Wells Fargo Bank, N.A., Respondent,

This opinion is nonprecedential except as provided by
Minn. R. Civ. App. P. 136.01, subd. 1(c).

STATE OF MINNESOTA
IN COURT OF APPEALS
A21-1269

Wells Fargo Bank, N.A.,
Respondent,

vs.

Viroment USA, LLC, et al.,
Appellants.

Filed May 2, 2022
Affirmed
Reilly, Judge

Washington County District Court
File No. 82-CV-20-955

Jeffrey D. Smith, Nauni J. Manty, Mary Sieling, Manty & Associates, P.A., Minneapolis,
Minnesota (for respondent)

Steven V. Rose, Peter L. Crema Jr., Nathan W. Nelson, Virtus Law, PLLC, Brooklyn Park,
Minnesota (for appellants)

Considered and decided by Connolly, Presiding Judge ; Reilly, Judge; and Smith,
Tracy M., Judge.
NONPRECEDENTIAL OPINION
REILLY, Judge
Appellants challenge the district court’s grant of summary judgment to respondent
on respondent’s breach-of-contract claim and on appellants’ counterclaims. Because there
are no genuine issues of material fact precluding summary judgment in respondent’s favor,
we affirm.
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FACTS
Appellant Viroment USA, LLC is a limited liability company in the water-treatment
business. Appellant Paul Koen ig is Viroment’s CEO. In October 2016, Viroment USA,
LLC and Koenig (appellants) applied for an express, secured loan (the express loan) from
respondent Wells Fargo Bank, N.A. (the bank).1 In July 2017, appellants executed a loan
agreement in the amount of $50,000 for the express loan (the express loan
agreement). Appellants used the proceeds from the express lo an to purchase a trailer for
use in their business.
The terms of the express loan are subject to the bank’s equipment express customer
agreement (the customer agreement). Under the customer agreement, appellants granted
the bank a security interest in the equipment financed by the loan, including “each item of
Equipment, together with all accessories and components appertaining or attached thereto,
whether now owned by Borrower or hereafter acquired,” and “all . . . income, profits and
proceeds of the foregoing.” Th e customer agreement also aut horized the bank to file or
record a security interest in the trailer, items related to the trailer, and proceeds and profits
derived from the trailer. In August 2017, th e bank recorded a financing statement under
the Uniform Commercial Code (the UCC) with the Minnesota Secretary of State.
Appellants defaulted on the express loan, a nd the bank demanded payment in full.
When appellants failed to pay the outstanding loan balance, the bank filed a breach-of-
contract complaint in February 2020. Appellants filed an answer and asserted

1 Appellants also executed a line-of-credit loan and received a Visa business credit card.
These loans are not at issue on appeal.
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counterclaims for breach of contract, violations of the UCC, and promissory estoppel. The
bank moved for summary judgment on its breach-of-contract claim and on appellants’
counterclaims. The district court granted the motion, entered judgment in the bank’s favor,
and dismissed appellants’ counterclaims with prejudice. This appeal follows.
DECISION
Summary judgment is appropriate if “there is no genuine issue as to any material
fact and the movant is entitled to judgment as a matter of law.” Minn. R. Civ. P. 56.01.
“A genuine issue of material fact exists if a rational trier of fact, considering the record as
a whole, could find for the nonmoving party.” Leeco, Inc. v. Cornerstone Bank , 898
N.W.2d 653, 657 (Minn. App. 2017), rev. denied (Minn. Sept. 27, 2017). A material fact
is one that affects the outcome or result of a case. O’Malley v. Ulland Bros., 549 N.W.2d
889, 892 (Minn. 1996). We review a grant of summary judgment de novo, viewing “the
evidence in the light most favorable to the nonmoving party and resolv[ing] all doubts and
factual inferences against the moving part[y].” Maethner v. Someplace Safe, Inc ., 929
N.W.2d 868, 874 (Minn. 2019) (quotation omitted).
I. The loan documents authorized the bank to file a security interest in the trailer,
items related to the trailer, and proceeds and profits.
Appellants challenge the district court’s grant of summary judgment in the bank’s
favor on its breach-of-contract claim. “[T]he primary goal of contract interpretation is to
determine and enforce the in tent of the parties.” Motorsports Racing Plus, Inc. v. Arctic
Cat Sales, Inc., 666 N.W.2d 320, 323 (Minn. 2003). If “a contract is unambiguous, a court
gives effect to the parties’ intentions as expressed in the four corners of the instrument, and
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clear, plain, and unambiguous terms ar e conclusive of that intent.” Knudsen v. Transp.
Leasing/Contract, Inc., 672 N.W.2d 221, 223 (Minn. App. 2003), rev. denied (Minn. Feb.
25, 2004). “Generally, construction of a written contract is a question of law for the district
court and therefore summary judgment is particularly appropriate.” Id. However,
“summary judgment is not appr opriate where the terms of a c ontract are at issue and any
of its provisions are ambiguous or unclear.” Donnay v. Boulware, 144 N.W.2d 711, 716
(Minn. 1966). “Whether a contract is ambig uous is a question of law that we review de
novo.” Dykes v. Sukup Mfg. Co ., 781 N.W.2d 578, 582 (Minn. 2010). “A contract is
ambiguous if, based upon its language alone, it is reasonably susceptible of more than one
interpretation.” Denelsbeck v. We lls Fargo & Co ., 666 N.W.2d 339, 346 (Minn. 2003)
(quotation omitted).
It is uncontested that appellants defaulte d on the terms of the express loan. And
appellants concede that the bank had a right to ta ke a security interest in the trailer itself.
But appellants argue the bank was not permitted to take a security interest in the proceeds
and profits of the trailer. The district court rejected appellants’ argument and determined
that the loan documents—enco mpassing the express loan agreement and the customer
agreement—“[gave] the Bank the authority to take a security inte rest in [appellants’]
equipment, which includes the Trailer” and any accessories, proceeds, and profits. The
district court relied on the language from the customer agreement, wh ich stated that the
express loan was secured by “each item of Equipment [and] . . . all rents . . . and proceeds.”
The district court noted that “[t]his document clearly states that th e Bank has a security
interest in Equipment and proceeds.”
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We agree. Appellants executed the express loan agreement, in which they agreed
that the express loan was “s ubject to the terms of the Cu stomer Agreement and other
documents that will be provided . . . if this application is approved.” By signing the express
loan agreement, appellants al so agreed “to be bound by the terms of the Customer
Agreement or other written documentation that w ill be sent [to them].” Section 1 of the
customer agreement, addressing loan proceeds and collateral, states:
As security for Borrower’s oblig ations to Wells Fargo under
the Agreement, Borrower here by grants to Wells Fargo a
security interest (i) in each ite m of Equipment, together with
all accessories and components appertaining or attaching
thereto, whether now owned by Borrower or hereafter acquired
. . . (iv) in all rents, issues, income, profits and proceeds of the
foregoing, and (v) . . . . All of the foregoing shall collectively
be referred to hereinafter as the “Collateral.”
The plain language of the loan documents, including the express loan agreement and the
customer agreement, grant the bank a security interest in “all accessories and components”
of the trailer and “in all rents, issues, income, profits[,] and proceeds” related to these items.
Given the plain language of these documents, the district court did not err by determining
that the bank could claim a security interest in the trailer, its accessories, and its proceeds
and profits.
Appellants argue they are not bound under the customer agreement because they did
not sign the customer agreement itself, separately from the express loan agreement. Under
the composite document rule, Minnesota courts will construe several instruments as one
contract when they are made pa rt of the same transaction. See Marso v. Mankato Clinic,
Ltd., 153 N.W.2d 281, 289 (Minn. 1967) (“Where several instruments are made part of one
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transaction, they will be read together and each will be construed with reference to the
others . . . .”); see also Am. Nat’l Bank of Minn. v. Hous. & Redevelopment Auth. for
Brainerd, 773 N.W.2d 333, 337 (Minn. App. 20 09) (“A contract a nd several writings
relating to the same transaction must be c onstrued with reference to each other.”); Allete,
Inc. v. GEC Eng’g, Inc. , 726 N.W.2d 520, 523-24 (Min n. App. 2007) (adopting the
composite document rule in Minnesota and re cognizing “that courts have found that a
financing statement, in conj unction with other writings, c onstitutes a security agreement
creating a security interest in property”).
Appellants do not dispute that they execu ted the express loan agreement. The
parties incorporated the customer agreement by reference into the express loan agreement.
Upon approval of the express loan, the bank sent a check for the loan proceeds to appellants
for the purchase of the trailer. The confirmation letter accompanying the check explained
that appellants’ “endorsement of the enclosed check, will confirm that you have accepted
the above terms as well as the terms and conditions set forth in the [customer agreement].”
Koenig endorsed this check. These instruments were made as part of the same transaction.
For these reasons, the district court correc tly found there is a properly authenticated
agreement, which, in turn, gave the bank the authority to file a UCC statement to perfect
its interest in the trailer, its accessories, and its proceeds and profits.
We determine there are no genuine issues as to any material fa ct that appellants
signed the express loan agreem ent, agreed to be bound by th e customer agreement, and
endorsed the check for the loan proceeds. The plain terms of the loan documents provide
that the bank has a security in terest in the trailer, its a ccessories, and any proceeds and
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profits related to the trailer. Thus, the di strict court did not err by granting summary
judgment for the bank on its breach-of-contract claim.
II. The financing statement fell within the loan documents.
Appellants also claim there is a genuine i ssue of material fact whether the bank’s
financing statement falls within the loan documents. Appella nts claim the district court
erred in its interpretation of the loan documents. When interpreting a contract, we “look
to the language of the contract to determine the parties’ intent.” Storms, Inc. v. Mathy
Constr. Co., 883 N.W.2d 772, 776 (Minn. 2016). We construe a contract as a whole and
seek to harmonize its clauses. Chergosky v. Crosstown Bell, Inc. , 463 N.W.2d 522, 525
(Minn. 1990). Whether the secu rity agreement granted the bank a security interest in the
trailer, its accessories, and its proceeds, is a question of law, which we review de novo.
First Minn. Bank v. Overby Dev., Inc., 783 N.W.2d 405, 413 (Minn. App. 2010).
The bank filed a financing statement claiming a security interest in:
All goods, tools, machinery, furnishing, furniture and other
equipment and fixtures of Debt or described below [including
the trailer], wherever located, whether in the possession of
Debtor or any other person, and all improvements,
replacements accessions and a dditions thereto and embedded
software included therein, and all such equipment and fixtures
now or at any time hereafter in stalled on the land or in the
improvements at the real prope rty described below, and all
proceeds of any of the foregoing, whether arising from the sale,
lease, or other use or dispos ition thereof, incl uding without
limitation, all rights to payment with respect to any insurance,
including returned premiums, or any claim or cause of action
relating to any of the foregoing.
Appellants argue the bank had a right to file a UCC financing statement for the
trailer, but not for the rents or proceeds from the use of the trailer. The district court
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rejected this argument and found that “[t]he UCC Financing Statement clearly describes
the collateral as the Trailer and items related to the trailer.” The district court determined
the financing statement “[did] not exceed the scope of the loan documents as [those
documents are] specifically lim ited to the Trailer and items related to the Trailer, which
was authorized by the terms and conditions of the loan documents.”
The loan documents authorized the bank to file a financing statement. The customer
agreement expressly granted the bank a security interest in the trailer and in related items
bought with the loan proceeds. The bank did not seek an interest in anything beyond the
trailer, items related to the trailer, or re nts and profits from the trailer. Generally, “a
description of personal or real property is suffi cient, whether or not it is specific, if it
reasonably identifies what is described.” Minn. Stat. § 336.9-108(a) (2020). A description
of collateral by category reasonably identifies the collateral. Minn. Stat. § 336.9-108(b)(2).
Minnesota courts will “liberally construe de scriptions in the se curity agreement and
financing statement because their essential purpose is to provide notice, not to definitively
describe each item of collateral.” Border State Bank of Gr eenbush v. Bagley Livestock
Exch., Inc., 690 N.W.2d 326, 331 (Minn. App. 2004), rev. denied (Minn. Feb. 23, 2005).
Here, the customer agreement describes th e property as “each item of Equipment,
together with all accessories and components appertaining or attached thereto, whether
now owned by Borrower or hereafter acquired,” and “all . . . income, profits and proceeds
of the foregoing.” The customer agreement reasonably identified the collateral. The
financing statement was limited to the trailer, ite ms related to the trailer, and profits and
proceeds from the trailer, as described in the customer agreement. The financing statement
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adequately placed other creditors on notice that the bank had a security interest in the items
described. Thus, the district court did not err by determining that the bank was allowed to
file a UCC statement for the trailer, its acce ssories, and its proceeds , and did not exceed
the scope of the loan documents.2
In sum, we conclude that the loan do cuments reasonably identified the collateral
and the bank’s security interest in that collateral. The di strict court did not err by
determining that there were no genuine issues of material fact in dispute and granting the
bank’s motion for summary judgment.3
III. Appellants are not entitled to relief on their counterclaims.
Appellants asserted counterclaims for breach of contract, violations of the UCC, and
promissory estoppel. As discussed above, appellants are not entitled to relief on their
breach-of-contract counterclaim because there are no genuine issues of material fact about
the bank’s rights under the loan documents to r ecord a security interest in the trailer, its
accessories, and its profits and proceeds. Appellants are also not entitled to relief on their
claim that the bank violated the UCC. The district court correctly determined that the loan
documents authorized the bank to file and re cord the UCC statement. Lastly, appellants
may not recover on their promis sory-estoppel claim. Promissory estoppel is an equitable

2 Appellants also claim they suffered damages because they could not locate alternative or
additional sources of financ ing because of the financin g statement. Based on our
determination that the bank’s financing statement was not faulty, we do not reach the issue
of damages.
3 Appellants also argue the bank did not have an authenticated record to authorize the filing
because they did not sign the customer agreem ent. As discussed above, Minnesota law
recognizes that several instruments made as part of a single transaction will be taken and
construed together. Allete, Inc., 726 N.W.2d at 523-24. We therefore reject this argument.
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doctrine and “an express cont ract covering the same subj ect matter will preclude the
application of promissory estoppel.” Greuling v. Wells Fargo Home Mortg., Inc ., 690
N.W.2d 757, 761 (Minn. App. 2005). Because a written contract governs the terms of the
loan between the parties, appellants are not entitled to relief under promissory estoppel.
For these reasons, the district court did not err by dismissing appellants’ counterclaims.
Affirmed.