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Oakley Grains, Inc. v. Shumate

United States District Court, E.D. Arkansas, Western Division

September 24, 2018

OAKLEY GRAINS, INC., et al. PLAINTIFFS
v.
GARY SHUMATE, et al. DEFENDANTS

          ORDER

          KRISTINE G. BAKER UNITED STATES DISTRICT JUDGE

         Before the Court are several motions filed by interpleader plaintiffs Oakley Grain, Inc., and Bruce Oakley, Inc. (collectively “Oakley plaintiffs”). Before the Court are Oakley plaintiffs' motion to tender funds and for an injunction under 28 U.S.C. § 2361, attorney fees, and costs; motion for attorney fees and court costs; first amended motion for attorney fees and court costs; and motion for partial default judgment against interpleader defendant Jimmy Jon Weinmiller Jr. (Dkt. Nos. 19, 20, 22, 24, 38). Separate interpleader defendants Gary Shumate and G2 Terra Firma, LLC (“G2”), responded to the motions for preliminary injunction and attorney fees and court costs (Dkt. Nos. 26, 27, 28). Also before the Court is interpleader defendant Farm Credit Services of America's (“FCSA”) motion to dismiss plaintiffs' interpleader complaint (Dkt. No. 34). Oakley plaintiffs responded to FCSA's motion to dismiss (Dkt. No. 36).

         For the following reasons, the Court grants Oakley plaintiffs' motion to tender funds and for an injunction under 28 U.S.C. § 2361, attorney fees, and costs; motion for attorney fees and court costs; and first amended motion for attorney fees and court costs (Dkt. No. 19, 20, 22, 24). The Court refers the motion for partial default judgment against defendant Mr. Weinmiller to the Clerk of Court for consideration (Dkt. No. 38). The Court grants FCSA's motion to dismiss plaintiffs' interpleader complaint (Dkt. No. 34).

         I. Factual And Procedural Background

         This is an interpleader action pursuant to 28 U.S.C. § 1335. Oakley plaintiffs are corporations located in Arkansas (Dkt. No. 1, ¶ 1). Oakley Grain, Inc., is a United States Department of Agriculture (“USDA”) licensed grain warehouse (Id.). Oakley plaintiffs allege that in the course and scope of their business they have come into possession of soybeans, in which interpleader defendants may claim an interest (Id., ¶ 11). Oakley plaintiffs claim that they are a mere stakeholder and, except for warehouse liens for storage, do not claim an interest in the grain held or proceeds of the grain (Id.). Oakley plaintiffs further claim that they have reasonable concerns and fears of possible exposure to multiple and contradictory or offsetting claims to the grain or grain proceeds; desire to deposit the grain or grain proceeds with the Court, pursuant to § 1335; and desire to withdraw from the proceedings (Id.).

         Oakley plaintiffs allege that, on October 27, 2017, four loads of soybeans were delivered to Oakley plaintiffs by or on behalf of interpleader defendants Mr. Shumate or G2 (Id., ¶ 12, Ex. 1-4). Oakley plaintiffs allege that they received a claim on soybeans from interpleader defendant Larry J. Pribil, a/k/a Jerome Pribil, on October 27, 2017 (Id., ¶ 14, Ex. 5). Oakley plaintiffs also allege that they received a Farm Products Security Interest Notice from FCSA (Id., ¶ 15, Ex. 6). FCSA's Security Interest Notice was prepared on August 15, 2017, and states that FCSA claims a security interest in soybeans, along with several other farm products, of Mr. Pribil and interpleader defendant JP Livestock, Inc. (“JP Livestock”) (Id., Ex. 6).

         Oakley plaintiffs describe the specific res in controversy as $54, 053.00, which is the priced proceeds of 5, 762.12 bushels of soybeans that were delivered to Oakley plaintiffs by Mr. Shumate or G2 (Dkt. No. 19, ¶ 3). According to the complaint, Mr. Shumate, G2, and Mr. Weinmiller are residents of Arkansas (Dkt. No. 1, ¶¶ 2, 3, 8). Mr. Pribil, JP Livestock, and FCSA are residents of Nebraska (Dkt. No. 1, ¶¶ 4, 5, 6, 7).

         After filing their complaint (Dkt. No. 1), Oakley plaintiffs filed a motion to tender funds and for an injunction under 28 U.S.C. § 2361, attorney fees, and costs (Dkt. Nos. 19, 20). They subsequently filed additional motions for attorney fees (Dkt. Nos. 22, 24). Mr. Shumate and G2 responded (Dkt. Nos. 26-28). FCSA filed a motion to dismiss the interpleader complaint as to FCSA (Dkt. No. 34), to which Oakley plaintiffs responded (Dkt. No. 36).

         Mr. Weinmiller has not answered or otherwise responded to Oakley plaintiffs' complaint. Oakley plaintiffs served Mr. Weinmiller individually (Dkt. No. 18). Oakley plaintiffs have now filed a motion for partial default judgment against Mr. Weinmiller (Dkt. No. 38).

         II. Subject Matter Jurisdiction

         In their complaint, Oakley plaintiffs maintain that they are a mere stakeholder and, except for warehouse liens for storage, do not claim an interest in the grain held or proceeds of the grain, as described in the complaint (Dkt. No. 1, ¶ 11). Oakley plaintiffs assert that they have reasonable concerns and fears of possible exposure to multiple and contradictory or offsetting claims to the grain or grain proceeds (Id.). Oakley plaintiffs desire to deposit the grain or grain proceeds with the Court, pursuant to 28 U.S.C. § 1335, and withdraw from the proceedings (Id.).

         Federal statutory interpleader applies where a plaintiff is in possession of “money or property of the value of $500 or more” and “[t]wo or more adverse claimants, of diverse citizenship . . . are claiming or may claim to be entitled to such money or property. . . .” 28 U.S.C. § 1335; see State Farm Fire & Cas. Co. v. Tashire, 386 U.S. 523, 530 (1967). “This provision has been uniformly construed to require only ‘minimal diversity,' that is, diversity of citizenship between two or more claimants, without regard to the circumstance that other rival claimants may be co-citizens.” State Farm, 386 U.S. at 530.

         Interpleader is a two-stage process. During the first stage, the court decides whether interpleader is available by determining “whether the prerequisites to rule or statutory interpleader have been met by examining such things as the citizenship of the litigants, the merits of the asserted threat of multiple vexation, and, if interpleader is sought under the statute, the sufficiency of the stakeholder's deposit or bond.” Charles Alan Wright, et al., 7 Fed. Prac. & Proc. Civ. § 1714 (3d ed.) (West 2013). The Court then proceeds to the second stage to determine the respective rights of the claimants to the fund at issue. Id.; United States v. High Tech. Products, Inc., 497 F.3d 637, 641 (6th Cir. 2007). Discharge is available at the conclusion of the first stage.

         Once the Court decides that interpleader is available, “it may issue an order discharging the stakeholder, if the stakeholder is disinterested, enjoining the parties from prosecuting any other proceeding related to the same subject matter, and directing the claimants to interplead . . . .” Charles Alan Wright, et al., 7 Fed. Prac. & Proc. Civ. § 1714 (3d ed.) (West 2013). When the stakeholder does not assert a claim to the stake, “the stakeholder should be dismissed immediately following its deposit of the stake into the registry of the court. That dismissal should take place ...


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