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United States v. Massey

United States District Court, D. South Carolina, Greenwood Division

February 3, 2017

United States of America, Plaintiff,
v.
Benjamin Roy Massey, Havird Oil Co., J. Brandon Crawford, Carter Trucking Co. South Carolina Department of Revenue, Branch Banking & Trust Co. of South Carolina, and Saluda County, Defendants.

          DECREE AND JUDGMENT OF FORECLOSURE AND SALE

          Bruce Howe Hendricks United States District Judge.

         BACKGROUND AND FACTUAL/LEGAL DETERMINATIONS

         Plaintiff commenced this action to foreclose on property located in Saluda County, South Carolina, for failure to repay loans made through the United States Department of Agriculture. Defendants in this suit include the debtor, Benjamin Roy Massey ("Massey" or "debtor"), and several parties with lien interests in the debtor's real and/or personal property.

         Plaintiffs action stems from four promissory notes. Massey executed the first note ("Note 1") on May 29, 2007, promising to pay to the order of the United States the sum of $188, 400.00 at an interest rate of 5.125% per annum. (ECF No. 7-2 at 1-3.) Massey executed the second note ("Note 2") on June 11, 2007, promising to pay to the order of the United States the sum of $200, 000.00 at an interest rate of 5.125% per annum. (Id. at 4-6.)[1] Massey executed the third note ("Note 3") on July 28, 2008, promising to pay to the order of the United States the sum of $105, 000.00 at an interest rate of 5.000% per annum. (Id. at 7-10.) Massey executed the fourth note (“Note 4”) on July 28, 2008, promising to pay to the order of the United States the sum of $75, 000.00 at an interest rate of 3.625% per annum.[2] (Id. at 11-14.)

         Plaintiff has pled that Massey, in order to provide security for the loans, granted and delivered to Plaintiff three real estate mortgages, dated May 29, 2007, June 11, 2007, and July 28, 2008, covering certain real property situated in Saluda County, South Carolina. (Am. Compl., ECF No. 7 ¶ 8.) Plaintiff represents: (1) that the tract of land secured by the mortgages dated May 29, 2007 and June 11, 2007 was foreclosed upon by South Carolina Rural Rehabilitation Corporation (“SCRRC”) and sold on September 6, 2011; (2) that Plaintiffs mortgages on that tract of land were subordinate to SCRRC's mortgage; and (3) that after SCRRC's mortgage was paid off, Plaintiff received surplus proceeds from the foreclosure in the amount of $158, 620.54, which were applied to Massey's outstanding balance owed to Plaintiff.[3] The mortgage filed on July 28, 2008 (“the mortgage”) secures the property that is the subject of this action and is of record in the Office of the Clerk of Court for Saluda County, South Carolina in Book 849, at Page 7. (ECF No. 7-3.) The mortgage secures two tracts of land, more specifically described in Exhibit A thereto. (See Id. at 5.)

         To further secure his indebtedness owed Plaintiff, Massey executed security agreements dated May 29, 2007, June 11, 2007, and July 28, 2008, which granted to Plaintiff a security interest in beef cows, dairy cows, and bred heifers, then owned or thereafter acquired, together with all increases, replacements, substitutions, and additions thereto, as well as a security interest in certain crops grown on acreage located in Saluda County, and all equipment and fixtures associated with the dairy barn. (ECF No. 7-4.) Plaintiff has plead that it perfected its security interest by filing two financing statements, duly recorded in the Office of the Secretary of State of South Carolina on June 4, 2007 and July 30, 2008, [4] a continuation statement on April 11, 2013, also duly recorded (see ECF No. 32-5 at 4), and a fixture filing, duly recorded in the Office of the Saluda County Clerk of Court on July 28, 2008 (see Id. at 1-3).

         Plaintiff filed this suit on January 15, 2016, claiming that Massey defaulted on the loans, and that Plaintiff is therefore entitled to: (1) judgment on the debt; (2) foreclosure on the real property; (3) foreclosure on the personal property; and (4) costs and expenses, including reasonable attorney fees. The initial complaint alleges the following competing lien interests in Massey's property: (1) Havird Oil Co. (“Havird”) may have a claim by virtue of a judgment dated November 24, 2009 and recorded December 3, 2009; (2) J. Brandon Crawford (“Crawford”) may have a claim by virtue of a judgment dated August 2, 2010 and recorded August 5, 2010; (3) Carter Trucking Co. may have a claim by virtue of a judgment dated September 20, 2010 and recorded September 30, 2010; (4) the South Carolina Department of Revenue (“SCDOR”) may have a claim by virtue of tax liens recorded January 14, 2010, August 4, 2010, and an unpaid balance for 2015; (5) Branch Banking & Trust Co. of South Carolina (“BB&T”) may have a claim by virtue of a deficiency judgment recorded June 7, 2011; and (6) the Internal Revenue Service may have a claim by virtue of a federal tax lien recorded on August 31, 2012. (ECF No. 1 ¶¶ 12-17.)

         Plaintiff filed an amended complaint on February 1, 2016, removing Martha Ann Massey as a defendant and adding Saluda County as a defendant. The amended complaint alleges an additional competing lien interest in Massey's property: Saluda County may have a claim as a result of unpaid property taxes in Massey's name, owed to Saluda County for the year 2015. (ECF No. 7 ¶ 18.)

         All defendants were served with the summons, complaint, and amended complaint; only Crawford and SCDOR filed answers (ECF Nos. 10; 12; 17). On August 8, 2016, Plaintiff filed a motion for default judgment and request for a damages hearing (ECF No. 32). None of the defendants responded to Plaintiff's motion for default judgment and request for a damages hearing.

         Having reviewed the evidence and the entire record in this case, the Court concludes as follows:

         1. Massey has defaulted on the obligations set out in Note 1, Note 2, Note 3, and Note 4.

         2. Massey's refusal to pay the amount owed required Plaintiff to hire counsel and incur costs to collect on the notes. Since the inception of the action, Plaintiff's counsel have assumed responsibility for the institution of this action and have searched and updated the title on the real property from the date the current owner received the property, or the date the mortgages were executed, to the date of the filing of the lis pendens. Plaintiff's counsel have been responsible for the preparation of the following:

(1) Lis pendens;
(2) Summons and Complaint;
(3) Amended Complaint;
(4) Motion for Default Judgment and Request for Damages Hearing;
(5) Proposed Decree of Foreclosure and Sale;
(6) Other documents as applicable pertaining to service and ...

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