MDQ, LLC v. Gilbert, Kelly, Crowley & Jennett LLP

*704 SUMMARY

The question in this interpleader action is which adverse claimant was entitled to the interpleaded funds: a judgment creditor with a properly recorded judgment lien, or an assignee who did not file a financing statement with respect to distributions irrevocably assigned to it by the judgment debtor before the judgment lien was recorded. The answer depends on whether the assignment created a security interest that had to be perfected (but was not) by the filing of a financing statement *213 under California's Uniform Commercial Code (UCC or the Code). We agree with the trial court that although the assignment created a security interest, the judgment creditor is entitled to the interpleaded funds because its recorded judgment lien has priority over the unperfected security interest.

Accordingly, we affirm the judgment. We also affirm the trial court's order requiring the assignee to pay the attorney fees and costs of the plaintiffs in the interpleader action.

FACTS

1. The Parties and Earlier Proceedings

The four plaintiffs in the interpleader action (MDQ Holding LLC, MDQ LLC, Johnny B. Goode Limited Liability Company and MDQ Vegas LLC)

*705 are referred to as…