Audio Odyssey, Ltd. v. Brenton First National Bank

United States Court of Appeals
FOR THE EIGHTH CIRCUIT
___________
No. 00-1634
___________
AUDIO ODYSSEY, LTD., *
an Iowa Corporation; DOGAN A. *
DINCER; ANN M. DINCER *
*
*
Plaintiffs/Appellants, *
* Appeal from the United States
v. * District Court for the
* Southern District of Iowa.
BRENTON FIRST NATIONAL BANK,*
an Iowa Banking Corporation; *
MICHAEL M. BLADEL, Sheriff of *
Scott County, Iowa; JOHN M. NORRIS,*
Deputy Sheriff of Scott County, Iowa; *
CHARLES A. BARTON; JOHN C. *
BRADLEY; CHRIS A. PIEPER, *
ROGER HOFFMAN; MERCHANTS *
BONDING COMPANY, a Corporation, *
CORPORATION, *
*
Defendants/Appellees, *
*
*
*
AUDIO ODYSSEY, LTD., an Iowa *
Corporation; DOGAN A. DINCER; *
ANN M. DINCER, *
*
Plaintiffs/Appellants, *
*
v. *
*
BERNARD J. HOFMANN; *
ANDERSON & NELSON, a *
Professional Corporation, *
*
Defendants/Appellees. *
___________
Submitted: January 10, 2001
Filed: April 6, 2001
___________
Before LOKEN and BYE, Circuit Judges and SACHS1, District Judge.
___________
SACHS, District Judge.
In mid-July 1995, Brenton First National Bank obtained a writ of replevin for
seizure of certain property of Audio Odyssey, Ltd., an electronics store in Davenport,
Iowa. A sheriff's deputy executed the writ later that day, ordered a locksmith to change
the locks at the store, and posted "No Trespassing" signs even though the writ called
for the seizure of personal, rather than real, property. Audio Odyssey's president and
sole shareholder, Dogan A. Dincer, could not (or did not) enter the premises for several
weeks, and the store went out of business. Seeking redress for the writ's ex parte
issuance and mishandled execution, Audio Odyssey, Dincer, and Dincer's wife brought
a variety of claims under 42 U.S.C. § 1983 and state law against the Bank, the Bank's
attorney and law firm, the Bank's bonding company, the county officials who aided the
writ's execution, and a loan officer of the Small Business Administration. Plaintiffs
now appeal from the district court's many adverse rulings. These include the dismissal
1
The Honorable Howard F. Sachs, United States District Judge for the Western
District of Missouri, sitting by designation.
-2-
of the Dincers' individual claims for lack of standing, the dismissal of the section 1983
claim against the SBA loan officer, and the grant of summary judgment to other
defendants on all federal claims. We affirm in part, reverse in part, and remand for
further proceedings.
I
We view the record in the light most favorable to plaintiffs. Dogan Dincer,
previously an employee and minority shareholder of Audio Odyssey, purchased the
business for $270,000 in 1991. The purchase was partially financed through a
$200,000 loan from the Bank, and the SBA guaranteed 85 percent of the loan. Audio
Odyssey, in turn, executed a "Business Security Agreement" giving the Bank a security
interest in the store's accounts, general intangibles, contract rights, instruments, chattel
paper, documents, inventory, machinery, equipment and fixtures. The Agreement
required Audio Odyssey to perform its payment obligations under the note, and to take
other steps such as maintaining insurance on the collateral and keeping current with all
tax obligations. In the event of default, the Agreement allowed the Bank to accelerate
the loan and to enter the store and take the collateral.
In the weeks preceding July 14, 1995, Bank personnel came to believe that
Audio Odyssey was failing to perform its duties under the loan and Agreement,
including the duty to make timely payments, to maintain insurance, and to pay taxes.
On July 13, 1995, Dincer paid $6,983 to the Bank, and instructed the teller to apply the
payment so as to satisfy the store's monthly obligation for June and July. The Bank
instead applied the payment to a previous overdraft. The next morning, John C.
Bradley, a commercial loan officer and vice president at the Bank, hand-delivered a
letter to Dincer stating that the Bank was accelerating the loan, and demanding payment
of the remaining balance (some $127,000) within ten minutes. Dincer contacted his
attorney and surmised that he could not raise the sum in such a short time. The attorney
faxed a letter to the Bank at around noon, contending that Audio Odyssey was not in
default.
-3-
The Bank was not persuaded, and it brought an ex parte replevin action later that
afternoon. Attorney Bernard Hofmann filed a Petition in Replevin in the Iowa District
Court for Scott County, contending, among other things, that (i) Audio Odyssey was
delinquent in its loan payments and other obligations, (ii) the Bank was entitled to
possession of the collateral under the Agreement, and (iii) immediate action was
necessary because the collateral might be destroyed, concealed, moved, sold, or
fraudulently transferred (Bank personnel had told Hofmann that an "annual sale" was
scheduled for that weekend, and the petition was filed on a Friday). Along with the
petition, Hofmann filed a "Bond for Replevin" in the amount of $300,000, or more than
twice the value of the collateral. The judge asked Hofmann whether the state's replevin
statute required notice to the defendant, and Hofmann advised that the court had
discretion to give such "notice and opportunity for hearing as it may prescribe" under
Iowa Code § 643.5. Hofmann also explained that the Bank's collateral was in danger
of being sold. The judge reviewed the statutory framework, considered the matter very
briefly, and signed the order that Hofmann had drafted. Pursuant to the order, the clerk
of the court issued a writ of replevin directing the sheriff to deliver the following
property to the Bank's possession:
All inventory, fixtures, accounts, furniture, equipment and machinery on
property described as follows:
4500 square feet located at 1718 E. Kimberly Road, Davenport,
Iowa, legally described as: Part of the Northwest Quarter of the
Southwest Quarter of Section 18, Township 78, Range 4, East of
the 5th P.M. . . . to the City of Davenport, Scott County, Iowa.
Armed with the writ and order, Hofmann visited the Scott County Sheriff's
Department and requested that the writ be served immediately. Sergeant Charles A.
Barton reviewed the writ and asked Hofmann if the Bank was prepared with moving
trucks to remove the collateral, as is customary. Hofmann said that the Bank did not
have moving trucks immediately available. Sergeant Barton explained that the
Department could not serve the writ because it was already late in the afternoon and
-4-
the Bank did not have moving trucks. Hofmann called Bradley at the Bank for
instructions, and Bradley told him that the Bank's intention was to change the locks and
keep Dincer and other store personnel off the premises. Hofmann relayed this
information to Sergeant Barton, insisted that the writ be executed that afternoon, and
asked whether the Sheriff's Department could lock the premises over the weekend to
prevent Audio Odyssey from selling the collateral. Sergeant Barton, in turn, reviewed
the writ and said that it would be possible to lock the store. At Sergeant Barton's
request, Hofmann completed a form entitled "Directions to Sheriff,"2 which stated that
Bradley and a locksmith would meet the deputies at Audio Odyssey.
Deputy John M. Norris served the writ of replevin at Audio Odyssey at 4 p.m.
He met Bradley and the locksmith at the premises, and ordered everyone inside to leave
the store. Deputy Norris thereafter directed the locksmith to change the locks, secured
the inventory and other collateral, and posted "No Trespassing" signs on the front and
back doors. During the next week, Deputy Norris and others completed an inventory
of the items described by the writ, removed the items, and turned them over to the Bank
(along with keys to the premises).3
In the meantime, Dincer tried to regain access to the premises--albeit somewhat
circuitously. He called the judge at home the night that Deputy Norris served the writ,
and the judge advised him to employ an attorney. Dincer and Audio Odyssey retained
their present counsel the next Monday. Meetings on July 26 and August 4 between
attorneys for Audio Odyssey and the Bank were unfruitful. On August 2, 1995,
plaintiffs' attorney wrote a certified letter to the Scott County Sheriff and demanded the
immediate surrender of the premises. The letter went unanswered; it is unclear who
may have received and reviewed it. Two days later, Audio Odyssey moved to dismiss
2
Under the Sheriff's Department's policy, a deputy reads the writ of replevin
along with the "Directions to Sheriff" in order to understand what the plaintiff wants.
If the directions conflict with the order and writ, the court documents control.
3
None of the parties contends that there were fixtures involved; that is,
improvements of value belonging to Audio Odyssey and affixed to the premises.
-5-
the replevin action, requested an order directing the sheriff to return the real estate, and
filed a jury demand. There was no record of a request for expedited handling, and no
evidentiary hearing until August 22, 1995. That hearing was continued and never
completed. On August 31, 1995, some six weeks after Deputy Norris executed the
writ, a court order allowed Audio Odyssey to enter the premises and remove the "No
Trespassing" signs. Dincer elected not to re-open the business, surmising that its
goodwill and commercial relationships had been destroyed. Ultimately, the state court
did not reach a judgment in the replevin action. It dismissed the case without prejudice
at the Bank's urging in September 1999--or more than two years after the federal
litigation commenced.
In their lawsuit, plaintiffs essentially alleged that Deputy Norris, Sergeant Barton
and the private defendants committed an unreasonable seizure of Audio Odyssey's real
property by changing the locks and erecting "No Trespassing" signs without a court
order authorizing such measures, and that the defendants deprived, and conspired to
deprive, plaintiffs of personal property without due process of law, by use of an
unconstitutional replevin statute. The district court dismissed the federal claim against
the SBA loan officer, and dismissed the Dincers' claims for lack of standing. It later
(i) granted summary judgment to the county officials (among other things, finding no
violation of plaintiffs' constitutional rights, and alternatively, granting qualified
immunity to the relevant officials), (ii) held that the Iowa replevin statute comported
with the requirements of due process, and (iii) rejected the conspiracy claims against
the Bank and others, having rejected the underlying claims of constitutional injury. The
court dismissed some of the pendent claims on the merits, while dismissing others
without prejudice to refiling in state court. It entered a final judgment consolidating the
various rulings on January 25, 2000, and plaintiffs timely appealed.
II
As a threshold matter, we hold that the Dincers lack individual standing to sue
defendants for the replevin. It is well established that a shareholder or officer of a
corporation cannot recover for legal injuries suffered by the corporation. See Heart of
-6-
America Grain Inspection Serv., Inc. v. Missouri Dep't of Agric., 123 F.3d 1098, 1102
(8th Cir. 1997); Chance Mgmt., Inc. v. South Dakota, 97 F.3d 1107, 1115-16 (8th Cir.
1996). The rule applies even to a corporation's sole shareholder. See Smith Setzer &
Sons, Inc. v. South Carolina Procurement Review Panel, 20 F.3d 1311, 1317 (4th Cir.
1994). Here, it was Audio Odyssey whose premises and personal property were taken,
rightfully or not. Any constitutional violations presented by this case were visited upon
Audio Odyssey, and any injuries to the Dincers occurred solely because of their
relationship with Audio Odyssey.
It is true that the "shareholder standing rule" does not apply when the alleged
injury is distinct from that suffered by the corporation or other shareholders. See, e.g.,
Soranno's Gasco, Inc. v. Morgan, 874 F.2d 1310, 1318 (9th Cir. 1989). The Dincers
seek redress for various emotional and reputational injuries stemming from the replevin
of the Bank's collateral and the seizure of the premises, including the loss of business
relationships with customers and suppliers. We do not think these injuries are
"distinct" from the corporation's. A "distinct" injury is one in which the claimant's
rights have been violated, not merely one in which the claimant is indirectly harmed
because of one party's injury to another. See, e.g., Gersman v. Group Health Ass'n,
725 F. Supp. 573, 577-78 (D.D.C. 1989) (holding that a Jewish president and principal
shareholder of company could not maintain suit under 42 U.S.C. § 1981 against insurer
charged with discriminatorily terminating contract with company), aff'd in relevant part,
931 F.2d 1565, 1567 (D.C. Cir. 1991), vacated on other grounds, 502 U.S. 1068(1992). The premises and replevined items belonged to the corporation, not the
Dincers. Doubtless a sole shareholder may suffer shame and humiliation when the
corporation is destroyed, but an "emotional injury" exception would swallow the rule
against shareholder standing. The district court correctly dismissed the individual
claims.
III
We also agree with the district court's grant of summary judgment on the federal
claims regarding Audio Odyssey's personal property. Audio Odyssey maintains that
-7-
the Iowa replevin statute, Iowa Code §§ 643.1 - 643.22 (1999), is unconstitutional
because it deprives debtors of property without due process of law. As best we can
surmise, Audio Odyssey challenges the statute facially and as applied by the defendants
and the state court. We reject both challenges.
A
A number of Supreme Court cases have examined whether various state property
seizure schemes comport with due process. In Fuentes v. Shevin, 407 U.S. 67 (1972),
for example, the Court invalidated Florida and Pennsylvania statutes that permitted an
ex parte replevin upon bare conclusory allegations by the creditor and the creditor's
posting of a bond, allowed the clerk of court to issue the writ without meaningful
judicial oversight, and permitted the defendant to regain its property only by posting
a bond or, in Pennsylvania, by initiating a separate lawsuit. See id. at 73-78. Fuentes
held that in the absence of "extraordinary situations," a debtor could not be deprived
of a significant property interest unless provided with notice and a pre-deprivation
opportunity to contest the creditor's claim. Id. at 90. The Court refined and perhaps
narrowed this holding two years later. See Mitchell v. W. T. Grant Co., 416 U.S. 600(1974). Mitchell upheld a Louisiana sequestration statute that did not provide for prior
notice to the debtor and a prior hearing, in light of other procedural safeguards that, on
balance, satisfied due process and permissibly accommodated the competing property
interests of debtors and creditors. See id. at 608-10. Specifically, the Louisiana statute
required a factually detailed affidavit explaining the debtor's delinquency, the posting
of a bond, an immediate post-deprivation hearing, and judicial supervision of the entire
process; the debtor could regain the property by posting a bond, and the creditor
remained potentially liable for wrongful attachment. See id.The Court invalidated a Georgia garnishment statute the next year. See North
Georgia Finishing, Inc. v. Di-Chem, Inc., 419 U.S. 601 (1975). The statute in question
allowed a writ of garnishment to issue by a court clerk without judicial participation in
the process and upon a conclusory affidavit; the statute did not provide for a prompt
-8-
hearing, and the debtor could not challenge the garnishment without posting a bond.
See id. at 606-08.
On the basis of Fuentes and subsequent authorities, our Court attempted to distill
"five primary factors" that must be evaluated in considering a replevin or attachment
scheme's constitutionality in the absence of prior notice and a pre-deprivation hearing.
Watertown Equip. Co. v. Norwest Bank Watertown, N.A., 830 F.2d 1487, 1491 (8th
Cir. 1987).4 These include:
(1) an affidavit accompanying the petition for the writ of attachment
which contains facts alleged by a person with knowledge; (2) an
opportunity for the debtor to dissolve the writ by posting a bond; (3) an
"early" post-deprivation hearing at which the creditor bears the burden of
proving the legality of the writ of attachment; (4) indemnification of the
debtor for a wrongful attachment; and (5) judicial supervision of the
attachment process.
Id.; see also Lewis Service Center v. Mack Financial Corp., 696 F.2d 66, 68 (8th Cir.
1982). As Watertown noted, however, there is no easy formula to follow, because due
process requirements are not "technical," and the creditor remedy scheme must be
evaluated "as a whole." 830 F.2d at 1490 (quoting Mitchell).5
B
4
We believe the Watertown elements remain sound despite Connecticut v.
Doehr, 501 U.S. 1 (1991), and United States v. James Daniel Good Real Property, 510
U.S. 43 (1993), at least in the personal property context, and when, as here, the dispute
is between a creditor and debtor rather than a plaintiff and defendant in tort. See
Doehr, 501 U.S. at 17 ("[D]isputes between debtors and creditors more readily lend
themselves to accurate ex parte assessments of the merits. Tort actions, like the assault
and battery claim at issue here, do not.").
5
Watertown turned on gross deficiencies in the fourth and fifth factors listed
above.
-9-
We believe that Iowa's statute satisfies the Watertown evaluation. First, the
statute adequately (perhaps generously) indemnifies the debtor in the event of a
wrongful taking. Section 643.7 requires the creditor to post a bond of at least "twice
the value of the property sought to be taken." Iowa Code § 643.7. The aggrieved
debtor may seek a judgment on the creditor's bond, or request that a jury "assess the
value of the property and the damages for the taking or detention thereof."6 See Iowa
Code §§ 643.16, 643.17, 643.20. By contrast, the defective statute in Watertown
limited the creditor's bond to $10,000, while the property seized was worth over
$275,000. See Watertown, 830 F.2d at 1494. Damages were unavailable under the
statute or common law absent a showing of malice or lack of probable cause. See id.
Iowa's replevin statute differs from the one we invalidated in Watertown in that it
protects the debtor against losses from wrongful replevins that may be reasonably
foreseeable. The damages to Audio Odyssey could conceivably exceed the bond, but
that hardly relates to the ex parte nature of the proceeding. In any event, it is Iowa
replevin practice in general that is in question here, not the more bizarre circumstances
and events surrounding the execution of this particular writ of replevin.
Second, the debtor may routinely regain the taken property by posting a bond of
its own. See Iowa Code § 643.12. Audio Odyssey insists that such a right terminates
once the officer transfers the property to the creditor. Even so, the collateral in this
case was not transferred to the Bank until some five days after Deputy Norris executed
the writ. We conclude that a counter-bond could have been timely posted even under
Audio Odyssey's reading of the statute.7
6
Such damages may exceed the value of the property. See Universal C.I.T.
Credit Corp. v. Jones, 227 N.W.2d 473, 479-80 (Iowa 1975); see also Iowa Code §
643.17 (stating that judgment "shall also award such damages to either party as the
party may be entitled to for the illegal detention [of the property]").
7
We confess some skepticism about the financial ability of Audio Odyssey to
post a large bond, but theoretical ability is all that Watertown contemplates.
-10-
Third, the statute provides adequate judicial supervision of the replevin process.
A clerk may issue a writ of replevin only "upon direction of the court after notice and
opportunity for such hearing as [the court] may prescribe." Iowa Code § 643.5. The
replevin suit is governed by "ordinary proceedings" and presumptively ends in a
judgment that one party or the other is entitled to possess the property in question, with
or without an award of damages. Iowa Code §§ 643.2, 643.17. These features
distinguish Iowa's statute from the ones stricken in Watertown and Fuentes, which
permitted a clerk to issue a writ on his or her own. See Watertown, 830 F.2d at 1492;
Fuentes, 407 U.S. at 74.
Fourth, we discount Audio Odyssey's argument that the statute makes no
allowance for a prompt post-deprivation hearing. Iowa Code § 643.2 provides that a
replevin action shall be tried "by ordinary proceedings." We agree with the defendants
and the district court that the term "ordinary proceedings" incorporates general motion
practice under state law, specifically, Iowa Rule of Civil Procedure 100. We see
nothing in the statute to prevent a replevin defendant from filing a post-deprivation
motion to dismiss under Rule 100 (or a motion to vacate the writ of replevin) and
requesting a very prompt hearing from the court. In this case the judge was
immediately available by telephone, and would presumably have been procedurally
accommodating if plaintiff had an attorney prepared to deal with the matter.
The statute does specifically preclude defendants from asserting counterclaims
and joining "any cause of action not of the same kind." Iowa Code § 643.2. By
negative implication, then, it would not preclude a request for a prompt hearing in
support of a defense to a replevin suit. Cf. Guzman v. Western State Bank, 516 F.2d
125, 131 (8th Cir. 1975) (invalidating North Dakota attachment scheme, which
required debtor to post a bond in order to obtain a post-seizure hearing). Indeed, the
state court did permit Audio Odyssey to seek a "post-deprivation hearing" to address
whether "the method by which the Replevin Order was and has been enforced was
incorrect"-- the very sort of hearing that is now asserted to be statutorily forbidden.
We do not believe that the statutory provision for a prompt hearing must be
explicit. See Watertown, 830 F.2d at 1492 ("The South Dakota statute can be
-11-
interpreted as having provided for an immediate hearing.") (emphasis added). The
Iowa statute does not expressly provide for a hearing, much less a prompt one. Yet,
the statute is no different in this regard from the one upheld by the Supreme Court in
Mitchell.8 There, the Louisiana statute provided that "The defendant by contradictory
motion may obtain the dissolution of a writ of attachment or of sequestration, unless the
plaintiff proves the grounds upon which the writ was issued." La. Code Civ. Proc. Art.
3506 (unchanged since 1961). In upholding the statute, the Supreme Court observed
that the debtor "was not left in limbo to await a hearing that might or might not
eventually occur [as in Fuentes]. Louisiana law expressly provides for an immediate
hearing and dissolution of the writ 'unless the plaintiff proves the grounds upon which
the writ was issued.'" Mitchell, 416 U.S. at 618.9 Just as a Louisiana creditor must
"prove the grounds upon which the writ was issued," Iowa's statute places the burden
of proof upon the creditor throughout the proceedings. See Wilson v. Findley, 275
N.W. 47, 56 (Iowa 1937).
Although the wording of Iowa's procedural plan might well be improved by fine-
tuning, the worst that might be said of it is that a particular debtor might fail to persuade
a particular judge to hold a prompt hearing, notwithstanding constitutional
requirements. But this possibility does not render the statute invalid on its face. A
statute should not be stricken based upon a "worst case" scenario that "may never
occur." Ohio v. Akron Center for Reproductive Health, 497 U.S. 502, 512 (1990).
Nor is the statute unconstitutional as applied. It allows for a prompt post-deprivation
8
See also Watertown, 830 F.2d at 1491 ("Although the statute did not specify
when a hearing must occur, its language was, in essence, no different on this point from
the Louisiana sequestration statute which in Mitchell, the Supreme Court said provided
for an immediate post-deprivation hearing.").
9
The Court's interpretation of Louisiana's statute is noticeably generous, but we
will adhere to "the principle that courts are to adopt constructions of statutes that avoid
grave and doubtful constitutional questions." United States v. Rea, 223 F.3d 741, 744
(8th Cir. 2000).
-12-
hearing, but Audio Odyssey did not seek one.10 Audio Odyssey, then, had a meaningful
opportunity to be heard. See Hroch v. City of Omaha, 4 F.3d 693, 696 (8th Cir. 1993).
Its failure to seize that opportunity is not a denial of due process. See Marler v.
Missouri State Bd. of Optometry, 102 F.3d 1453, 1456-57 (8th Cir. 1996).11
Fifth and finally, the Iowa statute sufficiently requires a plaintiff to substantiate
the legal basis for obtaining an ex parte replevin, and we conclude that as a practical
matter there was constitutionally adequate compliance--the essential message reached
the judge. The Watertown framework speaks of "an affidavit accompanying the
petition for the writ of attachment which contains facts alleged by a person with
knowledge." 830 F.2d at 1491. Absent advance notice and a hearing, due process
requires that the creditor explain not only the debtor's delinquency, but also the exigent
circumstances that justify a summary deprivation. See Guzman, 516 F.2d at 130 ("In
the absence of an assertion in the affidavit that the creditor believes that the property
will be concealed, disposed of, or destroyed and the creditor's interest therein lost or
defeated, we do not believe that the ex parte issuance of the warrant of attachment is
justified. . . . If such an emergency situation does not exist, the creditor's interest in the
property probably will not be impaired by a short delay to provide notice and a hearing
to the debtor.").
10
The somewhat leisurely activity suggests that Audio Odyssey was already
fatally damaged when the sale was stopped -- if not before -- but that remains subject
to proof on remand.
11
It could even be argued that Audio Odyssey waived its due process attack by
not timely resorting to the available procedures that it now claims are inadequate--even
if its attorneys did not realize that an immediate hearing could be requested and
provided. See Krentz v. Robertson Fire Protection Dist., 228 F.3d 897, 904-05 (8th
Cir. 2000) (holding that plaintiff waived claim that termination violated due process,
where plaintiff (a) forewent administrative remedies held by the court to be available
under state law, and (b) "could have ascertained the applicability [of state
administrative law] from a reading of the statutes and pertinent cases"); Hroch, 4 F.3d
at 696 (holding that party waived argument against adequacy of pre-deprivation
remedies that he forewent).
-13-
We discern no infirmity in the Iowa statute as written. Iowa Code § 643.1requires a verified petition (functionally equivalent to an affidavit), specifying "[t]he
facts constituting the plaintiff's right to the present possession thereof, and the extent
of the plaintiff's interest in the property." At the very least, this language would require
a creditor to specify the nature and extent of the debt owing, the nature of any
delinquency, and the extent of the creditor's security interest. Cf. Fuentes, 407 U.S. at
74 ("Florida law automatically relies on the bare assertion of the party seeking the writ
that he is entitled to one . . ."). The statute does not expressly require the creditor to
specify the exigent circumstances justifying an ex parte proceeding, but that is not fatal.
For one thing, the statute could readily be so construed. Exigency would be among
"the facts constituting the plaintiff's right to the present possession," given the
defendant's due process right to continued possession in the absence of exigent
circumstances. See Guzman, 516 F.2d at 130. For another, the court has discretion to
provide advance notice and a hearing when the circumstances are not exigent. See
Iowa Code § 643.5 (providing that writ may issue "upon direction of the court after
notice and opportunity for such hearing as it may prescribe"). It appears from the
record that the state court judge in this case considered doing just that, then relented
after the Bank's attorney explained the danger that the collateral would be sold. The
statute, then, is not facially unconstitutional on this basis.12
Nor are we greatly troubled by the replevin petition in this case. The Bank
offered considerably more than a "bare assertion," see Fuentes, 407 U.S. at 74, that it
was entitled to the collateral. The petition described and attached the note of $200,000
that Audio Odyssey had executed, explained Audio Odyssey's obligations under the
note, described and attached the Business Security Agreement and the extent of the
Bank's security interest, and, correctly or otherwise, specified various alleged
delinquencies including $6,233.63 in monthly installments, failing to insure the
12
"A facial challenge to a legislative Act is, of course, the most difficult
challenge to mount successfully[.]" United States v. Salerno, 481 U.S. 739, 745 (1987).
Subject to certain exceptions not here relevant, "[T]he challenger must establish that
no set of circumstances exists under which the Act would be valid." Id.-14-
collateral, failing to pay state payroll and sales taxes, and failing to provide the Bank
with certain business records. Moreover, the petition explained the need for immediate
action. Among other things, the Bank alleged that "harm . . . will result from the sale,
transfer or assignment of the disputed property to the extent [that] such sale, transfer
or assignment is fraudulent or in derogation of the plaintiff's rights in such property."
We need not rule that such boilerplate language is adequate by itself, because attorney
Hofmann explained to the judge his specific concern that "collateral in which [the
Bank] had a security interest in was in danger of being sold with the proceeds not going
to satisfy their -- the debts that were owed to them." The Bank knew that Audio
Odyssey was planning an "annual sale" the following day, and that much or all of the
collateral was in danger of being sold. Hofmann's oral statement adequately apprised
the judge of this exigent circumstance.13
The only noticeable failing is that the petition was verified by the Bank's attorney
rather than "a person with knowledge." See Watertown, 830 F.2d at 1491. This defect
alone does not create a viable due process claim. Attorney Hofmann drafted the
petition in reliance on what his client told him. There is no indication that a petition
executed by a Bank official would have been narrower in scope or otherwise different
from Hofmann's, or that such a petition would not have recited the allegations essential
to the Bank's replevin claim (the debt, the security interest, the delinquencies, and the
exigency). The Bank's books apparently did reflect a deficiency, although plaintiff
claims a deposit was misapplied. Without some plausible showing that a properly
verified petition would have made a difference, we cannot say that its absence violated
due process under these particular facts. See id. ("[T]he necessary procedural
safeguards in a given case are determined by comparing the extent to which they further
the defendant's interest in avoiding a wrongful or arbitrary deprivation of his property
with their negative effect upon the interest of the state in providing protective creditor
13
Since the proceedings were ex parte, and the question is whether a creditor has
adequately explained to the court why a writ of replevin should issue, the fact that there
was an oral showing rather than a written one is not constitutionally significant.
-15-
remedies."). More importantly, it must be emphasized that due process does not
require any "particular form of procedure." Mitchell, 416 U.S. at 610 (citation
omitted). Rather, the question is whether the protections afforded Audio Odyssey (and
other replevin defendants in Iowa) are sufficient on balance, i.e., whether the statute "as
a whole" constitutionally accommodates the property interests of debtors and creditors.
Id. We hold that it does, both in general and in this case. Considering Audio
Odyssey's ability to obtain a prompt post-deprivation hearing, its adequate
indemnification under the statute, its ability to regain the property by posting its own
bond, and the Bank's detailed allegations (albeit through an attorney) that Audio
Odyssey was delinquent under the note and was planning to sell the collateral, we are
satisfied that any harm occasioned by the improperly verified petition was no more than
"slight" in comparison to the statute's "substantial advancement of the state interest in
protecting a creditor from a dissipation of collateral." Watertown, 830 F.2d at 1491.
We thus agree with the district court and with a summary statement by the Iowa
Supreme Court, sustaining the constitutionality of the replevin statute. See Interfirst
Bank of Dallas v. Hanson, 395 N.W.2d 857, 860 (Iowa 1986). We also agree with the
district court that due process was observed in the seizure of the personal property in
question. It may be, of course, that the Bank had no sound factual and legal basis for
seeking replevin, which is a matter we do not decide. That will presumably be litigated
in state or federal court in connection with a damage claim on the bond.
We have no need to approve the initial state court decision to issue an ex parte
order having the effect of stopping Audio Odyssey's "annual sale." Even if we might
suppose that discretion was poorly exercised, and that too much weight may have been
given to the assumed risk of the collateral's loss in the event of notice to the debtor,
what is involved in this portion of the case is the ordinary risk of judicial error, not a
substantial constitutional question of due process.
IV
-16-
The judicially unauthorized lockout of Audio Odyssey's real property is a more
troubling federal question, although perhaps less damaging.14 We must determine
whether there is a triable claim that Sergeant Barton and Deputy Norris committed a
constitutionally unreasonable seizure of the real property, whether the officers are
entitled to qualified immunity, and whether the Bank and its attorneys conspired with
the officers to violate Audio Odyssey's Fourth Amendment rights (and whether they
might prevail under some notion of "good faith" immunity). For the reasons set forth
below, we reverse the grant of summary judgment on these claims.
A
The Fourth Amendment prohibits unreasonable searches and seizures by law
enforcement officers, whether of a person or property. See Garner v. Buerger, 82 F.3d
248, 251 (8th Cir. 1996). A "seizure" of property occurs whenever "there is some
meaningful interference with an individual's possessory interests in that property."
Soldal v. Cook County, 506 U.S. 56, 61 (1992) (citation omitted). We believe the
officers seized Audio Odyssey's premises by entering the store, ordering those inside
to leave, arranging for the locks to be changed, and erecting "No Trespassing" signs,
thereby excluding the company's principals from the store's property. Such an
exclusion from one's property, even for a rather brief period, is "meaningful
interference" as a matter of law.
Somewhat less obvious is whether the seizure was objectively unreasonable. A
seizure of property that is unsupported by a warrant or other court order is
presumptively unreasonable within the meaning of the Fourth Amendment. See, e.g.,
id. at 68-69. The order and writ of replevin relied upon by Sergeant Barton and Deputy
Norris did not authorize a seizure of Audio Odyssey's real property. Rather, it directed
the officers to seize various enumerated types of personal property located at a specific
address. Although the writ and order listed a legal address, they did so only to describe
14
Whether plaintiff's six week exclusion from the empty shell of its store was
seriously damaging remains to be determined.
-17-
the location of the items to be seized, specifically, "All inventory, fixtures, accounts,
furniture, equipment and machinery on property described as follows [followed by
legal description]." This language cannot reasonably be read to authorize a seizure of
the electronics store--particularly in the context of a writ of replevin, which, time out
of mind, has authorized the seizure of personal rather than real property.15 Presumably
an officer may briefly secure real property for minutes or hours while seizing personal
property located thereon, in order to maintain the peace or even to prevent customers
or employees from absconding with the collateral. Compare Illinois v. McArthur, ___
U.S. ___, 121 S. Ct. 946 (2001) (permitting temporary seizure of homeowner while
officers obtained search warrant).16 But erecting (and failing to remove) "No
Trespassing" signs, changing the locks, and giving the keys to the Bank far exceeded
the scope of any temporary seizure that might be justified. Defendants do not even
argue that the replevin writ and order, fairly construed, conferred a right to seize the
real estate for the several days required to conduct an inventory and arrange for the
removal of personal property. They do contend, however, that they acted reasonably.
Defendants' reliance upon Johnson v. Outboard Marine Corp., 172 F.3d 531 (8th
Cir. 1999), is misplaced. There, we held that an erroneous seizure of personal property
is not necessarily an "unreasonable" one, and that the officer in that case had a
reasonable basis for seizing a boat and trailer that fell outside of a writ of execution.
Johnson did not purport to immunize all errant seizures; rather, the question is whether
the officer's mistake is objectively reasonable. See id. at 536-37; Dawkins v. Graham,
50 F.3d 532, 534 (8th Cir. 1995) ("[T]he Fourth Amendment's allowance for officers'
honest mistakes is limited to mistakes that are objectively reasonable."). That is the
15
Interestingly, a civil procedure manual kept by the Sheriff's Department defines
"replevin" as "the redelivery to the owner the possession of personal property which
is his and which is wrongfully detained from him and to which he has a right to
immediate possession" (emphasis added).
16
We also assume there is an adequate law enforcement reason for seizing real
property for a fairly long time to secure a crime scene, but here we are dealing with a
routine civil proceeding.
-18-
same question we ask today. Our answer differs from that reached in Johnson because
the facts of the two cases stand in sharp contrast. The writ of execution in Johnson
authorized the seizure of "any and all personal property of the judgment debtor (a
dissolved corporation) located at" the address of the corporation's secretary. While
executing the writ, an officer seized a boat and trailer that were later discovered to be
the property of the corporation's secretary and president rather than the corporation
itself. Various circumstances not here present made the officer's decision reasonable:
--The boat and trailer were not identifiable as property of one entity or another,
and were the same sort of property handled by the judgment debtor in the course of its
business.
--The officer had been told by a superior that, even if the property were not the
corporation's, the secretary of the corporation was not protected under state law from
an execution to satisfy a judgment against the corporation. We tacitly accepted that as
authorization similar to legal advice.
--The officer confronted the secretary when seizing the boat, and the secretary
was unable to produce any documentation of ownership for the boat or trailer.
In short, the officer in Johnson relied upon specific facts creating a reasonable
belief that the writ of execution authorized a seizure of the property at issue, while the
officers in this case did not. An officer's mere recitation of a mistaken belief does not
make the mistake "reasonable" as a matter of law, and we cannot agree that the seizure
of Audio Odyssey's real property was "reasonable" under the Fourth Amendment.17
B
17
As Deputy Norris's superior, Sergeant Barton is potentially liable as a
supervisor as well as individually, since he "directly participated in the constitutional
violation." Otey v. Marshall, 121 F.3d 1150, 1155 (8th Cir. 1997). We explain in Part
V, however, that Sergeant Barton's supervision of Deputy Norris is not itself
actionable. We also leave open the question of whether Deputy Norris could rely, for
some of his conduct, on advice from a superior--as in Johnson.
-19-
The more challenging question is whether the officers are entitled to qualified
immunity. "In resolving a case in which the defense of qualified immunity has been
raised, this Court must determine whether the appellees asserted a violation of a federal
right, whether that right was clearly established, and whether a reasonable official in
[the defendant's] position would have known that his conduct violated that right."
Walden v. Carmack, 156 F.3d 861, 868-69 (8th Cir. 1998). We believe not only that
Audio Odyssey has demonstrated a violation of a constitutional right, but that the right
in question is well established, namely, the Fourth Amendment's protection against
seizure of one's property in the absence of a warrant, an equivalent court order, or
circumstances justifying a recognized exception to the warrant requirement. See id. at
872 (upholding denial of qualified immunity, where officer allegedly seized items
outside the boundaries of that described in search warrant and did not posit a
reasonable belief that the items were located within such boundaries).
Finally, we examine whether a reasonable officer in Sergeant Barton or Deputy
Norris's position would have known that the seizure at issue violated the right in
question. The tests for Fourth Amendment legality and qualified immunity both use the
term "reasonable," but the two questions are distinct. A seizure comports with the
Fourth Amendment if it is objectively reasonable; one way for a seizure to be
objectively reasonable is for the officer to have a reasonable belief that a court order
allows the seizure. See, e.g., Johnson, 172 F.3d at 536-37. Qualified immunity, on the
other hand, somewhat expands the leeway already afforded by the substantive Fourth
Amendment law. It may not be useful to ask whether an officer's conduct is
"reasonably reasonable," but we do examine the conduct more deferentially at the
qualified immunity stage. An analogy might be drawn from the standard governing a
qualified immunity defense to a charge that an arrest was lacking in probable cause;
then, "the issue for immunity purposes is not probable cause in fact but arguable
probable cause." Habiger v. City of Fargo, 80 F.3d 289, 295 (8th Cir. 1996).
Whatever measure of deference is due Sergeant Barton and Deputy Norris, it
cannot immunize an error as significant as theirs. "Qualified immunity does not protect
plain incompetence." Dawkins v. Graham, 50 F.3d 532, 535 (8th Cir. 1995) (affirming
-20-
denial of qualified immunity to officers who, among other things, erroneously executed
a search warrant at 611 Adam Street rather than 611 Byrd Street); Wooley v. City of
Baton Rouge, 211 F.3d 913, 926-27 (5th Cir. 2000) (holding that officers who
delivered child from mother to grandparents under court order awarding temporary
custody to grandparents were not entitled to qualified immunity, where the order did
not direct officers to effect a transfer of custody, and state law required a separate civil
warrant for such transfers); Bins v. Artison, 721 F. Supp. 1034, 1038 (E.D. Wisc.
1989) (rejecting qualified immunity defense to due process claim and entering judgment
for plaintiff, where officer seized plaintiff's racing car when executing judgment against
other parties, without ascertaining car's owner), vacated in part on other grounds, Nos.
90-1149, 90-1339, 1991 WL 10625 (7th Cir. Feb. 4, 1991). The mere inclusion of
Audio Odyssey's legal address within a writ and order requiring the seizure of various
enumerated items on the premises does not colorably justify a seizure of the premises
themselves--even if one ignores the legal distinction between real and personal
property, the purpose of a replevin, and the distinct possibility that the officers did not
even harbor the claimed reasonable belief on the day in question.18 At the very least,
a zealous creditor's request for measures clearly exceeding those authorized by the
court should have given the officers pause, either to consider their actions more
carefully or to seek disinterested legal advice from the county attorneys they regularly
consult. "Where an official could be expected to know that certain conduct would
violate statutory or constitutional rights, he should be made to hesitate." Harlow v.
Fitzgerald, 457 U.S. 800, 819 (1982).
18
If the officers truly believed that the writ and order allowed the Bank to seize
the premises and use them to store the personal property, then it is unclear why moving
trucks would be necessary to remove the personal property (and why Sergeant Barton
asked attorney Hofmann if the Bank had arranged for such moving trucks). It is equally
likely -- and probably should be assumed on summary judgment -- that the officers
correctly understood the writ and order, but were persuaded by Hofmann and the Bank
to carry out a seizure beyond the one authorized by the court.
-21-
We are aware that certain practical arguments can be asserted in favor of the real
estate seizure. As the district judge and the dissent would have it, we also suppose that
seizure of the premises may have been the "sensible" thing to do, at least while taking
an inventory of the property. But to make this dispositive simply strong-arms away the
unquestioned legal right of Audio Odyssey to enjoyment of the empty premises,
however that may be valued at trial. It may be equally "sensible" to create a path
across the vacant, unused land of another when needed, even though consent has not
been given. But the right of expropriation and self-help is clearly limited. There was
no reason to doubt that Audio Odyssey's legal right to its property was being invaded
without judicial approval, for an indefinite period, and for an unauthorized purpose--be
it to store and inventory the collateral, to effectuate the Bank's desire to possess the
premises, or otherwise. We therefore reverse the grant of summary judgment to
Sergeant Barton and Deputy Norris on the basis of qualified immunity.19
C
A further aspect of the case concerns the length of the wrongful seizure for
which the officers and the other defendants are potentially liable. Audio Odyssey
contends that the premises were seized for six weeks; Deputy Norris changed the locks
and erected "No Trespassing" signs on July 14, 1995, and Dincer did not regain access
to the premises until the court's order of August 31, 1995--despite the certified letter
sent to the Sheriff's Department and the meetings between attorneys from Audio
Odyssey and the Bank, during which demands for the real estate were made. Audio
Odyssey contends that defendants are liable for the entirety of the company's exclusion
19
The facts at trial may differ from those we have presented, but any
reassessment of qualified immunity will ultimately be a question of law for the court.
See Buffkins v. City of Omaha, 922 F.2d 465, 472 n.16 (8th Cir. 1990); Garionis v.
Newton, 827 F.2d 306, 309 (8th Cir. 1987) (holding that district court erred by
submitting the ultimate issue of qualified immunity to the jury). Qualified immunity is
unavailable to the officers on the record before us as we have construed it.
-22-
from the premises, as well as the foreseeable consequences of that exclusion--including
the store's failure. Defendants insist that the plaintiffs should have more promptly
sought a judicial remedy, and we agree that Audio Odyssey could have gone to court
very quickly to seek immediate return of its real estate. In addition, defendants argue
that plaintiffs could have posted a bond to have possession restored, and the record
suggests that Audio Odyssey claims to have been financially able to do so.
The issues include whether the defendants proximately caused Audio Odyssey's
extended injuries, and beyond that, whether the injuries are more fairly attributable to
plaintiff's failure to promptly mitigate damages. Those are jury questions. "Causation
is generally a jury question unless, in a particular case, the question is so free from
doubt as to justify taking it from the jury." Ricketts v. City of Columbia, 36 F.3d 775,
779 (8th Cir. 1994) (citation and quotation omitted). The possibility of an intervening
cause does not generally defeat an inference of proximate cause as a matter of law. See
Trudeau v. Wyrick, 713 F.2d 1360, 1367 (8th Cir. 1983). Here, the question of who
caused the extended lockout is not free from doubt.20
D
We next consider the responsibility of various private defendants for seizing the
real property. Recovery is available under section 1983 only for violations of federal
rights committed by persons acting "under color of state law." Private conduct is
actionable under section 1983 under two conditions. First, the constitutional
deprivation at issue "must be caused by the exercise of some right or privilege created
by the State . . ." Lugar v. Edmondson Oil Co., 457 U.S. 922, 937 (1982) (describing
the right to seek a garnishment or attachment as qualifying). Second, the private party
20
Because of our reversal on the Fourth Amendment claim, we need not decide
whether a brief or extended seizure of the real estate violated Audio Odyssey's right to
procedural due process. On remand, such a claim (if pursued) may depend upon
whether the seizure is characterized as "random and unauthorized," or as the result of
established state procedures. See Hudson v. Palmer, 468 U.S. 513, 533 (1984);
Coleman v. Watt, 40 F.3d 255, 262 (8th Cir. 1994).
-23-
must have "acted together with or . . . obtained significant aid from state officials" or
engaged in conduct that is "otherwise chargeable to the State." Id.; Wyatt v. Cole, 504
U.S. 158, 162 (1992). The second element requires more than the private misuse of
a state statute (as alleged in the taking of the personal property in this case); a plaintiff
must show that the private party acted in concert with or obtained significant aid from
state officials who were themselves involved in a constitutional violation. See Hassett
v. LeMay Bank & Trust Co., 851 F.2d 1127, 1129-30 (8th Cir. 1988); Apostol v.
Landau, 957 F.2d 339, 343 (7th Cir. 1992). Otherwise stated, there must be a "meeting
of the minds" or a "mutual understanding" between a private party and public officials
to engage in conduct that violates the plaintiff's federal rights. Miller v. Compton, 122
F.3d 1094, 1098 (8th Cir. 1997).
Audio Odyssey has clearly made a sufficient showing to survive summary
judgment. A reasonable jury could find a "meeting of the minds" between Bank's loan
officer and vice-president Bradley and attorney Hofmann, on one hand, and Sergeant
Barton and Deputy Norris, on the other, to seize Audio Odyssey's real estate even
though the state court ordered no such thing. Indeed, on the present record, the idea
appears to have been Bradley's to begin with.
We are unpersuaded that the Bank, Bradley, and Hofmann are entitled to any
sort of immunity. Qualified immunity does not extend to private defendants who
conspire with public officials to violate constitutional rights--at least in the replevin
context. See Wyatt, 504 U.S. at 168-69. Wyatt reserved the question of whether such
private defendants might be entitled "to an affirmative defense based on good faith
and/or probable cause[,] or that § 1983 suits against private, rather than governmental
parties could require plaintiffs to carry additional burdens." Id. at 169. We have not
squarely addressed this question, although other circuits have answered it affirmatively.
See, e.g., Jordan v. Fox, Rothschild, O'Brien & Frankel, 20 F.3d 1250, 1276 (3d Cir.
1994); Wyatt v. Cole, 994 F.2d 1113, 1118 (5th Cir. 1993); Pinsky v. Duncan, 79 F.3d
306, 313 (2d Cir. 1996). The precise scope of "good faith" immunity accorded by
these cases is unclear.
-24-
We need not decide whether to recognize such a defense, or define its scope,
because doing so would not assist the private defendants. Any immunity that might
apply would be no broader than the qualified immunity accorded public officials. See
Wyatt, 504 U.S. at 167-69 (discussing rationale of public immunity and of extending
it to private parties). Hofmann and the Bank's view of the scope of the court's order is
no more reasonable than what is now claimed by Sergeant Barton and Deputy Norris.21
If Sergeant Barton and Deputy Norris are not entitled to qualified immunity, then those
who conspired with them are not entitled to its private sector analogue.
As a separate basis for affirmance, Hofmann and his firm offer an "Assignment
of Real Estate Lease and Agreement" signed by Dogan Dincer on behalf of Audio
Odyssey. The document purports to assign Audio Odyssey's lease to the Bank, but it
is unsigned by the store's landlord (one Frank Brown) or by any representative of the
Bank. In the event of default, the Assignment allows the Bank to enter the premises
without notice, and "using such force as may be necessary," to remove or sell all
collateral. Hofmann argues that the Assignment gave him a reasonable belief that
Audio Odyssey consented to the seizure of the real estate, and that changing the locks
arguably falls within the Assignment's allowance for "such force as may be necessary"
to remove the collateral. The district court did not rule on the Assignment's
significance, and the issue is not adequately briefed by the parties. We may affirm a
grant of summary judgment on any basis supported by the record, see Wilson v. Spain,
209 F.3d 713, 716 (8th Cir. 2000), but the record is not adequately clear in this
instance. The parties are free to urge their positions before the district court--hopefully
in greater detail.22
21
Although Bradley was not present, and perhaps had no opportunity to study the
documents, he had even greater notice that the store itself was not subject to seizure:
Sergeant Barton's initial statement that the replevin could not be accomplished without
contemporaneous removal of the personal property.
22
We observe that Fuentes rejected an argument similar to Hofmann's. See 407
U.S. at 95-96.
-25-
V
Audio Odyssey's remaining assignments of error are without merit. First, there
is no viable claim under either section 1983 or otherwise against SBA loan officer
Roger Hoffman. On behalf of the SBA, Hoffman authorized the Bank to accelerate
Audio Odyssey's loan and to seek a replevin. This act alone does not create liability--
regardless of whether Hoffman is alleged to have conspired with the state officials to
violate Audio Odyssey's constitutional rights, or whether he is charged with violating
them himself as a federal official. The replevin of the personal property was not
unconstitutional in the first place. As for the real property, there is no contention that
Hoffman had advance knowledge of any scheme to seize Audio Odyssey's premises
without court authorization, or that he participated in such a scheme. Accordingly,
there was no "mutual understanding" between Roger Hoffman and the other defendants
to violate Audio Odyssey's rights. Miller v. Compton, 122 F.3d 1094, 1098 (8th Cir.
1997). At most, Hoffman's decision might have breached the SBA's agreement with
Audio Odyssey and the Bank, but that is not a constitutional violation and cannot
support a viable claim under Bivens v. Six Unknown Named Agents of Federal Bureau
of Narcotics, 403 U.S. 388 (1971). See Buford v. Runyon, 160 F.3d 1199, 1203 n.6
(8th Cir. 1998) (stating that Bivens claims lie "for violations of constitutionally
protected rights"); Schlock v. Beatrice Production Credit Assoc., 596 F.2d 278, 281
(8th Cir. 1979) (no constitutional violation "when a governmental agency breaches a
contract it has entered into in the commercial world").
We also reject the supervisory claims against Scott County Sheriff Michael M.
Bladel. The suit against Bladel in his official capacity is a suit against the municipality
he serves. See Spencer v. Knapheide Truck Equip. Co., 183 F.3d 902, 905 (8th Cir.
1999), cert. denied, 528 U.S. 1157 (2000). The County may be liable for
unconstitutional acts that implement a county policy or are invoked pursuant to a
governmental custom; the custom or policy must be the "moving force" behind the
constitutional violation. Patzner v. Burkett, 779 F.2d 1363, 1367 (8th Cir. 1985).
Audio Odyssey claims that Bladel did not adequately supervise the officers under him.
A failure to train officers may amount to a "policy," but this variety of claim generally
-26-
requires the municipality to have prior notice of its officers' misbehavior and to act with
deliberate indifference thereafter. See id. Audio Odyssey cites no evidence of previous
Fourth Amendment violations committed by Scott County officials that resemble the
one committed by Deputy Norris and Sergeant Barton, nor any evidence that the
County had notice of such misconduct. Nor was the danger of Deputy Norris's and
Sergeant Barton's seizure "so obvious" that a single occurrence will make the County
liable for not training its employees to prevent it. See Board of County Comm'rs v.
Brown, 520 U.S. 397, 409 (1997); City of Canton v. Harris, 489 U.S. 378, 390 (1989).
Finally, Audio Odyssey points to the County's "policy" of allowing private parties to
complete a "Directions to Sheriff" form to aid officers in serving and executing writs
and orders. This argument misstates the County's policy, which requires the officer to
follow the writ or order if it conflicts with the "Directions to Sheriff." For that matter,
the "policy" of using "Directions to Sheriff" forms is not itself unconstitutional, as an
express policy or affirmative custom must be to create municipal liability. See Patzner,
779 F.2d at 1367.
Equally without merit is the supervisory claim against Sheriff Bladel in his
individual capacity. Sheriff Bladel can be liable for Deputy Norris and Sergeant
Barton's constitutional violation only if he "directly participated in the constitutional
violation, or if his failure to train or supervise the offending actor caused the
deprivation." Otey v. Marshall, 121 F.3d 1150, 1155 (8th Cir. 1997) (citation and
quotation omitted). The Sheriff did not know about this replevin until he was notified
of this lawsuit, and there is no contention that he directly participated in the writ's
execution. To be individually liable for failing to train his subordinates, Sheriff Bladel
must have "received notice of a pattern of unconstitutional acts committed by
subordinates . . ., demonstrated deliberate indifference to or tacit authorization of the
offensive acts . . ., [and] failed to take sufficient remedial action"--and the failure must
have proximately caused Audio Odyssey's injury. Id. As explained above, there is no
showing of previous illegalities that place Sheriff Bladel on the requisite notice. The
supervisory claim against him necessarily fails. A similar claim against Sergeant
Barton for improperly supervising Deputy Norris fails for the same reason.
-27-
VI
For the foregoing reasons, the judgment of the district court is affirmed in part,
reversed in part, and remanded for further proceedings consistent with this opinion.23
LOKEN, Circuit Judge, dissenting in part.
As the Court's thorough opinion makes clear, hindsight suggests that all the
parties to this July 1995 dispute acted unreasonably. The Bank sought a replevin order
it was unprepared to implement and then insisted its borrower's store premises be
immediately seized. The County Sheriffs padlocked store premises that were not
encompassed by the replevin order without discussing with Audio Odyssey whether
less drastic measures would protect the Bank's interest in the replevined collateral. And
Audio Odyssey dallied for weeks rather than take prompt legal action to recover the
store premises.
In my view, the key to unraveling these events, at least for purposes of Audio
Odyssey's § 1983 claims, lies in the breadth of the replevin order -- "All inventory,
fixtures, accounts, furniture, equipment and machinery" found on the store premises.
The premises were part of a shopping center. Audio Odyssey was a tenant, not the
owner, of those commercial premises. Audio Odyssey's only interest in possession of
the premises was to operate its retail store. If the store was stripped of all the personal
23
Insofar as there may be individualized matters that are not referred to in this
opinion and that the parties have not briefed, such as the liability of defendants Chris
A. Pieper and the law firm, Anderson & Nelson, P.C., nothing in this opinion is
intended to preempt issues that would otherwise be available for trial--so long as those
issues are resolved in a manner consistent with the opinion. In addition, the district
court is free to reconsider its dismissal of Audio Odyssey's pendent claims in light of
our resolution of the federal claims. Damages from the inability to conduct plaintiff's
sale as scheduled cannot, of course, be litigated further except to the extent authorized
by state law.
-28-
property listed in the court order, it would obviously be inoperable, at least until Audio
Odyssey replaced the inventory, fixtures, furniture, equipment, and machinery.
The replevin order gave the Bank the right to immediate possession of all the
named personal property. If the order thereby authorized the County Sheriffs to
prevent Audio Odyssey from selling the replevied property before the order could be
executed -- and the court now agrees that it did -- then Audio Odyssey's right as a
tenant to continuing possession of the store premises was of no immediate value. That
is why it was reasonable for the Bank as secured creditor to urge that Audio Odyssey's
store operations cease until the replevin order could be executed. That is why it was
objectively reasonable for Sergeant Barton to review the breadth of the replevin order
and conclude that it authorized the County Sheriffs to close the store for a reasonable
period of time. And that is why Audio Odyssey made no effort to reaccess the store
premises until August, after its debtor-creditor negotiations with the Bank had proven
unsuccessful.
The district court thoroughly analyzed the applicable constitutional principles
and, mindful of the practical considerations that underlie any Fourth Amendment
reasonableness inquiry, concluded that defendants are entitled to summary judgment
dismissing all § 1983 claims. Applying its own more selective hindsight, the court
reverses in part, thereby casting doubt on the accuracy of the Supreme Court's
prediction that, when creditors obtain state court orders before seizing property, the
Fourth Amendment "should not foment a wave of new litigation in the federal courts."
Soldal v. Cook County, 506 U.S. 56, 72 (1992). In my view, permitting this case to
proceed further in federal court is both wrong and regrettable. Accordingly, I
respectfully dissent from Part IV of the court's opinion. I would affirm the judgment
of the district court.
-29-
A true copy.
Attest:
CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.
-30-