Stinehart v. Mid-American Bank & Trust Co. (In re Firsdon)

70 B.R. 719, 1987 Bankr. LEXIS 311
CourtUnited States Bankruptcy Court, N.D. Ohio
DecidedJanuary 21, 1987
DocketBankruptcy No. 85-0325; Related Case 82-00479
StatusPublished
Cited by3 cases

This text of 70 B.R. 719 (Stinehart v. Mid-American Bank & Trust Co. (In re Firsdon)) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, N.D. Ohio primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Stinehart v. Mid-American Bank & Trust Co. (In re Firsdon), 70 B.R. 719, 1987 Bankr. LEXIS 311 (Ohio 1987).

Opinion

MEMORANDUM OPINION AND ORDER

RICHARD L. SPEER, Bankruptcy Judge.

This cause comes before the Court upon the Motion For Summary Judgment filed by the Plaintiff in the above entitled adversary action. The parties have filed their arguments relative to the merits of this Motion and have had the opportunity to respond to the arguments made by opposing counsel. The Court has reviewed those arguments, the evidence, and the entire record in this case. Based upon that review and for the following reasons the Court finds that the Motion For Summary Judgment should be granted in part and denied in part.

FACTS

The facts in this case, to the extent they have been developed, do not appear to be in serious dispute. The Debtor in the underlying bankruptcy proceeding filed his voluntary Chapter 11 Petition with this Court on March 12, 1982. On March 19, 1984, this Court entered an Order confirming the [721]*721Debtor’s Plan of Reorganization. During the pendency of the Debtor’s post-confirmation reorganization efforts, it appears that the Debtor entered into an oral contract with the Plaintiff, whereby the Debt- or would farm approximately 322 acres of land owned by the Plaintiff. Under the agreement, 115 acres would be planted with com. The remaining acreage would be planted with soybeans. In return for the right to work this land, the parties agreed that the Plaintiff would be entitled to either one-half of each crop grown on this land or one-half of the proceeds therefrom.

Pursuant to this agreement, the Debtor grew the required amounts of each grain. However, the record is unclear as to the chain of possession which occurred after the grains were harvested. It appears that all of the corn was taken to the Debtor’s storage facilities. It also appears that while the soybeans were initially taken to the Plaintiff’s facilities, they were ultimately transferred to the Debtor’s bins. The record further indicates that at the time these grains were taken to the respective facilities, they were co-mingled with other grain being held by each of the parties. In addition, the record indicates that at the time the grains were harvested, no measurement was made to determine the amounts yielded from the Plaintiff’s property. Although the Debtor provided the Plaintiff with an estimate of the amounts of grain he was holding for the Plaintiff, it does not appear that a precise measurement was ever accomplished.

At some time in November of 1984, the Debtor applied for financing with the Defendants, Mid-American National Bank & Trust Co. (hereinafter Mid-Am), and Luck-ey Farmers, Inc. (hereinafter Luckey). It appears that this application was intended to provide for the Debtor’s 1985 operations. As a part of the application process, Mid-Am made an estimate of the amounts of grain being held in the Debtor’s facilities. This estimate included all grains being held by the Debtor, including those belonging to the Plaintiff. Although the record is unclear, it appears that Mid-Am was, at the time the estimate was made, apprised of the fact that some of the grain in the Debtor’s facility was owned by the Plaintiff. It should be noted that the record appears to reflect that the Debtor had obtained financing from both Defendants in the past, and that he was currently indebted to those Defendants for that prior financing.

In December of 1984, the Debtor, as a part of the apparent financing arrangement which had been reached with the other Defendants, caused the grain in his bins to be transported to Luckey for sale on the open market. The record is unclear as to the identity of those persons who participated in the transportation of this grain. However, it appears that the participants included the Debtor, several of his relatives, and employees from Luckey. The record reflects that this grain was sold on the market and that the proceeds of sale were ultimately divided between both Mid-Am and Luckey. It further appears that these proceeds were applied to the Debtor’s prior indebtedness with each of the respective Defendants. Although it appears that this sale of grain included the amounts being held by the Debtor on behalf of the Plaintiff, it is unclear whether or not the Debtor retained any grain subsequent to the transfer to Luckey.

At some time during the aforementioned transactions, the Plaintiff, unbeknownst to the Debtor, entered into a contract with another grain contractor for the sale of the Plaintiff’s share of grain. This contract included the grain which was being held by the Debtor for the Plaintiff. After learning of the Debtor’s transfer to Luckey, the Plaintiff was required to abrogate his contract with the other contractor through the payment of liquidated damages. The record indicates that the Plaintiff neither consented to the Debtor’s transfer to Luck-ey nor received any of the proceeds therefrom.

In an effort to recover the value of his grain, the Plaintiff initiated an action in the Wood County Court of Common Pleas [722]*722against the Debtor, Mid-Am, and Luckey. In this action, the Plaintiff alleged that the Debtor’s unauthorized transfer of grain to Luckey constituted a conversion of the Plaintiff’s property. He also alleged that Mid-Am’s and Luckey’s participation in the disposition of grain subjects them to conversion liability. However, on October 1, 1985, the Debtor converted his Chapter 11 case to a proceeding under Chapter 7. Shortly thereafter, the Debtor removed the Plaintiff’s State Court action to this Court. It should be noted that the notice to creditors mailed subsequent to the Debtor’s conversion established December 30, 1985, as the last day on which to file complaints to determine dischargeability or to object to the Debtor’s discharge. It should also be noted that the Plaintiff has filed a post-conversion claim in the Debtor’s case for the amount of Twenty-five Thousand Six Hundred Twenty-one and 98/100 Dollars ($25,-621.98). As reflected on the record, the Plaintiff asserts that this claim is entitled to priority.

In response to the filing of the adversary action, the Debtor filed Cross-Claims (captioned as a Third-Party Complaint), against Mid-Am and Luckey for: 1) contribution in the Plaintiff's conversion action, 2) equitable subordination, and 3) lien avoidance. On January 31, 1986, Luckey filed a Cross-Claim against the Debtor seeking both a denial of the Debtor’s discharge and a determination of dischargeability as to its debt. Mid-Am filed a Cross-Claim (captioned as a Counterclaim) against the Debt- or, wherein it is alleged that the Debtor’s action against Mid-Am is without any legal or factual basis.

The Motion presently before the Court seeks a summary adjudication in this adversary proceeding. In support of this Motion, the Plaintiff argues that there is sufficient deposition testimony, answers to interrogatories, and uncontested exhibits to establish all required elements of an action for conversion. The Debtor opposes the Motion, arguing that there are numerous matters of fact which remain in dispute. It is argued that the existence of these disputes precludes the availability of summary judgment.

LAW

The provisions of Federal Rule of Civil Procedure 56, as made applicable by Bankruptcy Rule 7056, state in pertinent part:

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Cite This Page — Counsel Stack

Bluebook (online)
70 B.R. 719, 1987 Bankr. LEXIS 311, Counsel Stack Legal Research, https://law.counselstack.com/opinion/stinehart-v-mid-american-bank-trust-co-in-re-firsdon-ohnb-1987.