Baker v. Veneman

• Decision Date: 04 March 2003
• Docket Number: No. 2:02CV00024 ERW.,2:02CV00024 ERW.
• Court: U.S. District Court — Eastern District of Missouri
• Parties: Lloyd J. BAKER, et al. Plaintiffs, v. Ann VENEMAN, Defendant.

Page 999

256 F.Supp.2d 999

Lloyd J. BAKER, et al. Plaintiffs, v. Ann VENEMAN, Defendant.

No. 2:02CV00024 ERW.

United States District Court, E.D. Missouri, Northern Division.

March 4, 2003.

COPYRIGHT MATERIAL OMITTED

George Dale Reesman, WILLIAMS AND RUSMAN, Boonville, MO, for Plaintiff.

Wesley D. Wedemeyer, Office of U.S. Atty, St. Louis, MO, for Defendant.

MEMORANDUM AND ORDER

WEBBER, District Judge.

This matter comes before the Court upon Defendant's Motion to Dismiss, or in the Alternative, for Summary Judgment [doc. # 21-1]; Plaintiffs' Motion to Strike [doc. #21-2]; and Plaintiffs' Motion for Summary Judgment [doc. # 22].

I. BACKGROUND FACTS

Plaintiffs Lloyd J. Baker ("Mr.Baker") and Bonnie J. Baker ("Mrs.Baker"), husband and wife, own 133 acres of land in Randolph County, Missouri (hereinafter "the Randolph County property"). Mr. and Mrs. Baker hold the Randolph County property as tenants by the entirety. In 1976, Mr. Baker applied for three loans from the Farmers Home Administration, now referred to as the Farm Service Agency ("FSA"), to refinance delinquent debts on the property. The loan application, dated July 16, 1975, is signed only by Mr. Baker.

FSA approved the loans in the amounts of $3,200.00, $9,100.00, and $47,700.00 on June 21, 1976. The promissory notes, signed by Mr. Baker as "borrower" and Mrs. Baker as "spouse" stated: "FOR VALUE RECEIVED, the undersigned (whether one or more persons, herein called ` Borrower') jointly and severally promise to pay to the order of the United States of America, acting through the Farmers Home Administration, United States Department of Agriculture ..." the principal sums of the loans. Def. Exhs. 2, 3, and 4. The loans were secured by a deed of trust on the Randolph County property. Mrs. Baker states in her Affidavit that she first learned of the loans when she was asked to sign the notes and deed of trust. She states that she signed the notes and deed of trust only for the purpose of allowing Mr. Baker to obtain the loans. She never made a payment on the loans and was excluded from many communications regarding the loans. Bonnie Baker Aff. ¶ 3. The loans became delinquent, and in 1980, the loans were accelerated; however, due to a national moratorium on foreclosures, no foreclosure sale was conducted. The FSA loans were accelerated a second time on June 30, 1982. FSA scheduled a foreclosure sale; however, it did not take place because Mr. and Mrs. Baker filed a law suit in the Western District of Missouri.

Mrs. Baker states in her Affidavit that she was "very unhappy with farm life" and that she "had a fear of farm animals since [she] was a little girl." She never participated in the farm chores or farm operations. While never obtaining a legal separation or dissolution, Mr. and Mrs. Baker have lived separately since 1981. Counsel for Mrs. Baker advised FSA in writing of Mrs. Baker's separate address in Moberly, Missouri. The letter, dated December 29, 1981, stated:

Enclosed herewith is a request for individual notice of foreclosure sale requested by Bonnie J. Baker.

You will note that Bonnie Baker's address is 1531 Park Drive, Moberly, Missouri rather than the address that you previously had in the file.

Bonnie would like to know, whether formally or informally if there is default on the loan and if you are planning to foreclose.

As you may gather, Mr. and Mrs. Baker do not always share correspondence at Mr. Baker's address, therefore it would save a lot of trouble and possible complications if you would let Bonnie know prior to the time of foreclosure. If you would also let me know in the event there will be a foreclosure, as soon as possible, I will also make sure that Mrs. Baker knows what is going on.

PI. Attach. 2.

Mr. Baker applied for and was approved to receive FSA loans of $5,724.73, $2,564.51, and $73,658.38, secured by a second deed of trust on the Randolph County property in 1987. The promissory notes for the 1987 loans listed "BAKER, LLOYD J. and BONNIE J." as the borrowers and listed "Lloyd & Bonnie Baker" as the "original borrowers." Mr. and Mrs. Baker signed the promissory notes as "borrowers." See Def. Exhs. 1, 2, and 3. Mrs. Baker avers in her Affidavit that FSA required her signature on the notes and deeds of trust and that she complied so that Mr. Baker could obtain the loans. She states that she made no payments on the loans and was not included in FSA communications regarding the loans. Bonnie Baker Aff. ¶ 4.

By April 1989, payment of the FSA loans became delinquent again. In 1989, the loans were restructured. FSA contacted Mrs. Baker and advised her that she must sign the restructured notes. Bonnie Baker Aff. ¶ 5. Three promissory notes, in the amounts of $6,225.13, $2,788.68, and $86,535.48, were signed by Mr. and Mrs. Baker on April 28, 1989. The promissory notes listed "BAKER, LLOYD J. AND BONNIE J." as borrowers and listed "Lloyd J. and Bonnie J. Baker"¹ as "original borrowers." Def. Exhs. 1, 2, and 3. Mrs. Baker states that she never made a payment on the loans. Bonnie Baker Aff. ¶ 5.

The loan payments again became delinquent in 1992. On March 28, 1994, FSA mailed acceleration notices to Mr. and Mrs. Baker. Mrs. Baker states that she did not receive most of the communications regarding the delinquency. She also states that Mr. Baker signed his name to her registered mail containing the acceleration notice but failed to deliver it to her. Bonnie Baker Aff. ¶ 6. An appeal was filed with the National Appeals Division. The appeal was denied, and the decision was further appealed to the Director of the National Appeals office. FSA agreed to postpone the foreclosure sale to allow a settlement offer, and both Mr. and Mrs. Baker applied for settlement of the FSA debt. Mrs. Baker's application is dated December 15, 1994. Def. Exh. 6. The settlement offer was refused.

Another foreclosure sale was scheduled for January 1996. However, Mr. Baker filed for Chapter 13 bankruptcy protection on January 25, 1996, thereby staying the foreclosure sale. Under the reorganization plan, Mr. Baker was discharged of the portion of the debt exceeding the value of the collateral upon which the debt was secured, and a new loan was established for the remaining debt, which totaled $90,500.00. Mrs. Baker did not join in the bankruptcy. Since the bankruptcy, Mr. Baker has remained current by making installments of $814.00 per month.

On July 25, 2000, FSA directed its finance office to cancel the portion of the debt that was discharged in Mr. Baker's bankruptcy; however, the action was then reversed when it became apparent that Mrs. Baker had not joined in the bankruptcy. Arnold Aff. ¶¶ 22-23. Over a year later, on July 6, 2001, FSA mailed a letter to Mrs. Baker at her residence in Moberly, Missouri, advising that it would begin administrative offset of monies held by the government. Michael P. Arnold, Farm Loan Manager at the United States Department of Agriculture, contacted Mrs. Baker about the remaining debt, which was approximately $27,000.00. Arnold Aff. ¶ 24. On September 5, 2001, Mr. Arnold issued an acceleration notice against Mrs. Baker, which Mrs. Baker appealed on September 25, 2001. The appeal was denied. FSA scheduled a foreclosure sale for March 25, 2002; however, the sale was withdrawn after this action was filed on March 21, 2002.

In the present action, Plaintiffs seek injunctive and declaratory relief to prevent foreclosure on the Randolph County Property. Mrs. Baker denies participating in the application for the loans; she also denies ever making payments on any of the loans. In March of 2001, she signed a money order for Mr. Baker because Mr. Baker had suffered a stroke, but she states the funds were from Mr. Baker's account. Bonnie Baker Counter-Aff. ¶ 4. Based upon Mrs. Baker's lack of participation in the loan process, Plaintiffs conclude that she should not be liable for any outstanding debt. Plaintiffs also allege in the Complaint that FSA discriminated against Mrs. Baker because of her gender by failing to provide her with the same notices that were sent to Mr. Baker and by depriving her of an opportunity to protect her interests. Plaintiffs further allege that FSA is guilty of laches for failure to seek collections from Mrs. Baker until nearly seven years after accelerating the notes against her. Because Mr. Baker's payments are current, Plaintiffs allege that any attempt to seek payment from Mrs. Baker is inappropriate. Plaintiffs ask the Court to enjoin Defendant from continuing with the foreclosure sale and to declare Defendant's actions arbitrary and capricious and in contravention with applicable law.

II. SUMMARY JUDGMENT STADARD

Pursuant to Federal Rule of Civil Procedure 56(c), a court may grant a motion for summary judgment only if all of the information before the court shows "there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). See Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986), cited in Donovan v. Harrah's Maryland Heights Corp., 289 F.3d 527, 528-29 (8th Cir.2002) (affirming summary judgment on the plaintiffs negligence claim); Dammen v. UniMed Medical Center, 236 F.3d 978, 980 (8th Cir.2001) (citations omitted) (stating that "summary judgment will be granted 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 judgment as a matter of law""). The United States Supreme Court has noted that "[s]ummary judgment procedure is properly regarded not as a disfavored procedural shortcut, but rather as an integral part of the federal rules as a whole, which are designed to ` secure the just, speedy and inexpensive determination of every action." ' Celotex, All U.S. at 327, 106 S.Ct. 2548 (quoting Fed.R.Civ.P. 1).

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