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Horob v. Farm Credit Services of North Dakota ACA

January 12, 2010

JAMES L. HOROB, PLAINTIFF AND APPELLANT
v.
FARM CREDIT SERVICES OF NORTH DAKOTA ACA, AND ITS SUBSIDIARIES, DEFENDANT AND APPELLEE



Appeal from the District Court of Williams County, Northwest Judicial District, the Honorable David W. Nelson, Judge.

The opinion of the court was delivered by: Crothers, Justice.

AFFIRMED.

[¶1] James L. Horob appeals from a summary judgment dismissing his action against Farm Credit Services of North Dakota ACA ("FCS"). We conclude the district court did not err granting summary judgment dismissal and did not abuse its discretion denying Horob's request for additional discovery. We affirm the judgment and impose sanctions on FCS for violating N.D.R.App.P. 30.

I.

[¶2] James Horob is a farmer and owns land in Williams County. In 1997, FCS loaned $305,800 to Horob; his brother, Todd Horob; and his father, Larry Horob, for the purchase of real property. The Horobs executed a promissory note and a real estate mortgage in favor of FCS.

[¶3] In 2001, FCS loaned Horob, Todd Horob and Larry Horob money for the purchase of two windrowers. Horob, Todd Horob and Larry Horob granted FCS a security interest in their livestock and poultry, the two windrowers and other equipment. The loan for the windrowers was paid off in 2002, and FCS terminated the Uniform Commercial Code financing statements for the windrowers and other equipment releasing the liens on the machinery. FCS did not release the lien on Horob's livestock.

[¶4] In 2002, FCS loaned Todd Horob and Larry Horob money. Todd Horob and Larry Horob gave FCS a new security interest in their livestock. Horob, Todd Horob, and Larry Horob also executed a real estate mortgage to secure the loan.

[¶5] In March 2006, Horob received a line of credit from Dakota Community Bank, N.A., to purchase 1,000 to 1,500 cattle. To secure the loan, Horob gave Dakota Community Bank a security interest in his livestock. Horob used a portion of the line of credit to purchase 198 cattle. Horob claims he was not aware FCS had not released the lien on his cattle.

[¶6] On March 17, 2006, Horob contacted his loan officer at FCS requesting release of the lien on his cattle. The loan officer initially informed Horob that he did not think it would be a problem to release the lien, but FCS later denied Horob's request. In April 2006, Horob's attorney sent FCS written notice demanding termination of the lien, and FCS refused. Because FCS refused to release its lien on the cattle, Dakota Community Bank found Horob was in default under the terms of their security agreement and refused to advance Horob any further credit.

[¶7] In 2007, Horob sued FCS, seeking damages and an order releasing the lien. Horob claimed FCS wrongfully refused to release the lien on his cattle and continued the lien falsely, maliciously and not in good faith. Horob alleged the continued lien was a slander of title on his livestock and on any livestock he purchases in the future and was an abuse of process causing irreparable harm, damage and injury.

[¶8] On July 23, 2008, Horob served discovery requests on FCS. On August 22, 2008, FCS responded, asking whether Horob wanted the entire 1,291 page file. On September 8, 2008, Horob confirmed he wanted the entire file. On September 10, 2008, FCS filed a motion for summary judgment. Horob received the file from FCS on September 24, 2008. Horob filed a response to the motion for summary judgment on October 14, 2008, and requested a continuance to allow further discovery. FCS filed a reply on October 24, 2008.

[¶9] After a December 4, 2008, hearing, the district court granted FCS's motion for summary judgment, determining Horob had sufficient time for discovery, no genuine issues of material fact existed and FCS was entitled to judgment as a matter of law. The court decided FCS was not required to release the lien on Horob's cattle because the 2001 security agreement granted FCS a security interest in the collateral to secure the payment of all existing and future loans, because an outstanding debt was owed to FCS and because the agreement did not require the release of the lien on Horob's cattle when the loan for the two windrowers was paid off. A judgment was subsequently entered.

II.

[ΒΆ10] Horob argues the district court erred in granting FCS's motion for summary judgment because issues of material fact are in dispute. Horob claims he was not informed the security agreement would secure any existing or future loans, he believed he was securing only the debt associated with the windrowers and he did not intend for his livestock to serve as collateral for existing and future obligations. He ...


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