United States v. Smoky Valley Bean, Inc.

673 F. Supp. 1551, 6 U.C.C. Rep. Serv. 2d (West) 221, 1987 U.S. Dist. LEXIS 10080, 1987 WL 4166
CourtDistrict Court, D. Kansas
DecidedOctober 13, 1987
DocketCiv. A. 86-1998
StatusPublished
Cited by1 cases

This text of 673 F. Supp. 1551 (United States v. Smoky Valley Bean, Inc.) is published on Counsel Stack Legal Research, covering District Court, D. Kansas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States v. Smoky Valley Bean, Inc., 673 F. Supp. 1551, 6 U.C.C. Rep. Serv. 2d (West) 221, 1987 U.S. Dist. LEXIS 10080, 1987 WL 4166 (D. Kan. 1987).

Opinion

OPINION AND ORDER

THEIS, District Judge.

The case is currently before the Court on the motions of both parties for summary judgment. This is an action by the United States on behalf of the Farmers Home Administration (FmHA), United States Department of Agriculture, for the conversion of beans in which the FmHA held a security interest. The defendant asserts that the FmHA did not have a valid security interest in the beans of Leonard E. Cox, the debtor.

The Court is familiar with the standards governing the consideration of a motion for summary judgment. To rule favorably on a motion for summary judgment, the Court must first determine that the matters on file regarding the motion “show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(c). By its very terms, Rule 56(c) “provides that the mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, -, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986) (emphasis in original). Instead, the inquiry is “whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law.” Id. at-, 106 S.Ct. at 2512. However, the Court must look at the record in the light most favorable to the nonmoving party. Lindley v. Amoco Production Co., 639 F.2d 671, 672 (10th Cir.1981). Pleadings and documentary evidence must be liberally construed in favor of the party opposing the motion. Harman v. Diversified Medical Investments Corp., 488 F.2d 111, 113 (10th Cir.1973), cert. denied 425 U.S. 951, 96 S.Ct. 1727, 48 L.Ed.2d 195 (1976). If the facts support an inference which would permit the nonmovant to prevail, summary judgment is inappropriate. Thomas v. United States Department of Energy, 719 F.2d 342, 344 (10th Cir.1983).

The following facts are uncontroverted:

(1) In May 1982, Leonard E. Cox delivered approximately three hundred forty and nine tenths (340.9) bags of beans to Smoky Valley Bean, Inc. at Sharon Springs, Kansas.

(2) On or about May 4, 1982, the beans were sold and the sum of Four Thousand Ninety and 80/100 Dollars ($4,090.80) was realized from the sale of the beans; Two Hundred Forty-Five and 45/100 Dollars ($245.45) of this sum was owed to Smoky Valley Bean, Inc. for storage, and the re *1553 mainder was applied to the account of Leonard E. Cox with Smoky Valley Bean, Inc.

(3) The sale of the 340.9 bags of beans by Smoky Valley Bean, Inc. was done without the consent of the FmHA or Leonard E. Cox.

(4) The FmHA filed a financing statement on March 4, 1976, in the office of the Register of Deeds in Wallace County, Kansas, and a continuation statement on September 20, 1980, in the same office, listing Leonard E. Cox and Elsie E. Cox as the debtors.

The parties have stipulated that the law governing this case is federal law. Since there was no applicable federal law in effect at the time of the events leading up to this case, it is appropriate to use Kansas law. See, e.g., United States v. Kimbell Foods, Inc., 440 U.S. 715, 99 S.Ct. 1448, 59 L.Ed.2d 711 (1979). In this case, the applicable law is the Kansas Uniform Commercial Code (UCC), K.S.A. Chapter 84. Under Kansas law, a secured party may bring a conversion action against a third party who, without authorization, sells the collateral subject to the security interest. First National Bank & Trust Co. v. Atchison County Auction Co., 10 Kan.App.2d 382, 699 P.2d 1032, review denied, 237 Kan. 886 (1985); First National Bank v. Southwestern Livestock, Inc., 616 F.Supp. 1515 (D.Kan.1985) (applying Kansas law). It is undisputed that the defendant sold the beans without the authorization of the FmHA. Thus, the only issue remaining is whether the FmHA qualifies as a secured party. The parties’ only dispute in this regard concerns whether the land descriptions contained in the security agreement and financing statement were sufficient.

Governing the attachment and enforceability of a security interest, K.S.A. § 84-9-203(1) provides, in pertinent part:

... a security interest is not enforceable against the debtor or third parties with respect to the collateral and does not attach unless
(a) the collateral is in the possession of the secured party pursuant to agreement, or the debtor has signed a security agreement which contains a description of the collateral and in addition, when the security interest covers crops growing or to be grown or timber to be cut, a description of the land concerned; and
(b) value has been given; and
(c) the debtor has rights in the collateral.

It is undisputed that the Coxes signed two security agreements, that value was given, and that the debtors had rights in the collateral. Since the security interest covered crops, a description of the land concerned was also required. Under the UCC, any description of real estate is sufficient, whether or not it is specific, if it reasonably identifies what is described. K.S.A. § 84-9-110. The real estate description need not be a legal description unless fixtures are involved. See id. and Kansas Comment 1983; Chanute Production Credit Association v. Weir Grain & Supply, Inc., 210 Kan. 181, 499 P.2d 517 (1972).

The two security agreements contained the same descriptions of the collateral and the real estate. See Dk. No. 1, Exhibits E, F. The collateral is described as:

Item 1. All crops, annual and perennial ... on the following described real estate:

Farm(s) or Other

Real Estate Approximate County and . . .

_Owner_ No. of Acres State Description

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Bluebook (online)
673 F. Supp. 1551, 6 U.C.C. Rep. Serv. 2d (West) 221, 1987 U.S. Dist. LEXIS 10080, 1987 WL 4166, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-v-smoky-valley-bean-inc-ksd-1987.