Watertown Equipment Co. v. Norwest Bank Watertown, N.A.

830 F.2d 1487
CourtCourt of Appeals for the Eighth Circuit
DecidedOctober 8, 1987
DocketNo. 86-5448
StatusPublished
Cited by13 cases

This text of 830 F.2d 1487 (Watertown Equipment Co. v. Norwest Bank Watertown, N.A.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Eighth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Watertown Equipment Co. v. Norwest Bank Watertown, N.A., 830 F.2d 1487 (8th Cir. 1987).

Opinion

HEANEY, Circuit Judge.

Appellants Watertown Equipment Company and Edward J. Moe bring this 42 U.S.C. § 1983 action against appellees Nor-west Bank of Watertown, its vice president, Jerry Miller, and its attorney, Thomas Green. The appellants claim that the appellees violated their rights to procedural due process by attaching property of Watertown Equipment Company under a South Dakota attachment statute. The district court granted summary judgment for each appellee, holding that each had qualified immunity from liability. We reverse and remand.

I. BACKGROUND.

Appellant Moe was the majority stockholder of three farm implement dealers, Watertown Equipment Company in Water-town, South Dakota, and two others in Dawson and Appleton, Minnesota. From 1976 to 1982, Norwest Bank of Watertown (then First National Bank of Watertown) extended a general line of credit to Water-town Equipment which was secured by an interest in Watertown Equipment’s inventory and receivables. Moe also personally guaranteed most of the loans. Altogether, Watertown owed Norwest about $488,000 on the loans.

Beginning in 1978, Watertown Equipment had difficulties meeting its loan obligations. Norwest and Moe tried to work out the difficulties. Norwest helped Moe list for sale a plot of about 180 acres which Watertown Equipment owned to finish payment on a mortgage and to help reduce the amount owing on the loans.

In 1982, Watertown Equipment’s financial state worsened. Norwest made frequent demands on Moe for payment, but Moe was only able to make several small payments in 1982. In the spring of 1982, Norwest required monthly and even weekly formal inventories at Watertown Equipment. By summer, Norwest decided to cut Watertown Equipment’s line of credit. At [1489]*1489this time, Norwest also claims to have discovered equipment missing from the dealership. According to Norwest, the manager of Watertown Equipment, Dan Toben, also warned Norwest that some of the collateral was going to be moved out of the state. In his affidavit, however, Toben stated that he never told this to Norwest, and, in fact, he said that Watertown Equipment had often moved equipment to one of Moe’s other dealers and that its behavior in the six months prior to the attachment was no different than it had been in the past. Moe stated that Norwest was aware of such transfers in the past.

Norwest’s vice president, Jerry Miller, claims that Norwest began to consider prejudgment attachment upon the suggestion of its attorney, Thomas Green, because of the movement of equipment out of the state and possible concealment of proceeds from sales. In early October of 1982, Miller more fully discussed the use of prejudgment attachment proceedings with Green. In a letter of October 25, 1982, Green cautioned that the South Dakota attachment statute in effect at that time1 might be unconstitutional, although his research of the case law construing attachment statutes in other states led him to the conclusion that the South Dakota law was “distinguishable.” Miller discussed the matter with Norwest’s Discount Committee which decided to undertake the attachment. Green prepared the necessary papers, and, on October 25, 1982, Norwest secured an order from the clerk of court of Codington County. Pursuant to the writ of attachment, the sheriff arrived at Watertown Equipment, told all the employees to leave, and secured the building and all the equipment in it by changing the locks. After several months while the business was still under the attachment, Norwest and Water-town Equipment reached a settlement agreement. Watertown Equipment apparently was closed as a result.

The appellants instituted this action and pendent state claims in federal district court. On November 27, 1985, the district court granted summary judgment for appellee Green. On October 6, 1986, the district court granted partial summary judgment for appellees Norwest Bank and Miller on the section 1983 claim and dismissed the state claims without prejudice.

II. DISCUSSION.

This appeal presents three issues: whether qualified immunity generally protects the appellees from liability in this case; whether Norwest’s and Miller’s reliance on Green’s advice as an attorney insulates them from liability; and whether Green’s participation in the attachment was sufficient to be under color of state law.

Initially, it should be pointed out that an action under 42 U.S.C. § 1983 lies when a plaintiff establishes that a defendant acting under color of state law has deprived the plaintiff of a right secured by the Constitution or federal law. See Buller v. Buechler, 706 F.2d 844, 846-47 (8th Cir.1983) (citing Flagg Brothers, Inc. v. Brooks, 436 U.S. 149, 155-56, 98 S.Ct. 1729, 1732-33, 56 L.Ed.2d 185 (1978)). The right allegedly deprived in this case is the right to due process of law guaranteed by the fourteenth amendment. The action under color of law is present because private parties acting pursuant to state attachment statutes such as this one have been held to act under color of state law. See Lugar v. Edmondson Oil Co., Inc., 457 U.S. 922, 102 S.Ct. 2744, 73 L.Ed.2d 482 (1982).

A. Qualified Immunity Under Attachment Statute.

In a suit under section 1983, a public official performing a discretionary function has qualified immunity from liability. Mitchell v. Forsyth, 472 U.S. 511, 105 S.Ct. 2806, 86 L.Ed.2d 411 (1985). The protection of qualified immunity has been extended by this Court to private individuals who act in joint participation with public officials acting pursuant to creditor remedies statutes. In Buller v. Buechler, 706 F.2d at 850, we held that private individuals acting pursuant to a North Dakota garnish[1490]*1490ment statute were entitled to the same qualified immunity as public officials. Because we can find no substantive distinction between an action under the garnishment statute in Butter and under the attachment statute here, we hold that each appellee here is entitled to invoke the defense of qualified immunity.

To gain the protection of qualified immunity, the defendant must show that he or she did not violate clearly established law of which he or she knew or should have known. Harlow v. Fitzgerald, 457 U.S. 800, 813-14, 102 S.Ct. 2727, 2735-36, 73 L.Ed.2d 396 (1982); see also Arcoren v. Peters, 829 F.2d 671, 673 (8th Cir.1987) (en banc). Law is not clearly established when there is a “legitimate” or “open” question as to the legality of conduct. Mitchell, 472 U.S. at 533-36, 105 S.Ct. at 2819-21, 86 L.Ed.2d at 430-31 & n. 12. The standard is generally an objective one, Harlow, 457 U.S. at 818, 102 S.Ct. at 2738, and presents a question of law which can usually be disposed of at the summary judgment stage. Id.

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

Related

Cite This Page — Counsel Stack

Bluebook (online)
830 F.2d 1487, Counsel Stack Legal Research, https://law.counselstack.com/opinion/watertown-equipment-co-v-norwest-bank-watertown-na-ca8-1987.