Fjellin v. Penning
41 F. Supp. 3d 775
D. Neb.2014Background
- This is a diversity action by trustees of the Leonard Van Lew Living Trust seeking recovery for wrongful termination of the Trust’s financing statement and misappropriation of sale proceeds.
- Kaplan and his firm McGill Gotsdiner Workman & Lepp moved to dismiss under Rule 12(b)(6).
- Plaintiffs allege the Trust had a perfected security interest in Four M Corporation collateral, perfected by a financing statement.
- Kaplan prepared notes, security agreements, and financing statements and interacted with Leonard Van Liew but did not represent the Trust.
- Four M’s sale of Dairy Queen stores included the Trust’s collateral; trustees did not provide prior written consent as required by the security agreements.
- Kaplan filed an amendment terminating the financing statement a few days after the sale, allegedly without trustees’ knowledge.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether § 9-625 applies to claims against non-secured parties | 9-625 remedies may extend to any aggrieved person | § 9-625 applies to secured parties; not third parties | § 9-625 does not provide a remedy against Kaplan/Law Firm; dismissed |
| Whether plaintiffs can proceed on a negligence claim | Kaplan breached a duty to ensure full payment before termination | No causation or damages linking termination to losses | Negligence claim dismissed for lack of causation/damages |
| Whether plaintiffs should be allowed leave to amend | Amendment could add related claims based on keeping sale proceeds | Amendment should be denied if futile | Leave to amend granted to pursue related claims; must follow NECivR 15.1 |
Key Cases Cited
- Iowa State Bank v. Trail, 449 N.W.2d 520 (Neb. 1989) (financing statements provide notice; do not affect security interest validity)
- Genoa Nat’l Bank v. Sorensen, 304 N.W.2d 659 (Neb. 1981) (financing statements give notice to world; priority concerns)
- Allstate Financial Corp. v. U.S., 109 F.3d 1331 (8th Cir. 1997) (illustrates Article 9 notice and remedies framework)
- Schaaf v. Residential Funding Corp., 517 F.3d 544 (8th Cir. 2008) (requires pleading causation and damages in negligence claims)
- Dura Pharmaceuticals, Inc. v. Broudo, 544 U.S. 336 (S. Ct. 2005) (adequate pleaded facts required to show causation)