305 B.R. 347 (Bankr. M.D. Fla.
2003), and In re John’s Bean Farm of Homestead, Inc.,
378 B.R. 385
(Bankr. S.D. Fla. 2007), the bankruptcy court determined that Live
Oak’s financing statements fell “within the Safe Harbor provision
of Fla. Stat. Section 679.5061(1) because the Registry’s standard
search logic discloses the Financing Statements on the page imme-
diately preceding the initial page on the Registry’s website.” The
bankruptcy court therefore concluded that the financing state-
ments “are not seriously misleading and are effective to perfect
[Live Oak’s] security interest in all of [Beach Boulevard’s] assets.”
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21-11742 Opinion of the Court 7
The bankruptcy court then entered judgment in favor of Live Oak
on the complaint.
Sitting in an appellate capacity, the district court affirmed
the bankruptcy court’s order without discussion of the issues in the
case, stating that the bankruptcy court “committed no errors of law
and made no clearly erroneous factual findings.” This appeal en-
sued.
II. ANALYSIS
On appeal, Beach Boulevard argues that the district court
erred in affirming the bankruptcy court’s order granting summary
judgment to Live Oak. It contends that Live Oak’s financing state-
ments were seriously misleading as a matter of law because a
search of the Registry under its legal name would not produce the
defective financing statements on the first page of results, but ra-
ther would require a searcher to click to the preceding page.
A. Perfection of Security Interests Under Florida Law
Under
11 U.S.C. § 544(a), the trustee in a bankruptcy case is
granted the status of a hypothetical lien creditor and may avoid any
lien that is not properly perfected under state law as of the petition
date. And, under
11 U.S.C. § 1107, a debtor in possession, such as
Beach Boulevard, generally has the rights, powers, and duties of a
bankruptcy trustee. In re Int’l Yacht & Tennis,
922 F.2d at 661.
As directed by § 544(a), we look to state law—here, Flor-
ida—to determine whether Live Oak perfected its security interest
in Beach Boulevard’s assets. In re Summit Staffing,
305 B.R. at 350.
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8 Opinion of the Court 21-11742
Florida has adopted Article 9 of the Uniform Commercial Code,
which governs secured transactions, including perfection of secu-
rity interests. See Fla. Stat. ch. 679; In re Summit Staffing,
305 B.R.
at 350. In Florida, a lien creditor takes priority over the rights of a
holder of any unperfected security interest.
Fla. Stat.
§ 679.3171(1)(b)(1) (“A security interest . . . is subordinate to the
rights of: . . . a person who becomes a lien creditor before the . . .
security interest . . . is perfected”). To perfect a security interest, a
creditor must file a “financing statement” with the Registry.
Id.
§ 679.5011. A financing statement must provide three pieces of in-
formation to be considered sufficient for perfection: (1) the name
of the debtor; (2) the name of the secured party; and (3) a descrip-
tion of the collateral covered by the financing statement. Id.
§ 679.5021(1).
A financing statement that substantially complies with the
statutory requirements “is effective, even if it has minor errors or
omissions, unless the errors or omissions make the financing state-
ment seriously misleading.” Id. § 679.5061(1). As it relates to the
debtor name requirement, Florida law expressly provides that “a
financing statement that fails sufficiently to provide the name of
the debtor in accordance with [Florida law] is seriously misleading”
and therefore ineffective to perfect a security interest. Id.
§ 679.5061(2).
In the case of Beach Boulevard, an LLC organized under
Florida law, the debtor’s name listed on a financing statement is
sufficient “only if the financing statement provides the name that
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21-11742 Opinion of the Court 9
is stated to be the registered organization’s name on the public or-
ganic record most recently filed with [the Florida Department of
State].” Id. § 679.5031(1)(a) (emphasis added). The Florida Depart-
ment of State’s Division of Corporations maintains an online index
of the legal names of all entities authorized to transact business in
Florida. See Sunbiz.org, https://dos.myflorida.com/sunbiz/ (last
visited Nov. 18, 2021). Using this index, a creditor need only con-
firm the correct name on the Sunbiz.org website and copy it into
the financing statement.
Florida law also provides a narrow safe-harbor provision re-
lating to the debtor’s name requirement:
If a search of the records of the filing office under the
debtor’s correct name, using the filing office’s stand-
ard search logic, if any, would disclose a financing
statement that fails sufficiently to provide the name
of the debtor in accordance with [the statute], the
name provided does not make the financing state-
ment seriously misleading.
Id. § 679.5061(3). Florida’s statutory regime, then, is that any devi-
ation from a debtor’s legal name in a financing statement renders
the statement “seriously misleading” as a matter of law (and thus
ineffective to perfect the security interest), unless performing a
search of the Registry using the debtor’s correct legal name and the
Registry’s standard search logic would disclose the defective state-
ment.
B. Perfection, Then and Now
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10 Opinion of the Court 21-11742
Under the previous iteration of Article 9, as adopted by Flor-
ida and repealed in 2002, see In re Summit Staffing,
305 B.R. at 350
& n.1, a financing statement that substantially complied with the
requirements of the statute would be effective, notwithstanding
minor errors that were not seriously misleading, see
Fla. Stat.
§ 679.402(6)–(7) (2001) (repealed). But the old statute provided no
definition of “seriously misleading.” In re John’s Bean Farm,
378
B.R. at 389. Absent a statutory definition, courts eventually
adopted a “reasonably diligent searcher” standard to determine
whether an error in the debtor’s name was seriously misleading.
Id. This standard “required the reviewing court to determine, on
a case-by-case basis, whether a hypothetical reasonable searcher
would have been able to discover the non-conforming financing
statement despite the error in a debtor’s name.”
Id. The standard
thus asked courts to “second-guess what searchers should or
should not have been able to discover had they tried hard enough.”
Id. (quoting Margit Livingston, “A Rose by Any Other Name
Would Smell as Sweet” (or Would It?); Filing and Searching in Ar-
ticle 9’s Public Records, 2007 B.Y.U. L. Rev. 111, 124 (2007)). Un-
surprisingly, this flexible, fact-intensive standard “created extensive
litigation and fragmented or contradictory decisions.”
Id.
When Florida adopted revised § 9-506 of the UCC, as Flor-
ida Statute § 679.5061, the Florida Legislature abrogated the judi-
cially-created “reasonably diligent searcher” standard. Looking at
the plain language of section 679.5061, the rule is clear: a financing
statement with the debtor’s incorrect legal name is effective only if
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21-11742 Opinion of the Court 11
a search of the Registry using the debtor’s correct name and the
Registry’s standard search logic produces that financing state-
ment. If the financing statement with the debtor’s incorrect name
is not produced after this search, then the financing statement is
ineffective as a matter of law. Id. § 679.5061(2)–(3).
As noted by two bankruptcy courts, Florida’s adoption of
this revision to Article 9 of the UCC puts the burden on the filing
creditor to include the debtor’s correct legal name in its financing
statement and removes the burden from searchers to conduct mul-
tiple searches. See In re John’s Bean Farm,
378 B.R. at 390 (“Post-
revision case law is fairly well settled that the burden is squarely on
the creditor to correctly identify the name of the debtor.”); In re
Summit Staffing,
305 B.R. at 354–55 (“The revisions to Article 9 re-
move some of the burden placed on searchers under the former
law, and do not require multiple searches using variations on the
debtor’s name. . . . Revised Article 9 rejects the duty of a searcher
to search using any names other than the name of the debtor indi-
cated on the public record of the debtor’s jurisdiction of organiza-
tion.”). As discussed below, however, these courts disagree about
what a “search” means for purposes of the statutory safe harbor.
C. The Live Oak Financing Statements
It is undisputed that Live Oak’s financing statements do not
appear on the initial page of twenty names generated by a Registry
search using Beach Boulevard’s correct legal name, but that they
do appear on an immediately preceding page. The user can view
that preceding page by clicking the “PREVIOUS” command tab on
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12 Opinion of the Court 21-11742
the screen displaying the page listing the twenty names, and above
the tab is the statement, “[u]se the Previous and Next buttons to
display additional results.” Beach Boulevard contends that the ini-
tial page of twenty names is both the beginning and the end of the
“seriously misleading” inquiry, while Live Oak contends that it is
just the beginning and that its financing statement appearing on the
preceding page falls into the statutory safe harbor.
A more detailed description of the Registry is helpful, as the
statutory safe harbor is expressly based on the Registry’s structure
and search logic. The Registry is Florida’s “centralized Uniform
Commercial Code (UCC) filing and retrieval system containing in-
itial financing statements, amendments, assignments, and other
UCC filings as authorized by Florida Statutes Chapter 679.” See
Florida Secured Transaction Registry, https://www.flori-
daucc.com/uccweb/ (last visited Nov. 18, 2021). In its order be-
low, the bankruptcy court described the mechanics of a Registry
search:
When a debtor’s name is entered into the search en-
gine, an alphabetical list with twenty names is dis-
played. If the debtor’s actual name is found, it will
appear at the top of the list. If the search does not
produce the debtor’s name, the nearest match is at
the top of the alphabetical list. There is a “Previous”
command arrow at the top of the list, with the state-
ment “Use the Previous and Next buttons to display
additional search results.” To locate the immediately
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21-11742 Opinion of the Court 13
preceding names on the alphabetical list, a searcher
must click the “Previous” command arrow.
(emphasis in original). Turning to the search rules, the bankruptcy
court explained that the Registry provides the following explana-
tion of its search program:
The name list search program will compact the name
entered according to the rules stated above. The pro-
gram will then provide a list of names (with additional
information) beginning with the name whose com-
pact key is equal to or greater than the compacted
version of the search name entered. A list of names
(currently 20) is displayed for the user to select to see
the detail record.
The user may select to move forward or backward in
the name list in compact name order. If this option is
chosen, the screen will display the next or prior list of
names in compact order.
(emphasis in original). Thus, the Registry’s search logic takes a user
to the point in the alphabetical list of all debtor names contained in
the Registry that most closely matches the name input for the
search. The search generates a page listing the twenty closest
matches to the name in alphabetical order; the pages preceding and
following this list of twenty names contain the entire remainder of
the Registry, with the debtors’ names listed in ascending and de-
scending alphabetical order from the initial page of twenty names.
Each search therefore allows a user to review using the “Previous”
and “Next” command tabs, although each search may take the user
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14 Opinion of the Court 21-11742
to a different “starting point” within the Registry depending on the
debtor name input for the search.
In determining that Live Oak’s financing statements were
not seriously misleading even though they did not appear on the
first page listing the twenty names generated by inputting Beach
Boulevard’s correct name, the bankruptcy court held that the
search results “appear[] to include more than the initial page dis-
played.” The court reached this conclusion because the explana-
tion of the Registry’s search program “references the option that a
user may select to move forward or backward in the list” and “[t]he
explanation also states that currently there is a list of 20 names dis-
played.” (first emphasis added).
In a case with almost identical facts, another bankruptcy
court sitting in the Middle District of Florida held that a defective
filing statement is not seriously misleading if a search of the Regis-
try under the debtor’s correct name would produce the defective
statement on the page preceding the initial search results; that is,
searchers have a duty to “check the immediately preceding names
as well as the immediately succeeding names on an alphabetical list
if there is not an exact match of the debtor’s correct name.” In re
Summit Staffing,
305 B.R. at 354–55. In In re Summit Staffing, the
creditor failed to update its financing statements when the debtor
incorporated.
Id. at 349. The financing statements listed “Randy
A. Vincent” as the debtor and “Summit Staffing” as an additional
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21-11742 Opinion of the Court 15
debtor, though the legal name of the debtor was changed to “Sum-
mit Staffing of Polk County, Inc.” 1
Id. While the defective filing
statements did not appear on the first page produced by entering
the debtor’s name into the Registry, the court determined that
[s]ince the name immediately following Summit
Staffing of Polk County, Inc. is produced at the top of
the alphabetical list, and since the filing office’s direc-
tions state that the searcher should use the “Previous”
command to display additional search results, clearly
a searcher should check the preceding names on the
alphabetical list.
Id. at 354.
The bankruptcy court in In re Summit Staffing further stated
that it was “clear” that “a searcher should check the immediately
preceding names as well as the immediately succeeding names on
an alphabetical list if there is not an exact match of the debtor’s
correct name” because, “[a]lthough Revised Article 9 does not re-
quire that a searcher exercise reasonable diligence in the selection
of the names to be searched or the number of searches to conduct,
1 Florida Statute § 679.508 governs the effectiveness of a financing statement
where, as in In re Summit Staffing, a new debtor becomes bound by a security
agreement entered into before its incorporation. Under this statute, a financ-
ing statement naming an original debtor will be effective unless the differences
between the name of the original debtor and the name of the new debtor
causes the financing statements to be seriously misleading. Id. § 679.508(2).
The statute provides that “seriously misleading” means the same standard set
forth in Florida Statute § 679.5061, the statute at issue here.
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16 Opinion of the Court 21-11742
the revisions to Article 9 do not entirely remove the duty imposed
on a searcher to be reasonably diligent.” Id. at 354–55. Acknowl-
edging that “it is conceivable that one could use the ‘Previous’
command to go back to the beginning of the alphabetical list,” the
court concluded that the “issue of ‘reasonableness’ develops at
some point because the listing is an alphabetical listing,” Id. at 354.
Thus, while “[a] searcher is not required to conduct multiple
searches,” he “must reasonably examine the results of the proper
search using the debtor’s correct name to determine if any financ-
ing statements relating to the debtor are disclosed by that search.”
Id. at 355.
Subsequently, in In re John’s Bean Farm, a bankruptcy court
in the Southern District of Florida concluded that the In re Summit
Staffing court simply changed the timing of the “reasonably dili-
gent searcher” inquiry that was supposed to have been abrogated
by the UCC revisions. In re John’s Bean Farm involved financing
statements filed under “John Bean Farms, Inc.,” instead of the
debtor’s legal name, “John’s Bean Farm of Homestead, Inc.”
378
B.R. at 386. The financing statements at issue could only be found
by clicking “previous” sixty times from the initial page produced
using the Registry’s search logic.
Id. at 393. Notwithstanding the
factual differences between the search results in its case and those
in In re Summit Staffing—i.e., sixty pages away from the correct
name versus one page away—the court in In re John’s Bean Farm
determined that the only page that matters for purposes of the stat-
utory safe harbor is the initial page of results displaying twenty
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21-11742 Opinion of the Court 17
names.
Id. at 395. The court found that the statute is unambigu-
ous, has no “reasonableness” qualifier, and establishes a bright-line
rule.
Id. As the court explained, “the very purpose of this statute
was to eliminate the need for, indeed, the ability of, a judge to inject
himself or herself in the determination of what is seriously mislead-
ing.”
Id. Because “Florida’s standard search logic is set by stat-
ute[,] . . . [t]he search logic clearly leads to one result—a single page
on which names appear.”
Id. As it was undisputed that the financ-
ing statement at issue did not appear on that page, “the financing
statement [was] seriously misleading and summary judgment in
the Trustee’s favor [was] appropriate.”
Id.
This appeal therefore depends upon the meaning of “search”
as used in the statutory phrase “a search of the records . . . using
the filing office’s standard search logic.” The In re John’s Bean
Farm court concluded that the statutorily-established “standard
search logic” generates “a single page on which [twenty] names ap-
pear” and that page constitutes the entirety of the “search” for pur-
poses of the safe harbor.
Id. Under that court’s logic, if a financing
statement with the debtor’s incorrect name does not appear on that
page, it is ineffective. In contrast, the In re Summit Staffing court
concluded that the initial page of twenty names does not constitute
the entirety of the “search”; instead, the “search” consists of the
entirety of the Registry, which can be scrolled to from the initial
page of twenty names. See
305 B.R. at 354–55. And that court de-
termined the searcher “must reasonably examine the results of the
search” to determine whether it discloses a financing statement
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18 Opinion of the Court 21-11742
with the debtor’s incorrect legal name.
Id. at 355. Thus, we are
confronted with a fairly well-defined split over whether section
679.5061(3) establishes a bright-line rule or a more flexible, reason-
ableness-based regime.
The statutory reference to “standard search logic” means
that the relevant “search” is limited to the results generated by use
of that search logic. On the one hand, it is undisputed that the Reg-
istry’s standard search logic involves a comparison of the name in-
put by the user with the names listed in the database and the sub-
sequent display of a single page listing the twenty names most
closely matching the search name. The court in In re John’s Bean
Farm concluded that the “search” as used in section 679.5061(3) is
limited to those twenty names—and only those twenty names—
for purposes of the safe harbor.
On the other hand, it is also undisputed that a search using
the Registry’s search logic merely takes the user to a given point in
the Registry database based on the debtor name input for the
search. The page listing the twenty names identified based on the
user’s input is preceded and followed by pages listing all debtor
names in the Registry database in ascending and descending alpha-
betical order. The initial page of twenty names states, “Use the
Previous and Next buttons to display additional search results,” and
a user can scroll backwards and forward from the initial page and
can review any financing statement in the Registry database with-
out running any additional searches. The court in In re Summit
Staffing therefore concluded that the “search” described in section
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21-11742 Opinion of the Court 19
679.0581(3) is not limited to the initial page listing twenty names—
the Registry search logic simply takes the user to the most relevant
starting point to review the contents of the search.
Under this latter interpretation, every financing statement in
the Registry database is part of a “search,” even if the user has to
scroll backwards or forwards to find it. Taken to its natural con-
clusion, no financing statement with the incorrect debtor’s name
would ever be ineffective, because each search “would disclose”
every financing statement. Recognizing that “it is conceivable that
one could use the ‘Previous’ command to go back to the beginning
of the alphabetical list,” the court in In re Summit Staffing con-
cluded that there is a “reasonableness” component, which “devel-
ops at some point,” to the user’s obligation to review the search
conducted under section 679.5061(3).
305 B.R. at 354. As the court
in In re John’s Bean Farm noted, this reasonableness qualifier to a
search conducted pursuant to section 679.0581(3) is not found in
the statutory text.
378 B.R. at 395.
All of this is to say that the existing case law contains two
competing interpretations of what “search” means for purposes of
the section 679.5061(3) safe harbor. Under one interpretation, the
Florida Legislature adopted a bright line rule—if a financing state-
ment with the debtor’s incorrect name does not appear on the ini-
tial page of twenty names, it has not been disclosed in the search
and is therefore ineffective. Under the other interpretation, which
the court in this case followed, the Florida Legislature created a
flexible standard under which a financing statement with the
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20 Opinion of the Court 21-11742
debtor’s incorrect name is effective as long as it is within a reason-
able number of pages from the initial page of twenty names.
D. Certification to the Florida Supreme Court Is Appropriate
Although the facts of this case involve a single creditor and
debtor, the legal principles involved may have broad effects on the
citizens of Florida and those who do business with them. The rules
governing secured transactions form an integral part of our mod-
ern commercial system, and uniformity in their application pro-
motes predictability and stability in economic relationships. Allow-
ing the development of diametrically opposed rules within the
same state promotes the opposite. Moreover, the answer to how
Florida’s statutory safe harbor operates is exclusively one of Florida
law. 2
When faced with substantial doubt on a dispositive state law
issue, our “better option is to certify the question to the state su-
preme court.” In re Mooney,
812 F.3d 1276, 1283 (11th Cir. 2016)
2 The bankruptcy court below erred when it took into consideration other
states’ systems, including the fact that the search logics used by those states
produce more results and were therefore more creditor friendly. For example,
according to one of the declarations filed in the case, Georgia allows users to
conduct a “stem search” instead of requiring the exact debtor name and allows
a searcher to display up to 100 results per page. The UCC, however, contem-
plates that states will use different search logics, and the Florida Legislature
specifically directed that the “seriously misleading” inquiry should be based on
the Florida Registry’s own search logic. That decision lies wholly within the
Florida Legislature’s prerogative.
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21-11742 Opinion of the Court 21
(quoting In re Cassell,
688 F.3d 1291, 1300 (11th Cir. 2012)). Thus,
as a matter of federalism and comity, dispositive issues of Florida
law should be first presented to the Florida Supreme Court to de-
cide. See Blue Cross & Blue Shield of Ala.,
116 F.3d at 1413. In-
deed, “[c]ertification of state law issues to state supreme courts is a
valuable tool for promoting the interests of cooperative federal-
ism.”
Id.
We therefore certify to the Florida Supreme Court the fol-
lowing questions under article V, section 3(b)(6) of the Florida con-
stitution and Florida Rule of Appellate Procedure 9.150 3:
(1) Is the “search of the records of the filing office un-
der the debtor’s correct name, using the filing of-
fice’s standard search logic,” as provided for by
Florida Statute § 679.5061(3), limited to or other-
wise satisfied by the initial page of twenty names
displayed to the user of the Registry’s search func-
tion?
(2) If not, does that search consist of all names in the
filing office’s database, which the user can browse
3 Article V, section 3(b)(6) of the Florida constitution provides that the Florida
Supreme Court “[m]ay review a question of law certified by the Supreme
Court of the United States or a United States Court of Appeals which is deter-
minative of the cause and for which there is no controlling precedent of the
supreme court of Florida.” Florida Rule of Appellate Procedure 9.150 estab-
lishes the procedure governing those discretionary proceedings to review such
certified questions.
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22 Opinion of the Court 21-11742
to using the command tabs displayed on the initial
page?
(3) If the search consists of all names in the filing of-
fice’s database, are there any limitations on a
user’s obligation to review the names and, if so,
what factors should courts consider when deter-
mining whether a user has satisfied those obliga-
tions?
Our phrasing of these questions “is intended only as a
guide.” United States v. Clarke,
780 F.3d 1131, 1133 (11th Cir.
2015). We do not mean to restrict the Florida Supreme Court’s
consideration of the issues or its scope of inquiry. See Blue Cross
& Blue Shield of Ala.,
116 F.3d at 1414. The Florida Supreme Court
may, as it perceives them, restate the issues and modify the manner
in which the answers are given.
Id. Finally, should the Florida Su-
preme Court exercise its discretion to answer these questions, its
response will be “conclusive on the issue[s] certified.” Edwards v.
Kia Motors of Am., Inc.,
554 F.3d 943, 945 (11th Cir. 2009).
III. CONCLUSION
For the foregoing reasons, we defer our decision in this case
until the Florida Supreme Court has had the opportunity to con-
sider our certified questions and determine whether to exercise its
discretion in answering them. The entire record of this case, in-
cluding the parties’ briefs, is transmitted to the Florida Supreme
Court.
QUESTIONS CERTIFIED.