Jack and Kathryn Benson v. United States Small Business Administration

Jack and Kathryn Benson appeal the district court’s dismissal of defendant Wells Fargo Bank for lack of subject matter jurisdiction, and grant of summary judgment in favor of defendant SBA. Appellate jurisdiction is proper under 28 U.S.C. § 1291 .

The Bensons signed a promissory note for and personally guaranteed a loan of $150,-000 from Wells Fargo Bank. They secured the loan with a second deed of trust on their real property. The SBA guaranteed the loan. A default occurred. The SBA paid Wells Fargo; Wells Fargo assigned the note to the SBA; and the SBA notified the Bensons that it expected them to honor the promissory note, personal guarantee, and second deed of trust. Instead, the Ben-sons brought suit against the SBA and Wells Fargo Bank to preclude the SBA from enforcing the loan contract and foreclosing on the second deed of trust. They allege that they reluctantly signed the second deed of trust on the representation of a Wells Fargo Bank officer that the SBA never forecloses on second deeds of trust. They argue that, in light of the representation of the bank officer, the SBA should not now be allowed to enforce the loan agreement and foreclose on the second deed of…