Farm Bureau Federation v. Amos, 07-Coa-006 (2-5-2008)

2008 Ohio 459
CourtOhio Court of Appeals
DecidedFebruary 5, 2008
DocketNo. 07-COA-006.
StatusPublished
Cited by2 cases

This text of 2008 Ohio 459 (Farm Bureau Federation v. Amos, 07-Coa-006 (2-5-2008)) is published on Counsel Stack Legal Research, covering Ohio Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Farm Bureau Federation v. Amos, 07-Coa-006 (2-5-2008), 2008 Ohio 459 (Ohio Ct. App. 2008).

Opinion

OPINION *Page 2
{¶ 1} Defendants-appellants Farley and Joyce Amos ("Appellants") appeal the January 22, 2007 Judgment Entry entered by the Ashland County Court of Common Pleas, which denied Appellants' Amended and Restated Objections to Appraisement and Confirmation of Sale, and Amended and Restated Motion for Relief from Judgment and confirmed the sheriffs sale, ordered the deed and distribution of proceeds. Plaintiff-appellee is Ohio Farm Bureau Federation, Inc.'s ("Farm Bureau").

STATEMENT OF THE FACTS AND CASE1
{¶ 2} In 1979, Appellants started a peat mining operation on a small bog area on their 123 acre farm. For thirteen years, Appellants mined peat on the property pursuant to a permit issued by the Ohio Department of Mines. In the fall of 1992, the U.S. Army Corps of Engineers issued a stop order on Appellants' mining operation on the basis such activity may violate the Clean Water Act. Appellants applied for a mining permit from the Ohio EPA, which denied their request. Appellants' administrative appeal of the denial of the permit was unsuccessful.

{¶ 3} From 1993 to 1995, Appellants sold peat which they had previously harvested or purchased from third parties in order to sustain their business. On November 12, 1993, Appellants filed a Chapter 11 bankruptcy petition. Appellants' petition in bankruptcy blocked a sheriff's sale of their farm which had been scheduled for November 15, 1993. *Page 3

{¶ 4} On March 3, 1995, Appellants sent a letter to a Farm Bureau Trustee, explaining their situation with the Ohio EPA and U.S. Army Corps of Engineers. Appellants asked for any help the Farm Bureau could provide them. Eventually, sometime in 1996, Appellants received a permit to mine peat in a restricted fashion. Despite obtaining the mining permit, Appellants were unable to resume mining peat on their property because of financial constraints and because their mining equipment had deteriorated during the stop-order. The Farm Bureau agreed to assist Appellants in restarting their business, and the parties entered into an agreement.

{¶ 5} The parties executed a loan agreement, mortgage note, and mortgage on October 14, 1996. Pursuant to the loan agreement, the Farm Bureau would loan Appellants up to $300,000 with which to pay their creditors from the bankruptcy proceeding, and to re-start their business. Additionally, Appellants were to use $25,000 of the $300,000 to pay a retainer to the law firm of Bricker Ecklar. Appellants agreed to commence a "takings" lawsuit against the government. The loan agreement and the mortgage note both stated the Farm Bureau was interested in establishing a valuable legal precedent in the area of "takings law", and the Farm Bureau believed Appellants' situation was an example of a regulatory taking, requiring compensation under the Ohio and United States Constitutions.

{¶ 6} Pursuant to the provision to advance the $25,000 retainer to Bricker Ecklar, Appellants would pay any additional legal fees in accordance with a contingent fee contract between the law firm and Appellants. The Farm Bureau had discretion to pay an additional retainer, but only with Appellants' prior approval. The parties agreed the approval would not be unreasonably withheld. The parties further agreed *Page 4 Appellants would not settle or dismiss the "takings" case without first consulting the Farm Bureau.

{¶ 7} The agreement called for interest at 8% per annum, calculated annually, from the date the money was advanced, and set forth six "payment dates", establishing when Appellants were to begin to re-pay the principal and interest. Prior to Appellants' filing their "takings" action, the United States District Court for the District of Columbia issued a decision in Am. Mining Congress v. United States Army Corps ofEngineers (D.D.C.1997), 951 F.Supp. 267. Therein, the district court invalidated the rule under which the Ohio EPA and the Army Corps of Engineers prohibited Appellants' mining operation. The D.C. Circuit Court of Appeals affirmed the district court's decision. Following this decision, Appellants' counsel advised them the decision would likely have an effect on their ability to mine peat and on the continued viability of their "takings" claim.

{¶ 8} Thereafter, on November 24, 1997, Appellants submitted a new permit application. The Ohio EPA and the Army Corps of Engineers responded in December, 1997, advising Appellants they needed a Section 401 Water Quality Certification before the Army Corps of Engineers could issue the permit. By June 1998, Appellants had not applied for the permit. Meanwhile, the Ohio EPA advised Appellants the agency was reviewing and assessing the impact of the federal case on state programs. On October 15, 1998, the Ohio EPA notified Appellants their mining permit remained under consideration, and the agency would not bring any enforcement action against Appellants for their proposed mining operation. *Page 5

{¶ 9} On October 26, 1998, the Army Corps of Engineers informed Appellants' counsel Appellants could begin harvesting peat without a permit if such operation could be accomplished in a one-step process. Appellants mined peat without any permit, and without any interference from the Ohio EPA or the Army Corps of Engineers. However, after a short time, Appellants ceased the mining operations as they had depleted their funds, and the process of harvesting peat from the large bog proved more difficult than the harvesting from the small bog they originally mined.

{¶ 10} Appellants did not make any payments on the note. On August 28, 2002, the Farm Bureau filed a Complaint for Foreclosure on the mortgage, alleging Appellants had failed to make payments on the over $500,000 the Farm Bureau had advanced them. Appellants filed an answer, but did not assert any counterclaims. During the pendency of the foreclosure action, Appellants filed a Petition in Bankruptcy in the United States Bankruptcy Court for the Northern District of Ohio. The bankruptcy court dismissed Appellants' petition on August 15, 2003. The trial court dismissed the Farm Bureau's complaint without prejudice on August 21, 2003, in deference to the bankruptcy proceedings, unaware the bankruptcy court had dismissed the matter.

{¶ 11} On September 16, 2003, the Farm Bureau re-filed its foreclosure action. Appellants filed an answer and counterclaim, arguing the Farm Bureau breached its obligations under the note. The Farm Bureau moved to dismiss the counterclaim and filed for summary judgment on all of the claims. Appellants moved to dismiss the complaint under the doctrines of maintenance and champerty. On March 26, 2004, the trial court granted the Farm Bureau's motion for summary judgment, and denied *Page 6 Appellants' motion to dismiss. The trial court entered judgment in favor of the Farm Bureau in the amount of $749,073.81, plus interest, and foreclosed on the mortgage.

{¶ 12} Appellants appealed to this Court. We found the trial court erred in granting judgment on the foreclosure as only $300,000, plus interest at 8% per annum, was secured by the mortgage and the balance of the indebtedness was unsecured. We also found the trial court erred in dismissing Appellants' counterclaim for breach of contract.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Wells Fargo Bank, Natl. Assn. v. Riddle
2020 Ohio 3796 (Ohio Court of Appeals, 2020)
U.S. Bank Natl. Assn. v. Green Meadow SWS L.L.C.
2014 Ohio 738 (Ohio Court of Appeals, 2014)

Cite This Page — Counsel Stack

Bluebook (online)
2008 Ohio 459, Counsel Stack Legal Research, https://law.counselstack.com/opinion/farm-bureau-federation-v-amos-07-coa-006-2-5-2008-ohioctapp-2008.