United States v. James Olayer

Opinions of the United
2009 Decisions States Court of Appeals
for the Third Circuit
5-26-2009
USA v. James Olayer
Precedential or Non-Precedential: Non-Precedential
Docket No. 08-4581
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"USA v. James Olayer" (2009). 2009 Decisions. Paper 1315.
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NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
___________
No. 08-4581
___________
UNITED STATES OF AMERICA
v.
JAMES S. OLAYER; PAUL M. DOBBS,
Administrator of the Estate of Sandra R. Olayer Dodds,
James S. Olayer,
Appellant
____________________________________
On Appeal from the United States District Court
for the Western District of Pennsylvania
(D.C. Civil Action No. 07-cv-01256)
District Judge: Honorable Terrence F. McVerry
____________________________________
Submitted Pursuant to Third Circuit LAR 34.1(a)
May 15, 2009
Before: MCKEE, HARDIMAN AND COWEN, Circuit Judges
(filed: May 26, 2009 )
___________
OPINION
___________
PER CURIAM
As the parties are familiar with the facts, we will not repeat the District Court’s
thorough recounting of the background of this case. It suffices to say that the United
States sued James S. Olayer and Paul M. Dodds, the administrator of the estate of
Olayer’s late ex-wife, for defaulting on mortgages and promissory notes received from
the United States, acting through the Farm Service Agency (“FSA,” previously known as
the Farmers Home Administration).1 The Government sought an in rem judgment in
foreclosure and an in personam money judgment for the total amount due. Olayer filed an
answer to the complaint, admitting about half of the allegations, and offering a general
denial of the others (writing “disagree” mostly but also complaining vaguely of
“misrepresentation” and “coercion”). He did not put forth an affirmative defense in his
answer.
The United States filed a motion for summary judgment. In addition to the copies
of the mortgages, promissory notes, and related security agreements and financing
statements, the Government included the affidavit of David Poorbaugh, the Custodian of
Records at the FSA. Poorbaugh averred, by reference to the payment history of the loans
at issue, that, as of February 28, 2008, the principal due was $102,015.46 and the interest
due was $108,260.78, with additional interest accruing at a rate of $18.67 per day. Olayer
filed a response, in which he raised complaints about a Farm Service Agent, Merle
Helbig, and a County Supervisor, Ervin Myers; explained the difficulty in balancing
employment in a steel mill and running a dairy farm; discussed the money paid on the
1
The United States won a default judgment against Dodds.
2
loans from milk assignments and bankruptcy proceedings; and objected to an interest rate
and the order in which payments were applied to the loans.
The District Court awarded the United States summary judgment in mortgage
foreclosure in the amount of $210,276.24 (plus continuing interest) and a
in personam judgment against Olayer, including a deficiency judgment for any balance
due after the sale of Olayer’s property. Olayer appeals. He also requests that Poorbaugh,
Helbig, Myers, and private counsel for the Government be held in contempt of court. He
contends that Poorbaugh lied in averring that all payments had been properly credited;
Myers forced him into milking cows and borrowing money for farm equipment; and
Helbig threatened to call his loans due in 1985 if he did not borrow more money.
We have jurisdiction pursuant to 28 U.S.C. § 1291. Our review of the District
Court’s order granting summary judgment is plenary. See Abramson v. William Paterson
College, 260 F.3d 265, 276 (3d Cir. 2001). We apply the same standard that a district
court must apply in deciding whether summary judgment is merited. See id. We view the
facts in the light most favorable to the nonmoving party and draw all inferences in that
party’s favor to determine whether there is a genuine issue of any material fact and
whether the moving party is entitled to judgment as a matter of law. See id.
As the District Court noted, because the Government acts in a commercial, not
sovereign, capacity, when it lends money through the FSA, state law serves as the federal
rule of decision in resulting controversies. Cf. United States v. Kimball Foods, 440 U.S.
3
715, 728-30 (1979). Because this matter relates to Pennsylvania citizens and real and
personal property located in the state, Pennsylvania law applies.
Under Pennsylvania law, a lender may institute a foreclosure proceeding to enforce
the terms of a mortgage. See Cunningham v. McWilliams, 714 A.2d 1054, 1056-57 (Pa.
Super. Ct. 1998). A mortgagee is entitled to the entry of judgment on establishing the
amount of the mortgage and the mortgagor’s default, including the failure to pay interest.
Cf. id. at 1057. The judgment may be satisfied by a foreclosure sale, but if it is not, the
mortgagor remains liable for the unpaid balance. See Aristi-Kote Co. v. Benefactor Bldg.
& Loan Ass’n, 64 F.2d 407, 408 (3d Cir. 1933) (summarizing Pennsylvania law).
Olayer admitted many of the background facts in his answer to the Government’s
complaint. Although he alluded to defenses in a couple of responses to the Government’s
allegations, vaguely arguing “misrepresentation” and “coercion,” he never clearly
presented an affirmative defense in his answer (or in a motion in response to the
complaint). Accordingly, he may have waived any affirmative defense. See Charpentier
v. Godsil, 937 F.2d 859, 863-64 (3d Cir. 1991).
Even if Olayer did not, he did not show a genuine issue of material fact in response
to the Government’s motion for summary judgment. The United States, submitting
lending agreements and financial statements as well as the affidavit of the Custodian of
Records at the FSA, presented evidence (as the District Court described in greater detail)
about the amount the mortgages and the default. Neither Olayer’s general denials in his
4
answer nor the documents he attached to his response to the motion for summary
judgment put the issues in controversy.
Olayer did not go beyond the pleadings and submit evidence like affidavits,
depositions, answers to interrogatories, or admissions on file to designate specific facts to
show that summary judgment was not warranted. See Celotex Corp. v. Catrett, 477 U.S.
317, 324 (1986). For example, although Olayer asserted that the milk assignments
payments were not properly credited, he did not provide proof that they were not.
Similarly, he claimed, but did not provide evidence, that payments were applied in the
incorrect order and that one interest rate should have remained at 7.25 percent instead of
changing to 8.25 percent in 1995.
In short, because there was no genuine issue of material fact, the District Court
properly granted summary judgment in favor of the United States. (We agree with the
District Court that the correct amount, inclusive of interest as of February 29, 2008, was
$210,276.24, not the slightly higher figure elsewhere.) Despite Olayer’s argument to the
contrary in his brief on appeal, there is no evidence that the District Court gave the United
States preferential treatment.
For these reasons, we will affirm the District Court’s judgment. We also deny
Olayer’s motion to hold Poorbaugh, Myers, and Helbig in contempt as Olayer has pointed
to no order of this Court that they violated. 2 See John T. ex rel. Paul T. v. Delaware
2
We also note and deny Olayer’s request that this appeal be sent to mediation.
5
County Intermediate Unit, 318 F.3d 545, 552 (3d Cir. 2003) (holding that a valid court
order is among the prerequisites to a contempt finding).
6