First National Bank v. Family Medicine Clinic

Burr, J.:

First National Bank of Medicine Lodge appeals a decision of the district court which found that K.S.A. 44-312 grants wage claims priority over prior perfected security interests.

The facts in this case are undisputed. The action began as a foreclosure action by the Bank against Family Medicine Clinic (FMC) on a promissory note secured by FMC’s accounts receivable, and involved a resolution of a priority dispute between two banks. The Bank obtained appointment of a receiver to collect FMC’s accounts receivable, and FMC’s employees intervened to establish their claims for wages, unpaid…