United States of America v. Mighty Fine Cattle Company LLC et al
Filing
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ORDER signed by Judge Pamela Pepper on 2/27/2018 GRANTING 31 Plaintiff's Motion for Partial Default Judgment against defendants Mighty Fine Cattle Co., Travis L. Krueger, Emily E. Krueger, Farmers Grain & Feed LLC, Kettle-Lakes Cooperative, Marvin Rate, David A. Thompson, Capital One Bank USA NA, and Fisher & Thompson; GRANTING 31 Plaintiff's Motion for Judgment on the Pleadings against defendants PHI Financial Services, Inc. and Serwe Implement Co., Inc. (cc: all counsel) (cb)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF WISCONSIN
UNITED STATES OF AMERICA,
Plaintiff,
v.
Case No. 17-cv-328-pp
MIGHTY FINE CATTLE COMPANY LLC,
TRAVIS L. KRUEGER, EMILY E. KREUGER,
FARMERS GRAIN & FEED LLC,
PHI FINANCIAL SERVICES, INC.,
KETTLE-LAKES COOPERATIVE,
MARVIN A. RATE,
DAVID A. THOMPSON,
SERWE IMPLEMENT CO., INC.,
CAPITAL ONE BANK USA NA,
FISHER & THOMPSON, INC.,
FOND DU LAC COUNTRY TREASURER,
Defendants.
ORDER GRANTING MOTION FOR PARTIAL DEFAULT JUDGMENT AND
JUDGMENT ON THE PLEADINGS (DKT. NO. 31)
The plaintiff filed a motion for partial default judgment and judgment on
the pleadings under Rules 55 and 12(c) of the Federal Rules of Civil Procedure.
Dkt. No. 31. The plaintiff moved for default judgment against defendants
Mighty Fine Cattle Company LLC, Travis and Emily Krueger, Farmers Grain &
Feed LLC, Kettle-Lakes Cooperative, Marvin Rate, David Thompson, Capital
One Bank USA NA, and Fisher & Thompson, and for judgment on the
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pleadings against PHI Financial Services, Inc. and Serwe Implement Co., Inc.1
None of these defendants responded to the motions. Defendant Fond du Lac
County, who holds a prior interest to the plaintiff on the property, filed an
objection to the motions but later reached a stipulation with the plaintiff. Dkt.
Nos. 34, 36. On October 31, 2017, the plaintiff filed a notice of abandonment of
the mortgaged property. Dkt. No. 37.
Both the motion for default judgment and the motion for judgment on
the pleadings are unopposed.
I.
Plaintiff’s Motion for Partial Default Judgment and Judgment on the
Pleadings (Dkt. No. 31)
A.
Standard of Review for Motion for Default Judgment
Federal Rule of Civil Procedure 55 requires a two-step process before the
entry of default judgment. A party first must seek an entry of default based on
the opposing party’s failure to plead. Fed. R. Civ. P. 55(a). Here, the plaintiff
requested the entry of default on August 11, 2017 (dkt. no. 27), and the clerk
of court entered default on August 14, 2017. After the entry of default, a
plaintiff may move for default judgment under Rule 55(b). Fed. R. Civ. P. 55(b).
When the court determines a defendant is in default, the court takes as true
the factual allegations in the complaint. Black v. Lane, 22 F.3d 1395, 1399 (7th
Cir. 1994).
On May 30, 2017, the parties stipulated to dismiss defendant Jacobson
Farmers Supply, Inc. because its mortgage had been satisfied before the
plaintiff filed the complaint. Dkt. No. 16.
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B.
Standard of Review for Motion for Judgment on the Pleadings
In considering a motion for judgment on the pleadings, the court
considers the complaint, answer and any written instruments attached to
those pleadings; accepts all well-pleaded allegations in the complaint as true;
and draws all inferences in favor of the plaintiff. See Pisciotta v. Old Nat’l
Bancorp, 499 F.3d 629, 633 (7th Cir. 2007); Forseth v. Village of Sussex, 199
F.3d 363, 368 (7th Cir. 2000).
C.
Defendants Failed to Answer or Otherwise Plead
On March 7, 2017, the plaintiff filed its complaint seeking to foreclose by
sale on real estate mortgages and chattel based on promissory notes, security
agreements, continuation states and mortgages entered into by the defendants
under the statutes, rules and regulations of the Farm Service Agency. Dkt. Nos.
1, 32 at ¶4. All of the defendants have been served with the waiver of summons
or the summons and complaint. With the exception of PHI Financial Services,
Inc. and Serwe Implement Co., who both filed a notice of entitlement to surplus
funds (dkt. nos. 7, 18), none of the defendants filed an answer, and the time for
doing so has expired.
The plaintiff established service as follows:
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Defendants Marvin Rate, John Howley (in his capacity as
attorney for defendant Kettle-Lakes Cooperative), and Daniel
Dineen (as registered agent for defendant Farmers Grain &
Feed LLC) signed and returned the waiver of service of
summons form on March 21, 2017. These defendants did
not file a responsive pleading by the May 15, 2017 deadline.
Dkt. No. 32 at ¶5.
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2.
3.
D.
The United States Marshal personally served the Mighty Fine
Cattle Company LLC on May 25, 2017, and Emily and Travis
Krueger on May 31 2017. These defendants did not file a
responsive pleading by the June 21, 2017 deadline. Id. at ¶6.
Finally, the United States Marshal personally served David
Thompson on June 6, 2017, and Thompson failed to respond
by June 27, 2017. The United States Marshal personally
served Capital One Bank USA NA on June 15, 2017 and
Capital One failed to respond by July 6, 2017. Id.
Allegations in Plaintiff’s Complaint are Proven True
The court has jurisdiction because the plaintiff filed this case under 28
U.S.C. §1345, which provides that the district courts have original jurisdiction
over civil actions brought by the United States or any agency authorized to sue
under an act of Congress. Dkt. No. 1 at ¶1. The plaintiff seeks a sale of the
mortgaged property under 28 U.S.C. §§2001-2003.
None of the defendants have contested the substantive allegations of the
complaint. Defendants PHI Services, Inc. and Serwe Implement Co. filed claims
for excess, but do not contest that the plaintiff’s interest in the mortgaged
property is superior to their own. Thus, the court takes all of the allegations of
the complaint as true for purposes of establishing liability.
The plaintiff seeks to foreclose on chattel and real estate held by
defendants Mighty Fine Cattle Company LLC and Travis L. and Emily E.
Krueger (“the Borrowers”). Dkt. No. 1 at ¶1. The Borrowers executed a series of
promissory notes with the Farm Service Agency, United States Department of
Agriculture. Id. at ¶3. The plaintiff attached to the complaint the promissory
notes and security agreements securing the remaining chattel. Dkt. Nos. 1-1
through 1-23. The mortgage premises at issue is described as follows:
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Lot One (1) of Certified Survey Map No. 7578 recorded in the office
of the Register of Deeds for Fond du Lac County, Wisconsin in
Volume 55 of Certified Survey Maps on pages 84 and 84A,
Document No. 972172; being a part of the Southwest Quarter of
the Southwest Quarter (SW 1/4 SW 1/4) of Section 7, Township 13
North, Range 18 East, Town of Ashford, Fond du Lac County,
Wisconsin.
Property Address:
W4855 Super Drive, Campbellsport, WI 53010
Id. at ¶8. In addition, the Borrowers included the plaintiff as a lien holder on
their 2007 Schuette Manufacturing and Steel Sales, Inc. single cattle trailer,
bearing Vehicle Identification Number 1S9JL17187M774216. Id. at ¶¶6,7, 131.
The plaintiff gave notice of this action on March 27, 2017 by filing a lis
pendens in the office of the Register of Deeds for Fond du Lac County,
Wisconsin as required by law after filing the complaint in this court and more
than twenty days prior to the trial or other resolution of this action.
The United States is due the following sums:
a) Unpaid Principal and Interest:
Principal Balance $513,322.39
Accrued Interest to August 11, 2017 $ 24,315.43
Interest continues to accrue on the note at a rate of $32.1681 per
day. The total amount of interest due to the United States will be
calculated as of the date Judgment is ordered.
b) Fees and Costs Already Incurred:
Lis Pendens fees $ 30.00
c) Taxes, Special Assessments, Insurance, and Necessary
Repairs: Under the terms of the mortgages, plaintiff may pay any
taxes, special assessments, or insurance premiums accruing
against the mortgaged premises that are now due or that shall
become hereafter due before a sale of the mortgaged premises; and
to protect and preserve the mortgaged premises, plaintiff may
make payments for such repairs to the premises as may
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reasonably be deemed necessary for the proper preservation
thereof. Under the terms of the mortgages, all sums advanced by
plaintiff for taxes, special assessments, insurance, or necessary
repairs become additional indebtedness secured by the mortgages.
d) Costs of Foreclosure: Under the terms of the mortgages,
plaintiff is entitled to collect expenses that it may incur in
pursuing the remedy of foreclosure. Such expenses include but are
not limited to title evidence and title insurance as well as fees,
charges, and expenses owed to the U.S. Marshal for a judicial sale
of the premises.
Dkt. Nos. 31-1 at ¶¶9-10, 32 at ¶¶14-20.
No other proceedings have been held at law or otherwise for the recovery
of the sum secured by the promissory notes, security agreements, continuation
statements, and mortgages. Dkt. No. 31-1 at ¶12.
E.
Conclusions of Law
The court will enter judgment of foreclosure of the premises as requested
in the plaintiff’s complaint and in accordance with the above findings of fact.
The plaintiff has established that, as of August 11, 2017, it was owed
$537,637.82 ($513,322.39 in principal balance and $24,315.43 in accrued
interest to August 11, 2017). All sums advanced by the plaintiff for taxes,
special assessments, insurance, or necessary repairs shall become additional
indebtedness secured by the mortgages, with interest thereon from the date of
payment at the legal post-judgment rate, and may be added to the judgment by
order any time after its entry. In addition, the plaintiff is entitled to a lien on
the premises for the amount of any payments made for reasonable expenses
incurred in pursuing the remedy of foreclosure and may obtain an order
directing that the amounts paid, with interest thereon from the date of
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payment at the legal post-judgment rate, be paid out of the proceeds of the
sale.
The defendants Mighty Fine Cattle Co., Travis Krueger, Emily Krueger,
Farmers Grain & Feed, LLC, Kettle-Lakes Cooperative, Marvin Rate, David
Thompson, Capital One Bank USA NA, Fisher & Thompson, PHI Financial
Services, Inc., and Serwe Implement Co. and all persons claiming under them
subsequent to the filing of the notice of the pendency of this action are forever
barred and foreclosed of all right, title, interest, claim and equity of redemption
in and to the lands and premises or any part, parcel, or portion thereof.
The defendants shall not be granted a period of redemption. See United
States v. Einum, 992 F.2d 761 (7th Cir. 1993).
II.
Conclusion
The court GRANTS the plaintiff’s motion for partial default judgment
against defendants Mighty Fine Cattle Co., Travis L. Krueger, Emily E. Krueger,
Farmers Grain & Feed LLC, Kettle-Lakes Cooperative, Marvin Rate, David A.
Thompson, Capital One Bank USA NA, and Fisher & Thompson. Dkt. No. 31.
The court GRANTS the plaintiff’s motion for judgment on the pleadings
against defendants PHI Financial Services, Inc., and Serwe Implement Co., Inc.
Dkt. No. 31.
Dated in Milwaukee, Wisconsin this 27th day of February, 2018.
BY THE COURT:
_____________________________________
HON. PAMELA PEPPER
United States District Judge
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