US v. Warren Brown & Sons Farms

Citation868 F. Supp. 1129
Decision Date03 November 1994
Docket NumberCiv. No. LR-C-92-477.
PartiesUNITED STATES of America, Plaintiff, v. WARREN BROWN & SONS FARMS, a partnership consisting of Warren H. Brown, Mary O. Brown, Dennis L. Brown, Dianne L. Brown, James D. Brown, and Pamelia A. Brown; Glen Norris, d/b/a Norris Spraying Service; Edward Schafer Lime Spreading Service; AG-PRO; Thermogas of Des Arc, Inc., n/k/a Mapco Gas Products, Inc.; Ceramic Arts Center; Thibault Milling Company; Dave Richards; M.M. Cohn Company; and Federal Land Bank of St. Louis, n/k/a Agribank, Defendants.
CourtU.S. District Court — Eastern District of Arkansas

Patrick C. Harris, Richard M. Pence, Jr., U.S. Atty's Office, Little Rock, AR, for plaintiff U.S.

Warren H. Brown, pro se.

Mary O. Brown, pro se.

Robert J. Brown, Crockett, Brown & Worsham, P.A., Little Rock, AR, for defendants Dennis L. Brown, Dianne L. Brown.

James D. Brown, pro se.

Bill Penix, Penix, Penix & Lusby, Jonesboro, AR, for defendant Thermogas of Des Arc, Inc. aka Mapco Gas Products, Inc.

W.J. Walker, Little Rock, AR, for defendant Ceramic Arts Center.

Raymond A. Harrill, Little Rock, AR, for defendant Dave Richards.

John W. Fink, Jack, Lyon & Jones, P.A., Little Rock, for defendant M.M. Cohn Co.

MEMORANDUM OPINION AND ORDER GRANTING SUMMARY JUDGMENT

EISELE, District Judge.

I. INTRODUCTION

Before the Court is a motion for summary judgment1 filed by the United States, acting through the Farmers Home Administration "FmHA", as well as a cross-motion for summary judgment2 filed by defendant David Richards. Defendant Mary O. Brown3 has filed a response4 opposing the FmHA's motion, while defendant Thermogas of Des Arc., Inc., n/k/a Mapco Gas Products, Inc., has indicated5 that it does not object to the Court's entering summary judgment in favor of the FmHA. Since none of the remaining defendants have responded to the FmHA's motion,6 the Court will consider these nonresponding parties as having consented to the relief sought by the FmHA.7Cf. E.D.Ark.R. C-10(b) & (c). For the reasons expressed in the following opinion, the FmHA's motion for summary judgment will be granted.

II. UNDISPUTED FACTUAL BACKGROUND

This is a foreclosure action involving three mortgages which were executed to secure various loans underwritten by the FmHA.8 During the period spanning June 29, 1979 through April 27, 1981, defendant Warren Brown & Sons ("the partnership"), a partnership apparently organized under the laws of Arkansas,9 obtained six emergency loans from the FmHA. Promissory notes10 were executed in connection with these each of these loans, all of which were signed by defendants Warren H. Brown, Mary O. Brown, Dennis L. Brown, and James D. Brown; Dianne L. Brown and Pamelia A. Brown were parties to only the last two notes. Moreover, all of the signatories to these notes were liable thereunder in both their individual capacities and as members of the partnership. The total amount advanced under these loans was $495,240.00, and each was secured by mortgages11 on several parcels of real property located in Arkansas' Prairie and Lonoke Counties. According to an affidavit12 submitted by Mark L. Petty, the FmHA supervisor for Prairie County, all but one of these mortgaged properties have been previously liquidated. The lone remaining parcel is the subject of the present foreclosure action, namely:

A part of Block Sixty-One (61), Hudspeth's Addition to the Town of Hazen, Arkansas, being more particularly described as follows, to wit: Beginning at the Southeast corner of said Block 61, thence run North along the East boundary line of said block 61 a distance of 150 feet to a point; thence run West a distance of 122.31 feet to a point; thence run South parallel to the said East boundary line of said Block 61 a distance of 150 feet to a point; thence run East a distance of 122.31 feet to the point of beginning.

As evidenced by a second affidavit submitted by Mr. Petty,13 the partnership has failed to make the payments required under the terms of the above-mentioned notes. This non-payment has resulted in a delinquency which as of April 26, 1994 totaled $537,649.29, with interest continuing to accrue at a daily rate of $55.4426. Pursuant to the notes' provisions governing borrower default,14 the FmHA accelerated the notes and declared the entire outstanding balance to be due and owing. Despite having received the FmHA's notice of default and demand for payment, neither the partnership nor the individual borrowers have made any effort to satisfy their payment obligations. Since no evidence has been submitted to the Court disputing the factual accuracy of Mr. Petty's affidavits, the Court considers the factual question of the borrowers' non-payment to be undisputed. Cf. Fed.R.Civ.P. 56(e); Celotex Corp. v. Catrett, 477 U.S. 317, 323-24, 106 S.Ct. 2548, 2552-53, 91 L.Ed.2d 265 (1986); Vance v. Stevens, 930 F.2d 661, 662 (8th Cir.1991).

Faced with the borrowers' persistent non-payment, the FmHA commenced this foreclosure proceeding. It is undisputed that the FmHA has properly served all persons holding an interest in the subject property,15 namely the borrowers and any identified lienholder-creditors.

III. Discussion

The standard governing the Court's consideration of a motion for summary judgment is well-established. Under Rule 56 of the Federal Rules of Civil Procedure, summary judgment is appropriate only when "`the pleadings ... on file, together with the affidavits ... show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.'" Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986) (quoting Fed.R.Civ.P. 56(c)). As previously discussed, it is undisputed that the borrowers are currently in default on their obligations under the notes. Further, Mr. Petty's second affidavit indicates that the borrowers were "sent, by certified mail, all required notices advising them of the availability of loan service programs for delinquent farm borrowers ... and that the borrowers were afforded all rights regarding FmHA Primary Loan Service Programs and Preservation Loan Service Programs."16 It was, therefore, clearly within the FmHA's authority to institute this foreclosure proceeding.17 See 7 C.F.R. § 1955.15 (1993); cf. United States ex rel. Farmers Home Administration v. Nelson, 969 F.2d 626, 630 n. 3 (8th Cir.1992). Moreover, no party has raised any challenge to the general enforceability of either the loan or the mortgage agreements. Thus, this foreclosure action is ripe for summary adjudication, and in the absence of an affirmative defense the FmHA will be entitled to summary judgment. See Federal Land Bank of St. Louis v. Hopmann, 658 F.Supp. 92, 94-95 (E.D.Ark.1987); cf. United States v. Winthrop Towers, 628 F.2d 1028, 1036 (7th Cir. 1980).

A. The Limitations Defenses

In opposition to the FmHA's motion, and in support of his own cross-motion for summary judgment, Mr. Richards argues that the FmHA is time-barred from maintaining this foreclosure action.18 In an action based on federal law, it is well-settled that the United States is not bound by any statute of limitations unless Congress has expressly so provided.19United States v. John Hancock Mut. Life Ins. Co., 364 U.S. 301, 308, 81 S.Ct. 1, 5-6, 5 L.Ed.2d 1 (1960); see also United States v. California, ___ U.S. ___, ___-___, 113 S.Ct. 1784, 1790-91, 123 L.Ed.2d 528 (1993). Mr. Richards argues that this foreclosure action is covered by the statute of limitations set forth in 28 U.S.C.A. § 2415(a) (West 1994), which provides:

Every action for money damages brought by the United States or an ... agency thereof which is founded upon any contract express or implied in law or fact, shall be barred unless the complaint is filed within six years after the right of action accrues....

The Court concludes that this statute, by its express terms, has no application in the present case. Quite simply, a foreclosure action is not an "action for money damages ... founded upon a contract" — it is an action in rem which allows a creditor to seize and sell mortgaged property in an effort to satisfy the contractual obligations of its debtor. United States v. Alvarado, 5 F.3d 1425, 1429 (11th Cir.1993). Thus, even though the FmHA is time-barred from instituting a contract action against the borrowers for their breach of the various promissory notes,20 see id. at 1428, the FmHA is nevertheless permitted to foreclose upon the mortgage it holds on the above-identified property.21Id. at 1428-30; United States v. Ward, 985 F.2d 500, 503 (10th Cir.1993); United States v. Succession of Siddon, 812 F.Supp. 674, 676 (W.D.La.1993); Cummings v. Farmers Home Admin., 825 F.Supp. 769, 771 (N.D.Tex.1992); United States v. Copper, 709 F.Supp. 905, 908 (N.D.Iowa 1988); see also Westnau Land Corp. v. United States Small Business Admin., 1 F.3d 112, 115-16 (2d Cir.1993). Consequently, the Court concludes that the FmHA's present foreclosure action is not barred by the statute of limitations set forth in § 2415(a).22

Since Congress has not established a statute of limitations applicable to foreclosure actions, see United States v. Alvarado, supra, 5 F.3d at 1428 n. 9, Mr. Richards argues that the Court should apply the Arkansas statute of limitations which bars a foreclosure action from being commenced after the limitations period governing the underlying obligation (in this case, six years) has expired. See Ark.Code Ann. § 18-49-101(a) (Michie 1987). However, as a general rule federal law, not state law, governs the United States' rights arising under nationally administered federal programs. United States v. Kimbell Foods, Inc., 440 U.S. 715, 726, 99 S.Ct. 1448, 1457, 59 L.Ed.2d 711 (1979); United States v. Kukowski, 735 F.2d 1057, 1058 (8th Cir.1984). While state law may, in certain circumstances, be applied to fill a void in the...

To continue reading

Request your trial
7 cases
  • Davidson v. F.D.I.C.
    • United States
    • U.S. Court of Appeals — Fifth Circuit
    • 25 d3 Janeiro d3 1995
    ...985 F.2d 500, 501-03 (10th Cir.1993); Cracco v. Cox, 66 A.D.2d 447, 414, 414 N.Y.S.2d 404 (4th Dept.1979); United States v. Warren Brown & Sons Farms, 868 F.Supp. 1129 (E.D.Ark.1994); United States v. Succession of Siddon, 812 F.Supp. 674, 675-76 (W.D.La.1993); United States v. LaSalle Nati......
  • U.S. v. Johnson
    • United States
    • U.S. District Court — District of Utah
    • 12 d2 Novembro d2 1996
    ...502 (10th Cir. 1993); Cassidy Comm'n Co. v. United States, 387 F.2d 875, 880 (10th Cir.1967); see also United States v. Warren Brown & Sons Farms, 868 F.Supp. 1129, 1134 (E.D.Ark.1994); United States v. Children's Shelter, Inc., 604 F.Supp. 865, 867 (W.D.Okla.1985); United States v. Bunker ......
  • U.S. v. Thornburg
    • United States
    • U.S. Court of Appeals — Ninth Circuit
    • 3 d5 Maio d5 1996
    ...that there is no statute of limitations for foreclosure actions filed by the United States. See United States v. Warren Brown & Sons Farms, 868 F.Supp. 1129, 1133-34 & n. 23 (E.D.Ark.1994); Cummings v. Farmers Home Admin., 825 F.Supp. 769, 771 (N.D.Tex.1992); United States v. Succession of ......
  • Turner v. United States Small Business Administration, No. 4:00-CV-833 CAS (E.D. Mo. 9/10/2001)
    • United States
    • U.S. District Court — Eastern District of Missouri
    • 10 d1 Setembro d1 2001
    ...cert. denied, 516 U.S. 806 (1995); United States v. Ward, 985 F.2d 500, 503 (10th Cir. 1993); United States v. Warren Brown & Sons Farms, 868 F. Supp. 1129, 1133-34 & n. 23 (E.D.Ark. 1994). This argument is therefore without Fourth, plaintiffs contend that their discharge in bankruptcy prec......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT