TXCode

TXCODE § 9.5185. Fraudulent Filing

Effective: July 01, 2001

Vernon's Texas Statutes and Codes Annotated Currentness

Business and Commerce Code (Refs & Annos)

Title 1. Uniform Commercial Code (Refs & Annos)

Chapter 9. Secured Transactions (Refs & Annos)

Subchapter E. Filing

§ 9.5185. Fraudulent Filing

(a) A person may not intentionally or knowingly present for filing or cause to be presented for filing a financing statement that the person knows:

(1) is forged;

(2) contains a material false statement; or

(3) is groundless.

(b) A person who violates Subsection (a) is liable to the owner of property covered by the financing statement for:

(1) the greater of $5,000 or the owner's actual damages;

(2) court costs; and

(3) reasonable attorney's fees.

(d) An owner of property covered by a fraudulent financing statement described in Subsection (a) also may file suit in a court of suitable jurisdiction requesting specific relief, including, but not limited to, release of the fraudulent financing statement. A successful plaintiff is entitled to reasonable attorney's fees and costs of court assessed against the person who filed the fraudulent financing statement. If the person who filed the fraudulent financing statement cannot be located or is a fictitious person, the owner of the property may serve the known or unknown defendant through publication in a newspaper of general circulation in the county in which the suit is brought.

CREDIT(S)

Added by Acts 1999, 76th Leg., ch. 414, § 1.01, eff. July 1, 2001.

STATE BAR COMMITTEE COMMENT

2002 Main Volume

This nonuniform provision is a retention of former Section 9.412, which was added by the Texas

legislature to Chapter 9 in 1995. Disgruntled individuals were filing completely fraudulent finan-cing statements against USDA officers, particularly those representing the Farmers Home Administration, simply to tie up such officers' credit and create the maximum amount of personal aggravation for such individuals. These filings were not based on any kind of a relationship whatsoever and were simply intended to harass and cause personal harm and inconvenience to government officers. A fraudulent filing was defined as one in which the person knows that the financing statement is either forged, contains a material false statement, or is groundless. An action is created if a person intentionally or knowingly presented for filing or caused to be presented for filing a fraudulent financing statement. Certain remedies were provided in that bill, including civil liability, criminal sanctions, and a remedy for removing the false evidence of a lien.

Subsequently in 1997 House Bill 1185 (companion Senate Bill 424) was enacted to further respond to what had become an epidemic problem. The Senate bill analysis digest includes the following:

Currently, individuals and organizations have begun to take action based on their refusal to recognize the authority and sovereignty of the government of the State of Texas. These entities have filed fraudulent judgment liens issued by so-called "common law courts" and fraudulent documents purporting to create liens or claims on personal and real property with the Secretary of State and many county and district court clerks throughout the state. Many of the filings have been against the State of Texas and public officers and employees, as well as private individuals.

These filings have clogged the channels of commerce and have amounted to harassment and intimidation of both public officials and ordinary citizens. This bill provides both civil and criminal remedies for those against whom such fraudulent filings have been made. Section 17 of this bill repeals the criminal sanctions in Section 9.412 [now 9.5185], but inserts other criminal remedies for not only personal property fraudulent filings but also real property and judgment lien fraudulent filings. Subsection (c) is inserted as a reminder of possible criminal liability. Texas Penal Code Section 37.101 is entitled "Fraudulent Filing of Financing Statement."

HISTORICAL AND STATUTORY NOTES

2002 Main Volume

Section 25 of Acts 2001, 77th Leg., ch. 705 provides:

"Nothing in Chapter 9, Business & Commerce Code, as effective July 1, 2001, shall apply to a claim or right to receive:

"(1) compensation for injuries or sickness as described in 26 U.S.C. Section 104(a)(1) or (2), as amended; or

"(2) benefits under a special needs trust as described in 42 U.S.C. Section 1396p(d)(4), as amended."

Prior Laws:

Acts 1995, 74th Leg., ch. 547, § 1.

Acts 1997, 75th Leg., ch. 189, § 17.

V.T.C.A., Bus. & C. Code § 9.412.

RESEARCH REFERENCES

2006 Electronic Pocket Part Update

Encyclopedias

TX Jur. 3d Secured Transactions § 3, Organization.

TX Jur. 3d Secured Transactions § 220, Fraudulent Filing.

Forms

Texas Forms Legal and Business § 42:25, Perfection by Filing.

Treatises and Practice Aids

Krahmer, 12 Tex. Prac. Series § 34.13, Perfecting a Chapter 9 Security Interest.

NOTES OF DECISIONS

Application 1

1. Application

The "fraudulent filing" provisions of section 9.412 of the Business and Commerce Code do not apply to any transaction listed in section 9.104 thereof. Op.Atty.Gen.2000, No. JC-0213.

V. T. C. A., Bus. & C. § 9.5185, TX BUS & COM § 9.5185

Current through the end of the 2006 3rd Called Session of the 79th Legislature.