Stegall v. United States

19 Cl. Ct. 765, 1990 U.S. Claims LEXIS 89, 1990 WL 26964
CourtUnited States Court of Claims
DecidedMarch 13, 1990
DocketNo. 304-88 C
StatusPublished
Cited by11 cases

This text of 19 Cl. Ct. 765 (Stegall v. United States) is published on Counsel Stack Legal Research, covering United States Court of Claims primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Stegall v. United States, 19 Cl. Ct. 765, 1990 U.S. Claims LEXIS 89, 1990 WL 26964 (cc 1990).

Opinion

OPINION

RADER, Judge.

This action arises from a dispute under the Agricultural Adjustment Acts of 1938 and 1949. 7 U.S.C. §§ 1281-1469 (1988). Plaintiffs are partners in two general part[767]*767nerships that conduct farming operations in Colusa County, California. The partnerships finance their operations through a joint loan obtained from a local bank.

The county, state, and federal Agricultural Stabilization and Conservation Service (ASCS) offices limited plaintiffs’ farm subsidy to $50,000.00 — the maximum payment for a single farmer. Plaintiffs believed that the $50,000.00 payment limitation would apply to each partner separately, not to the partnerships as a whole. Plaintiffs contend that each of the nine partners individually should receive a $50,-000. 00 payment for a total of $450,000.00 in subsidies. ASCS, however, treated the partnerships as one person because of the joint loan.

Plaintiffs instituted action in the United States Claims Court on May 20,1988, seeking review of the final decision of the Deputy Administrator of the ASCS. Plaintiffs and defendant now move for summary judgment. After oral argument, this court denies both motions. The court remands this action to the Deputy Administrator to make further factual findings.

Background1

Plaintiffs Ken Stegall, Ralph Stegall, Alfred Stegall, and Earl Stegall are equal partners in Stegall Brothers. Stegall Brothers is a general partnership organized in 1961 under California law. Stegall Brothers farms crops such as rice, wheat, and corn in Colusa County, California.

Plaintiffs Preston Reynolds, Anthony Stegall, Walter Seaver, and Jarrett Dunlap are general partners in the Southdown Partnership (Southdown). Plaintiffs organized Southdown in 1986 under California law. Like Stegall Brothers, Southdown engages in farming in Colusa County.

Stegall Brothers and Southdown conduct their farming operations on ASCS Farm No. 1786. Prior to 1986, members of the Andreotti family owned this 8,000 acre farm. Since 1975, Stegall Brothers has leased approximately 3,000 acres of the farm from the Andreottis. In the fall of 1985 the Andreotti’s, due to financial problems, deeded the property to Bank of America.

After the Andreottis lost the land, Ste-gall Brothers leased the whole farm from the bank. The lease with Bank of America permitted Stegall Brothers to sublease. Consequently, in 1986, Stegall Brothers executed five subleasing agreements, including one with Southdown.

On April 24, 1986, Stegall Brothers entered into a contract with the Commodity Credit Corporation (CCC) to participate in the 1986 farm subsidy program. South-down also signed this contract. Stegall enrolled 70 acres of farmland in the CCC subsidies program. Stegall Brothers anticipated receiving deficiency payments.

Under the CCC contract, Stegall Brothers promised to obtain outside financing to support its operations. Accordingly, on May 9, 1986, Stegall Brothers presented financing documents to Mr. David Schaad, Colusa County ASCS Director. Stegall Brothers proposed to obtain a joint promissory note with Southdown. According to plaintiffs, Mr. Schaad represented that the proposed financing would not limit the partnerships to a single $50,000.00 payment limitation under the Agricultural Adjustment Act of 1949. 7 U.S.C. § 1308 (1988).

Plaintiffs submitted their financing documents to the Colusa County ASCS Committee. Plaintiffs asked for a determination on how many partners would constitute separate persons under this arrangement. For each separate person, plaintiffs could receive up to $50,000.00.

The County Committee reviewed plaintiffs’ financing documents. On June 2, 1986, the Committee decided to consider the two partnerships as one person for the purpose of computing 1986 subsidy limitations. Plaintiffs therefore could receive no [768]*768more than $50,000.00. The County Committee did not consider the partnerships as separate persons under 7 C.F.R. § 795.3 (1986). The Committee determined that the two entities funded their farm operations from the same financial source. The Committee denied plaintiffs’ request for reconsideration.

Plaintiff thereafter appealed to the State ASCS Committee. On August 12,1986, the State Committee affirmed the County’s findings. The State Committee recommended — based on past practice — that each partner in Stegall Brothers receive a separate $50,000.00 payment.

Plaintiffs appealed to the Deputy Administrator of the ASCS in Washington, D.C. On September 3,1986, the Deputy Administrator determined that Stegall Brothers and Southdown were a single entity. The Deputy Administrator based his decision on the joint loan.

During administrative review of the payment limitation issue, plaintiffs also instituted review under 7 C.F.R. § 790.2(b) (1986) for equitable relief. Plaintiffs relied on misinformation from Mr. Schaad, who said that the joint loan would not pose payment limitation problems. The County Committee denied relief under 7 C.F.R. § 790.2 on June 11, 1987. Plaintiffs appealed on June 15, but the State Committee affirmed the County on August 17, 1987. The Deputy Administrator also denied relief on October 30, 1987 after a hearing.

Plaintiffs subsequently sought reconsideration of their claims under 7 C.F.R. § 791 (1986). Section 791 permits a party to obtain benefits that it otherwise could not receive. The County Committee, State Committee, and Deputy Administrator denied this request for reconsideration.

Plaintiffs have asserted before this court the same claims filed at the administrative level. These claims raise several issues. First, did the Deputy Administrator improperly conclude that plaintiffs constituted a single person under 7 U.S.C. § 1308 (1988) and accompanying regulations? Second, did the Deputy Administrator improperly deny plaintiffs’ request for relief under 7 C.F.R. § 790, which permits equitable relief for agency misaction or misinformation? Third, did the Deputy Administrator abuse his discretion in refusing to grant relief under the general equitable powers established by 7 C.F.R. § 791? Both parties now move for summary judgment.

DISCUSSION

Summary Judgment

When no material facts are in dispute, RUSCC 56 authorizes this court to resolve issues as a matter of law. D.L. Auld Co. v. Chroma Graphics Corp., 714 F.2d 1144 (Fed.Cir.1983). The Supreme Court has underscored the importance of summary judgment procedures:

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Bluebook (online)
19 Cl. Ct. 765, 1990 U.S. Claims LEXIS 89, 1990 WL 26964, Counsel Stack Legal Research, https://law.counselstack.com/opinion/stegall-v-united-states-cc-1990.