Court Opinion

ID: 3018391
Source: CourtListenerOpinion
Date Created: 2015-10-13 22:19:06.38671+00
Date Added: 2024-06-11T09:35:17.874870
License: Public Domain

United States Court of Appeals

                       FOR THE EIGHTH CIRCUIT

                            ___________

                            No. 96-1697
                            ___________

United States of America,        *
                                 *
          Plaintiff/Appellee,    *
                                 *
     v.                          *
                                 *
Gerald L. Fitzgerald;            *
Geraldine K. Fitzgerald;         *
Theodore J. Fitzgerald;          *
                                 *
          Defendants/Appellants,* Appeal from the United States
                                 * District Court for the
State Bank of Alcester; Salberg * District of South Dakota.
Excavating & Supply; Sioux       *
International; Farmers Coop      *
Elevator; Siouxland Implement    *
Company; South Dakota Department*
of Agriculture; Union County,    *
South Dakota, a political        *
subdivision of South Dakota;     *
Stewart & Gerry; Boyer Ready     *
Mix; Ben Hur Ford, Inc;          *
Robert E. Locke, Executor;       *
Valley Exchange Bank; Thomas L. *
Mau; Hauge Associates, Inc.;     *
Sweeney Oil Company; Sweeney     *
I-29 Station; L & L Motor        *
Supply;                          *
                                 *
          Defendants.            *
                            ___________

                  Submitted: February 11, 1997

                      Filed: April 7, 1997
                           ___________

Before MAGILL, BEAM, and LOKEN, Circuit Judges.
                           ___________
BEAM, Circuit Judge.

     Gerald, Geraldine, and Theodore Fitzgerald appeal from various
orders entered by the district court1 in foreclosure proceedings
brought by the United States after the Fitzgeralds defaulted on
Farmers Home Administration (FmHA) loans.       We affirm.

I.   BACKGROUND

     In 1968, Gerald and Geraldine Fitzgerald (“the Fitzgeralds”)
entered into a contract for deed with Gerald’s mother, Theressa
Fitzgerald, for a parcel of farmland Theressa owned in Union
County, South Dakota.        Although the contract for deed required
Gerald and Geraldine to make yearly payments of $1,000, they made
no payments after March of 1980.     In 1985, Theressa quitclaimed her
interest in the land to the Fitzgeralds’s son, Theodore, who at
that time was thirteen years old.

     Between 1978 and 1982, the Fitzgeralds obtained a number of
loans from FmHA,2 secured by mortgages on the property.      They later
defaulted on the loans, and the government commenced foreclosure
proceedings in November of 1992.      The government named Theodore as
an additional defendant, asserting that his vendor’s lien arising
by virtue of the contract for deed was inferior to the government’s
claim against the property.      The government also claimed a superior
interest to the Fitzgeralds’s other creditors, and named those

        1
      The Honorable John B. Jones, United States District Judge for
the District of South Dakota.
     2
            The FmHA was renamed the Farm Services Administration in
1994.        7 U.S.C. § 6932 (1994).

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parties as defendants as well.          The government moved for summary
judgment on all issues except the value of Theodore’s lien.

     Shortly thereafter, the Fitzgeralds filed for Chapter 12
bankruptcy,    and    the   district     court      stayed     the   foreclosure
proceedings.       In June of 1995, the Chapter 12 case was dismissed
and the district court vacated the stay.                  The Fitzgeralds and
Theodore    then    filed   briefs   opposing       summary    judgment.      The
Fitzgeralds argued that they were entitled to a right of redemption
under South Dakota law, and that this right had to be given effect
in FmHA foreclosure proceedings.             Theodore moved for summary
judgment on the issue of the superiority and value of his interest.
The government then moved for summary judgment on the valuation
issue as well.

     On October 20, 1995, the district court issued an order and
entered    judgment    on   the   motions,       determining    that:   (1)   the
Fitzgeralds    were   not   entitled    to   a    right   of   redemption;    (2)
Theodore’s vendor’s lien was superior to the government’s interest
and would be satisfied from the proceeds of the foreclosure sale;
(3) the contract for deed had a remaining balance of $52,209.48 and
Theodore was entitled to accrue interest at an annual rate of five
percent until the balance was paid; and (4) the FmHA mortgages were
superior to all other potential claims, except Theodore’s, and any
claims against the property by the remaining defendants were
foreclosed.
     The court entered an amended Decree of Sale on November 27,
1995, and the United States marshal filed a Notice of Sale on
January 5, 1996.      Theodore moved to amend the Notice of Sale, which
the district court denied.        At the foreclosure sale on January 25,
1996, a third party purchased the land for $108,931.82.                 Theodore
then moved to set aside the sale and refused to convey a deed.                 On

                                       -3-
February 13, 1996, the district court denied Theodore’s motion and
issued an order, pursuant to Rule 70 of the Federal Rules of Civil
Procedure, divesting Theodore of title and directing the marshal to
convey a marshal’s deed to the purchasers.               Theodore’s share of the
sale proceeds, $53,045.94, was delivered to the Clerk of Court,
where it apparently remained unclaimed at the time this appeal was
argued.

       The Appellants raise five issues on appeal.              The Fitzgeralds
assert that the district court lacked jurisdiction because the
government failed to show that it had complied with what they claim
are   state    law      based   mediation    requirements     and   federal    loan
preservation requirements.           The Fitzgeralds also claim that the
district court erred in concluding that they were not entitled to
state law redemption rights.3          Theodore asserts that the district
court should have set aside the foreclosure sale because the Notice
of Sale was defective.          Theodore further argues that the district
court incorrectly determined the value of his claim against the
property and lacked authority to divest him of title under Rule 70.

II.    DISCUSSION
       We must first consider whether this appeal is timely.                A party
must file a Notice of Appeal with the district court within thirty
days of the order or judgment from which the appeal is taken.                  Fed.
R.    App.    P.   4.      Timely   filing    is   not    merely    a    procedural
requirement, but "is mandatory and jurisdictional."                     Bartunek v.
Bubak, 941 F.2d 726, 728 (8th Cir. 1991).                 The government argues
that we have no jurisdiction on appeal because the district court

       3
      Redemption is “the right to repay the amount paid for real
property or any interest thereon, sold on foreclosure of a real
estate mortgage. . . .”    S.D. Codified Laws § 21-52-1 (Michie
1987).

                                       -4-
entered judgment on the parties’ summary judgment motions on
October 20, 1995, but Appellants did not file their Notice of
Appeal until March 11, 1996.

     We agree that with respect to those issues determined on
summary judgment, Appellants failed to timely appeal.   Gerald and
Geraldine Fitzgerald’s asserted right of redemption was considered
and specifically rejected by the district court in its summary
judgment order.   The district court also implicitly rejected the
Fitzgeralds’s purported right to mediation and loan preservation
services, insofar as it exercised jurisdiction and entered judgment
for the government.4    Likewise, the value and superiority of
Theodore’s interest was before the district court on summary
judgment, and the court fully resolved that question in its order.
Appellants never challenged these conclusions in any way prior to
this appeal.   The October summary judgment order was the final
order with respect to these issues, and the Notice of Appeal was
therefore untimely and we lack jurisdiction.5

     4
      The Fitzgeralds argue that we can nonetheless examine the
merits of this issue because they claim that prior mediation and
loan servicing are jurisdictional requirements for FmHA foreclosure
proceedings. Their position does not excuse their failure to take
a timely appeal.    An appeal of a district court’s exercise of
jurisdiction must still satisfy the requirements for appellate
jurisdiction.
     5
      We note that Rule 54(b) of the Federal Rules of Civil
Procedure would not have prevented review of the district court’s
summary judgment order. That order fully disposed of all issues
and determined the rights and claims of all parties to the action,
including Theodore and the other potential lienholders.         The
district court determined the value of Theodore’s interest, found
that it was a superior interest, and concluded that the property
would be foreclosed subject to that interest. The district court
further found that the interests of the other named defendants were
inferior to the government’s claims, and foreclosed those
interests. Because there were no issues remaining for litigation,
the summary judgment order was a final order “adjudicating all the

                               -5-
     Furthermore, these questions (except possibly Theodore’s claim
that his interest was improperly valued) are moot.   Once foreclosed
property is sold to a bona fide third-party purchaser, a court
generally lacks the power to craft an adequate remedy for the
debtor.   Roller v. Worthen Nat’l Bank (In re Roller), 999 F.2d 346,
347 (8th Cir. 1993); Van Iperen v. Prod. Credit Ass’n, 819 F.2d
189, 191 (8th Cir. 1987) (per curiam).     Therefore, a debtor who
fails to obtain a stay of the sale has no remedy on appeal and the
appeal is moot.    Van Iperen, 819 F.2d at 191.   The Appellants in
this case not only failed to obtain a stay following summary
judgment, but indeed waited until after two decrees of sale, the
notice of sale, the actual sale, and the order confirming sale
before they even moved for a stay.

     Theodore also appeals from the district court’s denial of his
motion to set aside the sale and from the court’s Rule 70 order
divesting him of title.   The district court entered these orders,
respectively, on February 13 and February 14, 1996.      Theodore’s
appeal from these orders is timely, but without merit.

      The first of these issues is moot.   Theodore argues that the
Notice of Sale was defective in that it failed to clearly indicate
that the property would be sold subject to his senior interest.   As
in the proceedings below, Theodore asks us on appeal to set aside
the foreclosure sale.   However, the property is now in the hands of
good faith purchasers who relied upon the sale, and we cannot undo
that purchase.    Van Iperen, 819 F.2d at 191.

     After the foreclosure sale, Theodore refused to deliver the
deed after he was tendered payment under terms of the contract for

claims and the rights and liabilities of all the parties.”   Fed. R.
Civ. P. 54(b).

                                 -6-
deed.     The district court entered an order pursuant to Rule 70
divesting Theodore of title and vesting title in the United States
marshal.6    On direction of the court, the marshal then conveyed a
deed to the third-party purchasers.          Theodore argues that the
district court lacked authority to divest his interest under Rule
70.

      This issue, too, may be moot, as it is difficult to see what
effective relief could be granted by reversing the district court.
At any rate, Theodore’s position is groundless.        In his motion for
summary judgment on the value of his vendor’s lien, Theodore
clearly elected that his interest in the property be paid from the
proceeds of the foreclosure sale.        The district court’s summary
judgment order determined that value, directed the sale, and
provided that    Theodore’s   interest   would   be   cashed   out.   The
district court did not abuse its discretion in divesting Theodore
of title after his refusal to convey a deed upon tender of full
payment.    See Gates v. Collier, 616 F.2d 1268, 1271 (5th Cir. 1980)
(Rule 70 orders reviewed for abuse of discretion).

      6
        Rule 70 provides in relevant part:

      If a judgment directs a party to execute a conveyance of
      land or to deliver deeds or other documents or to perform
      any other specific act and the party fails to comply
      within the time specified, the court . . . may enter a
      judgment divesting the title of any party and vesting it
      in others and such judgment has the effect of a
      conveyance executed in due form of law.

Fed. R. Civ. P. 70.

                                  -7-
III. CONCLUSION

     For    these    reasons,   we   affirm   the   district   court   in   all
respects.

A true copy.

            Attest:

                    CLERK, U. S. COURT OF APPEALS, EIGHTH CIRCUIT.

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