In re James Widtfeldt et al

Filing 9

MEMORANDUM AND ORDER - The court finds that the order of the bankruptcy court should be affirmed. The trustee is entitled to judgment as a matter of law on the validity of Mr. Widtfeldt's purportedsecurity interests. Accordingly, The judgment of the bankruptcy court is affirmed. This appeal is dismissed. Ordered by Chief Judge Joseph F. Bataillon. (Copy mailed/e-mailed to pro se party) (KBJ)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEBRASKA
IN RE:

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GARY M. & JOYCE BURIVAL,
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RICHARD BURIVAL & PHILLIP
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BURIVAL, d/b/a BURIVAL BROTHERS, )
a Partnership,
)
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Debtors.
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_______________________________ )
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RICK D. LANGE, Chapter 11, Trustee, )
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Plaintiff/Appellee,
)
)
vs.
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JAMES WIDTFELDT,
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Defendant/Appellant
)

8:10CV298
BK07-42271
A10-4008

MEMORANDUM AND ORDER

This matter is before the court on defendant/appellant James Widtfeldt’s appeal,
Filing No. 1, of the bankruptcy court’s order granting trustee Rick D. Lange’s motion for
summary judgment in a priority dispute. See Lange v. Widtfeldt, Inc., Bankruptcy Case No.
07-42271, Adversary Proceeding No. 10-4008 (hereinafter, “Bankr. Ct. R.”), Filing No. 25,
Judgment. The bankruptcy court declared Widtfeldt’s U.C.C. filings invalid and his claimed
liens and security interests void and accordingly determined that Widfeldt’s claims were
general unsecured claims. Id., Bankr. Record, Filing No. 23. Pursuant to 28 U.S.C.
§ 158(c)(1)(A), Widtfeldt has elected to appeal to this court.
I. FACTS
The debtors, Gary and Joyce Burival and Richard Burival and Phillip Burival d/b/a
Burival Brothers, filed for Chapter 11 bankruptcy protection in the United States Bankruptcy
Court for the District of Nebraska on November 29, 2007. Rick D. Lange is the Chapter
11 Bankruptcy Trustee of the debtors’ jointly administered bankruptcy cases. Bankr. Ct.

R., Filing No. 14, Affidavit of Rick D. Lange (“Lange Aff.”) at 1. Widtfeldt filed identical
proofs of claims in both of the Burivals’ consolidated bankruptcy cases, each for “rent and
expenses” of $17,500.00 and for “wages” of $2,000.00. Id., Filing Nos. 12 and 13, Exhibits
(proofs of claim). Widtfeldt's claims are based on a purported lease on certain property in
Holt County, Nebraska. Id., (attached leases). He claims priority under Bankruptcy Code
§ 507(a)(4). Id.
The record shows Gary and Joyce Burival farmed land that Widfeldt owned in 2007
and preceding years. Id., Filing No. 23, Order at 1. There was no signed lease agreement
for 2007. Id. Widtfeldt contends that there was also no oral agreement to lease the land
and characterizes the Burivals as trespassers who stole the 2007 corn crop owned by him,
as well as his portion of the cornstalks from the 2006 crop. Id.; Filing No. 18, Widfeldt
motion for summary judgment and objection to claim at 2.
The bankruptcy trustee filed an adversary proceeding to declare void, or to the
extent not void, to avoid, the liens filed by Widtfeldt against property owned by the debtors.
Id., Filing No. 1. The parties filed cross-motions for summary judgment and the bankruptcy
court found in favor of the trustee and against Widtfeldt. Id., Filing Nos. 11 & 18, Motions;
Filing No. 23, Order.
Before the Burivals filed bankruptcy, Widtfeldt had filed a U.C.C. financing statement
against Gary and Joyce Burival claiming a security interest in the debtors’ corn crop on his
premises. Id., Filing No. 12, Exhibit. He filed another U.C.C. financing statement against
them on the day after they filed bankruptcy. Id. Filing No. 13, Exhibit. Neither financing
statement names Burival Brothers. Id. Earlier Widtfeldt had filed a financing statement at
9904343516-2 with the Nebraska Secretary of State in 2004 (the “2004 financing
statement”). Id., Ex. 14, Affidavit of Rick D. Lange (“Lange Aff.”) at 3, 5-8 (attached U.C.C.
Financing Statement). The 2004 financing statement names the debtors as “Burival
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Partnership” and “Gary Burival” and includes a 2004 Lease signed by Gary A. Burival,
Joyce A. Burival, and Edwin Burival. Id. The 2004 financing statement is not included in
Widtfeldt’s proofs of claims. See id., Ex. 14, Lange Aff. at 1-2.
On appeal, Widfeldt, pro se, argues, in largely incoherent pleadings, that the
Burivals are liable for racketeering and that he should be allowed to recover in quantum
meruit.
II. DISCUSSION
“When a bankruptcy court’s judgment is appealed to the district court, the district
court acts as an appellate court and reviews the bankruptcy court’s legal determinations
de novo and its findings of fact for clear error.” See 28 U.S.C. §1334; In re Rine & Rine
Auctioneers, Inc., 74 F.3d 854, 857 (8th Cir. 1996). A factual finding is clearly erroneous
if it is not supported by substantial evidence in the record, if it is based on an erroneous
view of the law, or “if the reviewing court on the entire evidence is left with the definite and
firm conviction that a mistake has been committed.” See Johnson v. Arkansas State
Police, 10 F.3d 547, 552 (8th Cir. 1993) (quoting United States v. United States Gypsum
Co., 333 U.S. 364, 395 (1948)).
Summary judgment is proper when there is no dispute of material fact and the
moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c). A party
opposing summary judgment “may not rest upon the mere allegations or denials of his
pleadings, but . . . must set forth the specific facts showing that there is a genuine issue
of material fact for trial.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). The
nonmoving party must submit “sufficient evidence supporting a material factual dispute that
would require resolution by a trier of fact.” Id. “Where the unresolved issues are primarily
legal rather than factual, summary judgment is particularly appropriate.” Koehn v. Indian

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Hills Cmty. Coll., 371 F.3d 394, 396 (8th Cir. 2004). The review of a motion granting
summary judgment is de novo on the record. Maitland v. University of Minnesota, 43 F.3d
357, 360 (8th Cir. 1994). If the record shows that there is no genuine issue of material fact
and that the prevailing party is entitled to judgment as a matter of law, the granting of
summary judgment will be affirmed. Id.
Under Nebraska law, when a lease is on a cash rent basis, “the landlord’s only
recourse in the crops would be through an agreement with the tenant to give a security
interest in the crops.” Lone Oak Farm Corp. v. Riverside Fertilizer Co., 428 N.W.2d 175,
178 (Neb. 1988). “If a landowner holds a landlord’s lien created by the lease agreement,
it is governed by the U.C.C. and the landlord must file a financing statement and perfect
that security interest prior to one of the tenant’s creditors doing so.” Ag Servs. of Am., Inc.
v. Empfield, 587 N.W.2d 871, 874 (Neb. 1999); see also Neb. U.C.C. § 9-310.
The sufficiency of information in a financing statement is a mixed question of law
and fact. See Mid-America Dairymen, Inc. v. Newman Grove Co-op. Creamery, Inc., 214
N.W.2d 18, 24-26 (Neb. 1974). The Uniform Commercial Code requires three things for
a valid, enforceable security interest: (1) value has been given; (2) the debtor has rights
in the collateral; and (3) the debtor signs a security agreement containing a description of
the collateral. Neb. U.C.C. § 9-203(b). For a security agreement to attach, one of
requirements is that agreement be in writing, unless collateral is in possession of secured
party.

Paus Motor Sales, Inc. v. Western Sur. Co., 572 N.W.2d 403, 408 (Neb. App.

1997).
Widtfeldt admits that he has no signed lease and, therefore, no signed security
agreement. It is undisputed that the leases attached to Widtfeldt’s claims are unsigned.
The court also agrees with the bankruptcy court’s finding that the financing statements are
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void and grant Widtfeldt no security interest in the corn grown on the land at issue.
Further, the court agrees with the bankruptcy court’s finding that financing statement #2
is avoidable as a post-petition transfer or as an avoidable preference filed within 90 days
of the bankruptcy filing. The financing statement filed in 2004 is of no consequence
because crops harvested in that year are not assets of the bankruptcy estate. Widtfeldt
has presented no evidence of racketeering activity and there is no evidence on which to
base any award of damages under a quantum meruit theory. Widtfeldt failed to present
those arguments to the bankruptcy court and they would not be considered by this court
in any event.
III. CONCLUSION
The court finds that the order of the bankruptcy court should be affirmed. The
trustee is entitled to judgment as a matter of law on the validity of Mr. Widtfeldt's purported
security interests. Accordingly,
IT IS ORDERED:
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The judgment of the bankruptcy court is affirmed.

2.

This appeal is dismissed.

DATED this 8th day of June, 2011.
BY THE COURT:

s/Joseph F. Bataillon
Chief United States District Judge

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the District of Nebraska does not endorse, recom m end, approve, or guarantee any third parties or the
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