In the

United States Court of Appeals

For the Seventh Circuit ____________

No. 03-2043

BART HARRISON DYE,

Debtor-Appellant,

v.

UNITED STATES OF AMERICA, FARM SERVICES

AGENCY (FSA),

Creditor-Appellee.

IN RE: BART HARRISON DYE,

Debtor.

____________

Appeal from the United States District Court

for the Southern District of Indiana, Evansville Division.

No. 02 C 186—Richard L. Young, Judge.

____________

ARGUED NOVEMBER 6, 2003—DECIDED MARCH 10, 2004

____________

Before CUDAHY, MANION, and ROVNER, Circuit Judges.

MANION, Circuit Judge. After Bart Harrison Dye filed for

Chapter 12 bankruptcy, a dispute arose as to his ownership

rights to a family farm. The bankruptcy court determined

that Dye had earlier deeded the farm to the government in

lieu of foreclosure, so he no longer owned it. Instead, the

court found that he had exercised an option to purchase the
2 No. 03-2043

1 Prior to October 1, 1996, the FSA was known as the Farmers

Home Administration. For ease of reference, we will refer to both

agencies as FSA.

farm, and was thus required to pay $828,706 or forfeit his

interest. After Dye failed to make the payments for the farm

within 60 days, his Chapter 12 bankruptcy petition was

dismissed. Dye appealed and the district court affirmed. He

now appeals to this court and we also affirm.

I.

Dye filed for Chapter 12 bankruptcy protection on August

17, 2001, seeking relief from debts that arose from a mortgage he had taken on his family farm in 1981 with the Farm

Service Agency’s (FSA) predecessor.1

 Dye’s relationship

with the FSA began in the early 1980’s when the agency

recorded three mortgages against property in which Dye

and his wife had varying interests. Dye experienced financial difficulties and entered into an arrangement with the

FSA on September 7, 1984, whereby he and his wife conveyed the farm to the FSA and were released from all

personal liability on the mortgages. In other words, this

1984 transaction served as a voluntary conveyance in lieu of

foreclosure. As part of this conveyance, Dye received a

credit of $525,000 for his interest in the farm and the FSA

forgave the balance of a loan to Dye of $321,764.23 in

principal and $33,110.63 in interest. In order to acquire the

farm, FSA also paid Alvin Dye (A. Dye), Dye’s brother,

$120,000 for his interest in a portion of the farm. The FSA

recorded the deed in its name and then claims to have

rented the farm to others for a period of approximately five

years. 
No. 03-2043 3

In a letter dated December 22, 1989, the FSA advised Dye

of a new program under which former owners of foreclosed

property could enter into a lease back/buy back agreement

with the FSA. On June 6, 1991, Dye entered into a five-year

lease of the farm that he formerly owned. Under this lease,

Dye had the right to exercise an option to buy the farm

before the expiration of the lease, subject to certain terms

and conditions, including the requirement that the balance

of the purchase price had to be paid in cash at closing.

The FSA claims that Dye exercised the option to purchase

the farm by writing to the agency on May 13, 1996. He was

sent a standard sales contract to sign and return to the FSA.

The FSA never received the contract. Instead, Dye filed an

administrative appeal regarding the purchase price of the

farm and certain fish and wildlife easements on the farm.

After losing the administrative case, Dye filed a petition for

review of the administrative determination in U.S. District

Court, and a judgment was entered on April 10, 2002 in

favor of the government. In the meantime, Dye filed for

Chapter 12 bankruptcy on August 17, 2001, and asserted in

his schedules that he was the owner of the farm and that the

“USDA Farm Service Agency” had a first mortgage on the

property. Dye’s intent in filing Chapter 12, as revealed by

his counsel at the bankruptcy hearing, was to treat the

money due under a so-called “installment land sales contract” as a secured debt and cram it down, stretching the

payments out over 20 or 30 years. 

During Dye’s bankruptcy proceedings, the FSA asserted

ownership of the farm and requested that the court enter an

order establishing a time for Dye to assume or reject an

option to purchase the land. In response, Dye claimed that

he never relinquished what he perceived to be his equitable

interest in the property, and that the 1984 transaction resulted in him giving the FSA a deed held “in lien of trust.”
4 No. 03-2043

He claims that he lived and worked on the farm ever since

the 1984 transaction and has made payments to the FSA

in the amount of $396,902.92. Accordingly, he asserts an

equitable interest in the farm and that his arrangement with

the FSA constitutes an installment land sales contract. He

also denies entering into the five-year lease with an option

to purchase, and, naturally, denies sending a letter to

exercise any option.

The bankruptcy court rejected Dye’s arguments and on

September 23, 2002, pursuant to 11 U.S.C. § 365(d)(2), ordered that Dye, within 60 days, either assume the option to

purchase the farm (by tendering the purchase price of

$828,706) or that the option would be deemed rejected. Dye

did not tender payment, but instead appealed to the district

court without requesting a stay of the 60-day period. The

district court affirmed the bankruptcy court’s ruling. Dye

now appeals to this court.

II.

The findings of fact of the bankruptcy court are reviewed

for clear error. In re Generes, 69 F.3d 821, 824-25 (7th Cir.

1995). Conclusions of law are reviewed de novo. See Meyer

v. Rigdon, 36 F.3d 1375, 1378 (7th Cir. 1994). This appeal

involves application of 11 U.S.C. § 365(d)(2) of the

Bankruptcy Code, which provides, in pertinent part:

In a case under chapter . . .12 . . . of this title, the trustee

may assume or reject an executory contract or unexpired lease of residential real property or of personal

property of the debtor at any time before the confirmation of a plan but the court, on the request of any party

to such contract or lease, may order the trustee to determine within a specified period of time whether to

assume or reject such contract or lease. 
No. 03-2043 5

Pursuant to this provision, the bankruptcy judge determined that on June 6, 1991, Dye entered into a five-year

lease with an option to purchase the farm that he formerly

owned. The bankruptcy judge also determined that Dye

exercised his option to purchase on May 13, 1996, but failed

to follow through by tendering the purchase price. These

findings formed the framework for the bankruptcy judge’s

decision to order Dye to follow through with exercising the

option by tendering the purchase price for the farm within

60 days, or to forfeit the option. Under the bankruptcy

court’s ruling, Dye has forfeited any interest in the farm

because he apparently did not have the financing to follow

through with the exercise of the option within the 60-day

period and did not request a stay of the 60-day period.

Dye does not challenge the bankruptcy court’s authority

under 11 U.S.C. § 365(d)(2) to order an executory contract or

lease to be assumed or rejected. Instead, he challenges the

lower court’s underlying findings that he: 1) relinquished

full title to the farm in 1984 to the FSA; 2) then entered into

a lease with an option to purchase the farm in 1991; and

finally, 3) exercised the option to purchase in 1996. Accordingly, we begin the analysis by reviewing the 1984 transaction.

The record reveals that Dye and his wife executed a general warranty deed on June 21, 1984, and the FSA recorded

this deed in its name on September 7, 1984. Dye acknowledges that the transfer was voluntary, but, as best we can

tell, he now argues that his conveyance was in fact an

equitable mortgage or installment land contract disguised

as an absolute conveyance. Whether an instrument is a

mortgage or absolute conveyance is governed by the intent

of the parties at the time the transaction is undertaken, and

in assessing intent we may look at extrinsic or parol evidence if necessary. See, e.g., Matter of Willows of Coventry,
6 No. 03-2043

2 Bankruptcy Rule 9017 expressly makes the Federal Rules of

Evidence and a portion of the Federal Rules of Civil Procedure

applicable to bankruptcy proceedings.

3 We note also that the FSA has also failed to set forth evidence

concerning what happened with the property between the years

1984 and 1991. These are the years in which Dye’s attorney claims

that Dye made payments totaling $396,902.92 to the FSA. The

FSA claims, without evidence, that it leased the property to other

parties during this time—while Dye claims that he leased the

property to other parties during this time and forwarded the

payments to the FSA. This rather monumental discrepancy could

have been easily cured had either party, especially Dye, submitted documents to demonstrate which (if either) claim is correct.

Ltd. Partnership, 154 B.R. 959, 963 (Bankr. N.D. Ind. 1993)

(citing Barber v. Barber, 70 N.E. 2d 185, 187 (Ind. Ct. App.

1946)). 

Dye offers no evidence, extrinsic, parol, or otherwise, to

support his equitable mortgage/land contract theory. An

appellant’s brief must “contain appellant’s contentions and

the reasons for them, with citations to the authorities and

parts of the record on which the appellant relies.” Fed. R.

App. P. 28 (a)(9)(A). But Dye cites nothing in the record for

this court to review. He claims that he lived on the farm for

the entire time after the 1984 transaction, and paid the FSA

what he refers to as mortgage payments. While this argument is inherently plausible, Dye fails to cite the record, and

after our independent review we conclude that there is no

evidence in the record for this position. Dye had the opportunity to develop the record at the lower court level (by

testimony, affidavit, payment receipts, etc.),2

 but did not.

The FSA, for its part, has developed the record, at least as to

this issue.3
No. 03-2043 7

4 See Affidavit of C. Brent Kerns, Farm Loan Program Chief, FSA,

Indiana, Exh. C.

 The FSA does cite to a copy of a warranty deed in the record4

 that indicates that Bart H. Dye and Donna F. Dye

conveyed four tracts of land totaling just over 411 acres to

the United States through the FSA. The FSA claims that any

payments made by Dye were the result of his holdover

tenancy. The courts below cited several reasons to support

the finding that the 1984 transaction constituted an absolute

conveyance of Dye’s entire interest in the farm. For example,

the district court cited the Release From Personal Liability

given by the FSA to the Dyes acknowledging the conveyance of the real property. This document provided that Dye

was released from all personal liability for past indebtedness on the property and did not include any language

regarding redemption. In addition, the district court cited

the FSA’s purchase of A. Dye’s interest in the farm as

inferential evidence of the FSA’s intent, through the 1984

transaction, to own the entire interest in the farm. Finally, in

1989, the FSA sent a letter to Dye advising him that “[t]he

farm that you once owned may be available for you to buy or

lease under certain conditions.” (Emphasis added.) This

evidence is adequate to uphold the district court’s finding

that Dye conveyed his entire interest in the farm to the FSA

in 1984, particularly since we have no contradictory evidence from Dye.

Next, we consider whether Dye entered into a five-year

lease with an option to purchase. The lower courts cited the

above-mentioned 1989 letter from the FSA and Dye’s execution of a five-year Lease of Real Property with an option

to purchase the farm that he previously owned. Although

Dye claims he did not enter into a lease, the record includes

a copy of a lease with an option to purchase, signed by the
8 No. 03-2043

FSA as lessor and Dye as lessee on June 6, 1991. The declaration of Brent Kerns, Indiana’s FSA Chief, serves to authenticate this document. Dye does not challenge the authenticity

of his signature on the lease. This evidence thus supports

the finding that Dye in fact entered into a lease with an

option to purchase the farm.

 Unfortunately, the evidentiary record breaks down again

as we next examine the district court’s finding that Dye

exercised his option to purchase on May 13, 1996. The FSA

cites a November 4, 1997 letter from Paul Singleton, FSA

Manager of Farm Loan Programs, addressed to Eric Allan

Koch. This letter indicates that an agreement had been

reached regarding the sale of the “Dye” farm, but fails to

indicate the parties to such an agreement. Moreover, there

is no evidence in the record explaining Koch’s identity or

role in this case. While this letter was apparently sent to Dye

as well, there is no evidence that Dye responded. Of course,

Dye denies that he responded. Thus, the Koch letter is

insufficient to establish that Dye exercised an option to

purchase the farm.

As evidence that Dye exercised the option, the FSA

attempts to rely on Kerns’ assertions that Dye pursued an

administrative appeal regarding certain conservation easements and to dispute the purchase price of the real estate.

However, this begs the question of whether Dye manifested

an intent to exercise his option to purchase since the actual

administrative appeal is missing from the record. For all we

know, Dye’s intent to exercise the option could have been

conditioned on the outcome of the administrative appeal.

More importantly, an option is a contract, see Caisse

Nationale De Credit Agricole v. CBI Industries, Inc., 90 F.3d

1264, 1272 (7th Cir. 1996), and the May 13, 1996 “writing”

wherein the FSA claims Dye exercised the option is missing

from the record without explanation. While Kerns testified

to the existence of this letter at the bankruptcy hearing, we
No. 03-2043 9

5 The likely explanation for the missing document is that it was

lost. If so, Kerns’ testimony that the original was lost or destroyed

would suffice under Fed. R. Evid. 1004, and we could then rely

on Kerns’ declaration to find that Dye exercised the option.

However, as the record stands, the portion of Kerns’ declaration

referring to the document is inadmissible because it violates the

best evidence rule.

remind the FSA of the best evidence rule, Fed. R. Evid. 1002,

and its obligation to produce the actual key document

showing that the option was exercised.5 See, e.g., Dugan v.

R.J. Corman Railroad Co., 344 F.3d 662, 669 (7th Cir. 2003). 

Due to the lack of admissible evidence concerning Dye’s

exercise of the option, we cannot uphold the district court’s

decision ordering him to exercise or forfeit the option.

Accordingly, there is no evidence of an executory contract

or unexpired lease necessary for applying 11 U.S.C.

§ 365(d)(2). However, we are permitted to affirm on any

basis identified in the record that was argued below. Payne

v. Churchich, 161 F.3d 1030, 1038 (7th Cir. 1998). The fiveyear lease expired in 1996, and the option to purchase

arising from that lease has long since lapsed as a matter of

law. See Chicago Tribune Co. v. National Labor Relations Board,

965 F.2d 244, 248 (7th Cir. 1992). As stated, the record reveals that Dye transferred his entire interest in the farm in

1984. According to the record, he then lacked an interest in

the property until he signed the 1991 lease with an option to

purchase. By the time he filed the bankruptcy petition in

2001, his option had lapsed and he was without any other

interest in the farm. The family farm that Dye formerly

owned was improperly listed on his bankruptcy schedules.

Dye’s lawyer conceded at a hearing before the bankruptcy

judge that Dye was pursuing Chapter 12 in an attempt to

cram down the debt related to his installment land sales

contract. But there was no installment land sales contract.
10 No. 03-2043

6 The FSA argued below that Dye lacked any interest in the

property. This argument became obscured by the focus on the

option contract and the executory contract order under 11 U.S.C.

Section 365(d)(2) of the Bankruptcy Code. Whether Dye exercised

the option or not, the ultimate outcome is the same—he has no

interest in the farm. In addition, Dye’s petition would be dismissed in any event because he conceded at oral argument that

the government has leased the farm to others and he is thus not

an owner or operator of a farming operation as defined in 11

U.S.C. § 101(18)(A). 

7 Dye waives his argument that the 1984 arrangement clogged

his equitable right of redemption and violated Indiana statutory

law by raising it for the first time in his reply brief. See, e.g.,

Wildlife Exp. Corp. v. Carol Wright Sales, Inc., 18 F.3d 502, 508 n.5

(continued...)

The only “sale” of the land was the 1984 deed conveying the

property from the Dyes to the United States. There is no

other farm-related debt arising from any other transaction

evidenced in the record. As stated above, Dye’s 1984

transaction was an absolute transfer that released him from

all liability on the farm. He did not enter into an installment

sales contract. Moreover, he cannot cram down money due

under the lease with an option to purchase because he

denies exercising the option and there is no evidence that he

exercised it. His bankruptcy petition was correctly dismissed since he has lacked an ownership interest in the

former family farm since 1984—before the enactment of

Chapter 12 in 1986—and thus has no chance to keep land

with which he has already parted.6

Cf. In Re Thomas Fortney,

36 F. 3d 701, 703 (7th Cir. 1994) (“Congress created Chapter

12 in 1986 in order to give family farmers facing bankruptcy

a fighting chance to reorganize their debts and keep their

land.”) (quotation omitted). We are unaware of any grounds

under Chapter 12 to revive an interest in land that has been

lost before the filing of the bankruptcy petition.7
No. 03-2043 11

7 (...continued)

(7th Cir. 1994). In any event, he admits that the 1984 conveyance

was voluntary. His various other contentions are all irrelevant or

waived due to his failure to develop the argument. See, e.g.,

Pelfresne v. Village of Williams Bay, 917 F.2d 1017, 1023 (7th Cir.

1990).

8 At oral argument, Dye’s counsel claimed that he did not “see

an indication” that Dye leased anything. However, the record

clearly reveals that Dye signed a lease in 1991, and counsel later

admitted that Dye signed what he terms a “form letter.” Counsel

states in briefs that Dye signed a “quit-claim deed” in 1984 and

that the transaction was merely to release his wife, with whom he

was in the process of a divorce, from liability on the mortgage.

However, instead, the record reveals that Bart Dye and his wife

signed a general warranty deed—Bart’s brother, Alvin, signed the

quit-claim deed. Also, the release language releases both Dye and

his then-wife from liability. Finally, at the hearing before the

bankruptcy judge, counsel made the obviously inaccurate

assertion that Dye received “nothing” for the deed in 1984.

However, the evidence clearly shows that Dye received a release

of liability for his previous indebtedness that exceeded the value

of the land.

III.

This relatively simple case was complicated by an incomplete record coupled with Dye’s counsel’s attempts to confuse the 20-year history of the ownership-leasehold interest

concerning the land parcels in question.8

 This has forced us

to approach “playing archaeologist” with the record, a task

for which we are ill-suited in our appellate role. See DeSilva

v. DiLeonardi, 181 F.3d 865, 867 (7th Cir. 1999). Nevertheless,

the district court correctly dismissed Dye’s case because he

transferred his entire interest in the farm in 1984 and his

option to purchase the farm has lapsed since the expiration
12 No. 03-2043

of his lease in 1996. Dye is thus unable to take advantage of

Chapter 12 relief. We therefore AFFIRM the judgment of the

district court.

A true Copy:

Teste:

 _____________________________

Clerk of the United States Court of 

Appeals for the Seventh Circuit 

USCA-02-C-0072—3-10-04