Security Seed and Chemical, Inc. v. Manning Farms, L.L.C. et al
Filing
31
MEMORANDUM OPINION & ORDER Signed by Senior Judge Thomas B. Russell on 8/22/2018. granting 23 Motion for Partial Summary Judgment. The Court awards Plaintiff a judgment in the amount of $389,690.13. cc: Counsel(KJA) (Main Document 31 replaced on 8/22/2018) (KJA).
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF KENTUCKY
PADUCAH DIVISION
CIVIL ACTION NO. 5:17-CV-00124-TBR
SECURITY SEED AND CHEMICAL, INC.,
PLAINTIFF
v.
MANNING FARMS, LLC, et al.,
DEFENDANTS
MEMORANDUM OPINION AND ORDER
This matter is before the Court on Plaintiff Security Seed and Chemical, Inc.’s motion for
partial summary judgment, [DN 23.] Defendants, Manning Farms, LLC, Anthony Lynn
Manning, and Teresa Gail Manning, filed a response, [DN 25], and Plaintiff replied, [DN 26.]
Fully briefed, this matter is now ripe for adjudication. For the reasons explained in detail below,
Plaintiff’s motion for partial summary judgment is GRANTED.
BACKGROUND
The following facts, taken from Plaintiff’s Amended Complaint, are not disputed.
Defendants Manning Farms, LLC, Anthony Lynn Manning, and Teresa Gail Manning,
(collectively, “Defendants”), “are agricultural producers who raise crops in the vicinity of
Calloway County, Kentucky.” [DN 27 at 3 (Amended Complaint).] Plaintiff Security Seed and
Chemical, Inc. (“Security Seed”) “is in the business of selling farming inputs to agricultural
producers, such as seed, fertilizer, and pest control products.” [Id.] “In connection with their
agricultural business, the Manning-Defendants have obtained financing in order to purchase
inputs from the Plaintiff. The Manning-Defendants have become indebted on multiple lines of
credit and have failed to repay the indebtedness in accordance with the applicable loan
documents or account terms.” [Id. at 3–4.] Security Seed brought the instant lawsuit alleging that
“the Manning-Defendants are indebted to the Plaintiff for all outstanding amounts due on a line
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of credit.” [Id. at 4.] Currently before the Court is Security Seed’s motion for partial summary
judgment. [See DN 23.]
STANDARD
Summary judgment is appropriate when the record, viewed in the light most favorable to
the nonmoving party, reveals “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). A genuine dispute of
material fact exists where “there is sufficient evidence favoring the nonmoving party for a jury to
return a verdict for that party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986). The
Court “may not make credibility determinations nor weigh the evidence when determining
whether an issue of fact remains for trial.” Laster v. City of Kalamazoo, 746 F.3d 714, 726 (6th
Cir. 2014) (citing Logan v. Denny's, Inc., 259 F.3d 558, 566 (6th Cir. 2001); Ahlers v. Schebil,
188 F.3d 365, 369 (6th Cir. 1999)). “The ultimate question is ‘whether the evidence presents a
sufficient disagreement to require submission to a jury or whether it is so one-sided that one
party must prevail as a matter of law.’ ” Back v. Nestlé USA, Inc., 694 F.3d 571, 575 (6th Cir.
2012) (quoting Anderson, 477 U.S. at 251–52).
The moving party must shoulder the burden of showing the absence of a genuine dispute
of material fact as to at least one essential element of the nonmovant’s claim or defense. Fed. R.
Civ. P. 56(c); see also Laster, 746 F.3d at 726 (citing Celotex, 477 U.S. at 324). Assuming the
moving party satisfies its burden of production, the nonmovant “must—by deposition, answers to
interrogatories, affidavits, and admissions on file—show specific facts that reveal a genuine issue
for trial.” Laster, 746 F.3d at 726 (citing Celotex, 477 U.S. at 324). “[N]ot every issue of fact or
conflicting inference presents a genuine issue of material fact.” Street v. Bradford & Co., 886
F.2d 1472, 1477 (6th Cir. 1989). The test is “whether the party bearing the burden of proof has
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presented a jury question as to each element in the case.” Hartsel v. Keys, 87 F.3d 795, 799 (6th
Cir. 1996). Nor will mere speculation suffice to defeat a motion for summary judgment: “[t]he
mere existence of a colorable factual dispute will not defeat a properly supported motion for
summary judgment. A genuine dispute between the parties on an issue of material fact must
exist to render summary judgment inappropriate.” Monette v. Elec. Data Sys. Corp., 90 F.3d
1173, 1177 (6th Cir. 1996).
DISCUSSION
According to Security Seed, Defendants’ “indebtedness arises from separate ‘Sekure
Finance’ and ‘AgQuest’ lines of credit and also an ‘open account’ due for products sold by the
Plaintiff.” [DN 23 at 2.] However, “[s]ince this lawsuit was filed, the Defendants have paid the
‘AgQuest’ debt and the ‘open account’ out of the proceeds of their 2017 crops.” [Id.]
Accordingly, Plaintiff currently move for partial summary judgment, alleging that “[t]he
remaining loan is the Sekure Finance Loan (Count I), which is still outstanding and presently due
to the Plaintiff. Therefore, the Plaintiff is entitled to a summary judgment for the, remaining
balance of the Sekure Finance Loan, along with all interest, expenses and costs in accordance
with the terms of the promissory note.” [Id.]
To effectuate the Sekure Finance Loan, “each of the Defendants admit they signed the
Sekure Finance Note.” [Id.] “After the loan was approved, nine (9) advances were made on the
Sekure Finance Loan during the 2016 growing season for a total amount of $750,300.00 . . .
After the Defendants completed harvest in fall 2016, they failed to repay Security Seed by the
loan maturity date of February 1, 2017.” [Id. at 3 (internal citations omitted).] Eventually,
Security Seed “received four (4) separate checks from ADM Grain which constitute proceeds
from the sale of crops grown by the Defendants in 2017. The total amount of the four (4)
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payments was $608,625.44. As a result of these payments, the amounts due on Counts II and III
were repaid in full.” [Id.] Security seed applied the remaining funds “to the interest due on the
Sekure Finance Loan along with the legal fees and costs incurred.” [Id.] At the time Security
Seed filed the instant motion, it stated that, “[a]fter application of the forgoing payments, the
remaining funds of $340,526.33 were applied toward the principal balance of the Sekure Finance
Loan, leaving a remaining principal balance of $409,773.67.” [Id.]
In response, Defendants state that “they are not able to assert in good faith any valid
defenses of which they are aware, which would require the Court to deny Plaintiff’s Motion for
partial summary judgment.” [DN 25 at 1.] In other words, Defendants do not dispute their
indebtedness to Plaintiff. However, Defendants do “request the Court to require a more detailed
accounting of the calculation of the interest accrued and claimed by Plaintiff, and a more detailed
accounting of the attorney’s fees and costs claimed by Plaintiff.” [Id.]
In its reply, Security Seed offers a detailed “explanation regarding the $62,904.01 of
interest previously charged on the Sekure Finance Loan (Count I) and the $29,402.40 previously
charged for legal fees and costs.” [DN 26 at 2.] Security Seed attached all Sekure Finance
monthly finance statements which “reflect the interest rate and amount of interest accruing on the
loan.” [Id.] Security Seed further explained:
After April 14, 2017, the loan was only carried by Security Seed instead of Sekure
Finance. The existing interest rate of 5.25% was charged by Security Seed from
April 14, 2017 – February 26, 2018, calculated at the daily rate of $109.42875
($750,300.00 * 0.0525 = 39,390.75 / 360 = $109.41875). This daily rate figure
was multiplied by the 293 days from April 14, 2017 – February 26, 2018, to arrive
at $32,059.69 ($109.41875 * 293 = $32,059.69).
Based on the foregoing (i.e. the $30,844.32 in interest carried by Sekure Finance
through April 14, 2017 and $32,059.69 in interest charged by Security Seed),
from the payments received by Security Seed on March 6, 2018, Security Seed
applied a total of $62,904.01 toward the then outstanding interest due from the
Defendants.
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[Id. at 2–3.]
With regard to the legal fees and costs of $29,402.50, Plaintiff states as follows in their
reply:
Since the Plaintiff’s legal fees and costs will only continue to increase until the
Defendants repay the entire debt, there is a practical solution to the Defendants’
concerns over the “reasonableness” of the legal fees and costs. The Plaintiff is
agreeable to crediting the Defendants with the $29,402.50 that was previously
charged to legal fees/cost, with a reservation of its right to seek this amount
(along with all other legal fees) at the conclusion of the lawsuit or by a
subsequently filed motion. This way, the Court does not have to address the
“reasonableness” of the claimed legal fees on two separate occasions.
With the $29,402.50 credited back to principal, the Defendants’ are credited with
$369,928.83 as payments toward principal (i.e. the $340,526.33 previous credited
plus $29,402.50). Therefore, the Defendants’ remaining principal balance was
$380,371.17, as of March 6, 2018. With subsequently accrued interest at 5.25%,
the recalculated amount due on Count I is itemized as follows:
COUNT I – Sekure Finance Note
Principal $ 380,371.17
Interest (as of 06/21/2018) $ 5,935.29
(per diem: $55.47)
Add. Legal Fees/Court Costs $ TBD
TOTAL AMOUNT $ 386,306.46
[DN 26 at 3.]
“[A] plaintiff note-holder seeking judgment on a promissory note can win summary
judgment on a showing that the defendant debtor executed and defaulted on the note.” Hutson,
Inc. v. Windsor, No. 5:12-CV-00191-TBR, 2014 WL 5782541, at *2 (W.D. Ky. Nov. 6, 2014)
(quoting Publishers Press, Inc. v. Montage Media Corp., 2011 WL 4587568 at *2 (W.D. Ky.
Sept. 30, 2011)). As the Court noted above, Defendants do not dispute that they entered into and
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defaulted on the Sekure Finance Note. Accordingly, Plaintiff is entitled to summary judgment on
this claim.
During the telephonic status conference held on August 20, 2018, the Court advised the
parties that it would use Plaintiff’s above-proposed method of calculating the amount Defendants
owe and allow Plaintiff to seek its fees and costs at the conclusion of the litigation rather than at
this time. The parties advised that this was acceptable. Accordingly, the Court grants Plaintiffs’
motion for partial summary judgment on Count 1 of its complaint, [DN 23], and awards damages
in the amount of $389,690.13. This figure represents the principal amount of $380,371.17 added
to the current accrued interest amount as of August 21, 2018, which is $9,318.96 ($55.47 x 168
days).1
CONCLUSION
For the reasons explained in detail above, Plaintiff’s motion for partial summary
judgment on Count 1 of its complaint, [DN 23], is GRANTED. The Court awards Plaintiff a
judgment in the amount of $389,690.13.
IT IS SO ORDERED.
Date:
cc:
1
August 22, 2018
Counsel
There are 168 days in between 3/07/2018 and 8/22/2018.
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