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United States of America v. Adam Shane Morse; Centerville Ag; Aaa Collections

January 20, 2011

UNITED STATES OF AMERICA,
PLAINTIFF,
v.
ADAM SHANE MORSE; CENTERVILLE AG; AAA COLLECTIONS, INC.; SOUTH DAKOTA DIVISION OF CHILD SUPPORT, EX REL MALLORY A. SMITH, A/K/A MALLORY A. MILLER, DEFENDANTS.



The opinion of the court was delivered by: Karen E. Schreier Chief Judge

ORDER GRANTING PLAINTIFF'S MITCHEL MORSE; MOTION FOR SUMMARY JUDGMENT

Plaintiff, the United States of America on behalf of the Department of Agriculture, Farm Service Agency (FSA) f/k/a Farmers Home Administration, filed suit against defendant, Adam Shane Morse, after he defaulted on a promissory note held by the FSA. The FSA sued the other defendants because they may claim a lien or interest in Morse's chattel used to secure the promissory note. The FSA moves for summary judgment. Defendants do not resist. The motion is granted.

BACKGROUND

In the light most favorable to defendants, the nonmoving party, the pertinent facts to this order are as follows: On June 10, 2005, Morse executed and delivered to the FSA a promissory note in the amount of $42,300 in principal with interest at the rate of 4.5 percent (Note). On November 20, 2006, the parties rescheduled the Note for a principal amount of $44,751.89 at the same interest rate.

For security on the Note, Morse executed two security agreements with the FSA. The first security agreement, dated June 10, 2005, pledged crops, machinery, and some titled items as security. The second security agreement, dated October 30, 2006, again pledged crops, machinery, and some titled items as security. The FSA perfected its security interest by filing financing statements with the South Dakota Secretary of State on June 2, 2005, and March 22, 2010.

Morse failed to make timely payments on the Note. After Morse defaulted, the FSA notified him that it intended to exercise the rights accorded to it by the Note. The FSA then accelerated the debt in accordance with the Note's provisions. Morse did not pay off the debt.

The parties exhausted the debt restructuring, mediation, and associated administrative appeal rights that Morse is entitled to under federal law. As of November 10, 2010, Morse owes $48,298.90, consisting of $42,614.27 in unpaid principal and $5,684.63 in accrued interest. Interest continues to accrue at a daily rate of $5.2538. The fair and reasonable value of the chattel used to secure the Note was $35,650 as of May 7, 2009.

Centerville Ag filed an answer. In its answer, it claims a security interest in Morse's grain crops. The other defendants did not file an answer and have not contested that the FSA's assertion that their claims, if any, are inferior to those of the FSA and Centerville Ag.

FSA now moves for summary judgment. None of the defendants have responded to the motion for summary judgment nor disputed FSA's statement of facts. In its statement of undisputed facts, FSA stated that it does not believe Morse's grain crop exists and acknowledges that it is not making a claim on any grain crop.

STANDARD OF REVIEW

Federal Rule of Civil Procedure 56(c)(2) provides that summary judgment "should be rendered if the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law." Only disputes over facts that might affect the outcome of the case will preclude summary judgment. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). Summary judgment is inappropriate if a dispute about a material fact is genuine, that is, if the evidence is such that a reasonable jury could return a verdict for the nonmoving party. Id.

The moving party bears the burden of bringing forward sufficient evidence to establish that there are no genuine issues of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). The court views the facts "in the light most favorable to the party opposing the motion." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986) (internal citation omitted). Similarly, the nonmoving party receives "the benefit of all reasonable inferences to be drawn from the underlying facts" in the record. Vette Co. v. Aetna Cas. & Sur. Co., 612 F.2d 1076, 1077 (8th Cir. 1980) (citing Adickes v.

S. H. Kress & Co., 398 U.S. 144, 158-59 (1970)).

Under the local rules, when the nonmoving party fails to object to the moving party's statement of material facts, the facts are admitted as stated in the movant's statement of material facts. See D.S.D. L.R. 56.1(D) ("All material facts set forth in the movant's statement of material facts will be deemed to be ...


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