First State Bank Neb. v. MP Nexlevel ( 2020 )


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  • Nebraska Supreme Court Online Library
    www.nebraska.gov/apps-courts-epub/
    10/09/2020 12:48 AM CDT
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    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.
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    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.
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    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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    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
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    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.
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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 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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    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).
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    FIRST STATE BANK NEB. v. MP NEXLEVEL
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    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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    FIRST STATE BANK NEB. v. MP NEXLEVEL
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    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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    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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    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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    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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    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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    [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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    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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    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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    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.