Oakley Grains, Inc. v. Shumate
| Decision Date | 24 September 2018 |
| Docket Number | Case No. 4:17-cv-00717-KGB |
| Parties | OAKLEY GRAINS, INC., et al. PLAINTIFFS v. GARY SHUMATE, et al. DEFENDANTS |
| Court | U.S. District Court — Eastern District of Arkansas |
Before the Court are several motions filed by interpleader plaintiffs Oakley Grain, Inc., and Bruce Oakley, Inc. (collectively "Oakley plaintiffs"). Before the Court are Oakley plaintiffs' motion to tender funds and for an injunction under 28 U.S.C. § 2361, attorney fees, and costs; motion for attorney fees and court costs; first amended motion for attorney fees and court costs; and motion for partial default judgment against interpleader defendant Jimmy Jon Weinmiller Jr. (Dkt. Nos. 19, 20, 22, 24, 38). Separate interpleader defendants Gary Shumate and G2 Terra Firma, LLC ("G2"), responded to the motions for preliminary injunction and attorney fees and court costs (Dkt. Nos. 26, 27, 28). Also before the Court is interpleader defendant Farm Credit Services of America's ("FCSA") motion to dismiss plaintiffs' interpleader complaint (Dkt. No. 34). Oakley plaintiffs responded to FCSA's motion to dismiss (Dkt. No. 36).
For the following reasons, the Court grants Oakley plaintiffs' motion to tender funds and for an injunction under 28 U.S.C. § 2361, attorney fees, and costs; motion for attorney fees and court costs; and first amended motion for attorney fees and court costs (Dkt. No. 19, 20, 22, 24). The Court refers the motion for partial default judgment against defendant Mr. Weinmiller to the Clerk of Court for consideration (Dkt. No. 38). The Court grants FCSA's motion to dismiss plaintiffs' interpleader complaint (Dkt. No. 34).
This is an interpleader action pursuant to 28 U.S.C. § 1335. Oakley plaintiffs are corporations located in Arkansas (Dkt. No. 1, ¶ 1). Oakley Grain, Inc., is a United States Department of Agriculture ("USDA") licensed grain warehouse (Id.). Oakley plaintiffs allege that in the course and scope of their business they have come into possession of soybeans, in which interpleader defendants may claim an interest (Id., ¶ 11). Oakley plaintiffs claim that they are a mere stakeholder and, except for warehouse liens for storage, do not claim an interest in the grain held or proceeds of the grain (Id.). Oakley plaintiffs further claim that they have reasonable concerns and fears of possible exposure to multiple and contradictory or offsetting claims to the grain or grain proceeds; desire to deposit the grain or grain proceeds with the Court, pursuant to § 1335; and desire to withdraw from the proceedings (Id.).
Oakley plaintiffs allege that, on October 27, 2017, four loads of soybeans were delivered to Oakley plaintiffs by or on behalf of interpleader defendants Mr. Shumate or G2 (Id., ¶ 12, Ex. 1-4). Oakley plaintiffs allege that they received a claim on soybeans from interpleader defendant Larry J. Pribil, a/k/a Jerome Pribil, on October 27, 2017 (Id., ¶ 14, Ex. 5). Oakley plaintiffs also allege that they received a Farm Products Security Interest Notice from FCSA (Id., ¶ 15, Ex. 6). FCSA's Security Interest Notice was prepared on August 15, 2017, and states that FCSA claims a security interest in soybeans, along with several other farm products, of Mr. Pribil and interpleader defendant JP Livestock, Inc. ("JP Livestock") (Id., Ex. 6).
Oakley plaintiffs describe the specific res in controversy as $54,053.00, which is the priced proceeds of 5,762.12 bushels of soybeans that were delivered to Oakley plaintiffs by Mr. Shumate or G2 (Dkt. No. 19, ¶ 3). According to the complaint, Mr. Shumate, G2, and Mr. Weinmiller areresidents of Arkansas (Dkt. No. 1, ¶¶ 2, 3, 8). Mr. Pribil, JP Livestock, and FCSA are residents of Nebraska (Dkt. No. 1, ¶¶ 4, 5, 6, 7).
After filing their complaint (Dkt. No. 1), Oakley plaintiffs filed a motion to tender funds and for an injunction under 28 U.S.C. § 2361, attorney fees, and costs (Dkt. Nos. 19, 20). They subsequently filed additional motions for attorney fees (Dkt. Nos. 22, 24). Mr. Shumate and G2 responded (Dkt. Nos. 26-28). FCSA filed a motion to dismiss the interpleader complaint as to FCSA (Dkt. No. 34), to which Oakley plaintiffs responded (Dkt. No. 36).
Mr. Weinmiller has not answered or otherwise responded to Oakley plaintiffs' complaint. Oakley plaintiffs served Mr. Weinmiller individually (Dkt. No. 18). Oakley plaintiffs have now filed a motion for partial default judgment against Mr. Weinmiller (Dkt. No. 38).
In their complaint, Oakley plaintiffs maintain that they are a mere stakeholder and, except for warehouse liens for storage, do not claim an interest in the grain held or proceeds of the grain, as described in the complaint (Dkt. No. 1, ¶ 11). Oakley plaintiffs assert that they have reasonable concerns and fears of possible exposure to multiple and contradictory or offsetting claims to the grain or grain proceeds (Id.). Oakley plaintiffs desire to deposit the grain or grain proceeds with the Court, pursuant to 28 U.S.C. § 1335, and withdraw from the proceedings (Id.).
Federal statutory interpleader applies where a plaintiff is in possession of "money or property of the value of $500 or more" and "[t]wo or more adverse claimants, of diverse citizenship . . . are claiming or may claim to be entitled to such money or property. . . ." 28 U.S.C. § 1335; see State Farm Fire & Cas. Co. v. Tashire, 386 U.S. 523, 530 (1967). "This provision has been uniformly construed to require only 'minimal diversity,' that is, diversity of citizenship betweentwo or more claimants, without regard to the circumstance that other rival claimants may be co-citizens." State Farm, 386 U.S. at 530.
Interpleader is a two-stage process. During the first stage, the court decides whether interpleader is available by determining "whether the prerequisites to rule or statutory interpleader have been met by examining such things as the citizenship of the litigants, the merits of the asserted threat of multiple vexation, and, if interpleader is sought under the statute, the sufficiency of the stakeholder's deposit or bond." Charles Alan Wright, et al., 7 Fed. Prac. & Proc. Civ. § 1714 (3d ed.) (West 2013). The Court then proceeds to the second stage to determine the respective rights of the claimants to the fund at issue. Id.; United States v. High Tech. Products, Inc., 497 F.3d 637, 641 (6th Cir. 2007). Discharge is available at the conclusion of the first stage.
Once the Court decides that interpleader is available, "it may issue an order discharging the stakeholder, if the stakeholder is disinterested, enjoining the parties from prosecuting any other proceeding related to the same subject matter, and directing the claimants to interplead . . . ." Charles Alan Wright, et al., 7 Fed. Prac. & Proc. Civ. § 1714 (3d ed.) (West 2013). When the stakeholder does not assert a claim to the stake, Hudson Sav. Bank v. Austin, 479 F.3d 102, 107 (1st Cir. 2007) (citations omitted).
The Court finds that interpleader is proper. Oakley plaintiffs have met the statutory requirements of: (1) an amount in controversy of $500.00 or more, (2) diversity between any two adverse claimants, and (3) depositing the money at issue into the registry of the Court. 28 U.S.C. § 1335(a). Here, the grain proceeds are $54,053.00, which far exceeds the amount in controversy requirement of $500.00. The adverse claimants in this case are from Arkansas and Nebraska,satisfying the requirement of minimal diversity. Finally, Oakley plaintiffs have moved the Court to order Oakley plaintiffs to deposit the specific res in controversy into the registry of the Court. Oakley plaintiffs also have shown a legitimate fear of "multiple vexation" directed against a single fund by identifying adverse parties who claim or could have attempted to claim the grain proceeds. See Rhoades v. Casey, 196 F.3d 592, 601 (5th Cir. 1999) ( ); Dakota Livestock Co. v. Keim, 552 F.2d 1302, 1306 (8th Cir. 1977) () (emphasis added).
For the purposes of perfecting its jurisdiction over this action, the Court orders that Oakley plaintiffs are authorized to deposit the $54,053.00 in their possession, that is in issue in this case, into the registry of the Court. Upon Oakley plaintiffs deposit of the specific res in controversy, Oakley plaintiffs will be discharged from any further liability regarding the grain proceeds described in the complaint and dismissed with prejudice from this case.
The Court will next address FCSA's motion to dismiss plaintiffs' interpleader complaint as to FCSA (Dkt. No. 34). FCSA contends that it is not a proper party to interplead in this matter because it does not have a claim of ownership to the property described in Oakley plaintiffs' complaint — the specific crops, grains, and/or proceeds which form the basis of Oakley plaintiffs' complaint (Dkt. No. 35, at 2). In response, Oakley plaintiffs argue that FCSA is a proper party (Dkt. No. 36, ¶ 3). Oakley plaintiffs assert that FCSA served Oakley plaintiffs with a lien notice under 7 U.S.C. § 1361 for the 2017 crop year as to Mr. Pibil, before delivery of soybeans to Oakley(Dkt. No. 36, ¶ 3). Oakley plaintiffs further assert that Mr. Pibil served Oakley plaintiffs with a lien claim shortly after delivery of soybeans to Oakley plaintiffs (Id.). A copy of the FCSA Farm Products Security...
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