Request By:
Mr. Wilmer L. Hodges
Barren County Clerk
Glasgow, Kentucky 42141
Opinion
Opinion By: Steven L. Beshear, Attorney General; By: Charles W. Runyan, Assistant Deputy Attorney General
The prior holder of security agreements or chattel mortgages has executed an assignment of such agreements to the Farmers National Bank of Glasgow. The assignment refers to the various security agreements or chattel mortgages by giving the debtor name and address, the date of the instrument, description of collateral and the file number.
Your letter reads:
"The New Farmers National Bank of Glasgow, Kentucky has discovered a discrepancy in their Chattel Mortgage Contract in the portion of assignment which has been thus for a long period of time. They are attempting to correct said error by an assignment of contract and security agreement listing all assignments of that dealer within one instrument. Please render an opinion instructing proper procedure for processing and the proper fee to be charged.
"Question 1: Is it possible to record such in the Miscellaneous Book upon obtaining preparation statement and, when and if an aggravated cause exists, at that time those connected be informed of said instrument? Our index files already show New Farmers National Bank as the secured party. "
KRS 355.9-405(2) and (3) reads:
"(2) A secured party may assign of record all or a part of his rights under a financing statement by the filing of a separate written statement of assignment signed by the secured party of record and setting forth the name of the secured party of record and the debtor, the file number and the date of filing of the financing statement and the name and address of the assignee and containing a description of the collateral assigned. A copy of the assignment is sufficient as a separate statement if it complies with the preceding sentence. On presentation to the filing officer of such a separate statement, the filing officer shall mark such separate statement with the date and hour of filing. He shall note the assignment on the index of the financing statement. The uniform fee for filing and indexing such a separate statement of assignment shall be as provided in KRS 64.012.
"(3) After the disclosure of filing of an assignment under this section, the assignee is the secured party of record."
Under KRS 355.9-405(2), the secured party may assign of record all or part of his rights under a financing statement by filing a separate written statement of assignment signed by the secured party of record and setting forth in the assignment the name of the secured party of record and the debtor, the file number and the date of filing of the financing statement and the name and address of the assignee and containing a description of the collateral assigned.
The instrument you attached to your letter was not actually signed by the secured party, Gillie Hyde Ford. Otherwise, the statutory requirements were met.
Where the elements listed in KRS 355.9-405(2) are in KRS 355.9-405(2) are present in the assignment, it should be filed as a part of your security agreement files and index systems, as required by that subsection.
We know of no reason why the secured party cannot assign various security agreements, by incorporating them by reference, and by using the cluster technique, provided the terms of KRS 355.9-405(2) are met. If the legislature had intended to prohibit "clustering" in such assignments, it could have easily said so. The history of KRS 64.012 has indicated that the fee schedule is constructed around a specific fee for the filing of a particular document, i.e., the singular is used. The fee schedule does not deal specifically with the multiple document concept. Thus there is a specific fee for recording or filing a deed, a mortgage, a continuation statement, or a lease, all in the singular. Thus by such custom the assignment of "a financing statement" merely followed the practice relating to the financing statement. For this reason the prohibition against clustering would require an express legislative declaration to that effect.
The fee for filing and indexing a properly filed assignment is found in KRS 64.012, as amended in 1982 (Ch. 375). Under that statute, the county clerk's fee for "filing and indexing an assignment of a financing statement" is six dollars ($6.00). (Emphasis added). Thus a properly filed assignment (a single assignment), whether involving one, two or more security agreements, calls for a six dollar fee for the clerk. See OAG 72-152, relating to a clustered assignment of oil and gas leases.