KANSAS COMMENT, 1996

This section, which does not vary from the 1995 Official Text, gives a superpriority to liens arising by statute in Kansas. Although the text of the section talks of liens arising by statute or rule of law, the Kansas supreme court may have indicated there are no common law liens in Kansas. Reimer v. Davis, 224 K. 225, 580 P.2d 81 (1978). There, the supreme court held that K.S.A. 58-201 does not impose a lien for unpaid rentals due to a trailer park under a month-to-month oral agreement. Therefore, a prior security interest in the mobile home took priority over the rental claim. The court never discussed 84-9-310, apparently because there was no statutory lien to compete with the Article 9 security interest. Compare Security National Bank & Trust Co. v. Reisinger, 610 P.2d 1222 (Okla. 1980), where a warehouseman's lien for unpaid storage charges was held to prevail over a prior perfected security interest covering the bailed goods.

Under the section, a person who furnishes services or materials with respect to goods already subject to a perfected Article 9 security interest has priority over that security interest even though it arose earlier, unless a statute reverses the priority. The primary requirement is that the statutory lienor be in possession of the goods. For example, a cattle feeder who does not get paid has priority over an earlier perfected security interest covering the cattle, so long as the feeder retains possession. See K.S.A. 58-207. In United States v. Crittenden, 600 F.2d 478 (5 th Cir. 1979), the court imposed a requirement of continuous possession in order to take advantage of the superpriority given by this section; thus, the repairman had priority only for work done after the goods had been returned for the final time.

Many of the Kansas lien provisions in K.S.A 58-200's allow filing after possession is given to the debtor to preserve the lien. See, for example, K.S.A. 58-201 and 58-202. Others require the secured party to maintain possession. K.S.A. 58-215.

Some statutory liens in Kansas have priority over Article 9 security interests independent of this section. The most important example is the repairman's lien under K.S.A. 58-201. See Hockaday Auto Supply Co. v. Huff, 121 K. 113, 245 P. 1013 (1926). In the same category are thresher's liens (K.S.A. 58-218), certain bailing liens (K.S.A. 58-218), and the agister's lien for pasturing livestock (K.S.A. 58-220). Other statutory liens do not indicate whether they have priority under this section only if the lienor retained possession. And still other statutory liens are expressly subordinated to consensual security interests; these include the oil and gas mechanic's lien, which is preferred only to encumbrances attaching subsequent to the commencement of the work which forms the basis for the lien (K.S.A. 55-207), and the transporter's lien, which is subordinate to valid and existing consensual security interests (K.S.A. 55-214).

It should be noted that the Kansas repairman's lien statute (K.S.A. 58-201), probably the most important statutory lien provision in this jurisdiction, has an unusual option under which the lien claimant may file a statement locally within 90 days after the work is finished. This is analogous to the mechanic's lien covering real estate under K.S.A. 60-1101 et seq. Moreover, since K.S.A. 58-201 expressly gives priority to the repairman's lien over consensual security interests, the priority would stick even though the lien claimant chose to file rather than retain possession.

Revisor's Note:

Former section 84-9-310 was repealed by L. 2000, ch. 142, § 155 and the number reassigned to the current text.

Law Review and Bar Journal References:

"Survey of Kansas Law: Secured Transactions," J. Eugene Balloun, 32 K.L.R. 351, 360, 362 (1984).

"Commercial Law: Identifiable Proceeds and the Knowledge Factor [Farmers State Bank v. Production Credit Association, 243 Kan. 87, 755 P.2d 518 (1988)]," Mahesh I. Patel, 28 W.L.J. 295, 305 (1988).

"Revised Article 9 in Kansas," Hon. John K. Pearson, 51 K.L.R. 769, 810 (2003).

"A Brief Overview of Revised Article 9 in Kansas," John K. Pearson and J. Scott Pohl, 72 J.K.B.A. No. 8, 22 (2003).

Attorney General's Opinions:

Record of mortgage can be filed as a financing statement covering fixtures with the register of deeds in the county where the collateral is located if such record complies with the fixture filing requirements without using a UCC-1 form. 2009-19.

CASE ANNOTATIONS

1. Bank's application of funds in debtor's account to antecedent debt should not be considered transaction in ordinary course of business to defeat perfected security interest (dissenting opinion). Tuloka Affiliates, Inc. v. Security State Bank, 229 Kan. 544, 553, 627 P.2d 816.

2. Warehouseman lien is given priority over other perfected secured parties unless lien explicitly states otherwise. In Re Ragan, 15 B.R. 376, 377, 378, 379 (1981).

3. Statutory liens as having priority over security interests under certain circumstances examined. Jefferson County Co-op. v. NE Kansas Prod. Credit, 73 B.R. 3, 4 (1982).

4. Landlord's liens not entitled to super priority under super priority section. In re Roberts, 38 B.R. 128, 129, 134 (1984).

5. Basic legal principles of personal property liens reviewed; common-law requirement of possession still overriding consideration. Northeast Kansas Prod. Cred. Ass'n v. Ferbache, 236 Kan. 491, 494, 693 P.2d 1152 (1985).

6. Cited; foreclosing creditor's duty to check UCC files, give notice of pending sale, disclose subsequent purchaser's name examined. Utility Trailers of Wichita, Inc. v. Citizens Nat'l Bank & Tr. Co., 11 Kan. App. 2d 421, 422, 726 P.2d 282 (1986).

7. Resolution of priority dispute between holders of nonpossessory statutory liens and security interest not governed by Article 9. National Supply Co. v. Case Oil & Gas, Inc., 13 Kan. App. 2d 430, 431, 772 P.2d 1255 (1989).

8. Preferences for wages due when receiver appointed (K.S.A. 44-312) as not creating lien or priority over perfected security interests examined. First Nat'l Bank v. Family Medicine Clinic of Medicine Lodge, 14 Kan. App. 2d 749, 751, 798 P.2d 519 (1990).

9. Creditor claiming security interest in airplane for parts properly perfected interest precluding financing statement filing. In re Arcentral, Inc., 289 B.R. 170, 172 (2003).

10. If secured party assigns perfected security interest, no filing required to continue perfected status against creditors. In re Jackson, 358 B.R. 412, 419 (2007).

11. A financing statement must use the identical name as on the debtor's driver's license unless the official safe search harbor is satisfied. In re Prestion, 612 B.R. 770, 774 (Bkrtcy. D. Kan. 2019).