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United States v. Labatte

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

February 22, 2019

UNITED STATES OF AMERICA, Plaintiff,
v.
BRANDEN JOSHUA LABATTE and TIMOTHY LABATTE, Defendants.

          AMENDED 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 Branden J. LaBatte ("borrower"). Defendant Timothy LaBatte filed an answer to the foreclosure complaint pro se. Defendant Branden J. LaBatte did not file an answer to the foreclosure complaint. On September 6, 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 addressed the merits of Timothy LaBatte's answer in its December 3, 2018 Order, Document 18, in the closely related case of 17-CV-01032, where he provided an identical answer.

         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 chattels 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, 199.33 as of August 20, 2018, together with any additional sums advanced, costs or expenses expended, and interest accruing at a daily rate of $1.0779. 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 chattels identified in its complaint and any after acquired replacement chattels.

         Borrower signed two promissory notes. The first promissory note, 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, 2014. The second indicates that borrower borrowed S 14, 000, at a rate of 1.125%, on February 22, 2013, with payment due in full on February 22, 2014. 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 w/Loader

JD/Leon

4010/

Fair

51189

2

1

Tractor

Ford

5000

To be purchased

3

1

Mower

IHC

To be purchased

4

1

Round Baler

NH

688

To be purchased

5

1

Headgate

Priefert

85

Fair

6

1

Pig Feeder

60 Bu

Fair

7

2

Cattle Waters

Tuff

Rubber

Good

8

1

Snowblower

Lorenz

Fair

727147

9

1

Electric Fencer

Zareba

Solar - 3 mile range

Good

PP0904225287

10

2

Gas Saddle Tanks & Pumps

Fair

11

Farm Tools in Tool Box, Augers, Tire Chains

Fair

12

1

Riding Lawn Mower

Cub Cadet

Fair -Poor

@ Titans -broke down

13

1

Bale Trailer

To be purchased

14

1

Cattle Trailer

Trailmaster

Gooseneck -24'

Fair

2875

         Four of the items listed above were "[t]o be purchased." However, plaintiff alleges that borrower only purchased the NH Round Baler, and then also purchased a 1370 Case Tractor with rear duals (1976, Serial #8805223), a Monroe Plow (6 bottom), and a Flatbed. The provision in the security agreement providing plaintiff with an interest in "all replacements, substitutions, additions, and accessions," to the equipment listed above encumbers these additional items.

         The security agreement provides for acceleration of payment upon default. Doc. 1-3, 4(b)(1). The security agreement also provides that borrower shall assemble the secured property and make it available to plaintiff at the times and places designated by plaintiff. Id. at 4(b)(2), ...


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