United States Bankruptcy Appellate Panel of the Eighth Circuit
In re: Richard Allen Solberg, doing business as Solberg Farms Minnesota Debtor
Bremer Bank, National Association Defendant - Appellee Zaitz Trust, LLP Plaintiff - Appellant Norcan Seeds, Inc. Defendant - Appellant Richard Allen Solberg, individually and in his capacity as a partner of Solberg Farms, a Minnesota partnership; Kasey Solberg, individually and in his capacity as a partner of Solberg Farms, a Minnesota partnership; Solberg Farms, a Minnesota Partnership Defendants
Submitted: June 28, 2019
from United States Bankruptcy Court for the District of
Minnesota - Fergus Falls
SCHERMER, SHODEEN and DOW, Bankruptcy Judges.
a case involving competing rights in the crop proceeds and
crop insurance proceeds of Richard Allen Solberg, Debtor.
Zaitz Trust, LLP ("Zaitz") filed a complaint
against Bremer Bank, N.A. (the "Bank"), Norcan
Seeds, Inc. ("Norcan"), the Debtor individually and
as a partner of Solberg Farms, Kasey Solberg individually and
as a partner of Solberg Farms, and Solberg Farms, a Minnesota
partnership. The Bank and Norcan counterclaimed. The Bank
also filed a third party action against RRV, LLC
("RRV") and the Trustee, and RRV counterclaimed.
Bank subsequently filed a motion for summary judgment
challenging the validity of the other parties' liens and
asserting the priority of its own lien in the Debtor's
2017 crops. The Bankruptcy Court granted the Bank's
motion. Zaitz and Norcan (collectively, the
"Appellants") appealed. For the reasons that
follow, we reverse and remand for further findings.
review a bankruptcy court's grant of summary judgment
de novo. Mwesigwa v. DAP, Inc., 637 F.3d
884, 887 (8th Cir. 2011)(citing Anderson v.
Durham D & M, L.L.C., 606 F.3d 513, 518
(8th Cir. 2010). We will affirm if "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). "We may affirm on any basis supported by the
record." Seaver v. New Buffalo Auto Sales, LLC
(In re Hecker), 459 B.R. 6, 10-11 (8th
Cir. BAP 2011). Here we review de novo whether the
bankruptcy court's conclusions interpreting the relevant
statutes and applying them to the undisputed facts is
correct. Fisette v. Keller (In re Fisette),
455 B.R. 177, 180 (8th Cir. BAP 2011).
January, 2017, Zaitz leased approximately 3, 277 acres to
"Solberg Farms - Rick Solberg." In the lease,
Solberg Farms granted to Zaitz a security interest in the
crops grown on the land. Zaitz filed a statutory lien notice
against Richard Solberg in May of 2017.
Debtor and his son contracted with Norcan to purchase seed
for planting. Norcan was unwilling to sell directly to the
Debtor because of his financial position, but agreed to sell
to the Debtor and his son jointly as Solberg Farms, a
partnership. Norcan delivered the seed and presented its
invoice to "Solberg Farms, Rick Solberg, Kasey
Solberg." Norcan filed a UCC Financing Statement listing
Rick Solberg, Kasey Solberg and Solberg Farms as debtors.
Bank made several loans to the Debtor beginning in 2009
secured by virtually all of the Debtor's personal
property, including crops, farming supplies, and equipment.
The Bank perfected its security interest by filing a UCC
Financing Statement under the name of Richard Allen Solberg.
Debtor filed for Chapter 11 relief on August 11, 2017.
Pursuant to the Interim Cash Collateral Agreement entered in
the case, the Bank was granted a lien on the Debtor's
2017 crop insurance payments.
commenced an adversary proceeding to assert its lien in the
Debtor's 2017 crops. The Bank moved for summary judgment
seeking the adjudication of all the parties' rights.
Specifically, it asserted that Solberg Farms was a fictitious
d/b/a of the Debtor, that the Bank's interest in the
Debtor's 2017 crop insurance proceeds was superior to all
other parties' interests, and its interest in the
Debtor's 2017 crop proceeds was superior to all
parties' interests except for that of RRV. The Bankruptcy
Court granted the motion. The Appellants appeal on the basis
that the bankruptcy court erred in concluding that there was
no genuine issue of material fact that precluded summary
judgment. Specifically, they contend that there was
substantive, probative evidence that the Debtor and his son
engaged in farming as a partnership, and because this is a