United States District Court, E.D. Missouri, Eastern Division
CATHERINE D. PERRY, UNITED STATES DISTRICT JUDGE
brought this interpleader action to determine its obligations
with regard to a settlement reached with Texana Rice Mill in
another suit. Bayer and Texana settled Texana's
claims in that action (the Bayer Settlement), but
Texana's creditors had competing interests in the
settlement funds. Bayer therefore paid the funds into this
Court's registry. After disbursement of certain
undisputed amounts and receipt of a partial refund, the
registry now contains the principal sum of $977, 269.90,
representing the Net Settlement to be disbursed in this
action. The two remaining claimants, Stearns Bank National
Association and Amegy Bank National Association, each assert
claims greater than the Net Settlement.
matter is before me on remand from the Eighth Circuit Court
of Appeals. Bayer CropScience, LLC v. Stearns Bank
Nat'l Ass'n, 837 F.3d 911 (8th Cir. 2016). On
Stearns Bank's appeal of my grant of summary judgment to
Amegy Bank, the Eighth Circuit held that Stearns Bank had a
continued interest in the Bayer Settlement to the extent the
settlement was payment for damage to Stearns Bank's
original collateral, regardless of its foreclosure on the
collateral. Id. at 915. The court of appeals
therefore remanded the matter for me to determine what part
of the sum in the registry constitutes proceeds of Stearns
Bank's original collateral and what part does not.
Id. at 917.
remand, the issue was tried to the Court in a bench trial.
Upon consideration of the evidence and testimony adduced at
trial, this Court's own orders and records, and the law,
I conclude that 39.78% of the Bayer Settlement - or $765,
267.75 - constitutes the proceeds of Stearns Bank's
original collateral for which Stearns Bank has a priority
interest as payment for damage to the original collateral.
Accordingly, Stearns Bank shall recover $765, 267.75 of the
Net Settlement from the Court's registry. Amegy Bank
shall recover the amount of Net Settlement that does not
constitute proceeds of Stearns Bank's original
collateral, that is, $212, 002.15.
findings of fact and conclusions of law follow.
2006, Texana Rice Mill, Ltd., and Texana Rice, Inc.
(collectively, Texana), sued numerous Bayer entities and
associated entities (collectively, Bayer) relating to the
spread of Bayer's genetically modified rice into the
United States rice supply. Texana asserted several tort
claims alleging that Bayer's conduct caused Texana to
suffer, inter alia, lost profits and damage to its
equipment, facilities, and goodwill (the Bayer Suit). Texana
and Bayer settled the case in September 2012, whereupon Bayer
agreed to pay a total of $2, 137, 500 in exchange for
Texana's agreement to release its claims. Ten percent
(10%) of this agreed payment was not considered to be part of
any recovery, proceeds, or assets of Texana, however, but
instead was to be held back and set aside for common benefit
fees and costs under the MDL's Common Benefit
Order. Accordingly, the amount of the settlement
that represented Texana's damages was $1, 923, 750 (the
the Bayer Suit settled, Texana owed separate debts to Stearns
Bank and Amegy Bank arising from the following transactions
September 13, 2002-Stearns Bank made a $2.65 million
loan to Texana.
This loan was secured, in part, by a Commercial Security
All Fixtures All Chattel Paper, Equipment and General
INVENTORY AND ACCOUNTS RECEIVABLE)
[including] all the following, whether now owned or hereafter
acquired, whether now existing or hereafter arising, and
(A) All accessions, attachments, accessories, tools, parts,
supplies, replacements of and additions to any of the
collateral described herein, whether added now or later.
(B) All products and produce of any of the property described
in this Collateral section.
(C) All accounts, general intangibles, instruments, rents,
monies, payments, and all other rights, arising out of a
sale, lease, or other disposition of any of the property
described in this Collateral section.
(D) All proceeds (including insurance proceeds) from the
sale, destruction, loss, or other disposition of any of the
property described in this Collateral section, and sums due
from a third party who has damaged or destroyed the
Collateral or from that party's insurer, whether due to
judgment, settlement or other process.
(E) All records and data relating to any of the property
described in this Collateral section, whether in the form of
a writing, photograph, microfilm, microfiche, or electronic
media, together with all of Grantor's right, title and
interest in and to all computer software required to utilize,
create, maintain, and process any such records or data on
Stearns Bank perfected its security interest by filing a
Uniform Commercial Code (UCC) Financing Statement with the
Texas Secretary of State.
February 1, 2006-Amegy Bank loaned Texana $2
million. Texana defaulted on the Amegy Bank loan in 2006.
November 8, 2006-Texana brought its state court
action against Bayer for the contamination of Texana's
inventory and property by the genetically modified rice.
June 8, 2007-Texana executed a written Forbearance
Agreement with Amegy Bank. Pursuant to this agreement, Amegy
Bank agreed to forbear on certain of its contractual and
legal rights, and Texana in return gave Amegy Bank a security
interest in its Bayer Suit, a commercial tort claim.
June 13, 2007-Amegy Bank perfected its security
interest in the commercial tort claim by filing a UCC
Financing Statement of public record.
January 21, 2010-A Texas state court entered final
summary judgment against Texana for Texana's default on
the Stearns Bank loan.
June 1, 2010-Stearns Bank foreclosed on its Deed of
Trust and security agreement. It later purchased all of the
existing collateral sold at the ...