Wells Fargo Equipment Finance, Inc. v. Titan Leasing, Inc.

Federal 7th Circuit Court
Civil Court
Contracts
Citation
Case Number: 
No. 13-2291
Decision Date: 
September 30, 2014
Federal District: 
N.D. Ill., E. Div.
Holding: 
Reversed and remanded
Dist. Ct. erred in granting defendants’ motion for summary judgment in action by plaintiff, alleging that defendants breached warranty contained in security agreement used to secure loan from plaintiff, where collateral for said loan was defendants’ rights to payments contained in lease of locomotive to third-party. Record showed that locomotive was damaged in transit to third-party and was in repair shop at deadline for delivery of locomotive to third-party as set forth in security agreement, and third-party rejected said locomotive when it was eventually delivered to third-party due to its damaged condition. While Dist. Ct. found that under terms of lease and UCC defendants satisfied one warranty where third-party had “accepted” locomotive at time of its shipment, Ct. of Appeals found that plaintiff was entitled to recover loan proceeds from defendants because defendants had breached another warranty due to their failure to establish that third-party had acknowledged receipt of locomotive as required in terms of security agreement.