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Oakhurst v. Commercial State Bank of Wausa

United States District Court, D. Nebraska

February 6, 2015

CI OAKHURST, a California Limited Liability Company, Plaintiff,
v.
COMMERCIAL STATE BANK OF WAUSA, a Nebraska banking corporation, Defendant.

MEMORANDUM AND ORDER

RICHARD G. KOPF, Senior District Judge.

This is a diversity action in which Plaintiff, CI Oakhurst, seeks to recover loan payments that it made to Defendant, Commercial State Bank of Wausa ("Bank") over a period of 4 years in the allegedly mistaken belief that it had assumed the obligations of the loan debtor, Roaster Ranch, Inc., and purchased real property that secured the loans.[1] Bank counterclaims to recover the balance owing on the loans.[2]

The parties have filed cross-motions for summary judgment (Filings 52, 56).[3] Bank's motion only addresses CI Oakhurst's claim, while CI Oakhurst's motion involves the entire action. For the reasons discussed below, Bank's motion will be granted and CI Oakhurst's motion will be granted in part and denied in part.

Standard of Review

Summary judgment is appropriate "if the movant shows that 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). In considering summary judgment motions, the burden of demonstrating there are no genuine issues of material fact rests on the moving party, and the court reviews the evidence and inferences which reasonably may be drawn from the evidence in the light most favorable to the nonmoving party. See Davis v. Jefferson Hosp. Ass'n, 685 F.3d 675, 680 (8th Cir. 2012). However, the nonmoving party "may not rest upon mere allegation or denials of his pleading, but must set forth specific facts showing that there is a genuine issue for trial." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256 (1986).

"A mere scintilla of evidence is insufficient to defeat summary judgment and if a nonmoving party who has the burden of persuasion at trial does not present sufficient evidence as to any element of the cause of action, then summary judgment is appropriate." Brunsting v. Lutsen Mountains Corp., 601 F.3d 813, 820 (8th Cir. 2010) (internal quotation marks and citations omitted). "Where the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party, there is no genuine issue for trial.'" Torgerson v. City of Rochester, 643 F.3d 1031, 1042 (8th Cir. 2011) (quoting Ricci v. DeStefano, 557 U.S. 557, 586 (2009)).

Uncontroverted Facts

As required by the court's local rules, Bank's supporting brief (Filing 53, at 3-8) includes a 28-paragraph "statement of material facts about which the moving party contends there is no genuine issue to be tried and that entitles the moving party to judgment as a matter of law." NECivR 56.1(a)(1).[4] CI Oakhurst's opposing brief (Filing 60, at 1-8) includes an appropriate response to each paragraph. See NECivR 56.1(b)(1).[5] Similarly, CI Oakhurst's brief filed in support of its motion for summary judgment (Filing 57, at 2-4) contains a 19-paragraph statement of material facts, and the Bank's opposing brief contains an appropriate response (Filing 59, at 2-10). Upon review of the briefs and referenced materials, [6] the court finds there is no genuine dispute regarding the following facts:

1. CI Oakhurst is a California limited liability company with its principal place of business in Watsonville, California. [Plaintiff's Statement of Facts ("PSF"), ¶ 1.]

2. Bank is a Nebraska banking corporation with its principal place of business in Wausa, Nebraska. [PSF, ¶ 2.]

3. In approximately 2005, CI Oakhurst purchased one parcel of real property in the State of Missouri from Roaster Ranch, Inc., a Nevada corporation (Ex. 5 [Filing 58-5], Purchase Agreement, Bates Nos. 0001-0015). [PSF, ¶ 3.][7]

4. CI Oakhurst leased equipment and loaned money to Roaster Ranch (Ex. 2 [Filing 58-2], Galtelli Dec. at ¶9). [PSF, ¶ 6.]

5. On March 17, 2006, Roaster Ranch signed and delivered to Bank a note, disclosure, and security agreement in the original principal amount of $195, 000.00 (the "March Note") (Ex. A, [Filing 54-1, at 7] authenticated at Ex. 1 [Filing 54-1, at 1], Claussen Aff. ¶ 3). [Defendant's Statement of Facts ("DSF"), ¶ 1.][8]

6. The March Note was modified from time to time by two loan extension agreements (the "March Extension Agreements") (Ex. 1 [Filing 54-1, at 1], ¶ 3; Ex. K [Filing 54-1, at 92], authenticated at Ex. 1 [Filing 54-1, at 1], ¶ 18). [DSF, ¶ 1.]

7. On April 21, 2006, Roaster Ranch signed and delivered to Bank a note, disclosure, and security agreement in the original principal amount of $190, 000.00 (the "April Note") (Ex. B [Filing 54-1, at 10], authenticated at Ex. 1 [Filing 54-1, at 1], ¶ 4). [DSF, ¶ 2.]

8. The April Note was modified from time to time by two loan extension agreements (the "April Extension Agreements") (Ex. 1 [Filing 54-1, at 1], ¶ 4; Ex. K [Filing 54-1], at 92). [DSF, ¶ 2.]

9. On July 16, 2006, Roaster Ranch signed and delivered to Bank a note, disclosure, and security agreement in the original principal amount of $25, 000.00 (the "July Note, " and together with the March Note and the April Note, the "Notes") (Ex. C [Filing 54-1, at 12], authenticated at Ex. 1 [Filing 54-1, at 1], ¶ 5). [DSF, ¶ 3.]

10. The July Note was modified from time to time by two loan extension agreements (the "July Extension Agreements, " and together with the March Extension Agreements and the April Extension Agreements, the "Extension Agreements") (Ex. 1 [Filing 54-1, at 1], ¶ 5; Ex. K [Filing 54-1, at 92]). [DSF, ¶ 3.]

11. To secure payment of the indebtedness due pursuant to some or all of the Notes, on or about March 17, 2006, Roaster Ranch signed and delivered to Bank a deed of trust (the "Cedar County Deed of Trust") granting Bank a lien on certain real property owned by Roaster Ranch in Cedar County, Nebraska, as more fully described therein (the "Cedar County Real Property"). [DSF, ¶ 4.]

12. The Cedar County Deed of Trust was duly recorded on March 24, 2006, in the office of the Recorder of Cedar County, Nebraska, at Book 249, Page 92 (Ex. D [Filing 54-1, at 14], authenticated at Ex. 1 [Filing 54-1, at 1], ¶ 6). [DSF, ¶ 4.]

13. To secure payment of the indebtedness due pursuant to some or all of the Notes, on or about April 21, 2006, Roaster Ranch signed and delivered to the Bank a deed of trust (the "Madison County Deed of Trust") granting Bank a lien on certain real property owned by Roaster Ranch in Madison County, Nebraska, as more fully described therein (the "Madison County Real Property", and together with the Cedar County Real Property, the "Real Property"). [DSF, ¶ 5.]

14. The Madison County Deed of Trust was duly recorded on May 1, 2006, in the office of the Recorder of Madison County, Nebraska, at Doc. 2006-05, Page 56 (Ex. E [Filing 54-1, at 23], authenticated at Ex. 1 [Filing 54-1, at 1], ¶ 7). [DSF, ¶ 5.]

15. From April 2006 to approximately December 2007, Roaster Ranch paid the Bank the total amount of $114, 750.00 pursuant to the Notes. (Ex. F1-F3 [Filing 54-1, at 32], authenticated at Ex. 1 [Filing 54-1, at 1], ¶ 8). [DSF, ¶ 6.]

16. On or around February 2007, Roaster Ranch defaulted on its obligations owed to Bank pursuant to the Notes by failing to pay the Notes as required. (Ex. 1 [Filing 54-1, at 1], ¶ 9). [DSF, ¶ 7.]

17. Because of Roaster Ranch's defaults, in August 2007, Bank began the nonjudicial foreclosure process pursuant to both the Cedar County Deed of Trust and the Madison County Deed of Trust (Ex. 1 [Filing 54-1, at 1], ¶ 10). [DSF, ¶ 8.]

18. On September 6, 2007, Bank informed Jon Willers, President of Roaster Ranch, that it would halt the foreclosure process upon receipt of payment in the amount of $19, 980.00 (Ex. G [Filing 54-1, at 44], authenticated at Ex. 1 [Filing 54-1, at 1], ¶ 11). [DSF, ¶ 9.]

19. On September 7, 2007, YMG made a payment of $19, 980.00, which Bank credited against the Roaster Ranch debt, and which halted Bank's foreclosure (Ex. H [Filing 54-1, at 45], authenticated at Ex. 1 [Filing 54-1, at 1], ¶ 12). [DSF, ¶ 10.]

20. From September 7, 2007 through October 9, 2008, Bank received $86, 060.00 in payments from YMG (Ex. I [Filing 54-1, at 50], authenticated at Ex. 1 [Filing 54-1, at 1], ¶ 14). [DSF, ¶ 11; see also PSF, ¶ 7.]

21. From December 8, 2008 through September 13, 2011, Bank received $177, 279.90 in payments from CI Oakhurst (Ex. J [Filing 54-1, at 60], authenticated at Ex. 1 [Filing 54-1, at 1], ¶ 15). [DSF, ¶ 12; see also PSF, ¶ 8.]

22. Bank credited all payments it received from CI Oakhurst and YMG against Roaster Ranch's debt owed to Bank (Ex. 1 [Filing 54-1, at 1], ¶ 16). [DSF, ¶ 13.][9]

23. So long as Bank was receiving payments from Roaster Ranch, YMG, and/or CI Oakhurst, Bank forbore from exercising its rights to foreclose on the Real Property pursuant to the Cedar County Deed of Trust and Madison County Deed of Trust (Ex. 1 [Filing 54-1, at 1], ¶ 22). [DSF, ¶ 14.]

24. The following amounts are still owed to Bank pursuant to the Notes: (a) Principal amount of $95, 407.93; (b) Accrued interest of $12, 015.00 as of May 1, 2014; (c) Accruing per diem interest of ...


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