1. Explain the mistakes Wells Fargo made in its financing statements.

2. What does the court explain is the standard for determining whether a financing statement is sufficient for perfection?

3. What would happen if the court found that Wells Fargo’s financing statements did not have sufficient and accurate descriptions?

On September 8, 2005, Wells Fargo (Defendants) and the Christopher Hanson Insurance Agency entered into a promissory note and a security agreement for one million dollars. As security for the loan, Hanson assigned his interests in two separate annuity contracts, both issued by Fidelity & Guaranty Life Insurance Company (“Fidelity & Guaranty”). The two annuity contracts were valued at one million dollars, and they were identified as “L9E00015” and “L9E00016,” respectively.

That same day, Wells Fargo filed a financing statement with the Secretary of State of Missouri. The financing statement identified the “Debtor” as “Christopher J. Hanson,” and it describes the collateral as follows: All of Debtor’s right, title, and interest in and to, assets and rights of Debtor, wherever located and whether now owned or hereafter acquired or arising and all proceeds and products in that certain Annuity Contract No.: LE900015 issued by Lincoln Benefit Life in the name of Debtor.…

The financing statement identified the contract number as “LE900015” instead of “L9E00015,” and it identified the issuer as “Lincoln Benefit Life” instead of Fidelity & Guaranty. On September 16, 2005, Wells Fargo filed an additional financing statement that correctly identified the contract number but once again mistakenly referred to the issuer of this contract as “Lincoln Benefit Life” instead of Fidelity & Guaranty.

On February 9, 2006, Hanson obtained a loan from ProGrowth Bank, Inc. As security for the loan, Hanson assigned his interests in the Fidelity & Guaranty annuity contracts to ProGrowth. On February 14, 2006, ProGrowth filed two financing statements with the Secretary of State of Missouri that identified Hanson and the Agency as the debtor and accurately described the collateral as: “Fidelity and Guaranty Life Insurance Annuity Contracts Number L9E00015 and Number L9E00016[.]”

ProGrowth filed suit seeking a declaration that Wells Fargo and Global One were not perfected secured creditors and that it had priority to the annuity funds. The district court granted summary judgment in favor of ProGrowth Bank, Inc. Wells Fargo appealed.

JUDICIAL OPINION

BYE, Circuit Judge … [W]e view the validity of the financing statement in terms of whether “it provides notice that a person may have a security interest in the collateral claimed.” The UCC allows for imperfect financing statements, and it recognizes that sometimes “[f]urther inquiry from the parties concerned will be necessary to disclose the complete state of affairs.” Therefore, errors or omissions in the description of collateral do not render financing statements ineffective unless they are seriously misleading, which “is designed to discourage the fanatical and impossibly refined reading of statutory requirements in which courts have occasionally indulged themselves.” ProGrowth argues the Defendants’ financing statements are seriously misleading because they identify the annuity contracts as issued by Lincoln Benefit Life instead of Fidelity & Guaranty, and because contract no. L9E00015 is identified as no. LE900015. Were this the only language contained in the Defendants’ financing statements, we may be inclined to agree. These provisions of the financing statements, however, cannot be read in isolation.