The County Federal Credit Union v. Michael Madore

2025 ME 93

• Court: Supreme Judicial Court of Maine
• Decided: November 25, 2025
• Docket: Aro-25-27
• Status: Published

Opinion

MAINE SUPREME JUDICIAL COURT Reporter of Decisions Decision: 2025 ME 93 Docket: Aro-25-27 Submitted On Briefs: September 24, 2025 Decided: November 25, 2025

Panel: STANFILL, C.J., and MEAD, CONNORS, LAWRENCE, and LIPEZ, JJ.

THE COUNTY FEDERAL CREDIT UNION

v.

MICHAEL MADORE et al.

LIPEZ, J.

[¶1] Michael Madore appeals from a judgment of the District Court (Fort

Kent, Linthicum, J.) awarding The County Federal Credit Union possession of a

2022 Ski-Doo Expedition snowmobile. Madore asserts that the court erred in

issuing judgment for the credit union on its complaint for recovery of personal

property because the credit union did not hold a valid security interest in the

snowmobile and because Madore was a bona fide purchaser for value without

notice of the credit union’s interest. We reject these contentions and affirm the

judgment.

I. BACKGROUND

[¶2] We draw the following facts from the court’s findings, which are

supported by competent record evidence. See Mitchell v. Mitchell, 2022 ME 52, 2

¶ 8, 284 A.3d 89.

[¶3] On January 24, 2022, Edward Richard entered into a loan agreement

with the credit union, pursuant to which the credit union lent Richard

$15,076.64 to purchase a 2022 Ski-Doo Expedition snowmobile. To secure the

loan, the credit union took a security interest in the snowmobile. On the same

day, the credit union filed with the Maine Secretary of State a UCC1 Financing

Statement reporting its security interest.

[¶4] On February 6, 2023, Richard sold the snowmobile to Madore’s son,

Michael Madore Jr., for $15,500.2 Richard did not notify the credit union of the

sale. Richard told Madore’s son that there were no liens on the snowmobile and

showed the son the documents that he had received from the dealer at the time

of purchase. The Madores did not check for UCC filings recording liens on the

snowmobile or otherwise investigate the possibility that a third party held an

interest in the snowmobile.

1 “UCC” is short for “Uniform Commercial Code,” the model code of statutes governing commercial

transactions, which is codified in Maine at 11 M.R.S. §§ 1-1101 to 15-306 (2025). See U.C.C. Gen. Cmt. of Nat’l Conf. of Comm’r’s of Unif. State L. and the A.L.I. (A.L.I. & Unif. L. Comm’n), Westlaw (database updated June 2023); Gen. Motors Acceptance Corp. v. Colwell Diesel Serv. & Garage, Inc., 302 A.2d 595, 597 (Me. 1973).

2 Although the court did not distinguish between Michael Madore (the appellant) and Michael Madore Jr. (the appellant’s son) in its findings of fact, Madore presented uncontradicted evidence that Michael Madore Jr. purchased the snowmobile as a gift for his father. Madore does not argue that the credit union improperly named him as a defendant in its complaint for recovery of personal property. 3

[¶5] Richard later defaulted on the loan, prompting the credit union to

issue him a notice of right to cure on March 1, 2024. Richard did not cure the

default. The credit union then discovered that Madore had acquired the

snowmobile.

[¶6] On May 6, 2024, the credit union filed a complaint for recovery of

personal property pursuant to 14 M.R.S. § 7071 (2025), naming both Richard

and Madore as defendants. Richard filed for bankruptcy on June 19, 2024, and

received a discharge3 on September 18, 2024.

[¶7] On December 18, 2024, the court held a hearing on the credit union’s

complaint. Richard did not attend. On January 15, 2025, the court entered

judgment for the credit union, ordering Madore to turn over the snowmobile to

the credit union.

[¶8] Madore moved for further findings of fact and conclusions of law,4

and on January 22, 2025, the court issued an order making additional findings.

See M.R. Civ. P. 52(b). This timely appeal by Madore followed. See M.R. App. P.

2B(c)(2)(B).

3 The general effect of a discharge in bankruptcy is to release the debtor from personal liability for certain existing debts. See 11 U.S.C.A. § 524 (Westlaw through Pub. L. No. 119-36).

4 Although Madore cited M.R. Civ. P. 52(a) in his motion, the substance of the motion indicates that Madore intended to request amended or additional findings of facts pursuant to M.R. Civ. P. 52(b). See M.R. Civ. P. 52(a)-(b). 4

II. DISCUSSION

A. Security Agreement

[¶9] Madore first contends that the court erred in finding that the credit

union had a valid security interest in the snowmobile because the loan

documents that Richard signed did not comply with the requirements of

11 M.R.S. § 9-1203 (2025), which governs the attachment and enforceability of

security interests.

[¶10] We review matters of statutory interpretation de novo. Corinth

Pellets, LLC v. Arch Specialty Ins. Co., 2021 ME 10, ¶ 19, 246 A.3d 586. We review

findings of fact for clear error and will vacate the court’s findings only when

there is no competent evidence in the record to support them. Mitchell, 2022

ME 52, ¶ 8, 284 A.3d 89.

[¶11] Maine has adopted the Uniform Commercial Code in Title 11 of the

Maine Revised Statutes. Gen. Motors Acceptance Corp. v. Colwell Diesel Serv. &

Garage, Inc., 302 A.2d 595, 597 (Me. 1973); see 11 M.R.S. §§ 1-1101 to 15-306

(2025). Article 9-A governs secured transactions. See 11 M.R.S. § 9-1101. The

general rule is that a security interest “attaches to collateral when it becomes

enforceable against the debtor with respect to the collateral,” id. § 9-1203(1), 5

and that a security interest becomes enforceable against a debtor when, as

relevant here,

(a) Value has been given; (b) The debtor has rights in the collateral or the power to transfer rights in the collateral to a secured party; and (c) . . . (i) The debtor has authenticated a security agreement that provides a description of the collateral . . . .

Id. § 9-1203(2)(a)-(c).5 A “security agreement” is “an agreement that creates or

provides for a security interest.” Id. § 9-1102(73).

[¶12] The parties in this case do not dispute that value was given or that

the debtor (Richard) had rights in the collateral (the snowmobile). They

disagree, however, as to whether Richard “authenticated a security agreement

that provides a description of the collateral," as required by section

9-1203(2)(c)(i).

[¶13] At issue are the documents comprising the agreement that Richard

executed to obtain the loan from the credit union. The agreement, entitled

“Loan and Security Agreements and Disclosure Statement,” consists of five

pages, with the first identified as a “Truth In Lending Disclosure” statement, the

5 The quoted language, which has now been superseded, was in effect at all times relevant to this

case. On July 1, 2025, revised text became effective. See P.L. 2023 ch. 669 §§ A-89, E-1 (effective July 1, 2025) (codified at 11 M.R.S. § 9-1203(2)(c) (2025)). Both the revised text and the now superseded text are printed in the 2025 edition of West’s Maine Revised Statutes, along with a note explaining when the revised text would take effect. See 11 M.R.S. § 9-1203(2)(c). 6

second and third as a “Loan Agreement,” and the fourth and fifth as a “Security

Agreement.”

[¶14] The truth-in-lending disclosure statement, in addition to

identifying the loan amount, the interest rate, and the payment schedule,

provides:

Security: . . . . You are giving a security interest in . . . the property described below[.]

The 2022 Ski-Doo Expedition snowmobile is identified as “[c]ollateral” directly

beneath this language. The first page of the agreement further states:

By signing as Borrower, you agree to the terms of the Loan Agreement. If property is described in the ‘Security’ section of the Truth in Lending Disclosure, you also agree to the terms of the Security Agreement. If you sign as ‘Owner of Property’ you agree only to the terms of the Security Agreement.

(emphasis added). Richard’s electronic signature, dated January 24, 2022,

appears in a signature box on this page of the Agreement labeled “Borrower.”

Richard did not sign in a box provided on page five, labeled “Owner of

Property,” at the end of the section titled “Security Agreement.”

[¶15] Madore points to the absence of Richard’s signature on page five—

part of the so-called “Security Agreement”—as evidence that the credit union

lacks the authenticated security agreement it needed to properly attach its

security interest under section 9-1203(2)(c). We conclude, however, that 7

Richard’s signature on the first page of the agreement satisfied the statute’s

authentication requirements. See id. § 9-1203(2)(c)(i).

[¶16] The plain language of sections 9-1102(73) and 9-1203(2)(c)(i),

when read together, provides that a security interest is not enforceable unless

(1) the debtor authenticates an agreement (2) that creates or provides for a

security interest and (3) provides a description of the collateral. Here, the

agreement supports the court’s finding that these elements were met: (1) it is

signed by Richard, (2) it expressly states, “You are giving a security interest

in . . . the property described below,” and (3) in the space provided for a

description of property, it lists the make, model, year, and identification

number of the snowmobile.

[¶17] Madore’s argument—that no enforceable agreement exists

because Richard failed to sign the pages labeled “Security Agreement”—

elevates form over substance and lacks statutory support. Nothing in section

9-1203(2)(c)(i) requires a debtor to sign a separate formal document labeled

as a “security agreement” so long as the signed writing at issue clearly identifies

the secured property. See Frace v. Canal Nat’l Bank (In re Frace), 17 B.R. 198,

200-01 (Bankr. D. Me. 1982) (explaining that “[i]t is settled that a separate

formal document entitled ‘security agreement’ is not necessary to satisfy the 8

signed-writing requirement. . . . The requirements . . . are met if the evidence

identifies the property secured beyond dispute, and if that evidence is in the

form of signed writings sufficient to satisfy the Statute of Frauds” (citations

omitted)); 68A Am. Jur. 2d Secured Transactions § 147 (2003) (“The Uniform

Commercial Code reduces the formalities of a secured transaction and of the

security agreement to a minimum. No special words are necessary to create a

security interest. . . . [Nor does the UCC] require a formal document labeled

‘security agreement.’ To the contrary, a writing (or interconnected writings),

regardless of label, if it adequately describes the collateral, carries the signature

(authentication) of the debtor, and establishes that a security interest was

agreed upon, satisfies both the formal requirements of the statute and the

policies behind it.”).

[¶18] Furthermore, while Madore emphasizes the technicality and

specificity required by some provisions of the UCC, the purpose of the security

agreement is primarily evidentiary; it shows that the debtor has agreed to the

creation of the security interest. See U.C.C. § 9-203 cmt. 3 (A.L.I. & Unif. L.

Comm’n), Westlaw (database updated June 2023) (referring to the

authenticated security agreement as an “evidentiary requirement in the nature

of a Statute of Frauds”); 79 C.J.S. Secured Transactions § 30, Westlaw (database 9

updated May 2025) (“The function of a security agreement is merely to

evidence the intention of and define the rights of the contracting parties. The

agreement serves a Statute of Frauds function as between the creditor and

debtor.”); see also Casco Bank & Tr. Co. v. Cloutier, 398 A.2d 1224, 1231

(Me. 1979) (identifying the “‘frauds’ and evidentiary policies” served by

security agreements). There is therefore “a judicial tendency to overlook

defects and irregularities [in security agreements] when it is unlikely that any

prejudice will be caused by them. Any writing that satisfies the minimal

requirements for a security agreement, and intended to be a security

agreement, is generally held to be a security agreement.” 68A Am. Jur. 2d

Secured Transactions § 167 (2003). This is consistent with one of the stated

purposes of the UCC, which, contrary to Madore’s assertion, is to “make the law

of commercial transactions, as far as reasonable, liberal and nontechnical.” Id.;

see also Gen. Motors Acceptance Corp., 302 A.2d at 599 (noting that the

“underlying purposes and policies” of the UCC include “to simplify, clarify and

modernize the law governing commercial transactions”). Our holding here is

in keeping with this goal.

[¶19] Indeed, we have long adhered to this approach, noting in Cloutier

that it is “well settled” that “there is no requirement that the description of the 10

collateral be complete within the four corners of the security agreement or

other single document.” 398 A.2d at 1229 (quotation marks omitted). In that

case we instead held that two documents—a promissory note that referenced

a security interest but did not describe the collateral and a separate financing

statement that did describe the collateral—together formed a “composite” that

sufficed to satisfy the signed-writing requirement of Article 9. Id. at 1231-32.6

It stands to reason that if two separate documents may be read together to

create an enforceable security agreement, then a single document that

addresses each of the statutory prerequisites is also sufficient, even if not

formally designated as a “security agreement.” Page one of the agreement,

which Richard signed, satisfies this standard.7

[¶20] Finally, although we hold that section 9-1203(c)(2)(i) does not

require a document formally designated as a “security agreement,” we note that

here, the truth-in-lending disclosure statement that Richard signed as

6In Cloutier we analyzed 11 M.R.S. § 9-203 (1964), which was later repealed and replaced by 11 M.R.S. § 9-1203. Casco Bank & Tr. Co. v. Cloutier, 398 A.2d 1224, 1226, 1228-32 (Me. 1979); see P.L. 1999, ch. 699, §§ A-1, A-2 (codified as subsequently amended at 11 M.R.S. § 9-1203 (2025)). The relevant language of the statutes is substantially the same. Compare 11 M.R.S. § 9-203 (1964), with 11 M.R.S. § 9-1203 (2025).

Contrary to Madore’s contention, this case is not like Maine League Fed. Credit Union v. Atlantic 7

Motors, where we concluded that a UCC financing statement lacking the signature of the secured party failed to comply with the statutory requirement that such statements be “‘signed by the debtor and the secured party,’” 250 A.2d 497, 500 (Me. 1969) (quoting 11 M.R.S.A. § 9-402(5)(1969)). Here, Richard plainly signed the agreement. 11

“Borrower” makes clear that if property is designated as collateral on that

statement (as it was here), then a debtor who signs as a “Borrower” “agree[s]

to the terms of the Security Agreement.” Thus, by the agreement’s own terms,

Richard did agree to the “Security Agreement.”8 See 11 M.R.S. § 9-1203(2)(c)(i).

B. Bona Fide Purchaser for Value Without Notice

[¶21] Next, Madore asserts that the trial court judgment should be

vacated because his son was a bona fide purchaser for value of the snowmobile

without notice of the credit union’s interest and therefore Madore owns the

snowmobile free of the credit union’s lien. The applicable bona-fide-purchaser

defense to an action to recover personal property subject to a security interest

is set forth at 11 M.R.S. § 9-1320(2), which provides that

a buyer of goods from a person who used or bought the goods for use primarily for personal, family, or household purposes takes free of a security interest, even if perfected, if the buyer buys: (a) Without knowledge of the security interest; (b) For value; (c) Primarily for the buyer’s personal, family or household purposes; and (d) Before the filing of a financing statement covering the goods.

8 We do not reach the question of whether the credit union complied with applicable truth-in-lending disclosure requirements because Madore’s argument on this issue is underdeveloped and therefore waived. See, e.g., Melhorn v. Derby, 2006 ME 110, ¶ 11, 905 A.2d 290. And in any case, the remedy for violations of these requirements is a civil penalty, not invalidation of the security agreement. See Union Tr. Co. of Ellsworth v. Hardy, 400 A.2d 384, 390-92 (Me. 1979); 9-A M.R.S. § 8-505(5) (2025); 15 U.S.C.A. § 1640 (Westlaw through Pub. L. No. 119-36). 12

[¶22] In its January 15 order, the court found that Madore’s son satisfied

elements (a) through (c) of this defense but failed on element (d) because the

credit union filed its UCC Financing Statement on January 24, 2022, more than

a year before the son purchased the snowmobile on February 6, 2023. Because

the record supports the court’s findings, we affirm the court’s conclusion that

Madore does not benefit from the protection of section 9-1320(2).

The entry is:

Judgment affirmed.

Theodore M. Smith, Esq., Smith Law Office, LLC, Van Buren, for appellant Michael Madore

Richard L. Currier, Esq., and Jacob T. Flewelling, Esq., Currier, Trask & Dunleavy P.A., Presque Isle, for appellee The County Federal Credit Union

Fort Kent District Court docket number SA-2024-25 FOR CLERK REFERENCE ONLY