United States District Court, D. Kansas
JOSEPH H. PAGE; FRANCES K. PAGE, Plaintiffs,
FARM CREDIT SERVICES OF AMERICA, PCA Defendant.
MEMORANDUM AND ORDER
RICHARD D. ROGERS, District Judge.
This matter is presently before the court upon the motion of defendant Farm Credit Services of America (FCSA) for summary judgment. FCSA seeks summary judgment on all of the claims asserted by plaintiffs Joseph and Frances Page. Having carefully reviewed the extensive arguments of the parties, the court is now prepared to rule.
The claims in plaintiffs' complaint arise from two loans they had with FCSA. The Pages had received the loans to purchase cattle and feed for a feedlot in Cedar Rapids, Nebraska that was operated by Big Drive Cattle, LLC, an entity in which plaintiffs had an ownership interest. The Pages claim that, during the course of the loans, FCSA failed to properly monitor and inventory the cattle pursuant to the security agreement entered into between the parties.
Plaintiffs assert claims of negligent misrepresentation, fraudulent misrepresentation, negligence and breach of good faith and fair dealing.
Summary judgment is appropriate if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). The requirement of a genuine issue of fact means that the evidence is such that a reasonable jury could return a verdict for the nonmoving party. See Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 248 (1986). Essentially, the inquiry 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. Id. at 251-52.
The moving party bears the initial burden of demonstrating the absence of a genuine issue of material fact. This burden may be met by showing that there is a lack of evidence to support the nonmoving party's case. See Celotex Corp. v. Catrett , 477 U.S. 317, 325 (1986). Once the moving party has properly supported its motion for summary judgment, the burden shifts to the nonmoving party to show that there is a genuine issue of material fact left for trial. See Anderson , 477 U.S. at 256. A party opposing a properly supported motion for summary judgment may not rest on mere allegations or denials of [its] pleading, but must set forth specific facts showing that there is a genuine issue for trial. Id . Therefore, the mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment. See id.
When reviewing a motion for summary judgment, the court should keep in mind three principles. First, the court's role is not to weigh the evidence, but to assess the threshold issue whether a genuine issue exists as to material facts requiring a trial. See Anderson , 477 U.S. at 249. Second, the court must resolve all reasonable inferences and doubts in favor of the non-moving party and construe all evidence in the light most favorable to the non-moving party. See Hunt v. Cromartie , 526 U.S. 541, 550B55 (1999). Third, the court cannot decide any issues of credibility. See Anderson , 477 U.S. at 255.
The court notes that summary judgment is not a Adisfavored procedural shortcut;" rather, it is an important procedure Adesigned to secure the just, speedy and inexpensive determination of every action." Celotex , 477 U.S. at 327 (quoting Fed.R.Civ.P. 1).
Many of the facts are not in dispute. Big Drive, LLC owned and operated a cattle feedlot near Cedar Rapids, Nebraska. The feedlot was purchased by Big Drive on or about March 10, 2010. Big Drive was owned by the Pages, Don and Carole Haun and Carol and Shirley Knisley. Prior to the purchase of the feedlot, this group had leased the feedlot from a person in Texas. The feedlot was managed by A.J. Ostrander, both during the time the feedlot was leased and from the date Big Drive acquired it until he was fired in February 2011.
The feedlot purchase was financed by FCSA and their affiliated entity, Farm Credit Services of America, FLCA (FLCA). Big Drive also obtained a loan from the FCSA and FLCA to operate the feedlot. The Pages and the other owners of Big Drive personally guaranteed payment of the Big Drive loans.
On March 20, 2010, the Pages obtained a $2, 500, 000 operating loan from FCSA to finance the purchase of cattle to be fed at the feedlot. The Promissory Note and Loan Agreement signed by the Pages at the closing of the loan stated the following under the term ABorrowing Case":
The Borrower agrees to maintain a minimum margin between the value and advance rate of certain secured assets and the amount of certain liabilities (Borrowing Base). Said margin will be computed according to a Borrowing Base Report acceptable to Lender, an example of which is attached hereto as Exhibit B. The Borrowing Base Report shall be accompanied with itemized accounts receivable and accounts payable report, a cattle inventory yard sheet, an itemized feed and grain inventory report, an ...