United States v. Lein

• Decision Date: 13 December 1972
• Docket Number: No. 4-71 Civ. 73.,4-71 Civ. 73.
• Citation: 352 F. Supp. 120
• Parties: UNITED STATES of America, Plaintiff, v. Oscar E. LEIN, Individually, et al., Defendants.
• Court: U.S. District Court — District of Minnesota

352 F. Supp. 120

UNITED STATES of America, Plaintiff, v. Oscar E. LEIN, Individually, et al., Defendants.

No. 4-71 Civ. 73.

United States District Court, D. Minnesota, Fourth Division.

December 13, 1972.

Robert G. Renner, U. S. Atty., by Thorwald H. Anderson, Asst. U. S. Atty., appeared for plaintiff.

Prindle, Maland & Ward, by Donald L. Maland, Montevideo, Minn., appeared for defendants.

NEVILLE, District Judge.

Defendant Oscar E. Lein who since has been adjudicated incompetent and is here represented by the other two defendants as his guardians, obtained four loans over a several year period from the Commodity Credit Corporation (CCC) in return for his Farm Storage promissory notes, chattel mortgages and security agreements covering various lots of grain and soybeans which were permitted to be stored on his premises. For purposes of this motion for summary judgment brought by the plaintiff, it is conceded that the grain and soybeans pledged as security under the mortgages and security agreements were substantially destroyed by fire on November 14, 1969, without fault or negligence on Oscar Lein's part. From an affidavit and answers to interrogatories filed herein there is evidence about which apparently there is little controversy going to show that within hours after the grain was destroyed, the fire chief in attendance at the fire apprised by telephone the appropriate Agricultural Stabilization and Conservation Service (ASCS) county Committee office of the loss, talking with a secretary whom it is claimed left a written message for the Manager of the ASCS Committee. The ASCS is the local county representative of the CCC. The local ASCS Manager the same day directed an investigation by its personnel, one of whom personally inspected the farm virtually while the ashes were still warm. The county Committee shortly forwarded a written report of the loss to the state office of the CCC. Later, and in the summer of 1970, written confirmation of the loss and the county Committee's findings were provided to Oscar Lein's guardians. Defendants also make the uncontroverted allegation that a check for insurance proceeds payable jointly to CCC and Oscar Lein was endorsed by the CCC.

Jurisdiction is conferred on this court by the Commodity Credit Corporation Charter Act 15 U.S.C. § 714 et seq. and by 28 U.S.C. § 1345. The government has brought this action seeking recovery of some $18,000 plus interest and alleging that defendants have failed to pay the farm storage notes either by cash payment or by delivery of the mortgaged grain and soybeans. Defendants resist the government's summary judgment motion and claim a complete defense against liability for loss because of the fire and other specified occurrences provided for in the notes themselves. The various notes contain this provision:

"5. (b)(iii) The producer is responsible for any loss in quantity or quality of the commodity placed under farm storage loan. Notwithstanding the foregoing, and subject to the provisions of the Program Regulations relating to insurance on farm storage loans physical loss or damage occurring after disbursement of the loan funds will be assumed by CCC . . if the producer established to the satisfaction of CCC each of the following conditions: (1) The physical loss or damage occurred without fault, negligence, or conversion on the part of the producer, or any other person having control of the storage structure; (2) the physical loss or damage resulted solely from an external cause . . . .; (3) the producer has given the county committee immediate notice confirmed in writing of such loss or damage; and (4) the producer has made no fraudulent representation in the loan documents or in obtaining the loan." Emphasis added

Additionally, defendants have counter-claimed for certain grain storage charges. The government's motion for summary judgment is the type of motion as this court previously has stated which should be granted sparingly and only in unusual and succinctly clear cases. United States v. S. J. Groves & Sons Co., 53 F.R.D. 656 (D.Minn.1971), and cases cited therein.

The sole issue before the court on this motion and perhaps crucial to the entire case, is whether the facts of this case and the various reports of the above described events satisfy the condition of "immediate notice confirmed in writing." In light of other cases, defendant's argument that actual notice, even though verbally...