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Uniform Commercial Code Committee Reports
Committee meeting will be held on Friday, May 21, 2004, at Soaring Eagle Casino and Resort. 2. Council Approval None. 3. Membership New Committee members have been solicited and a new membership list compiled. 4. Accomplishments Toward Committee Objectives Nothing new to report. 5. Meetings and Programs Committee meeting will be held on Friday, May 21, 2004, at Soaring Eagle Casino and Resort. 6. Publications Nothing recent. 7. Legislative/Judicial/Administrative Developments None. 8. Miscellaneous None. Respectfully submitted, Patrick E. Mears, Chairperson
Next scheduled meeting of the Committee: May 21, 2004 @ 11:30 a.m. in Mt. Pleasant, Michigan. 2. Council Approval None. 3. Membership After the Council's December 6, 2003, meeting, I transmitted by email to all members of the Business Law Section an invitation to join the UCC Committee. To date, 155 members have responded positively and they have been added to a new listserve maintained by the Section. 4. Accomplishments Toward Committee Objectives As a result of the initiative described in Paragraph 3, the UCC Committee now has a large number of members. 5. Meetings and Programs The UCC Committee will meet during the Section's Mid-Year Meeting in Mt. Pleasant to review recently decided, important case law decided under the UCC. 6. Publications See Paragraph 3 above. 7. Legislative/Judicial/Administrative Developments None that I am aware of. 8. Miscellaneous None.
$2,000. 2. Use of Budgeted Funds in 2002-2003. No funds were requested or used in 2002-2003. 3. Next Scheduled Meeting of the Committee. Next scheduled meeting of the Committee: May, 2004 (in connection with 2004 Business Law Mid-Year Meeting). 4. Council Approval. No matters require Council approval. 5. Membership. Past efforts to attract new members to the UCC Committee have not generally been successful. In an effort to increase committee membership, I plan to hold a Committee meeting in conjunction with the Section's Mid-Year Meeting at which Scott Dales (my coauthor for Michigan's Revised Article 9 of the UCC) and I will present an update of recent developments under Article 9, both in Michigan and throughout the nation. This meeting would coincide with the anticipated publication date of the 2004 Supplement to our ICLE treatise. 6. Accomplishments. My efforts this past year have been to track and to keep the Council advised of the proposed amendments to Article 2, 2A and 7 of the Uniform Commercial Code. 7. Meetings and Programs. See No. 5 above. 8. Publications. The Committee arranged for the publication of three articles on issues involving Article 2 of the UCC in the Spring 2003 issue of The Michigan Business Law Journal. 9. Legislative/Judicial/Administrative Developments. In Crestmark Bank v. United States of America (In re Spearing Tool and Manufacturing Co., Inc.), Adversary Proceeding No. 02-5201 (E.D.Mich. Nov. 5, 2003), the United States District Court for the Eastern District of Michigan reversed Bankruptcy Judge Steven Rhodes decision below requiring that Michigan's standard search logic used in determining priorities under Revised Article 9 applies to federal tax liens as well as to consensual security interests. Copies of these two opinions are attached hereto (see Spearing-Crestmark Opinion 1 and Spearing-Crestmark Opinion 2). 10. Miscellaneous. There is nothing further to report.
Patrick E. Mears
2. Status of Revised Articles 2 and 2A of the UCC. The American Law Institute and the National Conference of Commissioners on Uniform State Laws ("NCCUSL") have approved amendments to Articles 2 and 2A of the UCC. Attached as Exhibit A are summaries of those proposed amendments. Bill Henning, the Executive Director of NCCUSL, has stated that NCCUSL will most likely bring these amendments to the ABA House of Delegates for approval in February, 2004. I would like to explore the possibility of a mini-seminar on these revisions once they are submitted to the states for adoption. 3. Decisions Under Revised Article 9 of the UCC. Attached to this Report as Exhibit B is a summary of recent court decisions construing the provisions of Revised Article 9 prepared by Keith Rowley, a law professor at the University of Nevada. Patrick E. Mears Chairperson
In September, 2003, in conjunction with the State Bar Annual Meeting. 2. Council Approval: There are no pending matters before this Committee that require Council approval. 3. Membership: In the recent past, I have sent a number of communications to Section members inviting them to joint the UCC Committee. These invitations have generated only a limited response. However, if the revised changes to Article 2 and 7 of the UCC are adopted soon by the Michigan State legislature, there may be renewed interest in this Committee among the Section membership. 4. Accomplishments Toward Committee Obligations: On behalf of the Committee, I have been monitoring the proposed revisions to the Uniform Commercial Code (Articles 2, 3, 4 and 7). These revisions were adopted by voice vote at the 2003 Annual Meeting of the American Law institute on May 13, 2003, in Chicago and will now be transmitted to the states and territories for legislature approval. I have also been following developments in the case law under the various Articles of the UCC. 5. Meetings and Programs: In the event that the proposed revisions to Articles 2 and 7 are approved by the state legislatures, the Committee will propose a seminar or conference to discuss these changes. 6. Publications: The current issue of the Michigan Business Law Journal contains three pieces by Committee members on Article 2 topics. 7. Legislative/Judicial/Administrative Developments: See the discussion above. Patrick E. Mears
"Demand for Adequate Assurance of Performance Under the UCC", by John R. Trentacosta and Steven R. Fox of Foley & Lardner. "The Importance of Complying with the Uniform Commercial Code's 'Notice1 Requirement When a Supplier Provides Defective Goods", by John J. Bursch of Warner, Norcross & Judd, L.L.P. "Installment Contracts Under UCC ยค 2-612 - - A Surprisingly Wide Path Around the Perfect Tender Rule", by Joseph A. Kuiper of Warner, Norcross & Judd, L.L.P. These are all fine articles for which I thank the authors for their contributions to scholarship on Article 2 of the UCC. The recent amendments to Articles 3 and 4 of the UCC have been approved by the American Law Institute ("ALI") and the National Conference of Commissioners on Uniform State Laws ("NCCUSL") and have been submitted to the states for approval. No bill including these amendments has been introduced in the Michigan State legislature as of yet. The Annual Meeting of the ALI will be held on May 12-14, 2003, in Chicago. At this meeting, the membership will vote on the proposed amendments to Articles 2, 2A and 7 of the UCC.
Patrick E. Mears
There has been very little reported case law under Revised Article 9 of the UCC. On January 8, 2002, Federal District Judge Richard A. Enslen issued an Opinion in the civil action entitled Shoup v. Illiana Recovery Systems, Inc. (Case No. 5:00-CV-104) that assessed damages against a repossession company and related entities for the tortuous repossession of an automobile by improper self-help methods. The provisions of the Article 9 authorizing self-help repossession were not cited in the opinion, probably because the debtor was not in default on his payments to the secured creditor. Finally, ICLE has expressed an interest in conducting a seminar on "Recent Developments Under the Uniform Commercial Code" (or some other similar title). However, ICLE's preference is to host such a seminar in conjunction with the enactment of changes to the Code. I will keep you advised on this point. Patrick E. Mears
Today, I discussed with Mary Hiniker of ICLE the possibility of holding, at some point in the future, a seminar on the UCC as had been done in the past. Mary will discuss this concept with Sheldon Stark of ICLE and respond to me at a later date. Patrick E. Mears
In addition, Scott Dales of my firm and I have submitted to the State Business Law Journal an article entitled "The Impact of Revised Article 9 of the Uniform Commercial Code on Commercial Lending". I have been advised by ICLE that this article will appear in the next issue of that publication. Patrick E. Mears
Going forward, I have the following goals to achieve subject, of course, to any input from the Council: 1. To Recruit New Members to the Committee. Eventually, I envision an active committee consisting of 20 to 30 functioning members. I understand that the Mid-Year Meeting affords me the opportunity to recruit new members and I will avail myself of that opportunity. 2. To Activate the E-Commerce Committee. Since e-commerce is a hot growth area of legal practice, I want to encourage that committee to become very active in recruiting members and in sharing information and coordinating with similar committees/subcommittees in other organizations, such as the American Bar Association and the Federal Bar Associations active in Michigan. 3. To Monitor the Proposed Changes to Articles 1, 2, 3 and 4 of the UCC. I plan now to focus on the proposed changes to these Articles now being discussed by ALI and NCCUSL. As always, I welcome the Council's feedback and suggestions. Patrick E. Mears
1. Planning for Seminar on Revised Article 9. I have been working closely with Sheldon Stark of ICLE planning a seminar on Revised Article 9 that will be held on April 24, 2001, in Troy, Michigan, and will apparently be broadcast to several Michigan locations. I will moderate the program and the following speakers have committed to make presentations there: (i) Professor James J. White (ii) Cynthia Baker of Mayer, Brown & Platt (iii) Steve Weise of Heller, Ehrman, White & McAuliffe (iv) Michael Khoury (v) Judith Greenstone Miller I have previously sent a request to Dan Minkus that the Section of Business Law agree to cosponsor this seminar. This request will be considered at the upcoming Council Meeting. 2. Increasing Membership in the Committee I have been contacted by a few attorneys around the state concerning the Committee. I would like to arrange for a statewide mailing soliciting membership so that a new membership list can be created. At present, no current list exists. 3. Future Projects Articles 2, 3 and 4 of the UCC are presently in the process of revision. If these revisions are adopted and promulgated by the ALI and the National Commissioners on Uniform State Laws, there will be substantial work for this Committee in disseminating learning on these revisions, etc. Patrick E. Mears |
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