The creditor, the assignee, and the bank claimed competing security interests in the property. The creditor appealed a summary judgment order holding that the bank’s security interest in the farm’s net proceeds was of higher priority than the creditor’s interest. The creditor also appealed, arguing that the circuit court abused its discretion in striking an amended complaint. The debtors, not parties in this suit, operated a farm on leased land. The bank made several loans to the debtor’s family partnership for farming equipment and was named as the secured party in the UCC financing statements. The debtor took out a separate loan from the creditor to purchase crop inputs. This loan was supported by guaranty agreements personally guaranteeing “all present and future account indebtedness.” This loan was also perfected and secured with UCC financing statements naming a partnership that the creditor claimed was distinct from the family partnership (the partnership), as the debtor. Both financing statements listed farm crops and equipment as collateral. A third creditor, after assignment of a promissory note, claimed a purchase-money security interest in specific farm equipment. That dispute was addressed in a companion case. The debtor allegedly failed to pay its debts, leading to claims among the creditors, the bank, and the assignee as to whose security interests were superior and who held priority among the liens. The assignee moved for summary judgment on the basis that its purchase-money security interest was superior to the bank’s interest on certain pieces of equipment, and the bank filed a cross-motion. The bank asserted that its interest superseded the assignee’s interest and the creditor’s claims as a matter of law because the parties named the partnership in the financing statements, which the bank claimed was merely a trade name of the family partnership. After the circuit court granted summary judgment in favor of the bank, the creditor appealed, arguing that the two partnerships differed, creating a genuine issue of material fact that precluded summary judgment. The creditor also filed an amended complaint, which the circuit court struck. On appeal, the creditor argued that striking the amended complaint was an abuse of the circuit court’s discretion.
In Helena Agri-Enterprises, LLC v. Simmons Bank, 725 S.W.3d 43 (Ark. App. 2025), the court reversed in part and remanded in part. First, it held that the creditor had presented sufficient evidence to create a genuine issue of material fact as to whether the debtor partnership identified in its financing statements was a separate legal entity from the family partnership. The court found that “reasonable minds might differ” on whether the two partnerships were the same because the other partnership’s name and other aspects of its formation could create a reasonable inference that the partnerships were separate entities. Additionally, the court concluded that the evidence indicating the partnerships had different partners and structures, as well as the debtor’s history of conducting business in only one of the entities, could create an inference that the partnerships were separate. The court noted that, to resolve the issue of fact, it would be necessary to weigh the parties' credibility, and that, when this is the case, summary judgment is inappropriate. Next, due to the undue delay before the filing of the amended complaint, the court held that the circuit court did not abuse its discretion in striking it. The court therefore reversed and remanded the summary judgment order and affirmed the striking of the amended complaint.
By Andrew Fielden [email protected]
Edited By Taylor O’Brien [email protected]
Edited By Callighan Ard [email protected]
Edited By Hayden Mariott [email protected]