DECREE AND JUDGMENT OF FORECLOSURE AND SALE

BRUCE HOWE HENDRICKS, 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.

Plaintiff's 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 Plaintiff's 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:

Further duties will include: forwarding copies of this Order to each defendant; advising each defendant of the date the property will be sold; arranging and coordinating the amount to be bid by Plaintiff; representing Plaintiff at sale; and preparing after sale documentation, as required.

The promissory notes provide that Plaintiff is entitled to collection costs including reasonable attorneys' fees, and Plaintiff requests that the Court award $1,750.00 in attorneys' fees. (See Ryan Aff., ECF No. 37-2.) In light of the potential liabilities inherent in a property action and the amount of the mortgage debt at issue, the attorneys' fees requested by Plaintiff are reasonable and shall be added to the total debt owed.

3. As of January 24, 2017, the amount due and owing on the notes, with interest at the rates provided therein, and other costs and expenses of collection, including attorneys' fees, secured by the notes and mortgage was as follows:

(See Fee Aff., ECF No. 37-1; Ryan Aff., ECF No. 37-2.)

4. Interest continues to accrue on the debt stated above at a per diem rate of $31.5428.

5. The lien interests of Havird, Crawford, Carter Trucking Co., SCDOR, BB&T, and Saluda County are junior to Plaintiff's lien interest in the real property.5 As a result, Plaintiff's mortgage lien against Massey constitutes a first mortgage lien on the real property described in "Exhibit A to Mortgage From Benjamin Roy Massey To USDA/Farm Service Agency Dated July 28, 2008" (ECF No. 7-1).

6. The security interests against Massey's personal property (livestock, equipment, and fixtures associated with the dairy barn) are perfected and also constitute a first lien on the property described in the documents entitled, "Security Agreement (Chattels and Crops)," dated May 29, 2007, June 11, 2007, and July 28, 2008 (ECF No. 7-4).

7. Therefore, Plaintiff is entitled to foreclose on its mortgage and to recover the personal property in which it has a security interest. Further, Plaintiff is entitled to sell the property described in its mortgage (see ECF No. 7-1) and security agreements (see ECF No. 7-4) and apply the proceeds first to the costs and expenses of this action, next to the payment and discharge of the debt Massey owes Plaintiff.

8. Finally, the Court notes that Plaintiff requests a deficiency judgment.

LEGAL STANDARD

Although "the government's power to foreclose [on property] emanates from state law, [28 U.S.C. §§ 2001 and 2002] govern the procedures to be followed [by federal courts]." U.S. v. Wise, No. 5:14-cv-844-FL, 2015 WL 5918027, at *6 (E.D.N.C. Oct. 9, 2015). Pursuant to § 2001, a federal court has wide discretion to determine the terms and conditions under which the sale of real property shall be executed; however, the sale must take place "at the courthouse of the county . . . in which the greater part of the property is located, or upon the premises or some parcel thereof located therein, as the court directs." Further, under § 2002, notice shall be "published once a week for at least four weeks prior to the sale in at least one newspaper regularly issued and of general circulation in the county, state, or judicial district of the United States wherein the realty is situated." When personal property is sold under federal court order, 28 U.S.C. § 2004 states that it should be sold in accordance with § 2001, unless the court directs otherwise.

ORDER OF FORECLOSURE AND SALE

It is hereby ORDERED:

1. The Clerk of Court is directed to enter judgment in favor of Plaintiff in the amount of $325,443.22 plus interest at a per diem rate of $31.5428 beginning on January 24, 2017.

2. The Clerk of Court is directed to enter a judgment of foreclosure as to Plaintiff's security interest in Massey's real and personal property at issue in this matter, as more fully described in "Exhibit A to Mortgage From Benjamin Roy Massey To USDA/Farm Service Agency Dated July 28, 2008" (ECF No. 7-1), and the documents entitled, "Security Agreement (Chattels and Crops)," dated May 29, 2007, June 11, 2007, and July 28, 2008 (ECF No. 7-4).

3. The Special Referee, or his designee, shall sell at public auction the property described in "Exhibit A to Mortgage From Benjamin Roy Massey To USDA/Farm Service Agency Dated July 28, 2008" (ECF No. 7-1) at the Saluda County Courthouse in Saluda, South Carolina, at the earliest possible date after having published notification of the sale in the Saluda Standard-Sentinel, a newspaper of general circulation in Saluda County, South Carolina, once a week for four weeks prior to the sale. The Special Referee, or his designee, shall sell at public auction the property described in the documents entitled, "Security Agreement (Chattels and Crops)," dated May 29, 2007, June 11, 2007, and July 28, 2008 (ECF No. 7-4), at public auction at the Saluda County Courthouse in Saluda, South Carolina, or another commercially reasonable location(s) as may be determined by the Special Referee, or his designee, at the earliest possible date after having published notification of the sale in the Saluda Standard-Sentinel for four weeks prior to the sale. The sale of the real and personal property itemized above shall be made on the following terms:

The following additional terms shall apply to the sale of the real property described in "Exhibit A to Mortgage From Benjamin Roy Massey To USDA/Farm Service Agency Dated July 28, 2008" (ECF No. 7-1):

4. The Special Referee, or his designee, shall apply the proceeds of the sale of the property described in "Exhibit A to Mortgage From Benjamin Roy Massey To USDA/Farm Service Agency Dated July 28, 2008" (ECF No. 7-1) and the documents entitled, "Security Agreement (Chattels and Crops)," dated May 29, 2007, June 11, 2007, and July 28, 2008 (ECF No. 7-4), as follows:

5. If Plaintiff is the successful bidder at the sale for a sum not exceeding the amount of costs, expenses, and debt Massey owes Plaintiff, Plaintiff may pay to the Special Referee, or his designee, only the amount of the costs and expenses, accrediting the balance of the bid to Massey's indebtedness.

6. After the sale of the real property described in "Exhibit A to Mortgage From Benjamin Roy Massey To USDA/Farm Service Agency Dated July 28, 2008" (ECF No. 7-1), the Special Referee, or his designee, shall make and deliver to the purchaser a deed in fee simple, and the purchaser shall be let into possession of that real property upon production of the deed. All persons holding adversely to the purchaser shall be ejected by the United States Marshal (or deputy).

7. The undersigned will retain jurisdiction to do all necessary acts incident to this foreclosure, including, but not limited to, the issuance of a Writ of Assistance. After sale of the property described in "Exhibit A to Mortgage From Benjamin Roy Massey To USDA/Farm Service Agency Dated July 28, 2008" (ECF No. 7-1), and as soon as the sale by the Special Referee, or his designee, is complete and has been approved by the court, Massey or other persons in possession, shall within 15 days of the date of approval by the Court, move from the premises, and give up the real property itemized above without damage or vandalism. Upon the failure of Massey or any other persons in possession, to vacate the property within 15 days of the date of approval by the Court, the United States Marshal (or deputy) is authorized, empowered, and directed to enter upon the real property itemized above and evict them therefrom, unless prior to such date, Massey or other persons in possession, obtain from the Court an order extending the time which Massey or any other persons in possession shall have to vacate the property. The United States Marshal (or deputy) is also authorized to effect removal from the real property itemized above any furniture or other possessions of Massey or other persons in possession, and any interference with the activities of the Special Referee or the United States Marshal (or deputy) will be upon pain of contempt of Court.

8. Massey shall assemble and turn over possession of all personal property described in the documents entitled, "Security Agreement (Chattels and Crops)," dated May 29, 2007, June 11, 2007, and July 28, 2008 (ECF No. 7-4), plus any increases, replacements, or substitutions, to Plaintiff within 30 days of the date of this Order. Massey may contact the Farm Service Agency Supervisor's Office in Saluda County, South Carolina, to arrange a mutually agreeable time to turn over this property. Should Massey fail to turn over the personal property itemized above within 30 days, the United States Marshal (or deputy) is directed and authorized to take all reasonable steps necessary to seize that personal property and turn it over to Plaintiff for sale. This may include entering onto the real property described in "Exhibit A to Mortgage From Benjamin Roy Massey To USDA/Farm Service Agency Dated July 28, 2008" (ECF No. 7-1), to locate and seize the personal property itemized above. Should the United States Marshal (or deputy) be required to seize the property, Plaintiff shall be responsible for taking possession of the property for purpose of sale.

IT IS SO ORDERED.