United States of America v. Lane et al

Filing 16

ORDER granting 9 Motion for Summary Judgment. Signed by District Judge Terrence W. Boyle on 11/15/2016. (Stouch, L.)

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF NORTH CAROLINA
WESTERN DIVISION
No. 5:16-CV-64-BO
UNITED STATES OF AMERICA,

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Plaintiff,

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V.

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ORDER

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MARK EARL LANE and CYNTHIA W.
LANE,
Defendants.

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This cause comes before the Court on plaintiffs motion for summary judgment pursuant
to Rule 56 of the Federal Rules of Civil Procedure. Defendants have failed to respond to
plaintiffs motion. For the reasons discussed below, plaintiffs motion for summary judgment is
granted.
BACKGROUND
Plaintiff, the government, filed this action on February 9, 2016, on behalf of its agency,
the Farm Service Agency (FSA), seeking judgment on defendants' default on three rescheduling
loans. Defendants, through counsel, answered the complaint and the case proceeded through a
period of discovery. The government filed its Rule 56 motion and statement of undisputed
material facts pursuant to Local Civil Rule 56.l on August 30, 2016. On September 14, 2016,
defendants filed a list of trial witnesses and exhibits. No response to the instant motion was filed
by defendants.
DISCUSSION
A motion for summary judgment may not be granted unless there are no genuine issues
of material fact for trial and the movant is entitled to judgment as a matter oflaw. Fed. R. Civ.

P. 56(a). The moving party bears the initial burden of demonstrating the absence of a genuine
issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). If that burden has
been met, the non-moving party must then come forward and establish the specific material facts
in dispute to survive summary judgment. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475
U.S. 574, 588 (1986). In determining whether a genuine issue of material fact exists for trial, a
trial court views the evidence and the inferences in the light most favorable to the nonmoving
party. Scott v. Harris, 550 U.S. 372, 378 (2007). However, "[t]he mere existence of a scintilla
of evidence" in support of the nonmoving party's position is not sufficient to defeat a motion for
summary judgment; "there must be evidence on which the [fact finder] could reasonably find for
the [nonmoving party]." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252 (1986).
"Although the failure of a party to respond to a summary judgment motion may leave
uncontroverted those facts established by the motion, the moving party must still show that the
uncontroverted facts entitle the party to a judgment as a matter oflaw." Custer v. Pan Am. Life
Ins. Co., 12 F.3d 410, 416 (4th Cir. 1993); see also Roseboro v. Garrison, 528 F.2d 309, 310 (4th
Cir. 1975) (in "ordinary civil action the failure of [a party] to file any counter-affidavit would
warrant the entry of summary judgment."). Here, defendants have not responded to the
government's motion and have not opposed its assertion that the facts presented in its Local Rule
56.1 statement are undisputed. Local Civ. R. 56.1 (a)(l )-(2). Thus, accepting the government's
proffer of uncontroverted facts, the Court must only determine whether the government has
demonstrated that those facts entitle it to judgment as a matter of law.
The Court applies North Carolina contract law to the government's claim to recover for
unpaid loan amounts under the FSA, a federal loan program. United States v. Friend's
Stockyard, Inc., 600 F.2d 9, 10 (4th Cir. 1979) (citing United States v. Kimbell Foods, Inc., 440

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U.S. 715 (1979)); see also United States v. Bailey Feed Mill, Inc., 592 F. Supp. 844, 846
(E.D.N.C. 1984) ("It has long since been settled that actions to recover on federal loan programs
are controlled by federal common law and that state law is adopted as the federal common law
unless it is found to be discriminatory.").
The government contends that its claim that defendants are in default on three FSA loans
is analyzed as a breach of contract claim, which under North Carolina law requires a showing of
first the existence of a valid contract and second breach of the terms of the contract. Poor v. Hill,
138 N.C. App. 19, 26 (2000). A valid contract requires mutuality of agreement supported by
adequate consideration. Croom v. Goldsboro Lumber Co., 182 N.C. 217, 108 S.E. 735, 737
(1921); Creech ex rel. Creech v. Melnik, 147 N.C. App. 471, 477 (2001). Failure to comply with
a duty assumed by a party to a contract constitutes breach, and "[n]on-performance of a valid
contract is a breach thereof unless the person charged shows some valid reason which may
excuse the non-performance .... " Sechrest v. Forest Furniture Co., 264 N.C. 216, 217 (1965)
(internal alterations and citation omitted). The remedy for breach of contract is actual damages,
"which are those that may reasonably be supposed to have been in the contemplation of the
parties when the contract was made or which will compensate the injured party for the loss
which fulfillment of the contract could have prevented or the breach of it has entailed."
Weyerhaeuser Co. v. Godwin Bldg. Supply Co., 292 N.C. 557, 560-61 (1977) (internal quotation
and citation omitted).
The undisputed facts as proffered by the government are these. Defendants Mark and
Cynthia Lane executed three rescheduling FSA promissory notes for loans of money, numbered
10, 11, and 12. [DE 11]; [DE 12 at 17-27]. Loan 10 was in the amount of $147,767.13 at the
rate of 2.5% per annum; Loan 11 was in the amount of $105,566.44 at the rate of2.5% per

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annum; Loan 12 was in the amount of$63,339.86 at the rate of2.5% per annum. /d. The first
installment payment was due on each loan on June 1, 2011. [DE 12 at 10]. No payments were
ever made by defendants on these loans. Id; [DE 12 at 28]. On September 26,2013, the
government expended a total of $4,500 in protective advances to collect on the loans. /d.
There is no evidence in the record which would contradict the above stated material facts.
There has been no suggestion or argument that valid contracts were not formed between the
government and defendants in regard to Loans 10, 11, and 12 and that defendants did not
materially breach the contracts by failing to make repayments as prescribed. The Court is
unaware of any basis upon which to find that defendants did not breach their loan agreements
and that judgment should not be entered against them for the amount of the unpaid loans and
protective advances, plus interest at the rate of 2.5%. The Court would note that although
defendants have filed their witness list and trial exhibit list, suggesting that they believe this
matter should proceed to trial and judgment should not be entered as a matter of law, review of
defendants' filing offers no basis upon which to deny the government's properly supported
motion.
CONCLUSION
For these reasons, plaintiff's motion for summary judgment [DE 9] is GRANTED. The
clerk is DIRECTED to enter judgment against defendants in the amount of$361,584.38, with
interest accruing at the daily rate, and to close the file.

SO ORDERED, this J.Vay ofNovember, 2016.

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