United States District Court, D. Idaho
In re RYAN CLIFFORD BRADFORD and JUDY KAY BRADFORD, dba PITCHFORK CATTLE CO., Debtors.
BANK OF EASTERN OREGON, a national banking association, Defendant. RYAN CLIFFORD BRADFORD and JUDY KAY BRADFORD, dba PITCHFORK CATTLE CO., Plaintiffs,
MEMORANDUM DECISION AND ORDER
Lynn Winmill U.S. District Court Judge
the Court is Plaintiff Ryan and Judy Bradford's Motion to
Withdraw the Reference (Dkt. 1) and Motion to Transfer Venue
(Dkt. 4). The Court will grant the motion to withdraw the
reference to the extent plaintiffs ask the Court to withdraw
the reference when the case is ready for trial but will deny
the motion to the extent an immediate withdrawal is sought.
The bankruptcy court will preside over all pretrial matters
in the proceeding, including the pending motion to transfer
November 2017, Ryan and Judy Bradford filed a chapter 12
bankruptcy petition in this District. A plan of
reorganization has not been confirmed, and the bankruptcy
court has sua sponte scheduled a dismissal hearing
for January 9 and 10, 2019. Several months before that
hearing was scheduled, the Bradfords filed an adversary
complaint against one of their creditors, the Bank of Eastern
Oregon (“BEO” or “the bank”). The
Bradfords now ask this Court to withdraw the reference and
transfer the adversary proceeding to the District of Oregon.
The Adversary Complaint
their adversary complaint, the Bradfords allege various
state-law claims against BEO, including breach of contract,
fraud, breach of fiduciary duty, negligence, unjust
enrichment, intentional interference with economic relations,
accounting, and defamation. The claims are based on the
following alleged facts:
Bradfords operate a cattle ranch in Malheur County, Oregon.
For several years, they financed their operation with loans
from BEO. Every year between June 2010 and March 2016, the
bank approved a revolving line of credit. The Bradfords would
use monies they received from cattle sales to pay down their
loans. The Bradfords remained current on their loan
obligations, and as of November 2015 the bank had been paid
in full for all previous loans.
March 2016, BEO issued the seventh - and what turned out to
be the final - operating loan for $788, 000. At that time,
the Bradfords also needed another $240, 000 to repay a loan
from the Producers Livestock Marketing Association (the
“Producers”). The Bradfords had purchased cattle
from the Producers on credit and the $240, 000 owed to
Producers represented an operating loss. See Adversary
Compl., Bankr. Dkt. 1, ¶ 36. The bank issued a
$201, 000 loan to cover this loss, with instructions to the
Bradfords to use their operating loan to make up the
six months later, in September 2016, the Bradfords needed
another $220, 000 to purchase cattle feed. The bank agreed to
lend this amount, but only if the Bradfords secured the loan
with real estate. The Bradfords report that this was unusual,
given that the bank had not previously secured its loans with
real estate. Id. ¶ 42.
Bradfords agreed to execute a deed of trust for the $220, 000
loan, but when they showed up at the title company to sign
the papers, they were surprised to discover that
BEO was attempting to obtain additional security not just for
the $220, 000 loan, as BEO had represented to them. Instead,
and contrary to BEO's representation, BEO prepared
paperwork for additional security that was for all
of the outstanding obligations by the Bradfords with BEO. BEO
did not inform the Bradfords of this unexpected change.
Furthermore, the additional security was not limited to their
business related real estate, but included their personal
residence. This was contrary to the express representations
by BEO when the $220, 000 loan was discussed and verbally
Id. ¶ 43.
Bradfords initially refused to sign the deeds but said they
eventually did so because of the imminent need to purchase
feed and because they did not have sufficient time to explore
other financing options. Id. ¶ 46. They also
believed that because they had now signed over all their real
estate to the bank, the bank would later renew the operating
line of credit.
Bradfords thus obtained additional funds for cattle feed
during the fall, but the winter of 2016-17 was extremely
severe, which resulted in a need for substantially more feed
than in a normal year. In February 2017, the Bradfords asked
the bank for an additional loan to purchase more feed.
bank responded by asking Ryan Bradford to come meet with his
loan officer to renew the line of credit. Mr. Bradford met
with the BEO loan officer and other bank representatives on
two occasions and both times, bank representatives assured
him that BEO “was an agricultural bank and that they
were in it for the long haul.” ¶ 58.
third meeting, however, BEO loan officers told Mr. Bradford
that the bank would not renew the operating line of credit
unless Bradford put his cattle under contract. Id.
¶ 68. Mr. Bradford did as the bank requested, even
though this was not his normal practice. In years past he had
been able to get better prices by selling the cattle later.
Regardless, he put cattle under contract because he needed to
renew the line of credit.
Mr. Ryan had the contracts in hand, he reported back to the
bank, fully expecting that the line of credit would be
renewed. But plaintiffs report that the bank reneged on its
promise to renew the line of credit and also told Mr. Ryan to
“‘break all contracts and hedges' and
‘sell the cattle.'” Id. ¶ 77.
Mr. Bradford refused to do so; he says if ...