Court Opinion

ID: 8975172
Source: CourtListenerOpinion
Date Created: 2022-11-27 10:53:06.628334+00
Date Added: 2024-06-11T17:10:31.422676
License: Public Domain

ARNOLD, Circuit Judge,
dissenting.
I respectfully dissent. I cannot agree with either the procedural or the substantive reason given by the Court for its holding.
The Court first says that the Cupples Brothers’ Rule 60(b) motion was untimely. The elapsed time is computed from the entry of the judgment of foreclosure on December 29,1987. Between that date and the filing of the motion on March 16, 1989, some 14V2 months passed. The Court holds that this is an unreasonable length of time.
This analysis overlooks two important facts. First, an appeal was pending for almost 12 of the I4V2 months in question. It is true, as the Court says, that a Rule 60(b) motion can be filed during the pend-ency of an appeal. But the fact that an appeal is pending “may be considered in determining whether a motion was made in a reasonable time.” 11 Wright & Miller, Federal Practice & Procedure § 2866, at p. 233 (1975 & Supp.1989) (footnote omitted). This is so for good reason. Although a Rule 60(b) motion may be made and considered while an appeal is pending, and a *769district court may deny it without action by the Court of Appeals, such a motion may not be granted unless the Court of Appeals remands the case to allow the district court to act. Busy lawyers, especially those who are not in large firms and who have more than one client, should be pardoned if they decide to concentrate on their appeal (which, if successful, will make a request for 60(b) relief entirely unnecessary). This Court routinely declines to remand for consideration of such motions, anyway, usually preferring to go ahead and decide the appeal, following which the post-judgment motion can still be made in the district court, if it has not become moot.
In addition, an important legal development occurred while the appeal was pending, a development that would significantly affect any lawyer’s decision whether to use the new Agricultural Credit Act in an attempt to get relief from the judgment of foreclosure. On September 14, 1988, the Farm Credit Administration issued its final regulations to carry the new law into effect. A prefatory statement accompanying these regulations, 53 Fed.Reg. 35428 (Sept. 14, 1988), made clear the view of the Administration that the restructuring rights created by the new law would apply to any foreclosure proceeding that was not complete on January 6, 1988, the day the new Act became law. Not until this statement had been issued could counsel for Cupples (or anyone else) have been aware that the agency charged with execution of the new law was going to construe it to apply to foreclosure proceedings that had already been commenced on the date of enactment. This was an important piece of information, and I think Cupples should be given a reasonable time after receiving it to decide what to do with it. Here, the Rule 60(b) motion was filed within six months of the agency announcement, and that strikes me as not unreasonable.
I also disagree with the Court on the merits. The question presented is simply stated: the statute requires lenders, under certain circumstances, to restructure loans. 12 U.S.C. § 2202a(e)(l). Obviously Cupples Brothers at one time had a “loan” from the Federal Land Bank. The loan was reduced to judgment on December 29, 1988, eight days before enactment of the new law. Did the loan, by virtue of being reduced to judgment, immediately cease to be a loan in the sense that Congress used that word?
I think the answer is no. In deciding otherwise, the Court relies on the familiar common-law doctrine of merger. When the foreclosure judgment was entered, it says, “the promissory notes and mortgages in favor of FLB merged into the foreclosure judgment and ceased to exist.” Ante, at 767. I doubt that the point is valid, even considered on its own terms, because the judgment had not yet become final when the new Act was signed. It was still subject to appeal, and in fact, as we have seen, it was appealed. If there was a merger at all, it was an inchoate or unperfected one, and should not be taken to have destroyed the “loan” for all purposes and all time. But there is a deeper flaw in the Court’s reliance on the merger doctrine. “Merger” is simply a way of saying that a debt that has been reduced to judgment is treated differently, for some purposes, from a debt that has not been reduced to judgment. After judgment, for example, no new action may be brought on the debt. Such an action is barred by the merger aspect of the doctrine of res judicata. Moreover, actions on judgments are typically subject to longer statutes of limitations than actions on debts; judgments may be periodically revived, thus remaining enforceable much longer than the underlying debt would have; and so forth. Steelman v. Planters Prod. Credit Ass’n, 285 Ark. 217, 685 S.W.2d 800 (1985), which the Court cites, is nothing but a routine example of one' of these state-law consequences of reducing a debt to judgment. It applies the merger aspect of the doctrine of res judi-cata to bar an action in one county on a debt that had already been reduced to judgment in another county.
It makes no sense to transplant this merger concept into the present case and apply it mechanically to quite a different question, a question not of common-law doctrines but of statutory interpretation. With all respect, I submit that the Court’s *770use of the merger doctrine to interpret an Act of Congress is based on the fallacy that a word must mean the same thing every time it is used. If a debt or a loan reduced to judgment is no longer a debt or a loan for res judicata purposes, the Court seems to say, then it can’t be a loan for purposes of the Agricultural Credit Act of 1987. It seems to me extremely unlikely that Congress, which passed the law in an effort to help farmers in trouble, intended its purpose to be confined by a technical state-law doctrine conceived and applied for quite different purposes. I believe that both borrowers and lenders, in everyday business dealings and speech, would continue to think of the Cupples Brothers as having a “distressed loan” from the Federal Land Bank, notwithstanding the fact that the Bank had secured a judgment. This common-sense reading of the Act would certainly help more distressed borrowers, thus more fully carrying out the general purpose of the Legislature.
Of course it is true that finality must occur at some point. A farmer whose land had already been taken and sold, for example, might continue to think of himself as having a distressed loan, but it would hardly be practical to give him restructuring rights. A line must be drawn at some point. But here the policy statement of the Farm Credit Administration, referred to once already, becomes important again. According to that policy statement, the Act applies in this case. The Administration stated:
While the issue is not free from doubt, upon a review of the statutory language, the FCA Board has concluded that as long as the foreclosure proceeding as defined in [12 U.S.C. § 2202a(a)(4) ] ... was not complete as of January 6, 1988, restructuring rights are applicable if otherwise appropriate.
53 Fed.Reg. 35428. Here, foreclosure proceedings were of course not yet complete on January 6, 1988. They are not complete even now. Courts must defer to an interpretation of a statute by the agency charged with its execution, so long as the interpretation is reasonable, as this one clearly is. I think we should follow this rule here.
I conclude with one further observation. The Court holds today only that Cupples has no right to restructuring. Other rights created by the new Act may be available. See Brief for Appellee Federal Land Bank 10 (“FLB intends to extend to ... Cupples any rights [of first refusal] that [it] may have pursuant to [12 U.S.C. § 2219a].”). In fact, if I understood correctly what counsel for the Bank said at the oral argument, the Bank is voluntarily extending rights of first refusal and repurchase even in cases where the loan had already been reduced to judgment on January 6, 1988.
For these reasons, I would reverse the judgment of the District Court.