CNH Industrial Capital America, LLC v. T & P Farms, LLC et al

Filing 27

FINAL CONSENT JUDGMENT. CASE CLOSED. Signed by District Judge Debra M. Brown on 5/30/18. (tab)

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF MISSISSIPPI
GREENVILLE DIVISION
CNH INDUSTRIAL CAPITAL
AMERICA, LLC
V.

PLAINTIFF
NO. 4:17-CV-55-DMB-JMV

T & P FARMS, LLC and
MICHAEL J. MASSEY, JR.

DEFENDANTS

FINAL CONSENT JUDGMENT
In accordance with the Court’s order granting the parties “Joint Motion for Entry of Final
Consent Judgment,” this final judgment is issued as to Count I: Replevin and Count II: Monetary
Judgment based on the following:
1.

This Court has jurisdiction over the subject matter of, and the parties to, this action.

Venue is proper in this Court.
Contract 1 (Loan No. 61786001)
2.

On April 24, 2015, T & P Farms, LLC (“Borrower”) purchased from Medlin

Equipment Company of Mississippi County, Missouri a Case IH Tractor 4WD Model No. STX580
(S/N ZEF300549) and one Rome Scraper Model No. 1814E (S/N RP-18E14.5-106) (“Contract 1
Collateral”). The purchase was evidenced by a Retail Installment Sale Contract and Security
Agreement (“Contract 1”). The contract reflects $381,795.66 in financing, to be paid in sixty
monthly payments of approximately $6,813 beginning on May 24, 2015; and states that, in the
event of a default in payment, the seller has the right to “take possession of all Collateral, without
notice or hearing .”
3. The contract included a provision assigning Medlin’s interest in Contract 1 to CNH
Industrial Capital America, LLC. Of relevance to the assignment, the contract provided:

Buyer will not assert against Assignee any claim or defense which Buyer may have
against Seller, the manufacturer of the Equipment, or any other person, Buyer
agrees that its obligation to remit payments will not be subject to, and it will not
make any claim against Assignee for breach of any representation, warranty or
condition with respect to the Equipment and that its obligation to pay Assignee all
amounts under this Agreement is absolute and unconditional without abatement,
reduction, set-off, counterclaim or interruption for any reason whatsoever,
including any dispute which now or hereafter arises between Buyer and Seller or
any other person.
4. CNH perfected its security interest in the Contract 1 Collateral through a UCC-1
Financing Statement, Filing Number 20151638519A, filed with the Secretary of State on April 30,
2015.

After making a payment on December 12, 2016, T & P ceased making payments under

Contract 1.
5. Borrower has surrendered the Rome Scraper Model No. 1814E (S/N RP-18E14.5-106)
to CNH.
6. As of January 25, 2017, Borrower is indebted to CNH under Contract 1 in the principal
amount of $265,472.78, interest accruing after January 25, 2017, at the contract rate of 7.74% per
annum, and late fees in the amount of $1,750.00.
7. Contemporaneously with the execution of Contract 1, Michael J. Massey, Jr. executed
a Guaranty (“Guaranty 1”) whereby he:
unconditionally and irrevocably guarantee[d] the payment, performance and
complete fulfillment of all Obligations, as defined in the Agreement described
above, of the Buyer to Secured Party, and any amendments or supplements thereto,
whether heretofore or hereafter incurred, including any revisions, renewals,
consolidations and extensions thereof, any of which may be made without notice to
the Guarantor.
Contract 2 (Loan No. 61786002)
8. On July 14, 2015, T & P purchased a John Deere Tractor 4WD Model No. 9630 (S/N
RW9630P013151) and a John Deere Pull Scraper Model No. 2112E (S/N T82112E080403)
(“Contract 2 Collateral”) from Medlin. The purchase was evidenced by a Retail Installment Sale
2

Contract and Security Agreement (“Contract 2”) identical in form to Contract 1. The contract
reflects $189,096.50 in financing, to be paid in sixty monthly payments of approximately $3,556
beginning on August 14, 2015.
9. CNH perfected its purchase money security interest in the Contract 2 Collateral through
a UCC-1 Financing Statement, Filing Number 20151713358A, filed with the Secretary of State on
July 21, 2015. After making a payment on December 12, 2016, T & P ceased making payments
under Contract 2.
10. As of July 25, 2017, Borrower is indebted to CNH under Contract 2 in the principal
amount of $137,386.01, interest accrued through January 25, 2017, in the amount of $2,180.94,
interest accruing after January 25, 2017, at the contract rate of 7.74% per annum and late fees in
the amount of $241.38.
11.

Contemporaneously with the execution of Contract 2, Massey executed a Guaranty

(“Guaranty 2”) whereby he:
unconditionally and irrevocably guarantee[d] the payment, performance and complete
fulfillment of all Obligations, as defined in the Agreement described above, of the Buyer
to Secured Party, and any amendments or supplements thereto, whether heretofore or
hereafter incurred, including any revisions, renewals, consolidations and extensions
thereof, any of which may be made without notice to the Guarantor.
Contract 3 (Loan No. 61786001)
12. On, February 19, 2016, Borrower executed a Retail Installment Sale Contract and
Security Agreement (“Contract 3”) in favor of CNH in the original principal amount of
$275,321.50, bearing interest at a rate of 7.49% per annum with a maturity date of February 19,
2019. Contract 3 is secured by a purchase money security interest in one CASE IH STEIGERS
Model No. STX600 (S/N ZCF129948) (“Contract 3 Collateral”).
13. Contemporaneously with the execution of Contract 3, Massey executed a Guaranty

3

(“Guaranty 3”) whereby he:
unconditionally and irrevocably guarantee[d] the payment, performance and
complete fulfillment of all Obligations, as defined in the Agreement described
above, of the Buyer to Secured Party, and any amendments or supplements thereto,
whether heretofore or hereafter incurred, including any revisions, renewals,
consolidations and extensions thereof, any of which may be made without notice to
the Guarantor.
14. CNH perfected its purchase money security interest in the Contract 3 Collateral by
UCC-1 Financing Statement, Filing Number 20151584917A filed with the Secretary of State on
February 23, 2015.
15. Sometime after the execution of Contract 3, the Contract 3 Collateral was destroyed
in a fire. A casualty insurance claim paid the indebtedness of Borrower under Contract 3 to CNH.
Contract 4 (Loan No. 61786004)
16. On March 23, 2015, T & P purchased a Case IH STEIGERS Model No. STX580 (S/N
ZEF300374), a John Deere Pull Scraper Model No. 1814C (S/N 60208), and a John Deere Pull
Scraper Model No. 1814C (S/N 60237) (“Contract 4 Collateral”) from Medlin. The purchase was
evidenced by a Retail Installment Sale Contract and Security Agreement (“Contract 4”), identical
in form to Contract 1. The contract reflects $434,534.00 in financing, to be paid in sixty monthly
payments of approximately $7,945 beginning on April 23, 2015.
17. CNH perfected its purchase money security interest in the Contract 4 Collateral
through a UCC-1 Financing Statement, Filing Number 20151607001A, filed with the Secretary of
State on March 25, 2015. After making a payment on September 13, 2016, T & P ceased making
payments under Contract 4.
18. Borrower has voluntarily surrendered the Contract 4 Collateral to CNH.
19. As of January 25, 2017, Borrower is indebted to CNH under Contract 4 in the
principal amount of $328,605.38, interest accrued through January 25, 2017, in the amount of
4

$8,621.56, interest accruing after January 25, 2017, at the contract rate of 7.44% per annum and
late fees in the amount of $1,750.00.
20. Contemporaneously with the execution of Contract 4, Massey executed a Guaranty
(“Guaranty 4”) whereby he:
unconditionally and irrevocably guarantee[d] the payment, performance and
complete fulfillment of all Obligations, as defined in the Agreement described
above, of [Borrower] to [CNH], and any amendments or supplements thereto,
whether heretofore or hereafter incurred, including any revisions, renewals,
consolidations and extensions thereof, any of which may be made without notice to
[Massey].
21. Contract 1, Contract 2 and Contract 4 (collectively, the “Contracts”) are crosscollateralized. The Contracts all contain language that states:
6. Security Interest/Cross Collateralization. [Borrower] hereby grants to Seller
and its successors and assigns (including [CNH]) a first priority purchase money
security interest in the Equipment,…to secure payment and performance of all
existing and future obligations of [Borrower] under this Agreement or any other
agreement between [Borrower] and Seller, between [Borrower] and [CNH] or any
affiliate of [CNH], or where [Borrower], under another agreement in favor of Seller
or [CNH], is a guarantor or obligor (the “Obligations”).
22. The Contracts also contain a “Cross Default” provision which provides:
14. Default/Cross Default. [Borrower] shall be in default under this Agreement,
and any other agreement with or assigned to [CNH], if any of the following occurs
(each an “event of default”): (a) [Borrower] fails to pay when due any of the
Obligations, or to perform any covenant or other obligation of [Borrower] under
this Agreement or any other agreement with or assigned to [CNH];…
23. The Contracts provide for payment of attorney’s fees incurred by CNH in enforcing
its rights under the Contracts. The Contracts provide:
16. Expenses. To the extent not prohibited by law, [Borrower] shall reimburse
Seller or [CNH] for any expense incurred by Seller or [CNH] in protecting,
defending or enforcing their rights under this Agreement, including, without
limitation, reasonable attorneys’ fees and legal expenses and all expenses of taking
possession, transporting, holding, repairing, refurbishing, preparing for disposition
and disposing of the Collateral, and all expenses and costs incurred in collection
the Obligations….
5

24. CNH has incurred attorney’s fees in connection with collection of the Contracts in the
amount of $21,689.53.
25. On October 5, 2017, the Court entered an Order whereby it ordered CNH is entitled
to possession of the Contract 1 Collateral, Contract 2 Collateral and Contract 4 Collateral under
Count I of the Complaint. Doc. #22. The Court also entered a final judgment according to Rule
54(b) of the Federal Rules of Civil Procedure awarding the same relief. Doc. #23. Count II of
the Complaint has not been adjudicated and remains pending.
26. CNH and Borrower have agreed to entry of a final judgment disposing of all claims
and defenses of all parties to this civil action granting the following relief, which the Court now
orders:
a.

CNH is entitled to immediate possession of the Case IH Tractor 4WD Model No.
STX580 (S/N ZEF300549), the John Deere Tractor 4WD Model No. 9630 (S/N
RW9630P013151), and the John Deere Pull Scraper Model No. 2112E (S/N
T82112E080403) (collectively, “Remaining Collateral”).

b.

Borrower shall disclose the location of the Remaining Collateral to the United
States Marshal and shall assemble the Remaining Collateral and segregate it from
Borrower’s other property so that CNH may take immediate possession of the
Remaining Collateral.

c.

The United States Marshal, or other lawful officer, shall immediately seize the
Remaining Collateral and deliver same to CNH or its agent and in the event the
Remaining Collateral is located outside the jurisdiction of the United States District
Court for the Northern District of Mississippi, Borrower shall cause the Remaining
Collateral to be transported within the jurisdiction of the United States District

6

Court for the Northern District of Mississippi within five (5) days of execution.
d.

The failure of Borrower to comply with this Final Judgment shall subject Borrower
to the contempt powers of this Court, but only after the filing of an appropriate
motion, notice, and an opportunity for a hearing.

e.

A monetary judgment is entered on Count II of the Complaint in favor of CNH
against Borrower and Massey, jointly and severally:
i.

Under Contract 1 in the principal amount of $265,472.78, interest accruing
after January 25, 2017, at the contract rate of 7.74% per annum through date
of entry of this judgment, post judgment interest accruing at the legal rate
as defined by 28 U.S.C. § 1961, late fees in the amount of $1,750.00 and
attorney’s fees and costs of collection in the amount of $21,689.53.

ii.

Under Contract 2 in the principal amount of $137,386.01, interest accrued
through January 25, 2017, in the amount of $2,180.94, interest accruing
after January 25, 2017, through entry of judgment at the contract rate of
7.74% per annum, post judgment interest accruing at the legal rate as
defined by 28 U.S.C. § 1961 and late fees in the amount of $241.38.

iii.

Under Contract 4 in the principal amount of $328,605.38, interest accrued
through January 25, 2017, in the amount of $8,621.56, interest accruing
after January 25, 2017, through entry of judgment at contract rate of 7.74%
per annum, post judgment interest accruing at the legal rate as defined by
28 U.S.C. § 1961 and late fees in the amount of $1,750.00.

f.

The final judgment as to Counts I and II of the Complaint and this Final Consent

Judgment are final judgments pursuant to Rule 54 of the Federal Rules of Civil Procedure.

7

SO ORDERED AND ADJUDGED, this 30th day of May, 2018.
/s/Debra M. Brown
UNITED STATES DISTRICT JUDGE

8