I had a problem with this as well. Turns out my default collation name was set to a case sensitive (CS) selection. This is set when you install sql server and not something you can change later.
I googled case sensitivity with sql server and found this text:
Check the collation setting of the database where you're having the problem. A collation name usually ends with a couple of two-character codes, like LithuanianCSAS.
The CS bit indicates that the collation is Case Sensitive. In most situations, you would see CI for Case Insensitive.
With CS, the string "PriceList" is considered different from the string "pricelist", although in CI they would be considered identical. So with CS, if you have a primary key then these two strings do NOT violate the unique constraint, and with CI they would.
On the database level, if the database collation is CS then it also means that you can have two different objects, named a and A. If the database collation is CI, then you can only have one object named a or A, but not both.
So the problem with a CS database collation is that you must be extremely careful in your scripts, because the use of lower case and upper case must be 100% correct. A database with a CI collation is both more forgiving, and less headache-inducing
