Farmers National Bank v. Green River Dairy, LLC
155 Idaho 853
Idaho2014Background
- Farmers National Bank (FNB) made secured loans to Green River Dairy and properly perfected a security interest in Green River’s dairy cows by filing a UCC-1F financing statement.
- Multiple commodity sellers (Sellers) sold feed to Green River on credit and filed lien notices under Idaho Code § 45-1804 asserting statutory agricultural commodity liens.
- Green River defaulted; FNB repossessed and sold the dairy cows; sale proceeds were insufficient to satisfy FNB’s debt.
- Sellers claimed priority in the cows and sale proceeds on the theory that Idaho Code § 45-1802 liens in feed continue into livestock that consume the feed.
- District court held § 45-1802 unambiguously extends feed liens into livestock that consume liened agricultural products and granted declaratory judgment for Sellers; FNB appealed.
Issues
| Issue | Plaintiff's Argument (FNB) | Defendant's Argument (Sellers) | Held |
|---|---|---|---|
| Whether a § 45-1802 agricultural commodity lien on an "agricultural product" continues in livestock that consumes the product | § 45-1802 does not extend liens to livestock; statute’s plain language limits liens to defined "agricultural products" or proceeds | The statute unambiguously permits the feed lien to attach to livestock that use/consume the feed, so Sellers’ liens continue in the animals and proceeds | The Court held § 45-1802 does not create liens in livestock; FNB’s perfected security interest in the cows is superior |
| Whether the statutory scheme (Chapter 45, Title 18) supports extending liens into livestock | Other provisions (§§ 45-1803, 45-1805) confine liens and priority to "agricultural products" and their proceeds, not livestock | Sellers contend other provisions and legislative history show intent to protect feed liens that continue into animals | The Court reasoned the chapter’s plain language confirms liens attach only to "agricultural products" or proceeds; livestock are not covered |
| Whether § 45-1802 is ambiguous (invoking legislative history/canons) | Statute is unambiguous; apply plain language; no need for legislative history | Sellers (in dissent) argue ambiguity exists and legislative history shows intent to protect feed liens into livestock | Majority: statute not ambiguous; resolve by text and hold for FNB; dissent would apply legislative history to reach opposite result |
| Entitlement to attorney fees on appeal | FNB sought fees under § 45-1809; other parties sought fees under § 12-120(3) and § 45-1809 | Sellers sought fees under same statutes | Court denied § 12-120(3) (no commercial transaction between parties) and denied § 45-1809 to both sides (Sellers did not prevail; FNB did not assert an agricultural lien) |
Key Cases Cited
- BHA Investments, Inc. v. City of Boise, 138 Idaho 356 (statutory ambiguity standard)
- St. Luke’s Reg’l Med. Ctr., Ltd. v. Bd. of Comm’rs of Ada Cnty., 146 Idaho 753 (interpretation begins with statutory text; give effect to legislative intent)
- County of Boise v. Idaho Cntys. Risk Mgmt. Program Underwriters, 151 Idaho 901 (summary judgment standard cited)
- Karle v. Visser, 141 Idaho 804 (broad reading of UCC definition of "proceeds")
- Hoebel v. Raymond, 46 Idaho 55 (early Idaho decision recognizing lien in crop continued into livestock that consumed it)