United States District Court, N.D. Iowa, Western Division
MEMORANDUM OPINION AND ORDER ON DEFENDANTS'
MOTION TO DISMISS OR TRANSFER FOR IMPROPER VENUE
LEONARD T. STRAND, CHIEF JUDGE.
case is before me on a motion (Doc. No. 13) by defendants
Orville Lage, Douglas Lage and Tessie Lage (collectively, the
Lages) to dismiss for improper venue or, in the alternative,
to transfer venue. Plaintiff Security National Bank of Sioux
City, Iowa (SNB), has filed a resistance (Doc. No. 14) and
the Lages have filed a reply (Doc. No. 17). The Lages have
also filed a supplement (Doc. No. 18) to the motion to
dismiss. I find that oral argument is not necessary. N.D.
Iowa L.R. 7(c).
commenced this action on December 27, 2018, by filing a
complaint (Doc. No. 1) against the Lages, along with Max C.
Kant and Ann M. Kant, doing business as MK Feedlots and MK
Purchase (collectively, the Kants), Justin Simon and Don
Hearnen. The Lages filed their motion to dismiss or transfer
venue on March 14, 2019. Simon and Hearnen filed an answer
(Doc. No. 19) on April 12, 2019. The Kants, while being
served on January 15, 2019, have not responded to the
case arises from SNB's extension of credit to the Kants
and Lages to purchase cattle, which were fed at a feedlot
located in Battle Creek, Nebraska. SNB alleges that in
September 2017, both the Kants and Lages defaulted on their
loans. The cattle were sold to Cargill and the proceeds
deposited into an account with SNB in Iowa. SNB alleges that
pursuant to various security agreements, it has a perfected
security interest in the proceeds. All of the defendants have
also claimed interest in the cattle proceeds and other
lawsuits have been filed concerning these competing claims.
SNB now seeks a declaratory judgment as to the ownership
rights and interests of the various parties to the cattle
Relationship Between the Parties
Kants, residents of Norfolk, Nebraska, entered into an oral
agreement with the Lages, residents of Pilger, Nebraska, in
1998, in which the Kants agreed to care for the Lages'
cattle on their feedlot if the Lages reimbursed them. The
Kants also agreed to oversee the sale of such cattle. Doc.
No. 13-3 at 74. The Lages' cattle were purchased with
funds loaned to them by SNB.
began funding the Kant's cattle feedlot business in the
early 2000s. By March 1, 2013, SNB was supervising and
effectively in control of the Kants' cattle feed
business. As such, the Kants were required to submit all
cattle sale proceeds received in the regular course of
business to SNB. Pursuant to various Commercial and
Agricultural Security Agreements, SNB alleges that it has a
security interest in, among other things, the livestock at
the Kants' feedlot, including cattle owned by others.
Defendant Simon was the manager of M&S Livestock, LLC,
and JS Enterprises, LLC. At some point after March 1, 2013,
those two companies also began using the Kants' cattle
feed services. Defendant Hearnen also owned cattle that were
kept and cared for at the Kants' feedlot. Both Simon and
Hearnen are residents of South Dakota.
September 18, 2017, SNB filed a replevin action against the
Kants in Madison County, Nebraska, to obtain possession of
the cattle due to the Kants' alleged default on their
loan obligations to SNB. Doc. No. 13-3 at 21. During the
course of that action, the cattle at issue were sold through
several sales in Nebraska and the proceeds went to
See Id. at 27, 30, 34-35. SNB dismissed the replevin
suit against the Kants without prejudice on September 25,
2017. Id. at 37.
December 18, 2017, SNB filed an action for breach of contract
against Orville Lage in the District Court of Stanton County,
Nebraska, due to his alleged default. Doc. No. 13-3 at 40.
Orville Lage then filed a third-party complaint against Max
Kant and MK Feedlots, LLC, on March 6, 2018, alleging breach
of contract and negligence for the Kants' failure to care
for Lage's cattle and for losing or “otherwise
illegally dispos[ing]” of the cattle. Id. at
74. Kant counterclaimed, alleging that Lage did not pay for
the services Kant provided for his cattle. Id. at
December 22, 2017, SNB filed an action against Max Kant and
Ann Kant, individually and doing business as MK Feedlots and
MK Purchase, in the District Court of Madison County,
Nebraska. Doc. No. 13-3 at 100-01. On February 1, 2018, SNB
filed an amended complaint in that case, asserting claims for
fraud and breach of contract and alleging that the Kants made
false claims as to the amount of cattle in their inventory.
Doc. No. 13-3 at 103-06. The District Court of Madison
County, Nebraska, entered summary judgment in favor of SNB on
December 18, 2018, on the breach of contract claim.
Id. at 128-36. SNB then dismissed its fraud claim
against the Kants without prejudice. Id. at 138.
11, 2018, Hearnen and businesses managed by Simon filed a
complaint against the Kants for breach of contract and fraud
in the District Court for Madison County, Nebraska. Doc. No.
13-3 at 146. The plaintiffs in that case alleged that the
Kants sold all the cattle at their feedlot, including cattle
owned by Hearnen and the other plaintiffs, and that the Kants
failed to provide them with the sale proceeds from their
cattle. Id. at 147. The Kants counterclaimed on
March 6, 2019, and alleged that after selling the cattle they
remitted Hearnen's proceeds to SNB on his behalf.
Id. at 155, 160.
November 26, 2018, the Kants filed a complaint against SNB
alleging, in essence, that the Kants paid excess money to SNB
that should be returned. Doc. No. 13-3 at 162, 180-81. That
case was removed to the United States District Court for the
Northern District of Nebraska on December 11, 2018, by SNB.
Id. at 278, 280.
Motion to Dismiss for Improper Venue
Rule of Civil Procedure 12(b)(3) provides that a party may
make a pre-answer motion to dismiss an action that is not
filed in the proper venue. Rule 12(b)(3) allows dismissal
“only when venue is ‘wrong' or
‘improper.'” Atl. Marine Const. Co. v.
U.S. Dist. Court for W. Dist. of Texas, 571 U.S. 49, 55
(2013). “Whether venue is ‘wrong' or
‘improper' depends ...