## Facts

- In October 2000, Kobelco America, Inc. sold two cranes to Syracuse Equipment Leasing Co., Inc. (Syracuse).
- Syracuse borrowed from Wells Fargo Equipment Finance, Inc. and granted Wells Fargo a security interest in one crane, serial no. GD0201061 (“crane 61”).
- On November 22, 2000, Wells Fargo filed a UCC financing statement to perfect its interest, but listed the serial number as “GD020161,” a one-digit mistake.
- Despite the serial-number error, Wells Fargo’s financing statement described crane 61 as new and identified the crane by make, year, model, and included a detailed list of attachments.
- In 2001, asserting Syracuse was not making timely payments, Kobelco entered into a transaction with Maxus Leasing Group, Inc. Maxus paid Kobelco in connection with the same two cranes and then entered into a lease arrangement with Syracuse.
- The parties disputed the nature of the Kobelco–Maxus transaction: Maxus characterized it as a purchase of the cranes for lease to Syracuse, while Kobelco treated it as a refinancing tied to Syracuse’s existing obligations.
- On May 29, 2001, Maxus filed its own financing statement covering both cranes and used the correct serial numbers.
- By early 2002, Syracuse had defaulted on its obligations to both Wells Fargo and Maxus.
- Wells Fargo repossessed crane 61 and sold it to Brownell Steel, Inc. in March 2002.
- Syracuse filed for bankruptcy in April 2002.
- Maxus sued multiple defendants on seven counts. As relevant here, Maxus asserted conversion against Wells Fargo (Count One) and sought recovery of the crane from Brownell (Count Two). The parties filed cross-motions for summary judgment.

## Issues

1. Whether Maxus had standing to pursue claims relating to crane 61 and crane 63, including whether Maxus could proceed based on a reassignment of a security interest.
2. Whether Wells Fargo’s financing statement, containing a one-digit serial-number error, sufficiently described the collateral to perfect Wells Fargo’s security interest under U.C.C. Article 9.
3. If Wells Fargo’s security interest was perfected, whether Wells Fargo’s earlier filing had priority over Maxus’s later filing with correct serial numbers.
4. Whether Wells Fargo’s repossession and sale of crane 61, and Brownell’s possession of it, supported Maxus’s conversion and recovery-of-chattel claims.
5. Whether Maxus’s tort theories against Kobelco were barred as duplicative of contract-based claims, and whether factual disputes prevented summary judgment on breach of warranty and unjust enrichment claims tied to the 2001 Kobelco–Maxus transaction.

## Decision

- The court held Maxus had standing to pursue claims connected to crane 61 based on a reassignment of a security interest.
- The court held Maxus lacked standing regarding crane 63 because it did not show a legally sufficient injury tied to that crane.
- The court granted summary judgment to Wells Fargo and Brownell on Maxus’s conversion claim (Count One) and its claim seeking recovery of crane 61 from Brownell (Count Two).
- The court concluded Wells Fargo’s financing statement was effective to perfect its security interest despite the one-digit serial-number error, given the financing statement’s detailed identifying information.
- Applying Article 9 priority rules, the court determined Wells Fargo’s earlier filing had priority over Maxus’s later filing, defeating Maxus’s possessory tort claims as to crane 61.
- As to Kobelco, the court dismissed Maxus’s tort-based claims that duplicated its contract/warranty theory arising from the same alleged wrong.
- The court denied summary judgment on Maxus’s breach of warranty and unjust enrichment claims against Kobelco because factual disputes remained about what the parties agreed to and what Maxus was told regarding prior ownership and interests.

## Legal Principles

- A plaintiff must show standing for each claim and each item of property at issue, including a concrete legally recognized injury; an assignment or reassignment of rights can supply standing as to the assigned interest.
- Under U.C.C. Article 9, a financing statement is a notice filing; collateral is sufficiently described if the description reasonably identifies what is covered.
- Minor errors in a financing statement do not defeat perfection unless the error is seriously misleading in light of the notice function of the filing system.
- Competing perfected security interests are generally ranked by the first-to-file-or-perfect rule, even if a later filer includes more precise identifying details.
- Conversion and recovery-of-chattel claims generally require a superior right to possession; a secured party acting under a prior perfected security interest after default is not liable in conversion for repossession and disposition authorized by Article 9.
- Under New York law, tort claims based on the same facts and seeking the same damages as a contract or warranty claim may be dismissed as duplicative, while contract-based claims may proceed where the parties’ agreement and related facts remain disputed.

## Conclusion

The court’s summary-judgment rulings turned on standing, Article 9 notice filing, and priority: it found Maxus could proceed as to crane 61 but not crane 63, held Wells Fargo’s earlier UCC filing remained effective despite a one-digit serial-number error, and ruled Wells Fargo’s priority barred Maxus’s conversion and recovery claims against Wells Fargo and Brownell; at the same time, the court trimmed duplicative tort claims against Kobelco but left warranty and unjust enrichment claims for further proceedings because the parties disputed the nature and terms of the 2001 transaction.


Maxus Leasing Group, Inc. v. Kobelco America, Inc., 2007 U.S. Dist. LEXIS 13312, 63 U.C.C. Rep. Serv. 2d 140 (2007)