USA v . Chappell CV-98-524-M 08/25/00
UNITED STATES DISTRICT COURT
DISTRICT OF NEW HAMPSHIRE
United States of America,
Plaintiff
v. Civil N o . 98-524-M
Opinion N o . 2000 DNH 189
Ronald C . Chappell and
Susan L. Chappell,
Defendants
O R D E R
After foreclosing on the farm owned by defendants Ronald and
Susan Chappell, the United States, through the Farm Service
Agency (“FSA”), a successor to the Farmers Home Administration
(“FmHA”), filed this action seeking a deficiency judgment. By
order dated July 1 5 , 2000, the court denied, without prejudice,
the government’s motion for summary judgment as to its claimed
entitlement to approximately $140,000, plus accumulating
interest.
In denying the government’s motion, the court observed that
the record was insufficiently developed for it to conclude, as a
matter of law, that the government acted in a reasonable and
timely manner in conducting the foreclosure on defendants’ farm.
While there appears little doubt that defendants are,
in fact, obligated to repay at least a portion of the
outstanding amount claimed by the government, the
precise amount owed remains uncertain. That
uncertainty arises from issues concerning the timing of
some of the government’s actions in this case. For
example, the following question presents itself:
Whether the government had an obligation to preserve
the value of the assets securing defendants’
obligations (i.e., the farm, structures, equipment,
cattle, and related assets) by acting in a more timely
fashion to foreclose upon those assets.
…
To be sure, there may be entirely plausible,
reasonable, and even laudatory reasons why the
government did not foreclose on the farm sooner. On
that point, however, the record is silent.
United States v . Chappell, N o . 98-524, slip op. at 6-7 (D.N.H.
July 1 5 , 2000).
In response, the government has moved the court to
reconsider its earlier denial of its motion for summary judgment.
Defendants have not objected. In support of its motion, the
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government has submitted the affidavit of Patrick Freeman, Farm
Loan Chief of the Farm Service Agency. In that affidavit, Mr.
Freeman addresses each of the factual questions raised in the
court’s prior order. That affidavit, along with additional
documentation submitted by the government, reveals that the
government complied with its regulatory obligations to defendants
and afforded them substantial assistance aimed at making the farm
profitable. Only when it became clear that defendants could not
devise a means by which to honor their obligations to the
government, did the government declare them in default,
accelerate their payment obligations, and, finally, foreclose on
the farm. Mr. Freeman’s affidavit makes it clear that all such
actions were taken in a timely manner.1 Even after the
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Mr. Freeman’s affidavit provides a detailed chronology
of the events relating to the servicing of defendants’ account.
It also explains that the government’s efforts to foreclose on
defendants’ property were delayed due to a stay issued in a
nationwide class action, issues raised by Congress’s enactment of
the Food, Agriculture, Conservation, and Trade Act of 1990,
Secretary Espy’s announcement, in May of 1993, of a temporary
moratorium on farm foreclosures, and defendants’ pursuit, as was
their right, of various administrative and appellate rights aimed
at maintaining the farm and preventing foreclosure.
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foreclosure, the government attempted to negotiate a settlement
with defendants, but it appears that defendants were less than
fully cooperative.
Following the foreclosure sale and in accordance with
agency regulations, FmHA further serviced this account
by offering to debt settle the remaining balance on the
family’s account, but they have refused to provide
financial information for that purpose, including
information about assets rumored to be held in trust
for Ron Chappell.
Affidavit of Patrick Freeman, at 1 2 .
Through its supplemental submissions, the government has
demonstrated that it acted in a reasonable and timely fashion in
servicing defendants’ loan and, when appropriate, declaring
defendants in default, accelerating their obligations, and
foreclosing on the farm pledged as security for their various
loans. In fact, defendants have not challenged the timeliness or
commercial reasonableness of the government’s foreclosure. See
generally Defendants’ objection to plaintiff’s (original) motion
for summary judgment (document n o . 1 9 ) .
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Conclusion
The government’s motion for reconsideration (document n o .
21) is granted. Having reviewed that motion and accompanying
submissions, the court concludes that the government has
addressed each of the outstanding issues identified in the
court’s prior order and has demonstrated its entitlement to
judgment as a matter of law with regard to its deficiency action
against defendants. Accordingly, the government’s motion for
summary judgment (document n o . 11) is granted. The Clerk of
Court shall enter judgment in accordance with this order and
close the case.
SO ORDERED.
Steven J. McAuliffe
United States District Judge
August 2 5 , 2000
cc: David L. Broderick, Esq.
Ronald C . Chappell
Susan L. Chappell
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