of UCC financing statement vs. assignment notice | Northwest: financing statement showing all accounts secured is tantamount to assignment as to account debtor | Western: financing statement merely gives notice of security interest, not assignment of particular accounts | Court: financing statement not itself an assignment of specific accounts; it notifies of collateral but does not create duty to pay assignee absent adequate notification identifying the assigned account |
| Whether factual disputes precluded summary judgment | Northwest: no, statutory notice sufficed as matter of law | Western: yes, course of dealing and invoice-specific notices created triable facts about which accounts were assigned | Court: material factual disputes existed (e.g., meaning of stickers, course of dealing), so summary judgment denial was proper |
Key Cases Cited
- Lybbert v. Grant County, 141 Wn.2d 29 (discusses summary judgment standard)
- Adcox v. Children's Orthopedic Hosp. & Med. Ctr., 123 Wn.2d 15 (on appellate focus when summary judgment denied and trial occurs)
- Kaplan v. Nw. Mut. Life Ins. Co., 115 Wn. App. 791 (exception permitting appellate review of legal rulings after trial)
- Kendrick v. Davis, 75 Wn.2d 456 (assignee takes only assignor's rights as of notice)
- Warrington v. Dawson, 798 F.2d 1533 (notification must reasonably identify assigned account to bind account debtor)