McBride v. Taylor
| Decision Date | 02 October 1990 |
| Docket Number | No. 90-1528,90-1528 |
| Citation | 924 F.2d 386 |
| Parties | Patrick F. McBRIDE and Sonya S. McBride, Plaintiffs, Appellees, v. Steven H. TAYLOR and Dwight A. Sewall, Defendants, Appellants. . Heard |
| Court | U.S. Court of Appeals — First Circuit |
John F. Daly, Atty., Dept. of Justice, with whom Stuart M. Gerson, Asst. Atty. Gen., Washington, D.C., Richard S. Cohen, U.S. Atty., Augusta, Me., and Barbara L. Herwig, Atty., Dept. of Justice, Washington, D.C., were on brief, for defendants, appellants.
Anthony P. Shusta, II with whom Corson & Shusta, P.A., Madison, Me., was on brief, for plaintiffs, appellees.
Before BREYER, Chief Judge, BOWNES, Senior Circuit Judge, and ATKINS, * Senior District Judge.
This is an interlocutory appeal from the district court's denial of the defendants' motion for summary judgment based on qualified immunity. The defendants, officials with the Farmers Home Administration (hereinafter "FmHA"), sued in their individual capacities, are alleged to have deprived the McBrides, poultry farmers, of an established property interest in violation of the Fifth Amendment to the United States Constitution. Despite our determination that this appeal was timely filed, 1 we reverse. While we do not condone the defendants' deceitful conduct, we nonetheless hold that the defendants are entitled to qualified immunity for their actions because they did not act to deny the McBrides of any property interest in violation of clearly-established constitutional norms.
The McBrides purchased a 57-acre farm in Norridgewock, Maine, in March of 1971. Sometime later, the McBrides decided to arrange financing to equip the farm with the necessary improvements for poultry ("broiler") farming. In 1975, the McBrides received a $94,000 farm-ownership loan from the FmHA to finance such meliorations. The McBrides also obtained a $40,000 real estate loan from Skowhegan Savings Bank (hereinafter the "Bank"). The Bank's $40,000 mortgage on the farm was senior to the FmHA's loan. In September of 1975, the McBrides received an additional $29,300 operating loan from the FmHA for farm equipment and machinery. Sometime between 1981 and 1982, the McBrides' loan payments were in arrears. 2 The FmHA took no actions through 1981 to early 1982, with respect to the McBrides' delinquency in their loan payments.
In the Fall of 1982, the McBrides met with defendant Taylor, the Somerset County supervisor for the FmHA, to discuss the McBrides' options in regard to their overdue mortgage payments. At the meeting, Taylor allegedly suggested that the McBrides request the Bank, the first lienholder, to foreclose on the McBrides' bank loan. This action, as represented by Taylor, would facilitate the FmHA's control over the entire indebtedness, by allowing the FmHA to purchase the Bank's mortgage; under this arrangement, the McBrides could keep their farm. Taylor denies these allegations.
The McBrides allege that they agreed to Taylor's plan and followed through by contacting the Bank to request that the Bank initiate foreclosure action. In October of 1982, the Bank began foreclosure proceedings against the McBrides. The Somerset County Superior Court entered a Judgment of Foreclosure and Sale of the Farm on January 14, 1983. This judgment triggered the running of a one year period of redemption under Maine law. 3
After the Bank initiated the foreclosure action, defendant Sewall, the FmHA State Director, submitted an affidavit and lien notice reflecting FmHA's secured interest in the McBrides' property. Between January of 1983 and January of 1984, the defendants, as FmHA officials, are not alleged to have taken any actions with respect to the McBrides or the impending foreclosure. In early February 1984, after the redemption period expired, Sewall, Taylor's FmHA supervisor, instructed Taylor to appear at the foreclosure sale, scheduled for March 1, 1984, and to bid on the McBrides' property.
The McBrides allege that on February 16, 1984, Taylor demanded that the McBrides "voluntarily" convey their farm to the FmHA. Taylor allegedly told the McBrides that if they did not voluntarily convey the farm, the FmHA would sell the property and the McBrides would still be liable for the FmHA debt. It is further alleged that Taylor stated that voluntary conveyance or foreclosure were the McBrides' only alternatives. On February 20, 1984, the McBrides then spoke with Sewall on the telephone, anent the voluntary conveyance. Sewall allegedly stated that voluntary conveyance was the McBrides' only alternative to foreclosure. On February 21, 1984, the McBrides met with Taylor and signed the papers for their voluntary conveyance of their farm. Included in the voluntary conveyance was a bill of sale for the fixtures on the farm. 4
Sometime between the end of February and the March 1, 1984 foreclosure sale, Taylor informed the McBrides that their voluntary conveyance to the FmHA would not be accepted. 5 Because the voluntary conveyance was not accepted, Taylor attended the foreclosure sale and the FmHA was the successful bidder, and accordingly obtained title to the entire property. The FmHA sold the farm on September 16, 1984, to a third party.
On November 14, 1983, a nationwide temporary injunction was entered by the United States District Court for the District of North Dakota. Coleman v. Block, 580 F.Supp. 192 (D.N.D.1983). This temporary injunction concerned various practices by the FmHA in regard to default, appeal and foreclosure procedures. The temporary injunction was made permanent after a trial on the merits. Coleman v. Block, 580 F.Supp. 194 (D.N.D.1984). The permanent injunction enjoined the FmHA and their agents from accelerating the indebtedness of borrowers' loans, foreclosing on the borrowers' real property or chattels, demanding voluntary conveyance of the borrowers and repossessing chattels of the borrowers or in any way proceeding against or depriving borrowers of property in which the FmHA has a security interest, unless the FmHA provided at least 30 days' written notice of the action with reasons for the action, a right to an appeal, and an opportunity to establish eligibility for loan deferral under 7 U.S.C. Sec. 1981a. Id. at 210-211. The rulings in the Coleman injunction were ultimately rendered moot by supervening legislation. Coleman v. Lyng, 864 F.2d 604 (8th Cir.), cert. denied, --- U.S. ---- 110 S.Ct. 364, 107 L.Ed.2d 351 (1989). Congress enacted the Agricultural Act of 1987, P.L. No. 100-233, 101 Stat. 1568, a statute which provides more relief to FmHA borrowers than the district court's order in the Coleman case. Id. at 605.
The McBrides subsequently brought this Bivens-type action in February of 1986 based on their constitutional right to due process. See Bivens v. Six Unknown Named Agents of Federal Bureau of Narcotics, 403 U.S. 388, 91 S.Ct. 1999, 29 L.Ed.2d 619 (1971). Taylor and Sewall, officials of the FmHA, were sued individually for damages associated with the claimed deprivation of the McBrides' property. This Fifth Amendment violation assertedly arose as the result of the defendants' failure to provide the plaintiffs with proper notice and an opportunity for a hearing, before foreclosure of the first mortgage on the McBrides' chicken farm. The defendants' unlawful actions are also alleged to have been in violation of the Coleman injunction.
The defendants, Taylor and Sewall filed a Motion to Dismiss or, for Summary Judgment or, a Motion to Stay Proceedings, on August 6, 1986. The McBrides likewise filed a Motion to Stay proceedings in this case pending the conclusion of their contempt action brought against Taylor and Sewall in the Coleman class action litigation and related Coleman injunction which established procedures in regard to foreclosure. On January 4, 1989, the North Dakota district court entered an order on the McBrides' motion in Civil No. A1-83-47-09 finding the defendants' actions in contempt of the Coleman injunction. 6
Following the stay of proceedings in this case, the district court ordered further briefing on the pending motion to dismiss or in the alternative for summary judgment. On February 21, 1990, the magistrate to whom the case had been referred, entered an order recommending denial of the motion, treating it as one for summary judgment. On April 6, 1990, the District Court entered an order adopting the magistrate's recommended ruling. Defendants filed their timely notice of appeal on May 31, 1990 pursuant to Rule 4(a)(1) of the Federal Rules of Appellate Procedure. Defendants brought this interlocutory appeal from the denial of immunity pursuant to Mitchell v. Forsyth, 472 U.S. 511, 530, 105 S.Ct. 2806, 2817, 86 L.Ed.2d 411 (1985).
Public officials performing discretionary functions enjoy qualified immunity from civil damages liability "insofar as their conduct does not violate clearly established statutory or constitutional rights of which a reasonable person would have known." Harlow v. Fitzgerald, 457 U.S. 800, 818, 102 S.Ct. 2727, 2738, 73 L.Ed.2d 396 (1982) (citations omitted). On a motion for summary judgment based on a defense of qualified immunity, the relevant question is whether a reasonable official could have believed his actions were lawful in light of clearly established law and the information the official possessed at the time of his allegedly unlawful conduct. See Anderson v. Creighton, 483 U.S. 635, 639, 107 S.Ct. 3034, 3040, 97 L.Ed.2d 523 (1987). The Supreme Court in Creighton observed that:
The contours of the right must be sufficiently clear that a reasonable official would understand that what he is doing violates that right. That is not to say that an official action is protected by qualified immunity unless the very action in question has...
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