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ProGrowth Bank, Inc. v. Wells Fargo Bank, N.A.

United States Court of Appeals for the Eighth Circuit
558 F.3d 809 (2009)


Facts

On September 8, 2005, Global One Financial, Inc. (Global One) (defendant) loaned Christopher Hanson and/or the Christopher Hanson Insurance Agency (Agency) $1 million pursuant to a promissory note. This promissory note was supported by a security agreement, which pledged two separate annuity contracts issued by Fidelity and Guaranty Life Insurance Company (Fidelity). The two annuity contracts were identified as L9E00015 and L9E00016. As an agent of Global One, Wells Fargo Bank, N.A. (Wells Fargo) (defendant) filed a financing statement on September 8, 2005. The financing statement described the collateral as “All of Debtor’s right, title, and interest in and to, assets and rights of Debtor . . . , and all proceeds and products in that certain Annuity Contract No. LE900015 issued by Lincoln Benefit Life in the name of Debtor.” This financing statement contained two errors: the number of the contract and the issuing party. Eight days later, Wells Fargo filed an additional filing statement that corrected the number of the annuity contract but did not correct the issuing party. On February 9, 2006, ProGrowth Bank, Inc. (ProGrowth) (plaintiff) entered into a loan agreement with Hanson. Hanson again pledged his interest in the two annuity contracts as collateral for the loan. A few days later, ProGrowth filed a financing statement that correctly identified the annuity contracts and the issuing party. ProGrowth sued, seeking a declaratory judgment that its security interest was superior to the security interest of Global One and Wells Fargo. The district judge granted summary judgment to ProGrowth, because the earlier financing statements were seriously misleading. Wells Fargo and Global One appealed.

Rule of Law

Issue

Holding and Reasoning (Bye, J.)

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