Federal court denies Altamont dairy farmers' motion to dismiss foreclosure case

By Dee Thompson | Aug 7, 2017

BENTON – Dairy farmers claiming the government is not entitled to foreclose on their Altamont farm because of foreclosure proceedings started a decade ago have lost their motion to dismiss.

The case, pending in U.S. District Court for the Southern District of Illinois, The United States of America v. the Schwerdtfeger Dairy Farm, Howard Schwerdtfeger and Robert Schwerdtfeger, was filed in March 2016. 

However, the United States government and the Schwerdtfegers have been engaged in litigation for years. The government started foreclosure proceedings against the Schwerdtfegers in March 2005 because the Schwerdtfegers allegedly had defaulted on loans which had been secured by their property. In 2007, the suit was dropped because the agency that had loaned money to the Schwerdtfegers reopened civil rights complaints the Schwerdtfegers had filed.

The litigation history actually goes back to 1994, when the Department of Agriculture dismissed Robert Schwerdtfeger’s administrative complaint related to the acceleration of the loan repayment schedule. 

“In June 2009, Robert sought judicial review of the December 2008 Department of Agriculture (“USDA”) final decision dismissing his 1994 administrative complaint... In April 2011, the court granted the Secretary of Agriculture’s motion to dismiss or, in the alternative, for summary judgment and entered judgment against Robert [Schwerdtfeger]. Robert [Schwerdtfeger] appealed that decision, but voluntarily dismissed the appeal in July 2011,” according to the suit.

Defendants Howard Schwerdtfeger and Robert Schwerdtfeger have filed motions to dismiss the 2016 case claiming that “...the debt has expired because, according to the government, they stopped making payments on or before August 1994,” the suit states. The Schwerdtfegers claim the statute of limitations has expired and the equitable doctrine of laches applies. They also claim that the government, in the 2005 action, “...was not forthright in revealing the status of Robert’s case… and that they have been prejudiced by the USDA’s misconduct and the delay in the foreclosure proceedings.”

The Schwerdtfegers also argue the government is retaliating for their 1994 administrative complaints and they don’t like the way the original 1976 loans were issued.

In its July 7 order, the court denied the motions to dismiss filed by defendants, based on the doctrine of laches and ordered both parties to file trial briefs outlining claims and counterclaims.

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