Lewis Service Center, Inc. v. Mack Financial Corp., 82-1139

Decision Date27 December 1982
Docket NumberNo. 82-1139,82-1139
Citation696 F.2d 66
PartiesLEWIS SERVICE CENTER, INC., Appellant, v. MACK FINANCIAL CORP., an Ohio corporation, Appellee.
CourtU.S. Court of Appeals — Eighth Circuit

Law Offices of Cobb & Rehm, P.C., Lincoln, Neb., for Lewis Service Center, Inc., appellant.

Cline, Williams, Wright, Johnson & Oldfather, Lincoln, Neb., for Mack Financial Corp., appellee.

Before HEANEY, Circuit Judge, HENLEY, Senior Circuit Judge, and ARNOLD, Circuit Judge.

HENLEY, Senior Circuit Judge.

Plaintiff Lewis Service Center (Lewis), a franchised dealer of Mack trucks, appeals the order of the district court 1 granting summary judgment to defendant Mack Financial Corp. (Mack), in this action based on 42 U.S.C. Sec. 1983. We affirm.

Mack, a subsidiary of Mack Trucks, provides financing to dealers pursuant to an agreement by which it receives a security interest in the inventory of the dealer. As a result of a dispute between Lewis and Mack concerning payments under the financing contract, Mack filed a replevin action against Lewis on October 20, 1980 in the state district court in Nebraska to recover possession of thirty-five vehicles in Lewis's inventory. In conjunction with this petition, Mack requested the court to enter a temporary order pursuant to Neb.Rev.Stat. Sec. 25-1093.02 which requires the defendant in the replevin action to hold the property "unimpaired and unencumbered" until a hearing which must take place within fourteen days after service and at which the court determines plaintiff's right to possession pending final resolution on the merits.

The hearing was held on November 3, and an order was entered on November 7, vacating the temporary order because Mack had failed to make an effective demand for payment. On November 10 Mack filed a motion to dismiss without prejudice and filed a new petition alleging that demand had been made and requesting a second temporary order which was entered on November 12. After a hearing on November 24 the court ordered immediate delivery of the property to Mack.

In the present action, Lewis claims that the issuance of the temporary orders deprived Lewis of property rights in violation of due process and Sec. 1983. Both Lewis and Mack filed motions for summary judgment based on the question of the constitutionality of the temporary order procedure. The remainder of the replevin statute is not challenged. 2 The district court concluded that the temporary order procedure satisfied due process standards and granted defendant's motion.

We agree with the district court that the temporary order results in a deprivation of property rights sufficient to trigger due process protection. See North Georgia Finishing, Inc. v. Di-Chem, Inc., 419 U.S. 601, 606, 95 S.Ct. 719, 722, 42 L.Ed.2d 751 (1975) (garnishment of debtor's bank account deemed deprivation of use of property subject to due process scrutiny). The issue, then, as appellant contends, is whether the procedural protections provided by the statute meet constitutional standards. We recognize that due process "guarantees 'no particular form of procedure.' " Mitchell v. W.T. Grant Co., 416 U.S. 600, 610, 94 S.Ct. 1895, 1899, 40 L.Ed.2d 406 (1974). Rather, due process analysis necessitates a balancing of the creditor's interest in protecting his property rights and the debtor's interest in avoiding a wrongful seizure. Guzman v. Western State Bank of Devils Lake, North Dakota, 516 F.2d 125, 128 (8th Cir.1975).

The district court found useful the following guidelines set forth in Aaron Ferer & Sons Co. v. Berman, 431 F.Supp. 847 (D.Neb.1977):

(1) The [temporary order] must issue only upon an affidavit containing facts. The affidavit must be by the creditor or his attorney who has personal knowledge of the facts.

(2) The [temporary order] must be issuable by a judge or at least involve judicial participation.

(3) The creditor must be required to indemnify the debtor from the risk and damages of a wrongful taking.

(4) The debtor must be able to dissolve the [temporary order] by filing a bond.

(5) The debtor must be afforded an immediate post-seizure hearing wherein the creditor shall have to prove the grounds upon which the [temporary order] was issued.

Id. at 852 (footnote omitted) (citing North Georgia Finishing, Inc. v. Di-Chem, Inc., supra; Mitchell v. W.T. Grant Co., supra; Fuentes v. Shevin, 407 U.S. 67, 92 S.Ct. 1983, 32 L.Ed.2d 556 (1972)). Although Aaron Ferer involved the constitutionality of the Nebraska prejudgment attachment procedure to acquire quasi in rem jurisdiction, we think the guidelines provided therein are helpful to the present analysis.

The first two factors weigh in favor of upholding the constitutionality of the temporary order procedure. The order is issuable only by a judge upon the filing of an affidavit which states facts showing plaintiff's interest in the property. Neb.Rev.Stat. Secs. 25-1093.01 to 1093.02.

With respect to the hearing, Lewis urges that the issuance of the temporary order without a mandatory hearing for up to fourteen days violates the due process requirement of an immediate hearing. We note that the Supreme Court in Di-Chem emphasized the need for an "early" hearing rather than an "immediate" hearing and declined to impose a specific time limit. 419 U.S. at 606-07, 95 S.Ct. at 722. The relevant portion of the replevin statute provides: "Unless otherwise...

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9 cases
  • McLinn, Matter of
    • United States
    • U.S. Court of Appeals — Ninth Circuit
    • August 7, 1984
    ...1982. Interpretation of state law by a district judge sitting in that forum is entitled to great deference.--Lewis Service Center, Inc. v. Mack Financial Corp., 696 F.2d 66. C.A.Neb. 1982. Although trial judge's interpretation of state law does not bind Court of Appeals, such interpretation......
  • Norby v. Farnam Bank, No. A-09-814 (Neb. App. 4/6/2010)
    • United States
    • Nebraska Court of Appeals
    • April 6, 2010
    ...reached by the court below. Id. Due process "'guarantees "no particular form of procedure."'" Lewis Service Center, Inc. v. Mack Financial Corp., 696 F.2d 66, 68 (8th Cir. 1982), quoting Mitchell v. W.T. Grant Co., 416 U.S. 600, 94 S. Ct. 1895, 40 L. Ed. 2d 406 (1974). Rather, due process a......
  • Watertown Equipment Co. v. Norwest Bank Watertown, N.A.
    • United States
    • U.S. Court of Appeals — Eighth Circuit
    • December 23, 1987
    ...21-17A (1987). The holding in this case only concerns Ch. 21-17.2 These factors were also recognized in Lewis Service Center, Inc. v. Mack Financial Corp., 696 F.2d 66, 68 (8th Cir.1982), a case decided on December 27, 1982, just a couple of months after the attachment in this case. The dis......
  • Woodring v. Jennings State Bank
    • United States
    • U.S. District Court — District of Nebraska
    • March 1, 1985
    ...is upon the other owner, Mrs. Woodring. The United States Court of Appeals for the Eighth Circuit in Lewis Service Center, Inc. v. Mack Financial Corp., 696 F.2d 66, 68 (8th Cir.1982), has qualifiedly endorsed the guidelines set forth in Aaron Ferer & Sons Co. v. Berman, 431 F.Supp. 847 (U.......
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