# United States Court of Appeals **For the Eighth Circuit**

___________________________
No. 11-3611

___________________________ BancorpSouth Bank, a Mississippi Banking Corporation

lllllllllllllllllllll Plaintiff - Appellee

v.
Hazelwood Logistics Center, LLC, formerly known as Hazelwood Commerce Center LLC; Hazelwood Commerce Redevelopment Corporation; Paul J. McKee Jr., Individually; Paul J. McKee Jr., in his capacity as Trustee of the Paul J. McKee Jr. Revocable Trust

lllllllllllllllllllll Defendants - Appellants

___________________________
No. 11-3741

___________________________ Murphy Property Tax

lllllllllllllllllllllIntervenor - AppellantBancorpSouth Bank, a Mississippi Banking Corporation

lllllllllllllllllllll Plaintiff - Appellee

v.
Hazelwood Logistics Center, LLC, formerly known as Hazelwood Commerce Center LLC; Hazelwood Commerce Redevelopment Corporation; Paul J. McKee, Jr., Individually; Paul J. McKee, Jr., in his capacity as Trustee of the Paul J. McKee Jr. Revocable Trust

lllllllllllllllllllll Defendant s

____________ Appeal from United States District Court for the Eastern District of Missouri - St. Louis

____________ Submitted: September 19, 2012 Filed: February 14, 2013

____________ Before RILEY, Chief Judge, SMITH and COLLOTON, Circuit Judges.

____________ RILEY, Chief Judge

BancorpSouth Bank (bank), successor by merger to The Signature Bank, sued Hazelwood Logistics Center, LLC and Hazelwood Commerce Redevelopment

-2-Corporation (collectively, HLC), and Paul J. McKee, Jr., both individually and in his capacity as Trustee of the Paul J. Mc Kee, Jr. Revocable Trust, (McKee and, collectively with HLC, Hazelwood), allegi ng breach of contract against HLC, breach of guaranty against McKee, and asserting a security interest in some of HLC’s property. Hazelwood raised lack of subj ect matter jurisdiction, improper venue and choice of forum, a nd a state law contract defense. Murphy Property Tax (MPT) intervened, claiming priority over real prope rty tax refunds owed to HLC and attached by the bank. The district court 1 found jurisdiction and venuewere proper and granted summary judgment to the bank on the breach of contract, breach of guaranty, and priority issues. Hazelwood and MPT appeal.

I. BACKGROUND A. Factual Background 1. Financing HLC was formed to implem ent a commercial real estate development project, known as the Hazelwood Logistics Center, inthe City of Hazelwood, Missouri. To finance the development, HLC and the bank entered into a Land Acquisition Loan Agreement (acquisition agreement) on Oc tober 7, 2005, and a Development Loan Agreement (development agreement) on A ugust 11, 2006 (collectively, as amended loan agreements). All Hazelwood parties are Missouri citizens, and the bank is a Mississippi citizen.

Under the loan agreements, the bank ag reed to loan HLC up to the maximum principal amount of $36,242,700. The loan was evidenced by a promissory note in the principal amount of $35,197,500, as ame nded. HLC granted the bank a security interest in its assets relating to the property, including “all general intangibles” and

1 The Honorable Henry E. Autrey, United St ates District Judge for the Eastern District of Missouri.
-3-“all Tax . . . Deposits.” McKee guara nteed HLC’s obligations under the loan agreements (guaranty).

On August 11, 2006, the bank entered into a participation agreement with four other banks, whereby the bank sold the participating banks undivided interests in the loan. At the time this lawsuit was filed, the four participati ng banks were Heartland Bank, Centrue Bank, Excel Ba nk, and Sun Security Bank (p articipating banks). The participating banks collectively held appr oximately 69% of the loan, and the bank retained the balance. At least three of the participating ba nks were citizens of Missouri.

Under the participation agreement, th e bank retained primary authority to administer the loan, subject to a few minorexceptions. The bank “h[e]ld in its name (as payee, endorsee or assignee), and ha[d] title to and retain[ed] possession or control of, the Loan Documents and all other s ecurity documents, papers and other items provided for or required under the Loan Do cuments.” The agreement provided that, in dealing with Hazelwood and with third parties, the bank was “considered to be the sole owner and holder of the Loan,” and th e bank, after reasonable efforts to collect, “without the consent of the [participating banks], [could] proceed to foreclose upon the collateral securing the Loan by appropriate proceedings.” The bank could not decrease the interest rate unde r the loan, increase the amount of the loan, or extend the maturity of the loan, without the participating banks’ prior written consent.

2. Development Part of the Hazelwood property (property or Hazelwood property) was a former landfill site and required environmental remediation before it could be put to commercial use. Hazelwood hired contract ors to prepare and implement a remedial action plan to address the property’s envi ronmental issues. Hazelwood and the bank contend the contractors negligently caused methane gas to spread “across portions of

-4-the [p]roperty previously uncontaminated by methane.” Hazelwood’s expert witness reported:

In its present condition the . . . property cannot be developed for commercial use. The presence of landfill gas, specifically methane, in the subsurface soil at the property is impairing development at the property. Extensive additional inves tigation is needed before developing remedial alternatives for addressi ng methane concerns at the site.
On October 30, 2009, the loan mature d, and Hazelwood failed to pay the amount owed.

3. Tax Refunds MPT is a commercial property tax consu lting firm. On July 1, 2009, HLC and MPT entered into an agreement for MPT to review HLC’s prope rty tax liability “for the 2007/2008 and 2009/2010 assessment years. ” HLC agreed to pay MPT a contingency “fee of thirty five percent ( 35%) of the tax savings for each of the 2007 thru 2009 assessment years.” MPT contends the bank was aware of HLC’s contract with MPT and “underst[ood] that MPT’s fee was to be paid out of any tax refunds procured.” MPT successfully obtained tax refunds for HLC in the amount of $465,379, plus interest.

B. Procedural History On April 7, 2010, the bank sued the various Hazelwood parties for respective breaches of contract, breaches of the guaranty, and related claims, invoking the district court’s diversity jurisdiction. See 28 U.S.C. § 1332(a)(1). Hazelwood moved to dismiss the action based on the loan ag reements’ and guaranty’s choice of venue provisions and Hazelwood’s claim the district court lacked subject matter jurisdiction. The district court denied these motions.

-5-The bank moved for a prejudgment writ of attachment on HLC’s expected real property tax refunds. The district court granted the motion on August 6, 2010. The Missouri State Tax Commission disbursed tax refunds of $466,128.37 to the bank pursuant to the writ of attach ment. MPT moved to intervene, asserting an interest in the tax refunds. The district court granted MPT’s motion to intervene.

The bank moved for summary judgment against Hazelwood and MPT, and MPT moved for summary judgment against th e bank. Hazelwood resisted the bank’s motion for summary judgment, arguing th e various loan contracts were not enforceable under the doctrine of commercial frustration. The district court denied MPT’s motion for summary judgment, and granted the bank’s motions for summary judgment against Hazelwood and MPT.

The district court’s order granting summary judgment on the bank’s claims against Hazelwood did not enter a damages amount. The bank moved pursuant to Federal Rule of Civil Procedure 59(e) fo r an amended judgment entering an amount of damages. The bank filed the motion on November 28, 2011, five days after the district court’s entry of judgment and th ree days after Hazelwood filed its notice of appeal to this court. Hazelwood opposed the bank’s motion to amend, arguing (1) the motion was procedurally improper under Federal Rule of Civil Procedure 60(a), and (2) the bank’s motion for summary judgmen t was not supported by sufficient evidence and suffered from a procedural defect. Th e district court granted the bank’s motion.

Hazelwood and MPT appeal. Having jurisdiction under 28 U.S.C. § 1291, we affirm.

-6-II. DISCUSSION A. Standard of Review and Choice of Law “We review de novo a district court’s gr ant of summary judgment, viewing all facts and making all reasonable inferences in the light most favorable to the nonmoving party.” Cent. Platte Natura l Res. Dist. v. U.S. Dep’t of Agric. , 643 F.3d 1142, 1146 (8th Cir. 2011). We affirm summary j udgment if “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a); see also Cent. Platte Natural Res. Dist. , 643 F.3d at 1146.

In this diversity case, we apply the s ubstantive law that w ould be applied by a Missouri state court. See Schwan’s Sales Enters. v. SIG Pack, Inc. , 476 F.3d 594, 595-96 (8th Cir. 2007). The loan agreements and guaranty provide Missouri law governs the interpretation and application of the contracts. Under Missouri law, “[a] valid choice of law provision in a contract binds the parties,” State ex rel. McKeage v. Cordonnier , 357 S.W.3d 597, 600 (Mo. 2012) (en banc), and the parties here—including MPT, whose contract with HLC was made and performed in Missouri—do not contend any law other than Missouri law applies. The loan agreements each additionally provide the “Loan Agreement and other Loan Documents shall not be construed agains t [the bank] merely because of the involvement of [the bank] in the prepara tion of such documents and agreements.”

B. Subject Matter Jurisdiction We first address whether the district court had subject matter jurisdiction over this case. See , e.g. , Associated Ins. Mgmt. Corp . v. Ark. Gen. Agency, Inc. , 149 F.3d 794, 796 (8th Cir. 1998). “‘[D]iversity of citizenship is determined by reference to the parties named in the proceeding before the district court, as well as any indispensable parties who must be joined pursuant to Rule 19’” of the Federal Rules of Civil Procedure. Northport Health Servs. of Ark., LLC v. Rutherford , 605 F.3d 483, 486 (8th Cir. 2010) (quoting Doct or’s Assocs., Inc., v. Disatajo , 66 F.3d 438, 445 (2d Cir. 1995); see also Little v. Giles , 118 U.S. 596, 603 (1886) (explaining “where

-7-the interest of the [named] party is real, th e fact that others are interested who are not necessary parties, and are not made partie s, will not affect” diversity jurisdiction) (quoted in Lincoln Prop. Co. v. Roche , 546 U.S. 81, 93 (2005)). Hazelwood asserts a lack of complete diversity of citizensh ip because both Hazelwood and (at least some of) the participating banks are Missouri c itizens. The participating banks were not named parties in the action below, a nd Hazelwood has not demonstrated the participating banks were nece ssary parties to the suit under Rule 19. We therefore reject Hazelwood’s argument. 2

Hazelwood invokes Iowa Public Servi ce Co. v. Medicine Bow Coal Co. , 556 F.2d 400 (8th Cir. 1977). In Iowa Public Service , individual utility companies sued individual coal companies in state court. See id. at 401-02. Some plaintiffs were diverse from the defendant coal compan ies, but the others were not. See id. at 402. The coal companies sought to remove th e case to federal court, arguing the nondiverse plaintiffs were not real parties to the controversy and had been fraudulently joined to defeat federal jurisdiction. See id. We disagreed, holding the dismissed non-diverse plaintiffs were real parties in interest and remova l from state court was not proper. See id. at 406. Contrary to Hazelwood’ s arguments, Iowa Public Service does not demonstrate the participating ba nks—who were not made parties in the action below—are necessary parties to the suit merely because they hold an interest in the loan.

2 Hazelwood asserts the district court impr operly relied on Fed. R. Civ. P. 17 to determine the Bank was a real party in inte rest capable of bringing suit in its own capacity, arguing “[t]he Fede ral Rules of Civil Procedure have no bearing on the requirements of federal diversity jurisd iction.” Associated Ins. Mgmt. Corp. , 149 F.3d at 796-97. For reasons later discusse d, Hazelwood has not established the participating banks were nece ssary parties for diversity purposes, irrespective of Rule 17.
-8-Hazelwood argues the bank and the participating banks function as an unincorporated business organization, and as such the citizenship of each member of the organization is relevant for diversity purposes. See Underwriters at Lloyd’s, London v. Osting-Schwinn , 613 F.3d 1079, 1086, 1088 (11th Cir. 2010) (holding a British insurance syndicate is an unincorpor ated business organization and therefore has the citizenship of each of its members). Underwriters also is distinguishable. In Underwriters , the syndicate itself was the party bri nging suit. In the instant case, the bank sued in its individual capacity and, at most, on behalf of the participating banks in a representative capacity. That the participating banks are alleged to be in a business relationship with the bank similar to an insurance syndicate is not dispositive.

We believe a better analogy is Navarro Savings Association v. Lee , 446 U.S. 458 (1980). In Navarro , the Supreme Court recognized a trustee may sue on behalf of a business trust, and only the trustee’s c itizenship is relevant for diversity purposes. See id. at 462 (citing Chappedelaine v. Dechenaux , 8 U.S. (4 Cranch) 306, 308 (1808)). Navarro recognized “a trustee is a real party to the controversy for purposes of diversity jurisdiction when he possesses certain customary powers to hold, manage, and dispose of assets for the benefit of others.” Id. at 464. “That the trust may depart from conventional forms in other respects has no bearing upon this determination.” Id. at 465.

In this case, the bank “ha[ s] legal title; . . . manage[s] the assets; [and] . . . control[s] the litigation.” Id. The participating banks ar e “‘not necessary parties and their citizenship [is] immaterial.’” Id. at 464 (quoting Bullard v. Cisco , 290 U.S. 179, 190 (1933)); see also Dexia Crédit Local v. Rogan , 629 F.3d 617, 619-20 (7th Cir. 2010) (deciding a participation agreemen t between a diverse plaintiff and a nondiverse non-party did not divest the court of subject matter jurisdiction where the named corporate plaintiff was a real party in interest); Oscar Gruss & Son, Inc. v. Hollander , 337 F.3d 186, 193-95 (2d Cir. 2003) (d etermining a business entity was a real party in interest for diversity purpos es where the entity held an 11.53% interest

-9-in the subject of the lawsuit, had a genui ne financial stake in the outcome of the lawsuit, and also held an e xpress power to act on behalf of other interested persons). The district court properly exercised jurisdiction under 28 U.S.C. § 1332(a)(1). 3

C. Venue Hazelwood also maintains the action infederal court violated the loan agreements’ and the guaranty’s choice of venue provisions. We disagree.

The loan agreements provide:

Any legal action or proceeding with respect to this Loan Agreement or any of the other Loan Documents may be brought in the Courts of the County of St. Louis, State of Miss ouri, and . . . [HLC] and [the bank] consent[], for itself and in respect of its property, to the jurisdiction of those Courts.

. . . Nothing in this [s]ection . . . shall . . . limit the right of [the bank] to bring any action or proceeding against [HLC] or its property in the Courts of any other jurisdiction.
(Emphasis added). The guaranty also contained a choice of venue provision. This provision stated, “at [the bank’s] sole a nd absolute election, all legal and other proceedings of any kind arising out of or re lated to this Guaranty shall be litigated in courts having sites in the County of St. Louis, Missouri.”

Under Missouri law, a forum selection cl ause is enforceable so long as “the clause [was] obtained through freely ne gotiated agreements absent fraud and

3 In comparing the participation agreem ent to a business trust for purposes of jurisdiction, we in no way imply the ag reement created a fiduciary relationship between the bank and the participants, or that other state law trust doctrines might apply. See First Citizens Fed. Sav. & Loan Ass’n v. Worthen Bank & Trust Co. , 919 F.2d 510, 513 (9th Cir. 1990) (explaining th e existence of a fiduciary relationship between participants in a participati on agreement depends on the terms of the agreement and intent of the parties).
-10-overreaching and its enforcement must not be unreasonable and unjust.” Chase Third Century Leasing Co. v. Williams , 782 S.W.2d 408, 411 (Mo. Ct. App. 1989). The dispute in this case involves the proper in terpretation of the clauses, not whether enforcement of the clauses would be unreasonable. “An unambiguous contract must be enforced according to its terms.” Turner v. Sch. Dist. of Clayton , 318 S.W.3d 660, 670 (Mo. 2010) (en banc) (per curiam). “‘ A contract is only ambiguous, and in need of a court’s interpretation, if its terms are susceptible to honest and fair differences.’” Ethridge v. TierOne Bank , 226 S.W.3d 127, 131 (Mo. 2007) (en banc) (quoting State ex rel. Vincent v. Schneider , 194 S.W.3d 853, 860 (Mo. 2006) (en banc)).

In this case, the forum selection clau ses are unambiguous and will be enforced as written. The loan agreemen ts simply provide an action may be brought in the courts of St. Louis County, but do not indicate such actions must be brought there. This clause is permissive, not mandatory. Cf. Dunne v. Libbra , 330 F.3d 1062, 1063 (8th Cir. 2003) (noting the distinction between permissive and mandatory forum selection clauses).

Hazelwood contends the forum sel ection provision in the guaranty is mandatory, because it provides “all legal . . . proceedings . . . shall be litigated in courts having sites in the C ounty of St. Louis, Missouri.” This provision is applicable “at [the bank’s] sole and absolute elec tion,” and does not limit the bank’s ability to select an alternative forum. Hazelwood a sserts the provision is ambiguous, suggesting the clause “grants [the bank] di scretion to choose among the courts sited in St. Louis County, Missouri.” (Underlining in original). We reject this interpretation. Hazelwood has not identified any federal courts situated in St. Louis County, Missouri, nor shown there are multiple courts in St. Louis County with jurisdiction over this action in which the bank c ould have exercised its discretion.

Hazelwood further argues, if the clause were construed as permissive, “there was no need for the clause . . . because th e Loan was made in St. Louis County and

-11-the Property is located in St. Louis County.” Hazelwood’s argument fails because the clause is permissive with respect to the bank only. The bank could enforce the choice of venue provision against Hazelwood were Hazelwood to bring suit elsewhere.

We hold the forum selection clauses ar e permissive and did not prohibit the bank from bringing suit in the United States Di strict Court for the Eastern District of Missouri.

D. Commercial Frustration Hazelwood claims the doctrine of co mmercial frustration relieves Hazelwood of its obligations under the loan agreements and guaranty. We disagree.

The Supreme Court of Missouri has notexpressly adopted the doctrine of commercial frustration, see Ellis Gray Mill. Co. v. Sheppard , 222 S.W.2d 742, 748 (Mo. 1949) (recognizing the doctrine had not been adopted in Missouri as of 1949), although the doctrine has been applied by one of Missouri’s intermediate appellate courts, see Howard v. Nicholson , 556 S.W.2d 477, 481-82 (Mo. Ct. App. 1977). The Howardcourt explained, “if the happening of an event not foreseen by the parties and not caused by or under the control of eitherparty has destroyed or nearly destroyed either the value of the perfo rmance or the object or purpose of the contract, then the parties are excused from further performance.” Id.

We assume for the sake of discussion the Supreme Court of Missouri would recognize the commercial frustration doctrine as expounded by Howard . Cf. Friedberg v. Chubb & Son, Inc. , 691 F.3d 948, 951 (8th Cir. 2012) (“We must predict how the Supreme Court of [Missouri] would rule, and we follow decisions of the intermediate state court when they are the best evidence of [Missouri] law.”). Applying the Howardstandard, Hazelwood is not entitled to relief. We suspect methane gas contamination during environmental remediation of a landfill is a foreseeable risk. See Conlon Grp., Inc. v. City of St. Louis , 980 S.W.2d 37, 40-41

-12-(Mo. Ct. App. 1998) (concluding the lo ss was foreseeable and the commercial frustration doctrine did not apply when a real estate devel oper discovered severe structural defects in a 100-year-old buildi ng the developer had pl anned to refurbish). We need not address this contingency directly. Even if the methane gas contamination were an unforeseeable occurre nce, the contamination did not result in “a total or practically total destruction of the purpose or object of the transaction.” Howard , 556 S.W.2d at 483. In its statement of facts, Hazelwood declares “[t]he Loan was made for the stated purpose of the envi ronmental remediation by third-parties and the commercial real estate development of the Property by” HLC. HLC already has acquired the property and can still pursue “e nvironmental remediation” and ultimately “commercial real estate de velopment of the Property.” Hazelwood’s plan may have “become less profitable,” or Hazelwood may even “sustain a loss,” Restatement (Second) of Contracts (Restatement ) § 265 cmt. a (1981), but loss of profit is not a sufficient ground to cancel a contract under the commercial frustration doctrine, which requires the “total or practically total destruction of the purpose or object of the transaction,” Howard , 556 S.W.2d at 483. See also Restatement § 265 cmt. a.

The district court did not err in granting summary judgment to the bank on its breach of contract claim agai nst HLC, or the breach of guaranty claim against McKee.

E. Damages Hazelwood insists the district court e rred in amending its judgment to include a specific damage award. We disagree.

First, Hazelwood asserts the district c ourt lacked jurisdiction to amend the judgment because the bank’s motion should have been made unde r Federal Rule of Civil Procedure 60(a). Under Rule 60(a), the district court generally must seek leave of this court to correct an error in the judgment once an appeal of the judgment has been docketed, and no such leave was sought in this case. Federal Rule of Appellate Procedure 4(a)(4) clarifies that no leave is n ecessary if the Rule 60(a) motion is filed

-13-within twenty-eight days of entry of judgment. See Fed. R. App. P. 4(a)(4)(A)(vi), (B)(i) (providing a notice of appeal does not take effect until the district court disposesof any Rule 59 or Rule 60 motions, provided such motions are filed within twentyeight days of entry of judgment); seealso id. , Advisory Committee Notes to paragraph (a)(4) for the 1993 Amendment (“A notice filed before the filing of [a Rule 59 or Rule 60] motion[] . . . is, in effect, suspended un til the motion is disposed of.”). The bank’s motion was filed five days after entry of judgment; therefore, the district court had authority to amend its judgment without leave of this court, regardless of whether the motion was made under Rule 59 or Rule 60.

Second, Hazelwood proposes the bank failed to comply with the Eastern District of Missouri’s Local Rule 7-4.01(E), requiring a summary judgment movant to set forth each material fact in separately numbered paragraphs. The bank did not list the damages calculation in its statement of material facts. Instead, the bank stated “all principal and interest outstanding became due and owing,” and cited to an affidavit from a bank representative with knowledge of the basis for the damages claim. The affidavit calculated the total amount due and was attached to and cited in the bank’s motion for summary judgment. The bank also included the damages calculation in the bank’s prayer for judgm ent, although the prayer did not explicitly cite the affidavit in support of the amount of damages claimed.

Even if the bank procedurally erred in drafting its motion for summary judgment and supporting materials, H azelwood suffered no prejudice. See28 U.S.C. § 2111 (“On the hearing of any appeal . . . , the court shall give judgment after an examination of the record without regard to errors or defects which do not affect the substantial rights of the parties.”); Fe d. R. Civ. P. 61; Taylor v. Dickel , 293 F.3d 427, 430 (8th Cir. 2002) (“‘To constitute reversibleerror, it must be established that the error complained of affected the substantial rights of the objecting party’” (quoting Gilliam v. City of Omaha , 524 F.2d 1013, 1015 (8th Cir. 1975))). Hazelwood actually

-14-was aware of the amount of damages claimed and the factual basis for the calculation. Hazelwood is entitled to no relief on this proposition.

Third, Hazelwood contends the bank’s cal culation is not supported by sufficient evidence, and speculates the total incl udes sums not properly chargeable to Hazelwood. Hazelwood first raised these contentions in opposition to the bank’s Rule 59(e) motion to amend the judgment, a nd Hazelwood has not provided any evidence to support its factual contentions. The ba nk offered an affidavit listing the total damages assessment and explaining the basi s for the calculation. This factually uncontroverted evidence is sufficient to support summary judgment. Hazelwood submitted no evidence to challenge the calculation, so there is no genuine dispute of fact on this matter. Hazelwood failed fa ctually to contest the bank’s damages assessment before the district court, and is not entitled to relief on appeal. Cf. Winthrop Res. Corp. v. Eaton Hydraulics, Inc. , 361 F.3d 465, 471 n.11 (8th Cir. 2004) (affirming summary judgment on damages where the opposing party failed to challenge the factual basis for the dama ges calculation at the summary judgment stage).

F. Tax Refunds MPT challenges the district court’s ruling granting summary judgment to the bank on MPT’s claim against HLC’s real pr operty tax refunds. We agree with the district court’s ruling.

In connection with the loan agreements , the bank acquired a security interest in some of HLC’s assets, including “all Tax . . . Deposits,” “all general intangibles” and “all other property, rights, interests, estates, or claims of any name, kind, character or nature or properties now owned or hereafter acquired in the other properties and interests comprising the Premises.” No ting the bank filed a UCC-1 financing

-15-statement, the district court concluded the bank had a valid, perfected security interest in the tax refunds. 4

The district court determined MPT’s contingency fee agreement with HLC created an equitable lien for MPT on any tax refunds received by HLC. We assume, without deciding, MPT has an equitable lien on the tax refunds. We then must determine whether MPT’s lien in the ref unds has priority over the bank’s perfected security interest.

MPT asserts the bank’s security intere st does not encompass the tax refunds, arguing the agreement’s reference to “all Tax . . . Deposits” does not include tax refunds. Whatever the meaning of “all Tax . . . Deposits,” the bank’s security interest in “general intangibles” relating to the Hazelwood property does encompass tax refunds. See In re Don Connolly Const. Co. , 110 B.R. 976, 978 (Bankr. M.D. Fla. 1990) (“‘It is now well established that the right to receive a tax refund and the anticipated tax returns [sic] themselves are general intangibles.’” (quoting Lazere Fin. Corp. v. Palmetto Pump & Irrigation, Inc. , 81 B.R. 109, 111 (Bankr. M.D. Fla. 1987))); see also In re Metric Metals Int’l, Inc. , 20 B.R. 633, 636 (Bankr. S.D.N.Y. 1981) (“Although there is little authority withrespect to whether a tax refund is a general intangible, the cases and commentator s that have addressed the question agree that tax refunds constitute ge neral intangibles as defined in the [Uniform Commercial] Code” (Code)). We are not aware of any ju risdiction that has c oncluded a tax refund is not a general intangible under the Code , and we anticipate the Supreme Court of Missouri would reach the same conclusion. Cf. Friedberg , 691 F.3d at 951.

MPT argues its equitable lien in the ta x refunds has priority over the bank’s security interest because permitting the bank to profit from MPT’s labor in obtaining

4 Because MPT does not challenge the distri ct court’s express finding, we accept the district court’s finding that the bank validly perfected its security interest in HLC’s property, although the record is unclear.
-16-the tax refunds would be “unj ust and inequitable.” MPT’s arguments are inconsistent with Article 9 of Missouri’s Uniform Co mmercial Code—Secured Transactions, Mo. Rev. Stat. § 400.9-101, etseq. (U.C.C.), which establis hes a comprehensive system of priorities for competing claims of this nature. Mo. Rev. Stat. § 400.9-301. Cf. Lone Oak Farm Corp. v. Riverside Fertilizer Co. , 428 N.W.2d 175, 180 (Neb. 1988) (explaining under Nebraska’s CodeArt. 9, an equitable lien is an unperfected security interest and subordinate to a perfected security interest).

Regardless of whether MPT’s equitable lie n is an unperfected security interest,

see Mo. Rev. Stat. § 400.9-102(71); see also Lone Oak Farm Corp. , 428 N.W.2d at 180, or a lien, see Mo. Rev. Stat. § 400.9-102(52), the bank’s perfected security interest takes priority. Th e U.C.C. “determine[s] the law governing . . . the priority of a security interestin collateral.” Id. § 400.9-301. “A perfected security interest . . . has priority over a conflicting unpe rfected security interest,” id . § 400.9-322(a)(2), or an after-acquired lien, see id. § 400.9-317(a), except as otherwise provided by law, see id. § 400.9-322(a); cf. Gale & Co. v. Hooper , 323 S.W.2d 824, 826-27 (Mo. Ct. App. 1959).

MPT suggests its equitable lien is equi valent to a common law artisan’s lien, 5 which under Missouri law has priority over “all other secu red interests,” citing Gale & Co. , 323 S.W.2d at 826-27. Gale & Co . decided a mechanic who serviced an automobile acquired a common law first priority lien in the vehicle for the value of

5 It is not clear whether Missouri recognizes such a lien. Compare Gale & Co. v. Hooper , 330 S.W.2d 826, 827 (Mo. 1959) (per curiam) (affirming the Missouri Court of Appeals’ judgment “that the chattel mortgage on an automobile was subordinate to the common law artisan’s lien” in favor of an automobile mechanic), withFleming-Gilchrist Const. Co. v. McGonigle , 89 S.W.2d 15, 18 (Mo. 1935) (“Mechanics’ liens were neither recognized at common law nor allowed in equity” and must be determined “almost exclusively [by] the construction of statutes.”). We need not determine how the Supreme Court of Missouri would reso lve this apparent conflict.
-17-services rendered. See id. at 826-27, 830. The Supreme Court of Missouri, with little explanation, transferred the case and affirmed Gale & Co. “in the agreed but precisely limited circumstances .” Gale & Co. , 330 S.W.2d at 827. The common law artisan’s lien recognized in Gale & Co. applies where the artisan “has enhanced the value of [a] chattel” “while . . . in [the artisan’s] possession,” Gale & Co. , 323 S.W.2d at 826, and exclusively is “dependent upon possession, ” Ozark Fin. Serv., a Div. of Ozark Kenworth, Inc. v. Turner , 735 S.W.2d 374, 375 (Mo. Ct. App. 1987). MPT’s professional services obviously did not enha nce the value of a ny chattel in MPT’s possession.

MPT proposes our 1927 decision in Ge ddes v. Reeves Coal & Dock Co. , 20 F.2d 48 (8th Cir. 1927), indicates we can disregard Missouri’s statutory priority scheme in the interest of fairness and equ ity. In MPT’s words, “this Court [in Geddes ] did not focus on any one particular state’ s law . . . in applying the well recognized doctrine of equitable liens.” The Geddes case was decided before the adoption of the Code and more than te n years before Erie Railroad Co. v. Tompkins , 304 U.S. 64, 78 (1938), established, “[e]xcept in matters governed by the Fede ral Constitution or by acts of Congress, the law to be applied in any case is the law of the state.” We are not free to disregard Missouri’s express statutory law, and instead follow our general perceptions of equity. 6

MPT repeatedly emphasizes its asserti on the bank was aware of and acquiesced to MPT’s expectation it could collect its fees from the tax refunds. Besides arguing

6 MPT cites two bankruptcy cases applying th e laws of other states. In re Reda, Inc. , 54 B.R. 871, 880-82 (Bankr. N.D. Ill. 1985), turns on the application of federal bankruptcy law, 11 U.S.C. § 506(c), and is inapplicable to MPT’s claim. The second case, In re Alston , 322 B.R. 265, 270-71 (Bankr. D.N.J . 2005), considered the publicpolicy underlying the state’s statutory super priority provisions to craft a nonstatutory, equitable super priority right in the equitable lienholder. This result is contrary to U.C.C. §§ 400.9-301, 400.9-317, and 400.9-322, and we decline to follow it. See Lone Oak Farm , 428 N.W.2d at 180.
-18-injustice and public policy, MPT has not explained how the bank’s purported knowledge of MPT’s agreement with HLC is rele vant to the issue of statutory priority. We need not decide whether these purported facts would affect our analysis in this case, because MPT has not offered sufficien t evidence for us to conclude, for purposes of summary judgment, the bank knew of and acquiesced in MPT’s claim for the refunds. See Fin. Timing Publ’ns, Inc., v. Compugraphic Corp. , 893 F.2d 936, 942 (8th Cir. 1990) (reiterating, “[ a] party may not rely sole ly on inadmissible hearsay in opposing a motion for summary judgment”).

In support of its position, MPT presente d an e-mail exchange between the bank and Hazelwood in January 2010. In the e- mail, the bank’s vice president recognized MPT had performed services for HLC and asse rted MPT should not be paid out of the refunds. In its response, HLC claimed MPT, Hazelwood, and the bank shared a “general understanding” at the time the agr eement was made that MPT would be paid from the refund proceeds. Hazelwood’s e- mailed statement regarding the bank’s “general understanding” is speculation a nd hearsay, and MPT did not argue the statements were admissible under any relevant exception to the hearsay rule. See , e.g. , Fed. R. Evid. 801(c) (defining hearsay as an out of court statement offered “to prove the truth of the matter asserted”). The bank vice president’s statements may not be hearsay. See Fed. R. Evid. 801(d)(2) (explaining an out of court statement made by a party and offered into evidence against that party is not hearsay). Even construed favorably for MPT, the bank vice president’s statements do not show the bank was aware of MPT’s contract with HLC before MPT performed its services, so the statements do not prove the bank acted unfairly toward MPT.

MPT is understandably upset that its labor produced the tax refunds at issue, and the bank arguably is receiving a windfall—but for MPT’s efforts, there would be no tax refunds for the bank to recover. MPT suggests the result in this case is poor public policy, as it will create a disincentiv e for similarly situated professionals to provide these services in th e future. However, MPT had notice of the bank’s security

-19-interest and could have protected itself by having the bank agree in advance to subordinate the bank’s security interest, in whole or in a compromised part, in exchange for MPT’s services. We decline MPT’s invitation to disregard state law and craft an “equitable” solution designed to prot ect a party who fails to take reasonable steps to protect itself and assumes a known risk.

III. CONCLUSION We affirm the district court’s entry of summary judgment in favor of the bank.

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