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Parties Involved:
United States of America
Appellee
Frank Velarde
Appellant
Lydia T. Velarde
Appellant

Document Text:

. FILED 

United States Court of Ap;lcals 

UNITED STATES COURT OF APPEALS ~rcnCl Circuit 

FOR THE TENTH CIRCUIT SEP 2 6 1991 

ROBERT L. HOECKER 

Clerk 

UNITED STATES OF AMERICA, 

Plaintiff-Appellee, 

v. 

FRANK VELARDE; LYDIA T. VELARDE, 

Defendants-Appellants. 

) 

) 

) 

) 

) No. 91-1037 

) (D.C. No. 88-B-1308) 

) 

) ( D. Colo.) 

) 

) 

ORDER AND JUDGMENT* 

Before ANDERSON, TACHA, and BRORBY, 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. See Fed. R. App. P. 

34(a); 10th Cir. R. 34.1.9. 

submitted without oral argument. 

The case is therefore ordered 

Frank and Lydia Velarde appeal the grant of summary judgment 

by the district court in favor of the Farm Home Administration 

(FmHA) on their counterclaim alleging that the FmHA was arbitrary 

and capricious and had acted contrary to its own rules and 

* 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: 91-1037 Document: 010110090684 Date Filed: 09/26/1991 Page: 1 
regulations when it denied them a loan to assist in the repurchase 

of their property after a foreclosure. Because we agree with the 

district court that there was no material issue of fact presented 

by the Velardes and that the FmHA was entitled to judgment as a 

matter of law, we affirm. 

The Velardes owned farmland in Las Animas County which was 

burdened by a first deed of trust in favor of the Federal Land 

Bank of Wichita, and by a second deed of trust in the amount of 

$160,700 in favor of the FmHA. After a foreclosure by the first 

lienholder, FmHA redeemed the property by paying to the sheriff of 

Las Animas County the amount of $62,673.51. This amount was added 

to the amount due under the FmHA's second deed of trust, resulting 

in a new total indebtedness in excess of $200,000. 

After the FmHA had secured the sheriff's deed to the 

property, the former attorney for the Velardes met with 

representatives of the FmHA proposing that his clients be granted 

a new loan from the FmHA, with which they would repurchase their 

property. The FmHA informed the Velardes' attorney that the total 

real estate indebtedness was $290,940 and that there was a 

$200,000 limit to loans to individuals for land purchase purposes. 

The FmHA clearly explained that in order to repurchase the 

property the Velardes would have to secure the participation of 

another lender for amounts in excess of $200,000. Despite this 

problem, the Velardes applied for a loan in the amount of 

"'$290,000 plus at least $10,000' to repurchase the real estate 

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Appellate Case: 91-1037 Document: 010110090684 Date Filed: 09/26/1991 Page: 2 
• 

and for operating expenses." 

loan application was denied. 

District Court Order at 7. 1 The 

After the United States brought this action in ejectment in 

the district court, the Velardes counterclaimed alleging wrongful 

denial of their loan application. The district court, in granting 

summary judgment in favor of the United States, found that as a 

matter of law the FmHA could not have granted the Velardes' loan. 

United States v. Velarde, No. 88-B-1308, memorandum order at 5 (D. 

Colo. Feb. 15, 1990) (District Court Order). 

In reaching this conclusion the district court noted the 

difference between operating loans, as authorized by 7 u.s.c. 

§ 1941-47, and farm ownership loans as authorized by 7 U.S.C. 

§ 1922-34. Id. at 5. The court reasoned that because 7 u.s.c. 

§ 1943(2) prohibits operating loans "'for the purchasing or 

leasing of land other than for cash rent, or for carrying on any 

land leasing or land purchasing program,'" District Court Order 

at 6, the FmHA did not have authority to make an operating loan to 

the Velardes to enable them to repurchase their ranch. Id. 

Nor could the Velardes qualify for a farm ownership loan 

sufficient to allow them to repurchase their property. Id. at 7. 

Those loans, like the operating loans, may not exceed $200,000, 

and the total real estate indebtedness on the property exceeded 

that amount. The district court correctly concluded that, even if 

1 The Velardes do not attach a copy of their loan application 

to the other materials designated as part of the record on appeal. 

As to those materials which are not designated as part of the 

record, the trial court's characterization of the evidence must be 

accepted as correct. See Rachbach v. Cogswell, 547 F.2d 502, 504 

(10th Cir. 1976). 

3 

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l 

• the Velardes had met the loan approval requirements, the loan 

approval officer would have been required to reject the loan 

application because it exceeded the $200,000 farm ownership loan 

limit. Id. at 7. 

To review a summary judgment order, we apply the 

same standard used by the trial court under Fed. R. Civ. 

P. 56. Osgood v. State Farm Mut. Auto Ins. Co., 848 

F.2d 141, 143 (10th Cir. 1988). Rule 56 directs that 

summary judgment is appropriate where there is no 

genuine issue of material fact and the moving party is 

entitled to a judgment as a matter of law. This court 

determines whether, under the correct interpretation of 

the substantive law, there exist material factual 

disputes which preclude summary judgment. See id.; see 

also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 

247-48 (1986). In determining whether a material issue 

of fact exists, we review the record in the light most 

favorable to the party opposing summary judgment. 

McKenzie v. Mercy Hosp., 854 F.2d 365, 367 (10th Cir. 

1988). The district court's conclusions of law are 

reviewed de novo. Id. 

Adolph Coors Co. v. Brady, Nos. 89-1203, 89-1239, slip. op. at 6 

(10th Cir. Sept. 23, 1991). 

On appeal, the Velardes argue that the presence of an 

outstanding issue of material fact regarding the allocation of 

their loan request precluded the entry of summary judgment. They 

contend that their request for "$290,000 plus at least $10,000" 

could reasonably be viewed as a request for a farm ownership loan 

in an amount less than $200,000 with 

characterized as an operating loan. 

supports this interpretation of the facts. 

the balance being 

Nothing in the record 

We perceive no issue of material fact regarding the loan 

request which prohibits summary judgment. The Velardes contend 

that the affidavit of Frank Velarde demonstrates that the request 

for $290,000 was for both farm ownership money and operating 

4 

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• 

expenses. We find no indication in the affidavit of such intent. 

Further, the financial realities of the Velardes' situation belie 

any conclusion that their request for a farm ownership loan was 

for less than $200,000. It is undisputed that the total amount of 

real estate indebtedness was more than $200,000. A loan for 

$200,000 or less would not have enabled the Velardes to repurchase 

their property without the participation of a secondary lender. 

Since there was no evidence of any participation by a secondary 

lender in the Velardes' repurchase plan, a loan of less than 

$200,000 would not have accomplished the Velardes' ends. 

In a letter dated October 25, 1984, the FmHA informed the 

Velardes' prior attorney that the $200,000 limit on farm ownership 

loans would prevent the loan request from being granted. There is 

no evidence of any effort on the part of the Velardes or their 

attorney to clarify to the FmHA that the request for a farm 

ownership loan was for an amount less than $200,000. 

The Velardes argue that by redeeming the property and adding 

the redemption amount to the amount of its original loan, the FmHA 

exceeded its own authorized loan amounts. This argument is 

without merit. The FmHA had not authorized the amount of the 

original loan from the Federal Land Bank. In redeeming its 

collateral, the FmHA did not authorize a loan to the Velardes in 

excess of $200,000. 

5 

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, 

The judgment of the United States District Court for the 

District of Colorado is AFFIRMED. The mandate shall issue forthwith. 

ENTERED FOR THE COURT 

Wade Brorby 

Circuit Judge 

6 

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