Oyens Feed & Supply, Inc. v. Primebank
879 N.W.2d 853
Iowa2016Background
- Crooked Creek, a farrow-to-finish hog operation, filed bankruptcy; sale of hogs left $342,371.78 in escrow but was insufficient to satisfy liens claimed by Primebank (earlier perfected Article 9 security interest) and Oyens Feed (statutory agricultural supply dealer lien for feed sold on credit).
- Oyens Feed filed two financing statements (May 28 and Aug 14, 2009) and claimed superpriority under Iowa Code chapter 570A; Primebank disputed both the temporal scope of perfection and the computation of priority under section 570A.5(3).
- Bankruptcy court (following In re Shulista) held a financing statement perfects only feed sold in the 31 days before filing; it found Oyens Feed perfected $156,367.43 of the escrow and treated the acquisition price of animals born on the farm as zero.
- Both parties appealed different aspects: Oyens Feed challenged the requirement to file serial financing statements; Primebank challenged the zero-acquisition-price ruling.
- The federal district court certified two questions of Iowa law to the Iowa Supreme Court: (1) whether a new financing statement must be filed every 31 days to perfect feed supplied in the preceding 31 days, and (2) whether acquisition price is zero for livestock born on the farm.
Issues
| Issue | Oyens Feed's Argument | Primebank's Argument | Held |
|---|---|---|---|
| Does Iowa Code §570A.4(2) require a new financing statement every 31 days to perfect the dealer's lien for feed supplied in the prior 31-day period? | “No” — once initially perfected, the financing statement remains effective for feed supplied thereafter (relying on §554.9308(2) and legislative intent). | “Yes” — plain language “within thirty-one days after” fixes a post‑purchase window; serial filings are required. | Yes. The court held a financing statement only perfects the lien for feed sold during the 31 days preceding the filing; additional feed supplied after filing requires a new filing within 31 days of that sale (subject to practical aggregation as noted in footnote). |
| Under Iowa Code §570A.5(3), is the “acquisition price” zero when livestock are born on the farm? | “Yes” — animals raised on the farm have no acquisition price, so dealer may claim priority up to the feed’s effect on value. | “No” — acquisition price should include costs of production/overhead, not just purchase price. | Yes. The court held acquisition price is zero for animals born on the farm (acquisition price refers to an amount paid or exchanged, not cumulative production costs), so the statute’s formula yields full priority subject to the statutory cap. |
Key Cases Cited
- Oyens Feed & Supply, Inc. v. Primebank, 808 N.W.2d 186 (Iowa 2011) (prior Iowa Supreme Court decision in same litigation addressing chapter 570A issues)
- Jensen v. Nelson, 19 N.W.2d 596 (Iowa 1945) (interpretive discussion of the word “within” and temporal limits)
- Johnson v. Brooks, 117 N.W.2d 457 (Iowa 1962) (statute requiring action “within” a period fixed both start and end dates; supports requiring post‑event filing)
- Stockman Bank of Montana v. Mon-Kota, Inc., 180 P.3d 1125 (Mont. 2008) (discusses the relationship between Article 9 security interests and agricultural liens)