Davis v. F. W. Financial Services, Inc. (2013)

Citation: 260 Or App 191, 317 P3d 916; review denied, 355 Or 567 (May 29, 2014) · Court: Court of Appeals of Oregon · Decided: December 26, 2013 (argued December 10, 2012) · Appeal from: Multnomah County Circuit Court (No. 110404916; A149988)

Facts

Davis and Gauthier, judgment creditors (an IBEW-NECA audit committee) of Dryer Electric, garnished Dryer’s accounts receivable. F. W. Financial Services (FWFS), a commercial lender, held a prior perfected security interest in those receivables under a 2002 security agreement. After FWFS foreclosed its security interest and demanded the collected funds, Davis refused.

Holding

Affirmed. Although Davis was entitled to the funds when garnished, he “took those funds subject to FWFS’s prior perfected security interest,” and he converted the funds when he refused to return them after FWFS foreclosed and demanded them. The trial court properly denied prejudgment interest because FWFS pleaded the wrong accrual dates.

Reasoning

Under Article 9’s priority rules (including former ORS 79.0317), a perfected security interest has priority over a later lien creditor; a garnishing judgment creditor is a lien creditor whose rights in traceable collateral are subject to the earlier perfected interest. The court rejected arguments that FWFS had waived priority by letting the debtor try to cure.

Practical impact

The holding concerns a garnishing creditor’s conversion of encumbered proceeds. It supports investigating earlier perfected interests before collection, but does not decide the title effect of every sheriff’s sale. For an ordinary execution levy, ORS 18.878(2) supplies secured-creditor status, and ORS 79A.3150(1)(a) generally continues security interests after a sale unless authorized free of them or another exception controls. Read any specific foreclosure judgment or discharge separately. [Current text retrieved 2026-10-17: https://www.oregonlegislature.gov/bills_laws/ors/ors018.html; https://www.oregonlegislature.gov/bills_laws/ors/ors079A.html]

Good-law status

needs_verification. The complete reported opinion, including its review-denial notation, was independently retrieved 2026-10-17. Review denial verifies that procedural history, not comprehensive subsequent treatment or current good-law status.

The complete court PDF in Cronk v. Oregon Credit and Collections Bureau, Inc., Adv. No. 14-6220-tmr (Bankr. D. Or. Sept. 25, 2015), Renn, J., was also retrieved 2026-10-17. Its opinion p. 4 cites Davis for the garnishor’s UCC lien-creditor status, while distinguishing questions about the character of other garnished interests. That limited later citation is not a complete treatment check.

Applies in →

oregon · Topics: court-ordered-administrative-and-creditor-sales, ucc-article-9-dispositions

Legal information, not legal advice. Verify current law and subsequent treatment before relying on this decision.