Bean v. Perdue

• Decision Date: 27 June 2018
• Docket Number: Civil Action No.: 17–0140 (RC)
• Citation: 316 F.Supp.3d 220
• Parties: Robert O. BEAN, Plaintiff, v. Sonny PERDUE, Secretary, United States Department of Agriculture, Defendant.
• Court: U.S. District Court — District of Columbia

316 F.Supp.3d 220

Robert O. BEAN, Plaintiff,

v.Sonny PERDUE, Secretary, United States Department of Agriculture, Defendant.

Civil Action No.: 17–0140 (RC)

United States District Court, District of Columbia.

Signed June 27, 2018

Paul A. Robinson, Jr., Law Office of Paul Robinson, Memphis, TN, for Plaintiff.

Joshua L. Rogers, U.S. Attorney's Office for the District of Columbia, Washington, DC, for Defendant.

MEMORANDUM OPINION

RUDOLPH CONTRERAS, United States District Judge

GRANTING DEFENDANT'S MOTION FOR SUMMARY JUDGMENT

I. INTRODUCTION

This action involves a dispute over the standards an agency must meet when mailing notices to regulated individuals. Plaintiff Robert Oneal Bean sued Sonny Perdue, the Secretary of the United States Department of Agriculture ("USDA"), claiming that USDA violated the Administrative Procedure Act ("APA") by failing to notify him of certain key information related to his USDA loan. More specifically, Mr. Bean alleges that he did not receive a letter that summarized USDA's decision not to reconsider accelerating his loan, and that explained his rights to mediation and appeal of that decision.

USDA has moved for summary judgment, asserting that it was not required by any regulation to send the letter at issue, and that regardless of the governing regulations, the record shows that the letter was sent. Although the Court finds that USDA regulations and internal handbook procedures required USDA to send the letter at issue, Mr. Bean has failed to raise a genuine dispute of material fact as to whether it complied with those regulations and procedures. Accordingly, for the reasons stated below, the Court grants Defendant's motion.

II. BACKGROUND

A. Regulatory Framework

The Farm Service Agency ("FSA") is an entity, housed within USDA, which administers loan programs for family-operated farms and ranches, among other activities. FSA, Farm Loan Programs , https://www.fsa.usda.gov/programs-and-services/farm-loan-programs/index (last visited June 15, 2018). FSA is governed by Title 7, Chapter VII of the Code of Federal Regulations. See generally 7 C.F.R. §§ 700–799.

This case involves USDA's administration of "Primary Loan Servicing" for FSA farm loans, which is regulated by 7 C.F.R. § 766. See FSA, Your FSA Farm Loan Compass , 39–44 (2017), https://www.fsa.usda.gov/programs-and-services/farm-loan-programs/farm-loanservicing/index. Primary Loan Servicing provides more lenient loan terms to a borrower who is financially distressed or delinquent on his or her FSA loans, provided that the distress or delinquency is due to circumstances beyond the borrower's control, including illness or injury. See 7 C.F.R. §§ 766.101, 104(a). A borrower may be considered for loan servicing only under certain conditions.¹ See § 766.104(a). Under its regulatory scheme, USDA will send loan servicing information via certified mail to any borrower who is "90 days or more past due on loan payments," or to any borrower who "[r]equest[s] this information."² 7 C.F.R. §§ 766.101(b), app. A ("FSA–2510"), 766.101(c); Def.'s Mot. Summ. J. ("Def.'s Mot.") Ex. 1, ECF No. 27–2. However, if a borrower who has received a loan servicing application form "fails to timely respond or does not submit a complete application within [a] 60–day timeframe," USDA will notify the borrower by certified mail of its intent to accelerate the loan, and of the borrower's right to request reconsideration, mediation, or appeal of that decision.³ 7 C.F.R. § 766.103(b) ; see Def.'s Mot. Ex. 3 ("FSA–2525"). Once all requests for reconsideration and administrative appeals are concluded, USDA will then accelerate the borrower's loan. See 7 C.F.R. § 766.351(b)(1) ; 7 C.F.R. § 766.355.

USDA's regulatory framework provides certain procedural protections for borrowers, including notice requirements and the opportunity to request mediation or informal review of certain USDA determinations. See, e.g. , 7 C.F.R. §§ 766.101(b), 766.103(b)(2), 780. For instance, Section 766, Subpart C, which addresses Primary Loan Servicing programs, includes three appended forms titled "Notice of Availability of Loan Servicing" ("Section 766 Notices"), stating that "[i]f [a reconsideration] meeting does not change the Agency decision, you will be notified and provided 30 days to request mediation, negotiation, or appeal." 7 C.F.R. § 766, subpt. C, apps. A–C(h) (emphasis added). Similarly, form FSA–2525, notifying a borrower of USDA's intent to accelerate the borrower's loans, informs the borrower of a right to reconsideration and states that "[i]f the reconsideration meeting does not change the Agency decision, you will be notified and provided 30 days to request mediation, or appeal as outlined." Def.'s Mot. Ex. 3. And 7 C.F.R. § 780 provides the process for appeal or reconsideration of adverse USDA decisions. It states that following the disposition of a reconsideration request, "[t]he official decision on reconsideration will be the decision letter that is issued ." 7 C.F.R. § 780.7(f) (emphasis added). Section 780 also provides that "[t]o the extent practicable, no later than 10 business days after an agency decision maker renders an adverse decision that affects a participant, FSA will provide the participant written notice of the adverse decision and available appeal rights." 7 C.F.R. § 780.15(a).

USDA further specifies procedures for borrowers' reconsideration requests in its internal handbook on farm loan servicing ("5–FLP Handbook"). See FSA, 5 –FLP, Direct Loan Servicing: Special and Inventory Property Management (2014), www.fsa.usda.gov/internet/FSA_file/5-flp.pdf. Paragraph 231 of the 5–FLP Handbook states that "[t]he authorized agency official will send the borrower a letter stating the results of the reconsideration meeting ... If FSA's decision has not changed, the borrower will be provided with new mediation and appeal rights." The 5–FLP Handbook procedures coincide with the USDA regulations, listed above, requiring the agency to notify borrowers in writing of the results of their reconsideration requests, and of their rights to mediation and appeal. See 7 C.F.R. §§ 766, 780.7(f), 780.15(a).

B. Mr. Bean's Loan History

Mr. Bean, a farmer from Mississippi, borrowed $50,000 from USDA in early 2001 to purchase farm land. Declaration of Michael Palmer ("Palmer Decl.") ¶ 2, ECF No. 27–1; Def.'s Statement of Material Facts Not in Dispute ("Def.'s SUMF") ¶ 1, ECF No. 26–1. Mr. Bean made timely payments to USDA until 2011, when he began to fall behind on the loan. See Palmer Decl. ¶ 3. He was never able to catch back up. Id.

Beginning in the spring of 2014, USDA sent Mr. Bean a series of certified mailings related to his flagging loan payments. Id. ¶ 4. Mr. Bean does not contest receipt of those mailings, save one. Pl.'s Opp'n Def.'s Mot. ("Pl.'s Opp'n") at 4–5, ECF No. 30. On April 17, 2014, Michael Palmer, a USDA Farm Loan Officer, sent Mr. Bean a loan servicing application, form FSA–2510. Palmer Decl. ¶ 4; Def.'s Mot. Ex. 1 ("FSA–2510"). As explained above, this application contained information on loan servicing options, and it explained that Mr. Bean must apply for loan servicing within 60 days of receiving the application or else risk loan acceleration. Def.'s Mot. Ex. 1 ("FSA–2510"); Def.'s Mot. at 3, ECF No. 26–2. On May 19, 2014, Officer Palmer sent Mr. Bean, by First Class regular mail, form FSA–2516, titled "30 Day Reminder of the Notice of Availability of Loan Servicing" ("30 Day Reminder"). Palmer Decl. ¶ 5; see Def.'s Mot. Ex. 2 ("FSA–2516"), ECF No. 27–2. On June 18, 2014, having received no response from Mr. Bean within the 60 day period mandated by form FSA–2510, Officer Palmer sent Mr. Bean form FSA–2525, titled "Intent to Accelerate." Palmer Decl. ¶ 6; see Def.'s Mot. Ex. 3 ("FSA–2525"). This form notified Mr. Bean of USDA's decision to accelerate his loan, and it demanded that he pay the full loan balance to avoid foreclosure, or that he pursue reconsideration, mediation, or appeal. See Def.'s Mot. Ex. 3 ("FSA–2525"). On June 23, 2014, Mr. Bean requested reconsideration of USDA's decision to accelerate his loan. See Palmer Decl. ¶ 7; Def.'s Mot. Ex. 4 ("FSA–2526"), ECF No. 27–2; Pl.'s Opp'n at 2.

On June 26, 2014, Officer Palmer and Mr. Bean met to discuss Mr. Bean's request for reconsideration. Palmer Decl. ¶ 8; Pl.'s Opp'n at 2. Based on that meeting, Officer Palmer determined that Mr. Bean failed to provide evidence that the Intent to Accelerate notice was sent in error, and therefore declined to halt the loan acceleration. Palmer Decl. ¶ 8; see Def.'s Mot. Ex. 5, ECF No. 27–2. On June 27, 2014, Officer Palmer sent Mr. Bean "Notice of the Farm Service Agency's Response to Plaintiff's Request for Reconsideration" ("Response Letter"), affirming USDA's previous decision to accelerate his loan and noting that Mr. Bean had 30 days to request mediation or appeal the determination. See Def.'s Mot. Ex. 5. Officer Palmer initially sent the letter by certified mail, but it was returned unclaimed on July 17, 2014, so he immediately re-sent it via First Class regular mail. Palmer Decl. ¶ 9; see Def.'s Mot. Ex. 5. Mr. Bean claims that he never received this First Class mailing. Decl. of Robert Bean ("Bean Decl.") ¶ 3, ECF No. 30–2; Pl.'s Statement of Material Facts in Dispute ("Pl.'s SMF") ¶ 5, ECF No. 30–1. On August 4, 2015, FSA's District Director sent Mr. Bean "Notice of Acceleration of Your Debt to the United States Department of Agriculture and Demand for Payment of that Debt," which reiterated the agency's final decision to accelerate Mr. Bean's loan. Palmer Decl. ¶ 10; see Def.'s Mot. Ex. 6, ECF No. 27–2.

C. Procedural History

In January 2017, Mr. Bean filed suit in this Court alleging, among other claims, that he "[did] not recall ... receipt either in person or via mail [of] an application for ‘Loan Servicing,’ " which he contends constituted arbitrary and capricious action by USDA under the APA. Am. Compl. at 5, ECF No. 3. In a prior Memorandum Opinion, this Court...