AgriBank, FCB v. Cupples

850 F. Supp. 780, 1993 U.S. Dist. LEXIS 19777, 1993 WL 643397
CourtDistrict Court, E.D. Arkansas
DecidedMarch 18, 1993
DocketNo. J-C-92-285
StatusPublished
Cited by2 cases

This text of 850 F. Supp. 780 (AgriBank, FCB v. Cupples) is published on Counsel Stack Legal Research, covering District Court, E.D. Arkansas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
AgriBank, FCB v. Cupples, 850 F. Supp. 780, 1993 U.S. Dist. LEXIS 19777, 1993 WL 643397 (E.D. Ark. 1993).

Opinion

[781]*781 ORDER

ROY, District Judge.

Now before the Court are the parties’ cross-motions for summary judgment. The Court agrees that there are no material facts at issue and that the matters before the Court can be decided as a matter of law.

Plaintiff AgriBank, FCB, formally known as The Federal Land Bank of St. Louis (its predecessor in interest), has brought this action pursuant to the Federal Declaratory Judgment Act, 28 U.S.C. § 2201, and Ark. Code Ann. § 16-66-418. The plaintiff and separate defendant United Agri Products Financial Services, Inc. (“UAP”) are both creditors of the remaining defendants, who will be collectively referred to as the Cupples. Complete diversity exists between the parties. An abbreviated summary of. the facts follows.

I.

The Cupples family, in its several legal forms, has engaged in farming in east Arkansas since at least 1979. A fraud perpetrated against them by a grain company dealt them a financial blow from which they have never recovered. Numerous lawsuits have resulted, two of which directly concern the case currently before this Court.

One of those two suits was tried by this Court, Federal Land Bank of St Louis v. Cupples Brothers, et al, Case No. J-C-86-021, which resulted in. a -large judgment in favor of The Federal Land Bank, the predecessor in interest of AgriBank. After several appeals to the Eighth Circuit and the sale of certain collateral, the current balance on the judgment in plaintiffs favor now approaches $700,000.

The other suit of interest is one currently pending in the Circuit Court of Crittenden County (Arkansas), Cupples Brothers v. Forrest City Production Credit Association, No. CIV-83-335.

Separate defendant UAP is the successor in interest to Delta Distributors, Inc., a business entity which had sold farm chemicals to the Cupples on credit. . The Cupples are now indebted to UAP in the amount of almost $500,000.

These two large creditors of the Cupples, AgriBank and UAP, both apparently believe that the only significant hope that either 'of them has to recover anything from the Cupples is for the Cupples to prevail in their suit pending in state court. The creditors have taken different steps toward that end.

The plaintiff has apparently caused writs of execution to be issued and served on the judgment debtors as well as the Crittenden County Circuit Court for the purpose of putting a lien on the pending action. Plaintiff then filed this suit.

On the other hand, UAP executed an agreement with ■ at least some members of the Cupples. family in April 1987 whereby UAP agreed to totally release the Cupples from their obligation to UAP in exchange for 40% of whatever proceeds the Cupples might eventually realize in their state court action. Presumably, this meant the debt was extinguished even if the Cupples never receive a dime in their lawsuit.

In their’ cross-motions for summary judgment, the creditors ask the Court to declare the priority of their respective liens. For the reasons set out below, this Court declines to do so.

II.

A The federal claim

The contingent nature of both AgriBank’s and UAP’s ability to recover anything from the Cupples makes the legal question of which entity has the superior lien somewhat hypothetical. To support declaratory judgment action, there must be an actual “controversy” under the Declaratory Judgment Act. United Public Workers v. Mitchell, 330 U.S. 75, 67 S.Ct. 556, 91 L.Ed. 754 (1947) (overruled on other grounds by Adler v. Bd. of Education, 342 U.S. 485, 72 S.Ct. 380, 96 L.Ed. 517 (1952)). The Act states, in pertinent part, “[i]n a case of actual controversy within its jurisdiction ... any court of the United States, upon the filing of an appropriate pleading, may declare the rights and other legal relations of any interested party [782]*782seeking such declaration____” 28 U.S.C. § 2201 (emphasis added).

The distinction between an abstract question and an actual controversy as contemplated by the Act is largely one of degree. Joslin v. Sec. of the Treasury, 832 F.2d 132 (10th Cir.1987). “The question is ‘whether the facts alleged, under all the circumstances, show that there is a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment.’” Super Tire Engineering Company v. McCorkle, 416 U.S. 115, 94 S.Ct. 1694, 40 L.Ed.2d 1 (1974), quoting Maryland Casualty Co. v. Pacific Coal & Oil Co., 312 U.S. 270, 273, 61 S.Ct. 510, 512, 85 L.Ed. 826 (1941).

“The contingent nature of the right or obligation in controversy will not bar a litigant from seeking declaratory relief when the circumstances reveal a need for a present adjudication.” Allendale Mutual Insurance Co. v. Kaiser Engineers, 804 F.2d 592 (10th Cir.1986). However, because there will be no money to fight over unless the Cupples prevail in their state action, there is no immediate need to decide the priority of the liens. The situation might be different had the parties shown the Court that there was the risk of some right being lost if the legal question were not decided right now, e.g., the right to sue, to appeal, to subrogate, etc. (See, e.g., Ibid, at 595, where the Tenth Circuit distinguishes the facts of that case from those present in National Valve & Mfg. Co. v. Grimshaw, 181 F.2d 687 (Tenth Cir.1950), a case where the district court saw no immediate need to decide an issue and dismissed a case as premature.)

The contingent nature of this dispute was well summarized by UAP in one of its briefs: The Crittenden County action has been

ongoing since 1983 and to date there has been no trial and no judgment entered by the Court, nor is one anticipated in the near future____ No one can say with any degree [of] certainty at this time when that case will finally be tried and/or when the Court will render its judgment. Nor can it be said with any degree of probably what the final judgment of the Court will be. It is probable that any judgment of the Court would be the subject of future appeals.

UAP’s motion for summary judgment and brief at 8-9.

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Cite This Page — Counsel Stack

Bluebook (online)
850 F. Supp. 780, 1993 U.S. Dist. LEXIS 19777, 1993 WL 643397, Counsel Stack Legal Research, https://law.counselstack.com/opinion/agribank-fcb-v-cupples-ared-1993.