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United States v. Mason

United States District Court, D. Maine

August 7, 2015

UNITED STATES OF AMERICA, Plaintiff,
v.
STEVEN A. MASON, Defendant, and UNITED CO-OPERATIVE FARMERS, Party-In-Interest.

ORDER ON THE PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT

JON D. LEVY, District Judge.

The plaintiff, the United States of America (the "United States" or "the government") filed this lawsuit against the defendant, Steven A. Mason, on October 21, 2014, seeking foreclosure of certain real property and repossession of chattels. ECF No. 1. In May 2015, the government filed a motion for summary judgment, which Mason has not opposed. ECF No. 17. For the reasons discussed below, I conclude that the United States has properly supported its motion and I grant the motion.

I. FACTUAL BACKGROUND

Mason has not opposed any of the factual assertions contained in the government's Statement of Material Facts. See ECF No. 18. Pursuant to Local Rule 56(f), facts contained in a statement of material facts "shall be deemed admitted unless properly controverted, " if the facts in question are supported by "record citations." LR 56(f). Therefore, based upon the government's Statement of Material Facts and the record materials cited in support of those facts, the following is established for purposes of summary judgment.

Mason obtained two loans from the Farm Service Agency ("FSA"), an agency of the United States Department of Agriculture, pursuant to the Consolidated Farm and Rural Development Act. ECF No. 18 at ¶¶ 1, 2, 10. The first loan, in the amount of $45, 000, was obtained on July 30, 1990, as evidenced by a promissory note of the same date. ECF No. 1-1. Mason subsequently rescheduled the loan three times, executing a new promissory note each time: on February 25, 1991, for $44, 918.15; on June 1, 1994, for $43, 782.78; and on November 8, 2000 for $46, 739.64. ECF No. 18 at ¶ 1. See also, ECF No. 1-2; ECF No. 1-3; ECF No. 1-4.

The second loan, in the amount of $25, 000, was obtained on December 5, 1991, as evidenced by a promissory note of the same date. ECF No. 18 at ¶ 2; see also, ECF No. 1-5. Mason subsequently rescheduled the loan twice, executing a new promissory note each time: first, on June 1, 1994, for $25, 522.30 and again on November 8, 2000, for $33, 738.39. ECF No. 18 at ¶ 2. See also, ECF No. 1-6; ECF No. 1-7.

To secure the promissory notes, Mason executed and delivered to the FSA three real estate mortgages for a property he owned in Paris, Maine, dated December 17, 1992, June 1, 1994, and November 8, 2000. ECF No. 18 at ¶ 3; see also, ECF No. 1-8; ECF No. 1-9; ECF No. 1-10; ECF No. 19 at ¶ 5. The mortgages were recorded in the Oxford County Registry of Deeds in Volume 1966, Page 295; Volume 2127, Page 182; and Volume 2880, Page 349, respectively. ECF No. 18 at ¶ 5.

United Co-Operative Farmers, a party-in-interest, has a lien interest in the mortgaged property by a Writ of Execution dated October 8, 1997, which was recorded in the Oxford County Registry of Deeds in Volume 2487, Page 189. ECF No. 18 at ¶

9. Although it was served with a summons and a copy of the Complaint, United Co-operative Farmers failed to file a responsive pleading. ECF No. 12; ECF No. 14-1. Accordingly, the Clerk of the Court entered default against it on April 13, 2015. ECF No. 16. On July 16, 2015, the court issued a Show Cause Order directing the United States to explain why it had not filed a Motion for Default Judgment as to United Co-Operative Farmers. ECF No. 20. The government responded to the Show Cause Order the very same day and contemporaneously filed a Motion for Default Judgment. ECF No. 22. The response deadline for the government's Motion for Default Judgment was August 6, 2015; however, United Co-Operative Farmers filed no response.

Mason also executed a series of security agreements granting the FSA an interest in his farm equipment, the most recent of which is dated February 16, 2000. ECF No. 18 at ¶ 6; ECF No. 1-11. The equipment listed on the security agreements includes a 20-foot Snowco hay elevator; a 1987 John Deere 950 4WD tractor; a 1987 John Deere 75 loader; a 1987 Kuhn EL 50 rototiller; a 3 pt. hitch scraper; a 3 pt. hitch hay spear, all listed as in "good" condition; and a 1993 Patz gutter cleaner, listed as in "new" condition. ECF No. 1-11 at 4.[1] To perfect the FSA's security interest in the farm equipment, Mason executed a UCC-1 Financing Statement on July 19, 1990, which was recorded by the Maine Secretary of State's Office in File No. 897889. ECF No. 19-12. Mason subsequently amended the UCC-1 Financing Statement four times, on July 12, 1995; May 9, 2000; May 19, 2005; and February 3, 2010, and recorded each amended statement with the Maine Secretary of State's Office in File Nos. 1133092, 1362732, XXXXXXXXXXXXX-XX, and XXXXXXXXXXXXX-XX, respectively. ECF No. 19-13; ECF No. 19-14; ECF No. 19-15; and ECF No. 19-16.

The promissory notes provide that Mason's failure to make payments when due shall constitute a default under the promissory notes, the security agreements, and the mortgages. ECF No. 18 at ¶ 13. Upon a default by Mason, the FSA may, with or without notice, declare the entire amount unpaid under the notes and declare any secured debt to the government immediately due and payable, or foreclose and sell the property. Id. at ¶ 15. The mortgages, by their terms, are governed by federal regulation and federal law. Id. at ¶ 14.

On July 25, 2011, and February 22, 2012, the FSA, noting that Mason had failed to make payments when due on the promissory notes, demanded that he pay the outstanding principal balance of the promissory notes and security agreements, plus accrued interest. ECF No. 19-17; ECF No. 19-18. The two demands were identified in capital letters as "NOTICE OF ACCELERATION OF YOUR DEBT TO THE FARM SERVICE AGENCY AND DEMAND FOR PAYMENT OF THAT DEBT, " ECF No. 19-17, and "AMENDED NOTICE OF ACCELERATION OF YOUR DEBT or "fair-poor" condition, citing the security agreements. Id. However, the security agreements state that the condition of the equipment is either "good" or "new." ECF No. 1-11 at 4. TO THE FARM SERVICE AGENCY AND DEMAND FOR PAYMENT OF THAT DEBT, " ECF NO. 19-18. The demands stated the following:

[T]he entire indebtedness due on the promissory notes... which evidence the loans received by you from the [FSA] is now declared immediately due and payable.... The promissory notes... are secured by real estate mortgages.... This acceleration of your indebtedness is made in accordance with the authority granted in the above-described instruments.... Unless full payment of your indebtedness is received... within 30 days from the date of this letter, the United States will foreclose the above described security instruments and pursue other available remedies.

Id. Mason certified that he received both demands at his residence, first on August 1, 2011, and again on February 28, 2012. ECF ...


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