U.S. v. Norris, 90-5861

• Decision Date: 21 June 1991
• Docket Number: No. 90-5861,90-5861
• Citation: 937 F.2d 286
• Parties: 23 Envtl. L. Rep. 21,116 UNITED STATES of America, Plaintiff-Appellee, v. Paul D. NORRIS, et al., Defendants, First Citizens National Bank of Dyersburg, Tennessee, Defendant-Appellant.
• Court: U.S. Court of Appeals — Sixth Circuit

Page 286

937 F.2d 286

23 Envtl. L. Rep. 21,116

UNITED STATES of America, Plaintiff-Appellee, v. Paul D. NORRIS, et al., Defendants First Citizens National Bank of Dyersburg, Tennessee Defendant-Appellant.

No. 90-5861.

United States Court of Appeals Sixth Circuit.

Argued Feb. 12, 1991.

Decided June 21, 1991.

Robert M. Williams, Jr., Asst. U.S. Atty., Office of U.S. Atty., Memphis, Tenn., Albert M. Ferlo, Jr. (argued), U.S. Dept. of Justice, Land & Natural Resources Div., Washington, D.C., Charles L. Harris, U.S. Army Corps of Engineers, Memphis Dist., Memphis, Tenn., for plaintiff-appellee.

Sammie L. Arnold (argued), Ashley & Ashley, Marianna G. Williams, Ashley & Ashley, Dyersburg, for defendant-appellant.

Before NELSON and SUHRHEINRICH, Circuit Judges, and HACKETT, District Judge. ^*

PER CURIAM.

The defendant bank acquired ownership of a parcel of land through mortgage foreclosure proceedings. Before he obtained the mortgage loan, the borrower had built a substantial levee and ditch that changed the physical character of the property as a wetland. The work had been done in violation of federal law. Upon application by the United States, the district court entered an order requiring the bank to let the former owner restore the land to its earlier state by "degrading" the levee at regular intervals. The bank has appealed. Finding no abuse of discretion by the district court, we shall affirm the order.

I

The Middle Fork of the Forked Deer River is a navigable waterway that flows through Crockett County, Tennessee. The land in question is adjacent to the river. In May and June of 1981, without obtaining a required permit from the Secretary of the Army, Paul Norris, the owner of the land, constructed a levee to control flooding and facilitate farming. The parties have stipulated that construction of the levee violated Sec. 404 of the Federal Water Pollution Control Act, 33 U.S.C. Sec. 1344.

On November 30, 1981, Mr. Norris mortgaged the land to defendant First Citizens National Bank for $284,000.00. A law firm retained by the bank conducted a title search and certified that Mr. Norris and his wife were the record owners. The law firm stated that its certification was "[b]ased solely on our examination of [the] public records" and was subject, among other things, to "any state of facts that an accurate survey might reveal." An affidavit by an officer of the bank attests that "First Citizens complied with its policies and procedures for making loans and securing collateral," but the record does not disclose whether these policies and procedures would have required the bank to conduct an on-site inspection of the property before agreeing to the mortgage.

Mr. Norris defaulted on the loan. The bank acquired title by foreclosure and later sold the property to a Mr. and Mrs. Davis. Unaware of these developments, the United States sued Mr. Norris to have the levee removed. The Davises were eventually added as defendants, whereupon they filed a third-party complaint against the bank. Pursuant to a settlement agreement with the Davises, the bank repurchased the land. The United States then added the bank as a defendant and dismissed its complaint against the Davises.

Under the terms of a settlement between Mr. Norris and the United States, Norris agreed to restore the property to its wetland status by making a series of openings in the levee. The bank refused to allow Norris to enter the land, however, contending that because title had been acquired by the bank without notice of any illegality, the bank was under no duty to let the agricultural value of the property be compromised.

In order to facilitate...