Bank of Kansas v. Hutchinson Health Services, Inc.

Meyer, J:

This is an appeal from the district court’s determination that appellee’s right of setoff had priority over appellant’s perfected security interest in proceeds of the debtor’s accounts receivable.

Appellant Bank of Kansas brought this action against Hutchinson Health Services, Inc., (hereinafter “Hutchinson Health Services” or “debtor”) to collect funds due under several loans. The Bank of Kansas had secured these loans with a security interest in, among other things, the accounts receivable of Hutchinson Health Services.

Hutchinson Health Services maintained its general checking…