Interflow Factors Corporation v. Hilton Holdings, LLC
This case involves a dispute between Interflow Factors Corporation, a factoring company, and Hilton Holdings, LLC, an account debtor. Interflow purchased accounts owed to Gulf Coast Security & Investigation by Hilton, and Hilton was notified of this assignment. Despite the notification, Hilton later paid Gulf Coast directly instead of Interflow, totaling $155,152.58. Interflow sought to collect these funds from Hilton, arguing that under UCC section 9.406, Hilton was obligated to pay the assignee. The trial court initially granted summary judgment for Hilton and denied Interflow's. The Court of Appeals reversed both decisions, holding that the Factoring Agreement constituted a valid security agreement and that Hilton could not rely on estoppel or a Rule 11 Agreement between Interflow and Gulf Coast to avoid its obligation to Interflow. The case was remanded for a determination of attorney's fees, costs, and interest.