USA v. Kilgore Planting LLC et al

Filing 31

JUDGMENT: Judgment in rem against the above-described property is hereby awarded to the plaintiff United States of America, U.S. Department of Agriculture, in the sum of $278, 399.19 as of 7/15/2016, with interest thereafter at the rate of $ ;22.075 per day until fully paid, plus any additional advances and recoverable charges for protection and maintenance of the property during the pendency of this action, and the costs of this action. If the Judgment is not paid within 10 days from th e date of entry of this Judgment, the United States Marshal is directed to sell the above-described property at public auction to the highest bidder by certified check, or on a credit of 60 days, at the front door of the St. Francis County Courthouse, Forrest City, Arkansas. Jurisdiction of this cause will be retained for the making of such further orders as may be necessary to effectuate this Judgment. Signed by Judge J. Leon Holmes on 8/25/2017. (ljb)

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF ARKANSAS
HELENA DIVISION

UNITED STATES OF AMERICA
VS.

PLAINTIFF
No. 2:16-cv-00138- JLH

KILGORE PLANTING, LLC;
WILLIAM W. KILGORE, Individually
And on Behalf of Kilgore Planting, LLC;
MONA N. KILGORE; CACH, LLC;
DISCOVER BANK; GREAT SENECA
FINANCIAL CORPORATION;
CAPITAL ONE BANK; STATE OF
ARKANSAS, DEPARTMENT OF
FINANCE AND ADMINISTRATION

DEFENDANTS

JUDGMENT
Plaintiff United States of America seeks judgment in rem against real property in St.
Francis County, Arkansas, and foreclosure of mortgages on the subject property that secure
payment ofloans from the U.S. Department of Agriculture (USDA), Farm Service Agency (FSA)
to defendants Kilgore Planting, LLC, William W. Kilgore and Mona N. Kilgore. The other
defendants are made parties because they may have or claim an interest in the subject property.
The government's complaint seeks foreclosure of the interest that each defendant may have or
claim in the subject property. The government does not seek to recover money damages against
any defendant. The defendant State of Arkansas, Department of Finance and Administration, filed
an answer asserting a subordinate lien, and consents to judgment in rem as provided herein. After
having been served with summons and complaint, the defendants Kilgore Planting, LLC.; William
W. Kilgore; Mona N. Kilgore; CACH, LLC; Discover Bank; Great Seneca Financial
Corporation; and Capital One Bank have not filed an answer or other response, or otherwise made
1

an appearance herein, and are in default. A Clerk's Default has been entered against each of these
defendants. It is, therefore, hereby ORDERED, DECREED AND ADJUDGED:
1.

The Court has jurisdiction over the parties and over the property described below.

2.

The payments due from defendants Kilgore Planting, LLC; William W. Kilgore and Mona

N. Kilgore on their loans from USDA FSA are delinquent. There is presently due and owing on
their promissory notes principal and interest in the total sum of $278, 399 .19 as of, and
including, July 15, 2016, with interest accruing thereafter at the rate of $22.075 per day.
3.

The above described indebtedness owed to the plaintiff United States of America is secured

by mortgages executed and acknowledged by William W. Kilgore and Mona N. Kilgore, husband
and wife, that were filed in the records of the Circuit Clerk and Recorder of St. Francis County,
Arkansas as follows: filed on July 21, 2005 in Book 743 at page 521; filed on May 18, 2006 in
Book 761 at page 845; filed on July 17, 2007 in book 780 at page 281 and filed on July 11, 2008
in Book 792 at page 940. The above-described mortgages collectively grant and convey to plaintiff
United States of America, U.S. Department of Agriculture, a first lien on the following described
real property in St. Francis County, Arkansas, together with all fixtures, appurtenances and
improvements thereon:
THE NORTHWEST QUARTER (NW\14) OF THE NORTHEAST QUARTER (NE1/.i) OF
SECTION 16, TOWNSHIP 6 NORTH, RANGE 4 EAST OF THE FIFTH PRINCIPAL
MERIDIAN, LESS AND EXCEPT THE FOLLOWING TRACT OF PROPERTY:
BEGINNING AT THE SOUTHEAST CORNER OF SAID NW1/.i OF THE NE\14 OF SAID
SECTION 16; THENCE NORTH ALONG THE EAST LINE OF THE SAID NW1/.i OF
THE NE 114 A DISTANCE OF 460 FEET TO THE CENTER LINE OF A COUNTY
ROAD; THENCE WEST ALONG THE CENTER LINE OF SAID COUNTY ROAD 475
FEET TO A POINT; TIIENCE SOUTH A DISTANCE OF APPROXIMATELY 460
FEET TO THE SOUTH LINE OF SAID NW\14 OF THE NE1/.i; THENCE EAST 475 FEET
TO THE POINT OF BEGINNING.
THE REAL PROPERTY IS COMMONLY KNOW AS NW1/.i OF THE NE1/.i OF
SECTION 16, T6N, R4E OF THE 5™ PM, ST. FRANCIS COUNTY, AR.

4.

Judgment in rem against the above-described property is hereby awarded to the plaintiff

United States of America, U.S. Department of Agriculture, in the sum of $278, 399.19 as of July
2

15, 2016, with interest thereafter at the rate of$22.075 per day until fully paid, plus any additional
advances and recoverable charges for protection and maintenance of the property during the
pendency of this action, and the costs of this action.
5.

The mortgages held by the United States of America, USDA, FSA, described in paragraph

3, above, are paramount and superior to all right, title, claim, estate and interest of all defendants
in and to the above-described property.
6.

The United States Department of the Treasury, by and through its agency, Internal

Revenue Service ("IRS"), has a lien on the subject property by virtue of a federal tax lien in the
original amount of$4,326.22 against defendant William Kilgore, filed in the records of the Circuit
Clerk and Recorder of St. Francis County, Arkansas on October 5, 2007, in Book N, page 345.
The above-described federal tax lien is subordinate to the mortgage lien held by the United States
Department of Agriculture, and is hereby foreclosed. Any sale proceeds remaining after payment
of the costs of sale and the Judgment herein awarded the United States of America, U.S.
Department of Agriculture, shall be paid to the IRS, to the extent of the tax debt owed under the
above-described federal tax lien.
7.

Defendant State of Arkansas, Department of Finance and Administration ("DF&A"), has

a lien on the subject property by virtue of a Certificate of Indebtedness in the original amount of
$2,430.57 against William Kilgore, filed in the records of the Circuit Clerk and Recorder of St.
Francis, County, Arkansas on September 24, 2010. The lien of defendant DF&A is subordinate
to the mortgage lien of the United States of America, U.S. Department of Agriculture, and
subordinate to the above- described IRS tax lien, and is hereby foreclosed. DF&A's lien shall
attach to and be paid from any surplus remaining after payment of the expenses of sale, the

3

Judgment herein awarded to the United States of America, U.S. Department of Agriculture, and
the tax debt due under the above-described IRS tax lien.
8.

The defendants Kilgore Planting, LLC; William W. Kilgore; Mona N. Kilgore; CACH,

LLC; Discover Bank; Great Seneca Financial Corporation; and Capital One Bank, after having
been served with complaint and summons, are in default, as evidenced by a Clerk's Default entered
against each of these defendants. The allegations of plaintiffs complaint against said defendants
are taken and accepted as true. All right, title, interest, estate, and all rights of dower, curtesy,
homestead, and equity or statutory right of redemption, said defendants may have or claim in and
to the above-described property are subordinate to the mortgage lien of the United States of
America, U.S. Department of Agriculture, and are hereby foreclosed.
9.

If the Judgment herein awarded to the United States of America, USDA, is not paid within

ten days from the date of entry of this Judgment, the United States Marshal is directed to sell the
above-describedpropertyatpublic auction to the highest bidder by certified check, or on a credit
of 60 days, at the front door of the St. Francis County Courthouse, Forrest City, Arkansas. The
date and time of the sale shall be fixed by the Marshal. If purchased on credit, payment of the
purchase price shall be secured by one of the following methods, at the purchaser's option:
Furnish a corporate security bond, or furnish a letter of credit from a financial institution, or post
a 10% down payment by certified check or money order. The corporate surety bond and letter of
credit shall be in the amount of the purchase price, plus interest at the rate of 10% per annum from
date of sale, and shall be subject to the approval of the U.S. Marshal. The 10% down payment
shall be forfeited in the event of failure to pay for the property within 60 days, in which event the
Marshal shall resell the property. In the event of a down payment, the purchaser shall pay interest
on the balance of the purchase price at the rate of 10% per annum from date of sale. A lien against

4

the property shall be retained to further secure payment of the purchase money. The property
shall be sold subject to any unpaid property taxes. Ifthe plaintiffshall become the purchaser at such
sale for a sum equal to or less than the indebtedness owed to plaintiff as of the date of sale, it may
credit its bid against the amount of the debt and this credit shall be an extinguishment of the debt
to the extent of the credit. The Marshal shall give notice of the sale as required by 28 U.S.C. §
2002, and shall forthwith report the result of the sale to the court.
10.

Upon the sale of the above-described property, all right, title, claim, interest, estate, equity

and statutory right of redemption, and all rights of dower, curtesy, and homestead, of the
defendants, and each of them,

in and to the subject property, and every part thereof, and

improvements and appurtenances thereon, shall from that date be foreclosed and forever barred.
11.

The purchaser at the sale shall be given possession upon demand and the Clerk of this

Court is hereby authorized and directed to issue writs of assistance to the United States Marshal
for the Eastern District of Arkansas, who will proceed to place the purchaser in possession of the
property.
12.

The sale proceeds, after expenses of sale, shall be paid and distributed to the U.S.

Department of Agriculture, Farm Service Agency, to the extent of the Judgment herein awarded;
next, to the IRS to the extent of the tax debt due under the above-described federal tax lien; and
next, to DF&A, to the extent of the debt due under its above-described Certificate of Indebtedness.
Any surplus remaining shall be retained by the U.S. Marshal, subject to further orders of the Court.
13.

Jurisdiction of this cause will be retained for the making of such further orders as may be

necessary to effectuate this Judgment.

5

IT IS SO ORDERED this dS~ay of August, 2017.

!-~~
United States District Judge

6

'
Approved:

Ric ar M. Pence Jr.
Assistant U.S. Attorney
Attorney for Plaintiff

'YlvJ' c~~v::e4(?£./
Michael J. Wehrle
Revenue Legal Counsel
Attorney for Defendant State of Arkansas. DF&A