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Uniform Commercial Code Committee Reports

March 3, 2005

    1. Next Scheduled Meeting of the Committee

    The Committee's next meeting will be held in conjunction with the Section's Mid-Year Meeting in May.

    2. Council Approval

    No Council Approval is requested for any project at this time.

    3. Membership

    The Committee remains open to participation by any interested parties. Although we have a large number of Committee members on our roster (as a result of a recruiting campaign two years ago), only a few of them actively participate in the Committee's activities. This can be explained, at least in part, by the relative dearth of statutory developments in Michigan involving the UCC.

    4. Accomplishments Toward Committee Objectives

    The Committee continues to monitor developments in the Uniform Commercial Code in Michigan and elsewhere.

    5. Meetings and Programs

    I have recommended to the Council and to ICLE that a seminar on third party legal opinions be scheduled in the near future. This seminar could be jointly sponsored by our Section and the Real Property Section and address issues arising in business and real estate transactions. I have not yet received any definitive response from either the Council or ICLE concerning this recommendation.

    6. Publications

    The Committee has not been requested to provide articles for the Michigan Business Law Journal for approximately two years.

    7. Legislative/Judicial/Administrative Developments

    A. Liens in Mobile Homes—The Saga Continues. On December 15, 2004, Federal District Judge Robert Holmes Bell issued his decision in In re Oswalt, 318 B.R. 817 (W.D.Mich. 2004), holding that the recent amendment to Michigan's Mobile Home Commission Act constituted a clarification of prior law and that a recorded mortgage perfected an interest in a mobile home attached to the realty. A copy of this decision is attached here. This decision is the subject of a pending appeal in the Sixth Circuit.

    B. Copies of recent articles on electronic filing of UCC financing statements and recent amendments to UCC Article 2-A are attached for your reading pleasure for your review.

    C. The 2005 Midwinter Meeting Council Report of the UCC Committee of the American Bar Association is also attached.

    8. Miscellaneous

    Nothing more at this time.

    Patrick E. Mears

December 4, 2004

    1. Budget Request for 2004-2005.

    $250 for refreshments at Committee meetings.

    2. Use of Budgeted Funds in 2003-2004.

    Refreshments at Committee meetings.

    3. Next Scheduled Meeting of the Committee

    This has not yet been scheduled but is anticipated to occur in conjunction with the mid-year meeting.

    4. Council Approval

    None required.

    5. Membership

    Nothing to report.

    6. Accomplishments Toward Committee Objectives

    The Committee will continue to meet to monitor statutory and case law developments under the various Articles of the Uniform Commercial Code.

    7. Meetings and Programs

    Most recent meeting was held on May 21, 2004 at the Soaring Eagle Casino in Mt. Pleasant, Michigan. Three members attended.

    8. Publications

    No recent publications.

    9. Legislative/Judicial/Administrative Developments

    Enrolled House Bill No. 5148, effective as of January 1, 2005 amending Article 9 of the Uniform Commercial Code. Copy attached.

    Report submitted by:

    Patrick E. Mears

September 23, 2004

    No report.

May 22, 2004

    1. Next Scheduled Meeting of the Committee

    Committee meeting will be held on Friday, May 21, 2004, at Soaring Eagle Casino and Resort.

    2. Council Approval


    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


    8. Miscellaneous


    Respectfully submitted,

    Patrick E. Mears, Chair

March 4, 2004

    1. Next Scheduled Meeting of the Committee

    Next scheduled meeting of the Committee: May 21, 2004 @ 11:30 a.m. in Mt. Pleasant, Michigan.

    2. Council Approval


    3. Membership

    After the Council's December 6, 2003, meeting, I transmitted by E-mail 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


December 6, 2003

    1. Budget Request for 2003-2004.


    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,Chair

September 11, 2003

    1. Business Boot Camp Seminar Series:

    In March, 2003, Kristi Katsma and Patrick Mears of Dickinson Wright PLLC will present seminars on the topic "Personal Property Transactions" as part of the Business Boot Camp series. These presentations will be made on March 9, 2003 in Grand Rapids and on March 26, 2004 in Metro Detroit. Topics that will be covered include the following: (i) negotiated sales of equipment involving the provisions of Article 2 of the Uniform Commercial Code ("UCC"); (ii) foreclosure sales and other dispositions of equipment by secured creditors under Article 9 of the UCC; (iii) sales of equipment in bankruptcy cases; and (iv) leases of personal property under Article 2A of the UCC.

    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, Chair

May 17, 2003

    1. Next Scheduled Meeting of the Committee:

    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

March 6, 2003

    The Committee has arranged for the publication of three articles relating to the UCC in the next issue of The Michigan Business Law Journal. The titles of these articles and their authors are as follows:

    "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.

December 7, 2002

    At this time, there is very little to report with respect to this Committee. The Business Law Journal is scheduled to publish a revised version of the materials on intellectual property law and bankruptcy that I distributed at the Section's Annual Meeting in September. In addition, I gave essentially the same presentation on these materials at the November, 2002 monthly meeting of the Michigan Intellectual Property Lawyers Association in Troy.

    Patrick E. Mears

May 18, 2002

    No report.

March 7, 2002

    There is little to report concerning this committee at this time. The proposed revisions to Article 2 of the Uniform Commercial Code have yet to be approved by the American Law Institute and the National Conference of Commissioners on Uniform State Laws. The proposed changes to Articles 3 and 4 of the UCC will be discussed at the Annual Meeting of the American Law Institute in May, 2002. I will report to you on the status of these initiatives when I return from the Annual Meeting.

    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

December 8, 2001

    The UCC Committee held a meeting at the Annual State Bar Meeting in Lansing but was sparsely attended. Items of discussion at the meeting included the current state of Revised Article 9 in Michigan and the dispute over the scope of proposed Revised Article 2 of the UCC. Also mentioned were the ALI's efforts to revise Articles 3 and 4 of the UCC.

    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

September 12, 2001

    This Committee has not been active over the Summer. I will hold my first Committee meeting on September 12, 2001 at 2:00 p.m. in Room 202 of the Lansing Center. I anticipate being able to present to the Council a list of Committee members after this meeting.

    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

May 19, 2001

    Until recently the foci of my efforts as Chair were (i) to complete and arrange for the publication of the ICLE treatise on Revised Article 9 of the UCC; (ii) to plan and present the April 24, 2001 ICLE seminar on Revised Article 9; and (iii) to ensure the creation of the "E-Commerce" Subcommittee and to appoint the co-Chairs of that subcommittee [who are Robert Hall of Dearborn and Mark Derwent of Grand Rapids]. These three goals have now been accomplished.

    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

March 1, 2001

    No report.

December 2, 2000

    The following is a report of the UCC Committee dated Friday, November 24, 2000.

    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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