Bank of Jackson County v. L. James Cherry Raymond G. Naeyaert

980 F.2d 1362, 1993 U.S. App. LEXIS 209, 1993 WL 100
CourtCourt of Appeals for the Eleventh Circuit
DecidedJanuary 11, 1993
Docket91-3547
StatusPublished
Cited by52 cases

This text of 980 F.2d 1362 (Bank of Jackson County v. L. James Cherry Raymond G. Naeyaert) is published on Counsel Stack Legal Research, covering Court of Appeals for the Eleventh Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Bank of Jackson County v. L. James Cherry Raymond G. Naeyaert, 980 F.2d 1362, 1993 U.S. App. LEXIS 209, 1993 WL 100 (11th Cir. 1993).

Opinions

HATCHETT, Circuit Judge:

In this appeal, we affirm the district court’s ruling that Farmers Home Administration (FmHA) officials did not deprive a bank of First Amendment, liberty, or property rights when they debarred the bank.

FACTS

The Bank of Jackson County (BJC) is a small bank in northwest Florida. In September, 1981, BJC loaned money to Elmer and Shirley Ferris to purchase forty-six dairy cows. The Farmers Home Administration, a federal agency, guaranteed the loan. In 1982, when the Ferrises began surreptitiously removing their cattle from Florida, BJC took possession of the cows remaining at the Ferrises’ farm. BJC and FmHA sold the cows jointly and put the proceeds into a joint account.

In September, 1984, BJC informed FmHA that it had begun applying funds from the joint account to its debts. FmHA objected, and a dispute followed. In July, 1986, FmHA informed BJC that it would not negotiate further over ownership of the funds until BJC restored the amounts that it had withdrawn from the account.

For nearly two years, FmHA did not communicate again with BJC regarding the Ferris cow dispute. Then, on April 14, 1988, Raymond G. Naeyaert, Florida chief of FmHA farmer programs, instructed the FmHA supervisor in Holmes County not to issue a conditional commitment for an FmHA guarantee on a BJC loan to a local farmer named Adron Miller. Naeyaert told the supervisor that he was not to conduct any further business with BJC because of the unresolved dispute over the Ferris proceeds.

The same day, an Assistant United States Attorney for the Northern District of Florida, Benjamin Beard, wrote a letter to the General Counsel’s Office of the U.S. Department of Agriculture in Atlanta. In relevant part, Beard stated:

[A]s I understand the facts of this case, [BJC] officials intentionally and with knowledge misrepresented their actions in the case and thereafter flatly refused to comply with their represented agreement. At the very least that is civil fraud and in my view demonstrates that the bank officials do not believe that they are required to deal in a forthright and ethical manner with the government.
If that is their belief, then I believe it is exceedingly unwise to enter into any financial transaction with them wherein the FmHA would have to rely on these officials to conduct servigin [sic] and to deal honestly with the FmHA_ [Emphasis added.]

On May 5,1988, Ted Elders, an Agriculture Department attorney, wrote to L. James Cherry, Florida state director of the FmHA, agreeing with Beard’s opinion. Elders suggested that Cherry consider withdrawing from pending transactions involving BJC and refuse to undertake any new transactions with the bank.

On June 1, 1988, Cherry wrote to BJC stating that (1) FmHA would not “enter into any loan guaranty submitted by [BJC]”; (2) FmHA would honor existing guaranties; and (3) FmHA was terminating its Treasury Limited Account with BJC on July 1, 1988. The reason for these actions, according to Cherry, was BJC’s refusal to negotiate in “good faith” over the Ferris cow dispute. Cherry and Naeyaert, the appellees, admitted that the purpose of the letter was to discontinue all further dealings with BJC in Florida, except those relating to existing guaranties. FmHA’s Alabama office, however, continued to issue guaranties on new BJC loans.

In July, 1988, Glen Walden, the acting Florida director of the FmHA, wrote to BJC rejecting its latest settlement offer in the dispute over the Ferris proceeds. Walden reaffirmed FmHA’s earlier settlement offer and encouraged BJC to accept it. In doing so, Walden stated:

[1365]*1365I am confident that when you consider the alternatives you will agree to a settlement more in line with what we are able to accept so we may discontinue the proposed litigation and resume normal relations between the bank and FmHA.

BJC did not accept FmHA’s settlement offer, and on September 9, 1988, FmHA sued BJC over the Ferris proceeds.

FmHA’s Florida office continued to refuse to issue new guaranties on BJC loans. In February, 1989, Naeyaert wrote the Jackson County FmHA supervisor, rejecting his request for a guaranty on a BJC loan to Charles M. Patrick, a local farmer. Naeyaert stated that FmHA would not issue new guaranties on BJC loans because of the bank’s failure to negotiate in “good faith” in the Ferris cow dispute. Around this same time, Cherry approved two BJC loan renewals, but reiterated that his office would not issue any new guaranties.

Appellees also continued to use the guaranty program as a lever to force resolution of the Ferris dispute. On May 5, 1989, Cherry met with Thomas W. Wilder, BJC’s president, at a “fish fry” for Agriculture Secretary Clayton Yeutter in Marianna, Florida. Wilder stated his belief that FmHA had “debarred” BJC without following the proper procedural requirements for that penalty. Cherry responded that the Florida FmHA office would resume its business relationship with BJC as soon as the Ferris cow litigation was settled.

In April, 1990, the District Court for the Northern District of Florida entered judgment in the Ferris cow litigation, finding BJC entitled to $25,000 and FmHA entitled to $62,000. Although the dispute was thereby resolved, FmHA did not resume its business relationship with BJC.

PROCEDURAL HISTORY

BJC brought this Bivens action against Cherry and Naeyaert alleging that termination of the business relationship with FmHA (“debarment”) deprived BJC of its constitutional rights. See Bivens v. Six Unknown Named Agents of the Federal Bureau of Narcotics, 403 U.S. 388, 91 S.Ct. 1999, 29 L.Ed.2d 619 (1971). In particular, the complaint alleged that termination of the business relationship, without following procedural requirements contained in FmHA regulations, deprived BJC of liberty and property without due process of law. The complaint further alleged that the debarment penalized BJC for exercising its First Amendment right to petition the government for a redress of grievances in the Ferris cow dispute. BJC sought damages against appellees in their individual capacities and injunctive relief in their official capacities.

The district court entered summary judgment for appellees on the damages claims and for BJC on the injunctive claim. The court found that FmHA failed to follow its own debarment regulations, and ordered BJC reinstated “as a viable participant in the Florida FmHA programs.” The court found, however, that the debarment did not deprive BJC of a liberty or property interest. In the alternative, the court held that appellees were immune from suit under the qualified immunity doctrine, because any deprivation did not violate BJC’s clearly established constitutional rights. Similarly, the court held that appellees’ actions did not violate BJC’s clearly established First Amendment rights.

BJC appealed from the district court’s entry of summary judgment for appellees on the damages claims. Appellees do not cross-appeal from the injunction ordering BJC reinstated in FmHA lending programs.

CONTENTIONS OF THE PARTIES

BJC contends that appellees deprived it of clearly established liberty and property interests without due process of law when they debarred it without following FmHA’s debarment procedures.

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980 F.2d 1362, 1993 U.S. App. LEXIS 209, 1993 WL 100, Counsel Stack Legal Research, https://law.counselstack.com/opinion/bank-of-jackson-county-v-l-james-cherry-raymond-g-naeyaert-ca11-1993.