Empire Life Insurance Company of America v. Valdak Corporation

GOLDBERG, Circuit Judge:

In this diversity case involving the precipitous diminution in value of stock pledged by defendant as collateral for a loan, plaintiff, suing for a deficiency judgment after a foreclosure sale, advocated one theory of the Uniform Commercial Code; defendant advanced a different reading of the U.C.C., and the trial court applied yet a third application of the Code. Finding the Code to be inapplicable to the transaction at issue, and finding defendant’s counterclaim for fraudulent depletion of the collateral wrongfully dismissed, we reverse and remand the case for a new…