FCA US LLC v. Santander Bank, N.A., 1:19-cv-01516

Background

New City Historic Auto Row entered a Floorplan Financing and Security Agreement with Santander (initial floorplan limit $3,750,000); Santander took a blanket security interest in substantially all New City assets and filed a UCC-1 financing statement.
Santander advanced funds to buy FCA vehicles; New City exceeded the floorplan limit (allegedly in part because FCA shipped unwanted vehicles) and failed to repay after Santander’s 60-day demand, constituting an Event of Default under the agreement.
FCA interpleaded approximately $440,000 in factory credits and incentive payments that New City claimed; Santander moved for summary judgment seeking those funds as collateral.
New City asserted defenses/claims that Santander breached fiduciary duties and tortiously interfered with New City’s business; those theories were first raised in opposition to summary judgment.
Related litigation: Santander obtained a default judgment in a separate replevin action against New City for over $5 million after New City failed to retain counsel; New City previously filed for Chapter 11 and repeatedly represented it had no contingent claims, leading to judicial estoppel issues.

Issues

Issue	Plaintiff's Argument (Santander)	Defendant's Argument (New City)	Held
1) Right to disputed funds / priority	Santander’s first-filed UCC-1 perfected a blanket security interest in New City’s assets (including factory credits); New City defaulted so Santander is entitled to the funds.	New City disputes amounts were properly due (claims FCA shipped unrequested vehicles) and contends Santander’s conduct undermines its entitlement.	Court granted summary judgment to Santander: New City admitted facts establishing default and Santander’s first-priority lien covers the funds.
2) Availability of fiduciary- duty and tortious-interference claims as defenses	Those theories are affirmative claims/crossclaims, not proper defenses to defeat Santander’s lien and were not previously asserted.	New City argues those theories defeat Santander’s right to the funds.	Court held New City waived these claims by not pleading them earlier; they are not cognizable defenses at summary judgment here.
3) Judicial estoppel based on bankruptcy disclosures	New City represented in bankruptcy that it had no contingent claims; judicial estoppel bars asserting those claims now.	New City seeks to assert claims it previously disclaimed in bankruptcy.	Court applied judicial estoppel: New City’s later positions are inconsistent and would unfairly benefit New City; claims are barred.
4) Preclusive effect of replevin default judgment	Santander: the replevin default judgment and New City’s prior active litigation estops New City from relitigating liability.	New City: default judgments ordinarily lack collateral estoppel effect.	Court concluded collateral estoppel applies here because New City actively litigated then defaulted after court warning; liability is precluded.

Key Cases Cited

Celotex Corp. v. Catrett, 477 U.S. 317 (summary judgment burden-shifting principle)
Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (reasonable jury standard for summary judgment)
New Hampshire v. Maine, 532 U.S. 742 (factors guiding judicial estoppel)
Cannon-Stokes v. Potter, 453 F.3d 446 (debtor who conceals assets in bankruptcy cannot later realize them)
In re Docteroff, 133 F.3d 210 (default may be given preclusive effect when party obstructs adjudication)
In re Catt, 368 F.3d 789 (default judgments generally do not have collateral estoppel effect)