Summary of a Recent
Judicial Development in
Finance and Credit

Farmer's Failure to Respond Entitles FSA to Foreclose
and Collect Farm Loan Program Indebtedness

Eric H. Foy
National AgLaw Center Research Associate

Summary of Decision

In United States v. Pritchett Farms, Inc., No. CV-07-3090-FVS, 2008 WL 4282754 (E.D. Wash. Sept. 17, 2008), the United States District Court for the Eastern District of Washington granted the motion for summary judgment made by the United States, acting on behalf of the Farm Service Agency (FSA), against Pritchett Farms, Inc. Defendant Pritchett Farms failed to respond to the United States' motion for summary judgment and failed to request additional time to respond.

Background

The United States brought a lawsuit against the defendant to collect Farm Loan Program indebtedness and to foreclose on a real estate mortgage and security agreement. Id. at *2. When the lawsuit was brought to trial, the United States motioned for summary judgment. Id. The defendant's response was due no later than June 17, 2008, but defendant failed to timely respond or request additional time. Id.

Arguments

The United States argued that there were no issues of material fact in dispute with respect to the elements of its claim to recover the defendant's indebtedness and subsequent foreclosure. Id. at *4. Based on the undisputed facts, the United States argued that it was entitled to judgment as a matter of law. Id.

Analysis and Holdings

The court explained that a moving party is entitled to summary judgment when there are no genuine issues of material fact in dispute and the moving party is entitled to judgment as a matter of law. Id. at *3. To prevail on its motion, the United States needed to establish that the defendant signed the note, that the government was the legal owner and holder of the note, and that a balance was due and owing on the note. Id. at *4-5. After examining the facts, the court determined that the defendant executed and delivered the promissory note at issue to the FSA; the promissory note was secured by the defendant's mortgage and perfected by a security agreement; the FSA was the holder of the promissory note, the mortgage, and the security agreement; the defendant was in default; and the defendant owed a sum certain to the FSA. Id. at *5-9. As a result, the United States' motion for summary judgment was granted, and it was entitled to foreclose on the subject property. Id. at *10.

The case was decided on September 17, 2008.