                 United States Court of Appeals
                            FOR THE EIGHTH CIRCUIT




           ___________

           No. 96-2173
           ___________


United States of America,           *
                                        *
       Plaintiff - Appellee,            *
                                        *
     v.                                 *
                                        *
Larry D. Wiegman; Carla J.              *
Wiegman;                                *
                                        *
       Defendants - Appellants,     *
                                        *
Bruce W. Van Zee, doing                 *   Appeals from the United
business as Riverside Animal            *   States District Court
Hospital; John C. Dean,                 *   for the Southern District
Co-Executor of the Estate of            *   of Iowa.
Ray L. Thomas; Wade Rubey,          *
Co-Executor of the Estate of            *
Ray L. Thomas; Leon G. Wiegman;     *
Edna H. Wiegman; Dwight A.          *
Dittus,                                 *
                                        *
       Defendants.                      *
           ___________

           No. 96-3837
           ___________

United States of America,           *
                                        *
       Plaintiff - Appellee,            *
                                        *
     v.                                 *
                                        *
Larry D. Wiegman; Carla J.          *
Wiegman;                                *
                                        *
       Defendants - Appellants,     *
                                          *
Bruce W. Van Zee; John C. Dean,      *
Co-Executor of the Estate of              *
Ray L. Thomas; Wade Rubey,           *
Co-Executor of the Estate of              *
Ray L. Thomas; Leon G. Wiegman;      *
Edna H. Wiegman; Dwight A.                *
Dittus,                                   *
                                          *
         Defendants.                      *

                                 ___________

                       Submitted: January 17, 1997

                 Filed: April 10, 1997
                                ___________

Before MURPHY, JOHN R. GIBSON, Circuit Judges, and KYLE,1
    District Judge.
                               ___________

JOHN R. GIBSON, Circuit Judge.


     In these two appeals Larry and Carla Wiegman appeal from the district
court’s grant of summary judgment against them and its denial of their
motion to set aside a foreclosure sale disposing of their farm.        The
Wiegmans argue that summary judgment was improper because the plaintiff,
the Farmers Home Administration, failed to follow its own regulations in
calling the Wiegmans' loans.   The Wiegmans also contend that, once having
obtained a judgment of foreclosure, the government failed to give the
Wiegmans the necessary personal notice before the foreclosure sale.
Therefore, the Wiegmans argue,    the district court should have set aside
the sale.   We reverse and remand.


     The Wiegmans borrowed money from the Farmers Home




     1
     The Honorable Richard H. Kyle, United States District Judge
for the District of Minnesota.

                                         -2-
Administration and gave mortgages on their farm as security for the loans.
The Wiegmans defaulted on their loan agreements, and so received a notice
from the Farmers Home Administration of their right to participate in
primary loan servicing, a restructuring option designed to keep debtor
farmers on their land while minimizing the cost to the taxpayers.                 The
Wiegmans applied for primary servicing, but the Farmers Home Administration
sent them a Notice of Intent to Accelerate their loan, stating that the
Farmers Home Administration had determined that they were not eligible for
the debt restructuring because even with restructuring they would not have
enough money to pay their loan off.           The Farmers Home Administration had
therefore decided to foreclose.    The notice advised the Wiegmans of their
statutory rights and options, and of the time limits for exercising the
various options.   See generally 7 C.F.R. §§ 1951.901-.950 (1996).


     The Wiegmans had fifteen days from the receipt of the notice to
request a meeting with a Farmers Home Administration county official, or
thirty days to appeal the denial of their primary loan servicing request.
On December 22, 1992, the twenty-ninth day after receipt of the notice, the
Wiegmans’   attorney   returned   the   response     form   to   the   Farmers   Home
Administration, inadvertently marking an X in the box asking for a meeting,
rather than the box asking for an appeal hearing, as he intended.            By the
time Wiegmans' attorney learned of his mistake, the thirty-day time limit
to request an appeal had expired.


     On January 8, the attorney filed an amended form with the appeal box
checked, together with a letter explaining that the failure to check the
appeal box the first time was an oversight, caused by the rush to get too
much work done before Christmas.    He asked the Farmers Home Administration
to consider the request for




                                        -3-
appeal timely in accordance with 7 C.F.R. § 1900.56(a)(1) (1992), which
allowed an appeal to proceed despite a late request if the delay was
"beyond the appellant’s control or for other good reasons as determined by
the Area Supervisor."


     On January 27, 1993 the Area Supervisor wrote, stating that the
Wiegmans' appeal would not be considered because it was late.         The Area
Supervisor stated:   "If the reason for not responding within 30 days was
outside your control, please advise this office of the circumstances, and
your request will be reconsidered.    Any request for reconsideration should
be accompanied with written documentation substantiating the circumstances
that were beyond your control."      (Emphasis in original).


     The Wiegmans' attorney responded by letter, arguing that the mistake
was beyond the Wiegmans' control.            He also pointed out that the Area
Supervisor had not addressed the clause in section 1900.56(a)(1) allowing
the Area Supervisor to consider a late appeal timely if there was "other
good cause."   The Area Supervisor reconsidered the Wiegmans' request to
appeal, and again denied it, saying: "The appellant's appeal request is
deemed untimely absent a valid, documented reason, beyond his control for
the late request."      The Area Supervisor did not address the Wiegmans'
argument that the Area Supervisor could consider an appeal timely if there
were "other good cause" for the delay.


     The government then notified the Wiegmans that they could apply for
preservation loan servicing, an option to lease or buy back the farm.      The
Wiegmans applied for preservation loan servicing, but the government denied
their application because it concluded they could not make the lease or
buyout payments.




                                       -4-
     The government brought suit in the Southern District of Iowa, where
the land was located, to foreclose on the mortgages.        The Wiegmans appeared
in the case by their attorney.     The government moved for summary judgment,
which the Wiegmans opposed on the ground that the government had failed to
consider   their   request   for   an   appeal   in    accordance   with   section
1900.56(a)(1).


     The district court rejected the Wiegmans' argument about section
1900.56(a)(1) reasoning that an agency is entitled to substantial deference
when interpreting its own regulation.


     The court entered a judgment and decree of foreclosure providing:

           IT IS FURTHER ORDERED, ADJUDGED AND DECREED by the court
     that the plaintiff’s mortgages be and the same are hereby
     foreclosed and that a Writ of Special Execution shall issue
     against the following real property situated in Mills County,
     Iowa, to-wit: [legal description of the Wiegmans’ farm]. And
     under the Writ of Special Execution the United States Marshal
     for the Southern District of Iowa or her representative is
     commanded to sell for cash, subject to any unpaid real property
     taxes or special assessments, the real property in aid and
     enforcement of the claim, right, and judgment of the plaintiff,
     and the defendant is forever barred and foreclosed from having
     or claiming any right, title or interest in the real property
     pursuant to federal law.


     The government published notice in a local newspaper, as required for
a judicial sale under 28 U.S.C. §§ 2001-02.           The government did not send
personal notice to the Wiegmans, as would be required for an execution sale
under Federal Rule of Civil Procedure 69(a), which incorporates Iowa law
by reference.    As provided in the order, the government filed a praecipe
for a Writ of Execution, the clerk issued the writ, and the marshal sold
the property.




                                        -5-
     After the sale, the Wiegmans moved to set the sale aside, arguing
that the publication notice was inadequate under Iowa law and the Due
Process Clause of the Constitution.     The district court denied the motion
to set aside the sale.


                                      I.


     The Wiegmans argue that the Farmers Home Administration's Area
Supervisor did not properly apply 7 C.F.R. § 1900.56(a)(1) in denying them
relief, because he simply ignored the "other good cause" provision in the
regulation.     The government argues that we must defer to an agency's
interpretation of its regulations.


     After the events at issue here, the regulations governing adverse
decisions and administrative appeals, including section 1900.56, were
revised.   See 60 Fed. Reg. 67,318-19 (1995) (effective January 16, 1996).
Although the Wiegmans note the change, they rely on the old regulation, and
the government does not argue that the new regulation applies.      We take
this as an admission that the old regulation applies.


       In holding that the Area Supervisor had not violated section
1900.56(a)(1), the district court quoted Stinson v. United States, 508 U.S.
36 (1993), which said: "[P]rovided an agency's interpretation of its own
regulation does not violate the Constitution or a federal statute, it must
be given 'controlling weight unless it is plainly erroneous or inconsistent
with the regulation.'"   Id. at 45 (quoting Bowles v. Seminole Rock & Sand
Co., 325 U.S. 410, 414 (1945)).   That quotation covers this case precisely,
since the Area Supervisor’s letters indicate that he made his decision in
a manner plainly inconsistent with the regulation he was supposed to be
interpreting.




                                      -6-
     Both of the Area Supervisor's letters indicate that it was necessary
for the Wiegmans to show that the lateness of their request was beyond
their control (e.g., "Any request for reconsideration should be accompanied
with written documentation substantiating the circumstances that were
beyond your control";      "The appellant's appeal request is deemed untimely
absent       a valid, documented reason, beyond his control for the late
request.")      The letters gave no consideration to the good cause provision,
despite the Wiegmans’ attorney's explicit observation that the agency had
not yet addressed the good cause provision and his request that the agency
do so.       Section 1900.56(a)(1) gave two possible bases for relief and made
those bases disjunctive.      The Area Supervisor's letters make one of those
bases a sine qua non.       This is plainly inconsistent with the regulation.
We therefore reverse the district court’s grant of summary judgment.2


                                        II.


     The Wiegmans argue that the sale was defective because it was not
conducted in accordance with Rule 69(a), which incorporates Iowa law,
including a personal notice requirement.       See Iowa Code § 626.78 (1985);
Iowa R. Civ. P. 56.1(a).       The government asserts that Rule 69(a) governs
only execution sales, whereas the foreclosure sale here was a judicial
sale, governed by 28 U.S.C. §§ 2001-02, rather than Rule 69(a).3     Sections
2001-02 do not




     2
      The government also argues that it afforded the Wiegmans the
proper procedures for preservation loan servicing. This does not
change the fact that the government denied them the full benefit of
the primary loan servicing procedures to which they were also
entitled.
         3
       The Wiegmans further argue that even if the sale was a
judicial sale subject to sections 2001-02, rather than Rule 69(a),
state law notice provisions that are consistent with federal policy
should be incorporated into federal law. See Travelers Ins. Co. v.
Lawrence, 509 F.2d 83, 94 (9th Cir. 1974) (Sneed, J., dissenting);
see generally United States v. Kimbell Foods, Inc., 440 U.S. 715,
740 (1979). Because of our disposition of this case, we need not
decide either this question or the Wiegmans' due process arguments.

                                        -7-
incorporate state law.


       In Weir v. United States, 339 F.2d 82, 85 (8th Cir. 1964), this court
distinguished between execution sales,       "'which issue by mere praecipe of
the judgment creditor . . . and only come under judicial supervision on
complaint of either party,'" and judicial sales, "made under order or
decree of the court and requiring confirmation by the court for their
validity."   Id. (quoting Yazoo & M.V.R. Co. v. Clarksdale, 257 U.S. 10, 19
(1921)).


       In Weir we held that an execution sale was not subject to the
requirements of 28 U.S.C. §   2001-02; we stated that sections 2001-02 only
governed judicial sales.   See   id.   Conversely, in United States v. Branch
Coal Corp., 390 F.2d 7, 10 (3d Cir.), cert. denied, 391 U.S. 966 (1968),
the Third Circuit held that a judicial sale is not governed by Rule 69(a).
Accord United States v. Petty Motor Co., 767 F.2d 712, 715 (10th Cir.
1985), cert. denied, 475 U.S. 1056 (1986).


       The sale in this case appears to be a hybrid between the classic
judicial sale described in Weir, 339 F.2d at 85, and an execution sale.
The sale was ordered by the court in a foreclosure proceeding, not chosen
unilaterally by a judgment creditor as one of the many possible avenues for
collecting a money judgment against the debtor.        However, the order did
not, on its face, require confirmation, and it did require the government
to obtain a writ of execution.         Cf. Branch Coal, 390 F.2d at 9 n.2
(judicial sale where, though writ of execution issued, marshal actually
sold




                                       -8-
property pursuant to court order); Travelers Ins. Co. v. Lawrence, 509 F.2d
83, 90 (9th Cir. 1974) (despite issuance of writ, foreclosure sale was a
judicial sale).


        Because we have held that the government failed to follow its
regulations in calling the Wiegmans' loans, the sale must be set aside in
any case.    It is therefore unnecessary that we determine the nature of the
sale.    However, the government would do well to avoid a recurrence of this
issue if there is occasion for another sale in this matter.


        We reverse the summary judgment and the denial of the motion to set
aside the sale.


        A true copy.


             Attest:


                   CLERK, U. S. COURT OF APPEALS, EIGHTH CIRCUIT.




                                     -9-
