Equitable Principles May Be Applied To Give Priority To An Earlier Unperfected Security Interest.

The facts here are complicated and lengthy, so they will not be set forth here. Suffice it to say, the appellate court pointed out that Commercial Code section 9310(a) provides that a financing statement must be filed to perfect all security interests and that Commercial Code section 9322(a)(2) further provides a perfected security interest has priority over a conflicting unperfected security interest. The Court of Appeal went on to hold: “Although the code reflects the Legislature’s intention to create a simplified, clear and uniform means of prioritizing security interests, there are circumstances when the letter of the law yields to the principles of equity and the spirit of justice. [] Here we hold that if a perfected security interest is created by breaching a fiduciary duty owed to another person, then equitable principles may be applied to give priority to an earlier unperfected security interest.” (Feresi v. The Livery, LLC (Cal. App. Second Dist., Div. 6; December 15, 2014) (As mod., January 8, 2015) 232 Cal.App.4th 419, [182 Cal.Rptr.3d 169].)