The Maine Supreme Judicial Court has affirmed a District Court judgment that awarded The County Federal Credit Union possession of a 2022 Ski-Doo Expedition snowmobile, rejecting the defendant's claims that he was a bona fide purchaser protected from the credit union's security interest.
In *The County Federal Credit Union v. Michael Madore* (2025 ME 93), decided Nov. 25, 2025, the court upheld the Fort Kent District Court's ruling in favor of the credit union in what became a dispute over competing claims to the snowmobile.
The case originated when Edward Richard entered into a loan agreement with The County Federal Credit Union on Jan. 24, 2022. The credit union lent Richard $15,076.64 to purchase the 2022 Ski-Doo Expedition snowmobile, taking a security interest in the vehicle to secure the loan. On the same day, the credit union properly filed a UCC1 Financing Statement with the Maine Secretary of State, officially reporting its security interest in the snowmobile.
The transaction that sparked the legal dispute occurred nearly a year later. On Feb. 6, 2023, Richard sold the snowmobile to Michael Madore Jr., the son of appellant Michael Madore, for $15,500. Crucially, Richard failed to notify the credit union of this sale, as would typically be required under the terms of most secured loan agreements.
According to the court's findings, Richard told Madore's son that there were no liens on the snowmobile and showed him documents he had received from the dealer at the time of purchase. This representation proved to be false, as the credit union's properly filed security interest remained in effect despite the sale to an unsuspecting third party.
When the credit union discovered the unauthorized sale, it filed a complaint for recovery of personal property, seeking to reclaim the snowmobile based on its valid security interest. The District Court ruled in favor of the credit union, prompting Michael Madore to appeal the decision to Maine's highest court.
In his appeal, Madore advanced two primary arguments against the credit union's claim. First, he contended that the credit union did not hold a valid security interest in the snowmobile, challenging the fundamental basis of the lender's claim to the property. Second, Madore argued that he qualified as a bona fide purchaser for value without notice of the credit union's interest, a legal doctrine that can protect innocent purchasers from claims by prior secured parties.
The bona fide purchaser defense is a well-established principle in commercial law designed to protect purchasers who buy property in good faith, pay valuable consideration, and have no knowledge of competing claims. If successful, this defense can cut off prior security interests and allow the purchaser to take clear title to the property.
However, the Maine Supreme Judicial Court found both of Madore's arguments unpersuasive. Writing for the court, Justice Lipez rejected these contentions and affirmed the District Court's judgment in favor of the credit union.
The court's decision reinforces the importance of proper documentation and filing procedures in secured transactions. By filing the UCC1 Financing Statement with the Maine Secretary of State on the same day as the loan agreement, the credit union created a public record of its security interest that provided constructive notice to potential purchasers.
This case highlights a common scenario in secured lending where borrowers sell collateral without the lender's knowledge or consent. While the Madore family may have been innocent purchasers who believed they were buying a lien-free snowmobile, the law typically favors properly perfected security interests over the claims of subsequent purchasers.
The ruling serves as a reminder to potential purchasers of high-value personal property to conduct thorough due diligence, including UCC searches, before completing transactions. It also underscores the effectiveness of the Uniform Commercial Code's filing system in protecting secured lenders' interests.
For secured lenders, the decision validates the importance of promptly and properly filing financing statements to perfect security interests. The credit union's diligent compliance with UCC filing requirements proved essential to protecting its interest in the collateral.
The case also demonstrates the legal risks faced by borrowers who sell secured property without lender consent. Edward Richard's unauthorized sale of the snowmobile ultimately led to legal complications for the Madore family, who lost both the snowmobile and their purchase price.
The five-member panel that decided the case included Chief Justice Stanfill and Justices Mead, Connors, Lawrence, and Lipez. The case was submitted on briefs in September 2025, with oral arguments not held, suggesting the court viewed the legal issues as straightforward based on the written submissions.
This decision reinforces established principles of secured transactions law in Maine and provides guidance for both lenders and purchasers in similar situations involving personal property with existing security interests.