Audio Odyssey, Ltd. v. Brenton First National Bank

245 F.3d 721, 2001 U.S. App. LEXIS 5682
CourtCourt of Appeals for the Eighth Circuit
DecidedApril 6, 2001
Docket00-1634
StatusPublished
Cited by28 cases

This text of 245 F.3d 721 (Audio Odyssey, Ltd. v. Brenton First National Bank) is published on Counsel Stack Legal Research, covering Court of Appeals for the Eighth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Audio Odyssey, Ltd. v. Brenton First National Bank, 245 F.3d 721, 2001 U.S. App. LEXIS 5682 (8th Cir. 2001).

Opinions

SACHS, District Judge.

In mid-July 1995, Brenton First National Bank obtained a writ of replevin for seizure of certain property of Audio Odyssey, Ltd., an electronics store in Davenport, Iowa. A sheriffs deputy executed the writ later that day, ordered a locksmith to change the locks at the store, and posted “No Trespassing” signs even though the writ called for the seizure of personal, rather than real, property. Audio Odyssey’s president and sole shareholder, Do-gan A. Dincer, could not (or did not) enter the premises for several weeks, and the store went out of business. Seeking redress for the writ’s ex parte issuance and mishandled execution, Audio Odyssey, Dincer, and Dincer’s wife brought a variety of claims under 42 U.S.C. § 1983 and state law against the Bank, the Bank’s attorney and law firm, the Bank’s bonding company, the county officials who aided the writ’s execution, and a loan officer of the Small Business Administration. Plaintiffs now appeal from the district court’s many adverse rulings. These include the dismissal of the Dincers’ individual claims for lack of standing, the dismissal of the section 1983 claim against the SBA loan officer, and the grant of summary judgment to other defendants on all federal claims. We affirm in part, reverse in part, and remand for further proceedings.

I

We view the record in the light most favorable to plaintiffs. Dogan Dincer, previously an employee and minority shareholder of Audio Odyssey, purchased the business for $270,000 in 1991. The purchase was partially financed through a $200,000 loan from the Bank, and the SBA guaranteed 85 percent of the loan. Audio Odyssey, in turn, executed a “Business Security Agreement” giving the Bank a security interest in the store’s accounts, general intangibles, contract rights, instruments, chattel paper, documents, inventory, machinery, equipment and fixtures. The Agreement required Audio Odyssey to perform its payment obligations under the note, and to take other steps such as maintaining insurance on the collateral and keeping current with all tax obligations. In the event of default, the Agreement allowed the Bank to accelerate the loan and to enter the store and take the collateral.

In the weeks preceding July 14, 1995, Bank personnel came to believe that Audio Odyssey was failing to perform its duties [727]*727under the loan and Agreement, including the duty to make timely payments, to maintain insurance, and to pay taxes. On July 13, 1995, Dincer paid $6,983 to the Bank, and instructed the teller to apply the payment so as to satisfy the store’s monthly obligation for June and July. The Bank instead applied the payment to a previous overdraft. The next morning, John C. Bradley, a commercial loan officer and vice president at the Bank, hand-delivered a letter to Dincer stating that the Bank was accelerating the loan, and demanding payment of the remaining balance (some $127,000) within ten minutes. Dincer contacted his attorney and surmised that he could not raise the sum in such a short time. The attorney faxed a letter to the Bank at around noon, contending that Audio Odyssey was not in default.

The Bank was not persuaded, and it brought an ex parte replevin action later that afternoon. Attorney Bernard Hof-mann filed a Petition in Replevin in the Iowa District Court for Scott County, contending, among other things, that (i) Audio Odyssey was delinquent in its loan payments and other obligations, (ii) the Bank was entitled to possession of the collateral under the Agreement, and (iii) immediate action was necessary because the collateral might be destroyed, concealed, moved, sold, or fraudulently transferred (Bank personnel had told Hofmann that an “annual sale” was scheduled for that weekend, and the petition was filed on a Friday). Along with the petition, Hofmann filed a “Bond for Replevin” in the amount of $300,000, or more than twice the value of the collateral. The judge asked Hofmann whether the state’s replevin statute required notice to the defendant, and Hof-mann advised that the court had discretion to give such “notice and opportunity for hearing as it may prescribe” under Iowa Code § 643.5. Hofmann also explained that the Bank’s collateral was in danger of being sold. The judge reviewed the statutory framework, considered the matter very briefly, and signed the order that Hof-mann had drafted. Pursuant to the order, the clerk of the court issued a writ of replevin directing the sheriff to deliver the following property to the Bank’s possession:

All inventory, fixtures, accounts, furniture, equipment and machinery on property described as follows:
4500 square feet located at 1718 E. Kimberly Road, Davenport, Iowa, legally described as: Part of the Northwest Quarter of the Southwest Quarter of Section 18, Township 78, Range 4, East of the 5th P.M. ... to the City of Davenport, Scott County, Iowa.

Aimed with the writ and order, Hof-mann visited the Scott County Sheriffs Department and requested that the writ be served immediately. Sergeant Charles A. Barton reviewed the writ and asked Hofmann if the Bank was prepared with moving trucks to remove the collateral, as is customary. Hofmann said that the Bank did not have moving trucks immediately available. Sergeant Barton explained that the Department could not serve the writ because it was already late in the afternoon and the Bank did not have moving trucks. Hofmann called Bradley at the Bank for instructions, and Bradley told him that the Bank’s intention was to change the locks and keep Dincer and other store personnel off the premises. Hofmann relayed this information to Sergeant Barton, insisted that the writ be executed that afternoon, and asked whether the Sheriffs Department could lock the premises over the weekend to prevent Audio Odyssey from selling the collateral. Sergeant Barton, in turn, reviewed the writ and said that it would be possible to lock the store. At Sergeant Barton’s re[728]*728quest, Hofmann completed a form entitled “Directions to Sheriff,”2 which stated that Bradley and a locksmith would meet the deputies at Audio Odyssey.

Deputy John M. Norris served the writ of replevin at Audio Odyssey at 4 p.m. He met Bradley and the locksmith at the premises, and ordered everyone inside to leave the store. Deputy Norris thereafter directed the locksmith to change the locks, secured the inventory and other collateral, and posted “No Trespassing” signs on the front and back doors. During the next week, Deputy Norris and others completed an inventory of the items described by the writ, removed the items, and turned them over to the Bank (along with keys to the premises).3

In the meantime, Dincer tried to regain access to the premises — albeit somewhat circuitously. He called the judge at home the night that Deputy Norris served the writ, and the judge advised him to employ an attorney. Dincer and Audio Odyssey retained their present counsel the next Monday. Meetings on July 26 and August 4 between attorneys for Audio Odyssey and the Bank were unfruitful. On August 2, 1995, plaintiffs’ attorney wrote a certified letter to the Scott County Sheriff and demanded the immediate surrender of the premises. The letter went unanswered; it is unclear who may have received and reviewed it.

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Cite This Page — Counsel Stack

Bluebook (online)
245 F.3d 721, 2001 U.S. App. LEXIS 5682, Counsel Stack Legal Research, https://law.counselstack.com/opinion/audio-odyssey-ltd-v-brenton-first-national-bank-ca8-2001.