Maxus Leasing Group, Inc. v. Kobelco America, Inc.

In October 2000 Kobelco America, Inc. (Kobelco) (defendant) sold two cranes to Syracuse Equipment Leasing Co., Inc. (Syracuse) (defendant). After the purchase, Syracuse acquired a loan from Wells Fargo Equipment Finance, Inc. (Wells Fargo) (defendant) and pledged crane GD0201061 (crane 61) as collateral. Wells Fargo filed a financing statement on November 22, 2000, to perfect its security interest. However, the serial number, listed as GD020161, was incorrect by one digit. Wells Fargo also described the crane as new, listed its name, year, model number, and included a comprehensive description of crane 61’s attachments. Claiming that Syracuse was not making timely payments, Kobelco entered into an agreement with Maxus Leasing Group, Inc. (Maxus) (plaintiff). The parties disputed the nature of this transaction, but Maxus paid Kobelco for the same two cranes Kobelco sold to Syracuse. Kobelco treated the transaction as a refinance of Syracuse’s loan, and Maxus entered into a lease agreement with Syracuse. Maxus filed a financing statement in both cranes on May 29, 2001, using correct serial numbers. By the beginning of 2002, Syracuse had defaulted on its loan with Wells Fargo and its lease agreement with Maxus. Wells Fargo repossessed crane 61 and sold the crane to Brownell Steel, Inc. (Brownell) (defendant) in March 2002. In April 2002, Syracuse filed for bankruptcy. Maxus brought seven counts against the various defendants. On counts one and two, Maxus sued Wells Fargo for conversion and sought recovery of the crane from Brownell. The three parties filed cross-motions for summary judgment.