United States District Court, E.D. Missouri, Eastern Division
MEMORANDUM AND ORDER
CATHERINE D. PERRY, District Judge.
Stearns Bank and Amegy Bank filed cross motions for summary judgment on their claims in this interpleader, seeking a declaration of rights to the Settlement Payment made by Bayer to Texana Rice Mill that now resides in this court's registry. On March 31, 2015, this court held that Amegy had a superior claim, denied Stearns Bank's motion for summary judgment, and granted Amegy's. The action is back before this court on two motions filed by Stearns Bank.
Stearns Bank first asks this court to reconsider its Order and instead hold that it has a superior claim to the Settlement Payment. A review of the Order reveals two sections that require amendment. First, this court misstated the law of priorities under the Uniform Commercial Code. Second, this court's analysis of Stearns Bank's interest in general intangibles requires amendment for clarity. However, those amendments do not change the ultimate outcome of the motions for summary judgment. Because Stearns Bank has not demonstrated a sufficient basis for altering or amending the Order in its favor, this court will deny the motion to reconsider.
Stearns Bank also requests a stay of this court's Order that the Settlement Payment funds be disbursed from this court's registry and paid to Amegy. Because this case involves legal issues for which there is little Eighth Circuit precedent and because a stay pending appeal would not change the status quo, this court will grant Stearns Bank's motion and issue a stay of disbursement.
In 2006, Texana Rice Mill, Ltd., and Texana Rice, Inc. (collectively, Texana), sued numerous Bayer entities and associated entities (collectively, Bayer) related to the spread of Bayer's genetically modified rice into the United States rice supply. Texana asserted tort claims alleging, inter alia, lost profits and damage to its equipment, facilities, and goodwill ("the Bayer Suit"). Texana and Bayer settled the case in September 2012, and Bayer brought this interpleader action to adjudicate the competing claims of Texana's creditors against the Settlement Payment. The contested portion of the Settlement Payment, which now resides in this court's registry, amounts to approximately $933, 697.90. Only two of the interpleaded creditors are relevant to the instant motion: Stearns Bank, N.A., and Amegy Bank, N.A. Both claim an amount exceeding the Settlement Payment.
Stearns Bank lent $2.65 million to Texana in September 2002. As collateral, Texana pledged its fixtures, chattel paper, equipment, and general intangibles (whether then existing or thereafter acquired) and all proceeds thereof. Stearns Bank filed a Uniform Commercial Code financing statement describing the collateral on September 20, 2002, and it filed amendments and continuation statements in 2003, 2007, and 2012. After Texana defaulted on the loan, Stearns Bank sued in state court, where it obtained a final summary judgment against Texana on January 21, 2010, in the amount of $3, 161, 405.94 plus attorney's fees and interest. Stearns Bank foreclosed upon the Deed of Trust and the Stearns Security Agreement on June 1, 2010; three days later, it bought all collateral at the foreclosure sale at the sale price of $268, 000. ECF No. 78-6. Stearns Bank filed its Application for a Writ of Garnishment against the Bayer Entities in the District Court of Harris County, Texas, on October 4, 2012; the writ was issued three days later and then served on the Bayer entities on October 12 and 15, 2012.
Amegy lent Texana $2 million on February 1, 2006, secured by collateral including Texana's inventory, accounts, equipment, furniture, and fixtures, among others (the "Amegy Loan"). Texana defaulted on the Amegy Loan in 2006. On June 8, 2007, Texana and Amegy executed a Forbearance Agreement, wherein Amegy agreed to forbear its collections rights on the Amegy Loan in exchange for a security interest in the Bayer Suit, including any recovery or settlement therefrom (the "Claims Agreement"). On June 13, 2007, Amegy filed a UCC financing statement covering the Claims Agreement. As of April 30, 2014, the unpaid principal balance on the Amegy Loan totaled $1, 935, 749.93.
Thus, the relevant timeline is:
September 2002 - Stearns Bank obtains its security interest in Texana's fixtures, equipment, general intangibles, including such collateral later acquired and proceeds thereof
September 2002 - Stearns Bank files a UCC financing statement covering the above collateral
November 2006 - Texana sues Bayer
June 2007 - Amegy perfects its security interest in the Bayer Suit
January 2010 - Stearns Bank obtains final summary judgment against Texana after ...