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Nature of Suit Code: 110
Nature of Suit: Insurance
Cause of Action: 

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FI LED 

UNITED STATES COURT OF APPEALJ-loit~ States Coore of Appeals Tenth Ci:cuit 

FOR THE TENTH CIRCUIT 

JOHNNY B. HERMES, 

Plaintiff-Appellant, 

v. 

FEDERAL CROP INSURANCE CORPORATION, 

Defendant-Appellee. 

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ORDER AND JUDGMENT* 

FEB 15 199t 

ROBERT L. HOECKER. . Clerk ,. 

No. 90-3089 

(D.C. No. 88-1040) 

(D. Kan.) 

Before McKAY, SEYMOUR, and EBEL, Circuit Judges. 

After examining the briefs and appellate record, this panel 

has determined unanimously that oral argument would not materially 

assist the determination of this appeal. ~ Fed. R. App. P. 

34(a); 10th Cir. R. 34.1.9. The case is therefore ordered 

submitted without oral argument. 

This appeal arises from the district court's order granting 

defendant's motion for summary judgment in plaintiff's suit to 

recover crop insurance proceeds for his grain sorghum and wheat 

crop losses in 1983, 1984, and 1985. "In reviewing a summary 

* This order and judgment has no precedential value and shall 

not be cited, or used by any court within the Tenth Circuit, 

except for purposes of establishing the doctrines of the law of 

the case, res judicata, or collateral estoppal. 10th Cir. R. 

36.3. 

Appellate Case: 90-3089 Document: 010110099979 Date Filed: 02/15/1991 Page: 1 
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judgment order, the appellate court applies the same standard 

employed by the trial court under Rule 56(c) of the Federal Rules 

of Civil Procedure." Osgood v. State Farm Mut. Auto Ins. Co., 848 

F. 2d 141, 143 ( 10th Cir. 1988). "We will affirm a grant of 

summary judgment if it is clear from the record that there are no 

genuine issues of material fact and the defendants are entitled to 

judgment as a matter of law," Willner v. Budig. 848 F.2d 1032, 

1033-34 (10th Cir. 1988), cert. denied, 488 U.S. 1031 (1989), but 

"[t]he moving party carries the burden of showing beyond a 

reasonable doubt that it is entitled to summary judgment, and the 

court must review the record in the light most favorable to the 

opposing party." Ewing v. Amoco Oil Co., 823 F.2d 1432, 1437 

(10th Cir. 1987). 

COUNTS I AND II: 

Plaintiff's first and second counts claim insurance recovery 

for losses of 1984 grain sorghum crops planted on two parcels of 

land in Harvey County, Kansas (section 29 and section 33) and 

insured by defendant under policy t 20-079-26360. The facts in 

this case appear to be uncontroverted. On April 11, 1983, both of 

these parcels of land became the subject of foreclosure by a local 

bank due to plaintiff's default on a mortgage and promissory note 

secured by the two parcels. In September, 1983, plaintiff leased 

both parcels to Robert Robben. The parcels were subsequently sold 

at a sheriff's sale on December 14, 1983. Plaintiff remained in 

possession under the right of redemption by his tenant, Robben, 

for six months. On February 3, 1984, plaintiff filed Chapter 7 

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bankruptcy. On May 29, 1984, following the bankruptcy filing and 

the sheriff's sale, plaintiff made application to defendant to 

insure the grain sorghum crops on the parcels. A week later 

Robben executed an agreement assigning all rights to the grain 

···- sorghum · crops to· plaintiff including , the right . to, insure the 

crops. On June 14, 1984, plaintiff's six-month redemption period 

ended, and the sheriff's deed to purchaser was executed. On July 

13, 1984, plaintiff informed defendant that he had completed the 

planting of the grain sorghum on June 24 and 25, 1984, and that 

his interest in this crop was one hundred percent. These crops 

· ··were ul~imately lost-, ,and ... plaintif,f filed .:. claim ~with . _ defendant. 

Defendant alleged that plaintiff had misrepresented his interest 

in the crops and denied the claim. Defendant also requested 

recoupment of prior payments made to plaintiff for earlier crop 

losses under the same policy. Defendant based its denial of 

plaintiff's claim and its request for recoupment on the following 

language in the policy: 

10. CONCEALMENT OR FRAUD. 

We may void the contract on all crops insured without 

affecting your liability for premiums or waiving any 

right, including the right to collect any amount due us 

if, at any time, you have concealed or misrepresented 

any material fact or committed any fraud relating to the 

contract. Such voidance will be effective as of the 

beginning of the crop year with respect to which such 

act or omission occurred. 

(Emphasis added). 

An examination of this chronology of events quickly reveals 

that at the time plaintiff made application for insurance covering 

these crops, the land was in possession of Robben pursuant to an 

agricultural lease agreement, and the crops had not come into 

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existence. Further, it is clear that at the time the crops were 

planted, title to the land had passed to the purchaser bank via 

the sheriff's deed. Plaintiff argues that the bank's interest in 

the land did not vest until the sheriff's deed was delivered to 

the bank,-~ -and · since· the -date of delivery has -not- been established, 

a material fact is in dispute and summary judgment is 

inappropriate. We do not agree. The applicable statute, Kan. 

Stat. Ann. S 60-2416 (1983), states: 

60-2416. Sheriff's deed as evidence of legality; 

sufficiency of order. Every deed for any lands or 

tenements heretofore or hereafter made and executed by 

any sheriff or other officer, purporting to have been 

made ·under or · in pursuance , of ·any execution; ·process or 

judgment of any court of record in this state, shall be 

sufficient evidence of the legality of the sale and the 

proceedings therein until the contrary be proved, and 

shall vest in the purchaser as good and perfect an 

estate in the premises therein mentioned as was vested 

in the person or persons against whom the execution, 

writ or order was issued at or after the time when such 

lands and tenements became liable to the satisfaction of 

the judgment or lien for which the same was sold .... Title to the property thereby conveyed shall vest in the 

grantee as of the date of execution of the sheriff's 

deed. 

(Emphasis added). 

In an old, but authoritative, case, the Kansas Supreme Court 

discussed the ownership status of crops growing on land at the 

time of voluntary or involuntary conveyance. 

'It has been clearly settled in this state that a 

conveyance of land, either by voluntary deed or judicial 

sale, without reservation, carries all growing crops 

with the title to the land. This rule only applies to 

crops which are immature and have not ceased to draw 

nutriment from the soil at the time of sale, and is not 

applicable to crops that are ripe and ready for harvest. 

This distinction has been carefully recognized in all 

the cases where the subject was considered [citing 

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cases]. When the crops mature they can no longer be 

regarded as a part of the realty, and hence do not pass 

to the purchaser of the land .... ' National Bank v. 

Beegle, 52 Kan. 709, 711, 35 Pac. 814, 815. 

Myers v. Steele, 158 P. 660, 661 (Kan. 1916). As to Robben's 

interest, he was a tenant of plaintiff and at the time the period 

of redemption ended and the sheriff's deed was executed, he became 

the tenant of the bank. See Brendle v. Hudson, 73 P.2d 1013, 1015 

( Kari . 19 3 7 ) . It is our further determination that Robben's 

assignment of rights to the grain sorghum crop was of no 

consequence to the denial of plaintiff's claim. Neither Robben 

nor the bank are parties to this action. Robben's right to 

possession of -the land and his agreements -with -the bank subsequent 

to the execution of the sheriff's deed have no bearing on the 

issues of this case and are of no interest to this court. 

Plaintiff expends a great deal of energy arguing that on 

September 7, 1984, when he made his claim for the crop loss, no 

one else claimed an interest in the crop. As plaintiff was the 

only person or entity with standing to make a claim as an insured, 

we determine this argument to be unpersuasive. Plaintiff also 

argues that it was customary to insure crops prior to acquiring an 

interest. Due to our conclusion that the land as well as any 

later-planted crops belonged exclusively to the bank immediately 

following the expiration of the six-month redemption period and 

the execution of the sheriff's deed on June 14, 1984, we conclude 

that this contention has no relevance. 

Plaintiff was apparently fully aware of the foreclosure 

proceeding and of the date of expiration of the redemption period. 

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Therefore, his representation to the defendant that he had a one 

hundred percent interest in the crops on these two parcels was 

erroneous. We determine that plaintiff's claim of a one hundred 

percent interest in these crops, when no interest existed in 

either the land or the crops, constituted a material 

misrepresentation as a matter of law. 

COUNTS III ARD IV: 

Plaintiff's third claim is for recovery for grain sorghum 

crop losses pursuant to policy# 20-155-26360, on a parcel of land 

in Reno County, Kansas (section 22). This _parcel was leased by 

one Walter Back to plaintiff's son, Scott, via a cash farm lease 

on September 24, 1983. On May 29, 1984, plaintiff applied for and 

received insurance coverage for this crop, claiming a one hundred 

percent interest. Scott subsequently assigned all rights to the 

crop on this parcel to his father on June 8, 1984. The district 

court determined that there was no misrepresentation as to 

plaintiff's interest in this crop, and defendant has not appealed 

this conclusion. 

Under the same policy, plaintiff applied for and received 

insurance coverage for a wheat crop being cultivated on another 

parcel of land in Reno County (section 12). This crop, along with 

a subsequent grain sorghum crop on the same land, is the subject 

of count IV. Plaintiff leased section 12 to his son, Scott, on 

September 21, 1983, with Scott receiving a two-thirds interest in 

the crop and plaintiff retaining a one-third interest. When he 

made application for insurance coverage, plaintiff represented his 

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share of the wheat crop as one hundred percent. 

loss of this wheat crop in 1985, plaintiff planted 

Following the 

the land in 

grain sorghum. He again applied for insurance on the sorghum but, 

in so doing, correctly reported his share of the crop to be one 

third. This crop was also ultimately lost. Defendant denied 

coverage of the 1984 wheat crop, the 1985 wheat crop, the 1985 

grain sorghum crop, and the crops covered in count III due to 

plaintiff's alleged material misrepresentation as to his interest 

in the 1984 wheat crop. The relevant provision in the insurance 

contract, as previously set forth, permits the insurer to void the 

contract for all crops effective at-the beginning· of the crop year 

in the event of a material misrepresentation,. 

It has been held generally that if a parent continues to 

derive some benefit from the existence of certain property 

following transfer to a child, the parent retains an insurable 

interest in the property. See,~, Luchansky v. Farmers Fire 

Ins. Co., 515 A.2d 598 (Pa. Super. 1986); Hunter v. State Farm 

Fire & Casualty Co., 543 So.2d 679 (Ala. 1989). We conclude that 

since the count IV land and crops were the subject of various 

conveyances and assignments between father and son, an issue of 

genuine material fact exists as to whether plaintiff's 

representation of his insurable interest in these crops was in 

error. 

We are also concerned with the materiality of this alleged 

misrepresentation. Fed. R. Civ. P. 56(c) governs the burden which 

must be met by the party seeking summary judgment. 

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The judgment sought shall be rendered forthwith if the 

pleadings, depositions, answers to interrogatories, and 

admissions on file, together with the affidavits, if 

any, show that there is no genuine issue as to any 

material fact and that the moving party is entitled to a 

judgment as a matter of law. 

(Emphasis added). "Broadly speaking, the test of materiality is: 

Did the fact or circumstances represented or misrepresented 

operate to induce the insurer to accept the risk, or to accept it 

at a lower premium?" 7 G. Couch, Cyclopedia of Insurance Law 2d 

S 35:79 (Rev. ed. 1985); see also Parks v. FCIC, 416 F.2d 833, 

840 (7th Cir. 1969). It was defendant's burden to establish 

materiality. We have reviewed the record, and we find no evidence 

presented by the defendant on the issue of materiality. We are 

not inclined to hold as a matter of law that failure to disclose 

intrafamily conveyances of land and crops constitutes a material 

misrepresentation. 

Accordingly, the judgment of the United States District Court 

for the District of Kansas is AFFIRMED on counts I and II. We 

vacate the grant of summary judgment as to counts III and IV and 

remand for further proceedings consistent with this order and 

judgment. 

Entered for the Court 

Stephanie K. Seymour 

Circuit Judge 

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