Factor King, LLC v. Housing Authority

Citations

• 197 Conn. App. 459

Syllabus

The plaintiff appealed from the judgment of the trial court granting summary judgment in favor of the defendant. The plaintiff and A Co., a nonparty entity, entered into a factoring and security agreement under which the plaintiff received the option to purchase any of A Co.'s accounts receivable that it deemed to be eligible accounts, and, additionally, received a security interest in all of A Co.'s accounts receivable. There- after, the plaintiff sent a notice to the defendant asserting that A Co. had assigned to it an invoice due to A Co. from the defendant. The defendant remitted payment directly to A Co. The plaintiff commenced this action, claiming that payment should have been made to it pursuant to statute (§ 42a-9-406), and not to A Co. The trial court granted the defendant's motion for summary judgment and denied the plaintiff's motion for summary judgment, from which the plaintiff appealed to this court. Held: 1. The trial court properly granted the defendant's motion for summary judgment, that court having properly held that the plaintiff was not entitled to a direct payment of a receivable due to A Co. from an account not purchased through its agreement with A Co., but in which the plaintiff had a security interest; the factoring agreement did not constitute an outright sale of A Co.'s accounts but, rather, it gave to the plaintiff the sole discretion to purchase certain of A Co.'s accounts, the agreement did not indicate that either party to that agreement intended for the unpurchased accounts to be subject to collection upon the notice and demand of the plaintiff in the absence of a breach by A Co., and the agreement's security interest provision had no direct relationship to its separate provisions authorizing the plaintiff to purchase and collect on certain accounts; moreover, although the plaintiff was assigned a secu- rity interest in all of A Co.'s accounts receivable, including that of the defendant, there was no assignment of the amount due or