In Re Duckworth

776 F.3d 453 (7th Cir. 2014)

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Nature of the Case

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Facts

Duckworth borrowed $1,100,000 from P. The transaction was executed through a promissory note that was dated and signed on December 15 and an Agricultural Security Agreement dated two days earlier, December 13, 2008. The security agreement said that Duckworth granted P a security interest in crops and farm equipment. The promissory note referred to the security agreement. The security agreement identified the debt to be secured. The security agreement said that it secured a note 'in the principal amount of $_______ dated December 13, 2008.' there was no promissory note dated December 13. Both the December 15 promissory note and the security agreement were prepared by the P's loan officer. In 2010, Duckworth filed under Chapter 7. D was appointed trustee. P filed two complaints in bankruptcy court to initiate adversary proceedings. On cross-motions for summary judgment, the bankruptcy court held that the mistaken date in the security interest did not defeat P's security interest and that the security agreement of December 13, 2008, secured the note of December 15, 2008. P got the decision for proceeds from the sale of Duckworth's crops and another for proceeds from the sale of some of his farm equipment. D appealed both bankruptcy court orders to the district court, where the appeals were assigned to different judges. Both district judges affirmed, and D appealed again.