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United States v. LaBatte

United States District Court, D. South Dakota, Northern Division

November 30, 2018

UNITED STATES OF AMERICA, Plaintiff,
v.
BRENDAN J. LABATTE; TIMOTHY LABATTE; and DALE VOGT, Defendants

          ORDER

          CHARLES B. KORNMANN, UNITED STATES DISTRICT JUDGE

         BACKGROUND

         On December 7, 2017, plaintiff filed a complaint against defendants to foreclose on secured property pursuant to two outstanding loans to Brendan J. LaBatte ("borrower"). Defendant Dale Vogt has a judgment lien, filed after plaintiffs lien, on chattel securing the loans, and defendant Timothy LaBatte maintains possession of the secured chattel on his property. The court dismissed defendant Roberts County, South Dakota, which also held a lien on the secured property at issue here, after it disclaimed its interest in this case. Defendant Timothy LaBatte filed an answer to the foreclosure complaint pro se. Defendants Brendan J. LaBatte and Dale Vogt did not file an answer to the foreclosure complaint. On September 7, 2018, plaintiff moved for summary judgment requesting a judgment of foreclosure, a decree of sale, and a finding that plaintiffs interest is superior to any other stated interest. No. defendant has filed a response to the motion for summary judgment or requested to enlarge the deadline for responding.

         The court has jurisdiction over this case because it is a proceeding commenced by the United States. 28 U.S.C. § 1345.

         DECISION

         I. Standard of Review

         The purpose of summary judgment is to determine whether there is a "genuine issue for trial" with regard to a claim or defense or "part of each claim or defense." Matsushita Elec. Indus. Co.. Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986); Fed.R.Civ.P. 56(a). Summary judgment should be granted only where there is "no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a). If facts are disputed, "[o]nly disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). The moving party bears the burden of showing that the material facts in the case are undisputed and "inferences to be drawn from the underlying facts ... must be viewed in the light most favorable to the party opposing the motion." Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986); United States v. Diebold, Inc., 369 U.S. 654, 655 (1962) (per curiam). However, a nonmoving party "may not rest on mere allegations or denials" and "must do more than show that there is some metaphysical doubt as to the material facts." Anderson, at 256; and Matsushita at 587. In sum, an issue of fact is genuine if, based upon the evidence in the record, a reasonable jury could return a verdict for the nonmoving party. Anderson, at 248.

         When the United States is a creditor, the law of the state where the court is situated applies when giving effect to a promissory note. See 28 U.S.C. § 2410(c). The issue of foreclosure is therefore governed by South Dakota Law. See Donovan v. Farmers Home Admin., 19 F.3d 1267, 1269 (8th Cir. 1994). District Courts will grant summary judgment and foreclosure relief on chattel securing a promissory note where the Farm Services Agency has followed its administrative procedures in seeking relief on such note. U.S. v. Morse, 2011 WL 197579 *2 (D.S.D. 2011) (internal citations omitted).

         Under Local Rule 7.1, defendants were required to serve and file a responsive brief to plaintiffs motion for summary judgment containing opposing legal arguments and authorities in support thereof within 21 calendar days. No. defendant filed such a motion, nor did any defendant file a motion to enlarge the time in which to respond. Under Local Rule 56.1(d), "[a]ll material facts set forth in the movant's statement of material facts will be deemed to be admitted unless controverted by the opposing party's statement of material facts." Because the defendants have not responded to the motion for summary judgment or statement of material facts submitted in connection therewith, the Court, under the Local Rule, deems the statement of material facts to be admitted.

         II. A Judgment of Foreclosure Should be Entered Against Borrower

         Plaintiff requests that this court enter judgment against borrower in the amount of $36, 950.13 as of August 20, 2018, together with any additional sums advanced, costs or expenses expended, and interest accruing at a daily rate of $1.0806. Plaintiff also requests that this court adjudge borrower's security interest in the secured chattel property to be foreclosed. Plaintiff has provided as evidence promissory notes signed by borrower, a security agreement, acceleration notice, and the UCC filings indicating plaintiff has perfected its interest in the specific chattel identified in its complaint and any after acquired replacement chattel.

         Borrower signed two promissory notes. The first indicates that borrower borrowed $14, 000, at a rate of 1.125%, on February 22, 2013, with payment due in full on February 22, 2014. The second promissory note, also signed February 22, 2013, indicates that borrower borrowed $21, 000 at a rate of 1.125%, due in seven yearly installments, with the first installment of $3137.00 due on February 22, 2013. The security agreement provides plaintiff a security interest in, inter alia, the following farm and other equipment, together with all replacements, substitutions, additions, and accessions thereto:

Line No.

Quantity

Kind

Manufacturer

Size and Type

Condition

Serial or Model No.

1

1

Tractor

IHC

656

Fair

To be purchased

2

1

Tractor

JD

4010

Fair

To be purchased

3

1

Mower

International

Good

To be purchased

4

1

9-Wheel Rake

To be purchased

5

1

Square Baler/Accumulator

NH

268

Fair

21082

6

1

Bale Fork

3Pt

Fair

7

1

Feed Wagon

Algoma

WF

Fair

709

8

17

Cattle Panels & Posts

Good

9

Tools in Tool Chest

10

1

Bobcat Trailer

Homemade

Fair

Not Titled

         Four of the items listed above were "[t]o be purchased." However, plaintiff alleges that borrower only purchased the 9-Wheel Rake, and then also purchased a Ford 5000 Tractor (1966, Serial #9C12BB7016), a Rowse Mower (S-9, Serial Number CC-R2S-25), a Sickle Mower, a Gehl V-Rake (520-6 each side, Serial Number 9705), and a Delta Trailer (6x16, Serial Number 4MWBS16206N017001, 2006). The provision in the security agreement providing plaintiff with an interest in "all ...


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