N Texas Prod Credit Ass'n v. McCurtain Cty. NB
| Decision Date | 15 August 2000 |
| Docket Number | 98-7175,98-7140,Nos. 98-7076,s. 98-7076 |
| Citation | 222 F.3d 800 |
| Parties | (10th Cir. 2000) NORTH TEXAS PRODUCTION CREDIT ASSOCIATION, Plaintiff-Appellant, v. MCCURTAIN COUNTY NATIONAL BANK, DONALD WYRICK, MILDRED FULLER, and HERSHEL ROGERS, Defendants-Appellees. NORTH TEXAS PRODUCTION CREDIT ASSOCIATION, Plaintiff-Appellee, v. MCCURTAIN COUNTY NATIONAL BANK, Defendant, and DONALD WYRICK, MILDRED FULLER, and HERSHEL ROGERS, Defendants-Appellants. NORTH TEXAS PRODUCTION CREDIT ASSOCIATION, Plaintiff-Appellant, v. MCCURTAIN COUNTY NATIONAL BANK, Defendant-Appellee, and DONALD WYRICK, MILDRED FULLER, and HERSHEL ROGERS, Defendants |
| Court | U.S. Court of Appeals — Tenth Circuit |
Appeal from the United States District Court for the Eastern District of Oklahoma. D.C. No. 97-CV-567-S
[Copyrighted Material Omitted]
[Copyrighted Material Omitted]
[Copyrighted Material Omitted] J. Mark Chevallier of McGuire, Craddock, Strother & Hale, Dallas, Texas (Scott B. Aston and James W. Ribman of Looper, Reed, Mark & McGraw, Inc., Dallas, Texas, with him on the briefs), for North Texas Production Credit Association.
James A. Belote of Stipe Law Firm, Oklahoma City, Oklahoma, for McCurtain County National Bank.
Alan V. Johnson (William F. Logan and Kyle J. Mead with him on the briefs) of Sloan, Listrom, Eisenbarth, Sloan & Glassman, L.L.C., Topeka, Kansas, for Donald Wyrick, Mildred Fuller, and Hershel Rogers.
Before BALDOCK,EBEL and KELLY, Circuit Judges.
Plaintiff-Appellant North Texas Production Credit Association ("NTPCA") filed suit against Defendants-Appellees McCurtain County National Bank ("MCNB") and individuals Donald Wyrick, Mildred Fuller, and Hershel Rogers1 ("Wyrick," "Fuller," and "Rogers," collectively, the "Individuals;" the Individuals and MCNB referred to together as "Defendants") in United States District Court for the Eastern District of Oklahoma pursuant to 28 U.S.C. § 1332 (diversity jurisdiction). Rowland and Loretha Clark (the "Clarks") engaged in series of loan transactions with both NTPCA and MCNB in connection with their cattle ranching business. The present litigation arose when the Clarks defaulted on a loan from NTPCA, and, as a result, NTPCA brought this action against Defendants. Generally, NTPCA sought to obtain the proceeds received by MCNB from the sale of some of the Clarks' cattle and it also alleged that Defendants conspired to commit fraud and, in fact, committed fraud against NTPCA.
The district court granted summary judgment for Defendants on all claims. MCNB and the Individuals separately sought attorney's fees pursuant to Okla. Stat. Ann. tit. 42, § 176. The district court granted attorney's fees to MCNB but denied attorney's fees for the Individuals. NTPCA appeals the order of the district court granting summary judgment for Defendants (No. 98-7076) and also appeals the award of attorney's fees to MCNB (No. 98-7175). The Individuals appeal the order of the district court denying them attorney's fees (No. 98-7140). Exercising jurisdiction pursuant to 28 U.S.C. § 1291, we AFFIRM in part and REVERSE in part as to the grant of summary judgment for Defendants, VACATE the grant of attorney's fees to MCNB, and AFFIRM the denial of attorney's fees to the Individuals.
Between 1989 and 1995, MCNB made a series of loans of approximately $200,000 each on a revolving basis to the Clarks in connection with the Clarks' cattle business.2 MCNB filed a number of UCC-1 financing statements in connection with these loans in order to perfect its security interests in the collateral pledged by the Clarks.
NTPCA and the Clarks also had a lending relationship that dated back to 1989. As relevant to this appeal, on November 3, 1994, the Clarks executed and delivered to NTPCA a Variable Rate Promissory Note (the "Note") as part of a loan transaction wherein the Clarks agreed to pay NTPCA the principal sum of $673,285 on or before October 15, 1995. The Clarks executed a security agreement in connection with the Note, pledging livestock as collateral.
Previously, on January 3, 1993, NTPCA had filed a UCC-1 financing statement in McCurtain County, Oklahoma (the "1993 Financing Statement"). The 1993 Financing Statement gave the following description of the collateral: Thus, the 1993 Financing Statement caused NTPCA's security interest in the cattle pledged as collateral for the Note to be perfected pursuant to Okla. Stat. Ann. tit. 12A, § 9-302.
The November 3, 1994 loan was to enable the Clarks to purchase 1,688 head of cattle for approximately $512,000 in a series of transactions with James Conley of Conley Cattle Co. ("Conley") between November 1994 and March 1995. NTPCA disbursed funds directly to Conley for the cattle purchases. MCNB, like NTPCA, also had a lending relationship with the Clarks.
In September and October 1995, Rowland Clark sold 1,090 head of cattle to Conley. Conley provided payment for the cattle in the form of three checks: one payable to Rowland Clark for $135,464.50 dated September 13, 1995; one jointly payable to Rowland Clark and MCNB for $205,856.43 dated October 4, 1995; and one jointly payable to Rowland Clark and NTPCA for $111,000.94 dated October 4, 1995.
The Clarks did not repay the Note to NTPCA by October 15, 1995 and therefore went into default. On October 19, 1995, however, the Clarks paid $120,317.68 to NTPCA from the sale of the cattle to Conley. In order to recover the amount remaining due on the Note, NTPCA attempted to assert what it believed to be a first-priority interest in the remaining proceeds from the cattle Rowland Clark sold to Conley based on NTPCA's 1993 Financing Statement. MCNB, however, claimed it had first priority in the proceeds from the sale based on the UCC-1 financing statement that MCNB had filed in McCurtain County on September 20, 1991 (the "1991 Financing Statement"). The 1991 Financing Statement covered: "All livestock now owned or hereafter acquired, being of defferent [sic] sizes, sex, age and bred [sic], located in McCurtain County, Oklahoma."3
MCNB's 1991 Financing Statement cannot be found in the McCurtain County records available for public inspections. As evidence that the 1991 Financing Statement exists and remains in effect, MCNB provided a numerical copy of the 1991 Financing Statement. Apparently, when a financing statement is filed in McCurtain County, one copy is placed in an alphabetical index, which is accessible to the public for purposes of conducting lien searches, and one copy is placed in a numerical file located in the basement of the clerk's office. When a secured party terminates a financing statement, the alphabetical index copy in the public records is removed and returned to the secured party, but the duplicate numerical copy in the basement is not.
NTPCA disputed MCNB's asserted priority in the remaining proceeds from the Clarks' sale of the cattle to Conley and brought the present action seeking: (1) a declaratory judgment that it held a lien superior to the lien of MCNB on certain livestock owned by the Clarks; (2) judgment for all proceeds received by MCNB from the Clarks' sale of 1,090 head of cattle based on the theory that NTPCA held a purchase money security interest in the livestock; (3) avoidance of liens held by MCNB in connection with a loan made to the Clarks on November 2, 19954 on the theory that these liens were granted with the intent to hinder, delay or defraud NTPCA in violation of the Oklahoma Uniform Transfer Act, Okla. Stat. Ann. tit. 24, §§ 112-23 In the alternative to counts (2) and (3), NTPCA sought an equitable lien on the proceeds from the sale of the Clarks' livestock. NTPCA also sought damages on the ground that the Clarks, the Individuals, and MCNB engaged in a civil conspiracy to defraud NTPCA, and in fact defrauded NTPCA. NTPCA sought punitive damages in connection with the fraud and conspiracy claims. Finally, NTPCA sought to preclude MCNB from enforcing its priority position pursuant to the 1991 Financing Statement under waiver and estoppel theories. As noted above, the district court granted summary judgment to Defendants on all claims, and NTPCA now appeals.
"We review the district court's grant of summary judgment de novo, applying the same legal standard used by the district court." Simms v. Oklahoma ex rel. Dep't of Mental Health and Substance Abuse Servs., 165 F.3d 1321, 1326 (10th Cir.), cert. denied, 120 S.Ct. 53 (1999). Summary judgment is appropriate "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed. R. Civ. P. 56(c). "When applying this standard, we view the evidence and draw reasonable inferences therefrom in the light most favorable to the nonmoving party." Simms, 165 F.3d at 1326.
NTPCA argues that the district court erred in granting summary judgment for MCNB on its claim that it has priority in the proceeds5 from the Clarks' sale of their cattle to Conley. NTPCA puts forth a number of different legal theories in support of this claim. We hold that the district court erred in granting summary judgment against NTPCA on the lien priority claim, but only as to one of the theories asserted by NTPCA.
NTPCA first urges that the district court erred in rejecting NTPCA's claim that it has priority in the proceeds received by MCNB from the sale of the 1,090 head of cattle based on the theory that MCNB terminated the 1991...
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