Farm Credit Leasing Services Corporation v. Farrar

Background

Farm Credit Leasing Services Corporation sued Frank Farrar, asserting unjust enrichment and seeking delivery of property under Minnesota law and Federal Rule of Civil Procedure 64. The dispute concerned a July 22, 2014 lease for a 2013 Bron Self-Propelled Drainage Plow, model number 550, serial number 13M01164. Farrar agreed to make 60 monthly payments of $9,542.05 and to keep the plow at a specified address for use in his trade and business.

The lease allowed the plaintiff to take immediate possession and sell, lease, or otherwise dispose of the plow if Farrar defaulted. Farrar failed to make the required payments, and the plaintiff sent notices of default and acceleration. The plaintiff stated that the plow was worth approximately $240,000 and was located in a field in a rural area near Morris, Minnesota. Farrar admitted the default, accepted responsibility for any remaining deficiency, acknowledged that he had allowed a third party to use the plow, and said he did not know where it was. He also agreed that the plaintiff could sell or otherwise dispose of it and asked that no bond be required.

Legal standard and analysis

Minnesota law permits a claimant, in certain circumstances, to recover property after serving the summons and complaint but before final judgment. The claimant must provide information about the property, the basis for its right to possession, the alleged wrongful detention, any secured obligation, relevant contractual provisions, and the property’s approximate market value. The court must order seizure and delivery if the claimant shows a probability of success on the merits and posts the required bond, subject to specified protections for the respondent. Federal Rule of Civil Procedure 64 makes these Minnesota remedies available in federal court.

The court found that the plaintiff’s affidavit complied with Minnesota law. Based on Farrar’s concessions about the default, the court found that the plaintiff had shown a probability of success on its claim and had shown irreparable harm if seizure and delivery were not ordered.

The court nevertheless declined to issue a blanket authorization allowing law enforcement to enter any property where the plow might be located. It authorized law enforcement to seize the plow from Farrar’s residence, place of business, or the identified field near Morris, Minnesota. If the plaintiff obtained information that the plow was elsewhere, it could reapply for an order supported by an affidavit or other documentation explaining why it believed the plow was at that address.

Order

The court granted in part and denied in part the plaintiff’s Motion for an Order for Seizure and Delivery of Property. Farrar, or anyone else possessing the plow, was ordered to surrender it to the plaintiff or law enforcement. If it was not surrendered, law enforcement could enter the specified locations, demand disclosure of the plow, take possession of it, and deliver it to the plaintiff. Under the conditions stated in the order, law enforcement could break open a building or enclosure at those locations if a public demand for delivery was refused or received no response.

The plaintiff was authorized to sell or otherwise dispose of the plow immediately under the lease while the case remained pending, but had to notify Farrar of his right to redeem and pay off the plow and provide notice of the sale’s method, manner, and date. The plaintiff was not required to post a bond because Farrar agreed to that relief. The order did not state a final decision on the merits of the underlying case.