565 B.R. 655
Bankr. D. Iowa2017Background
- Debtors (Gary and Julie Schley) ran a pig feeder-to-finish operation; 3,061 pigs at Lone Rock consumed feed supplied by Watonwan Farm Service.
- Watonwan supplied $43,314.54 in feed between Feb. 9 and Mar. 11, 2010 and filed a financing statement on Mar. 11, 2010 asserting an agricultural supply dealer lien.
- Peoples Bank held a prior perfected security interest in Debtors’ livestock and proceeds from loans executed 2008–2009.
- Debtors sold 1,571 pigs in May 2010 and the remaining 1,490 pigs in June 2010, producing proceeds contested by the parties.
- Parties agreed Watonwan had superpriority to at least $21,224.14 (49% of its claim); $22,094.06 remained in escrow and was disputed.
- The central legal dispute: whether Watonwan’s superpriority lien attached to the full $43,314.54 (as to the livestock that consumed the feed) or was limited pro rata to the portion of feed consumed by the sold pigs (49%).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Scope and amount of an agricultural supply dealer superpriority lien under Iowa Code § 570A.3 (whether the lien on "livestock consuming the feed" is limited pro rata to feed consumed by the animals that generated the proceeds) | Watonwan: lien amount equals the full retail cost owed for feed supplied ($43,314.54); the statute sets lien value by amount owed and it attaches to livestock that consumed the feed, so full amount attaches to those animals/proceeds | Peoples Bank: lien should be limited to the portion of the feed consumed by the animals that generated the contested proceeds (pro rata), i.e., 49% already paid ($21,224.14); remaining proceeds belong to Bank | Court: granted Watonwan summary judgment — statute unambiguous that lien amount is the retail cost owed and attaches to livestock consuming the feed; Watonwan entitled to remaining $22,094.06 |
Key Cases Cited
- Oyens Feed & Supply, Inc. v. Primebank, 808 N.W.2d 186 (Iowa 2011) (interpreting chapter 570A and recognizing superpriority under § 570A.5)
- Oyens Feed & Supply, Inc. v. Primebank, 879 N.W.2d 853 (Iowa 2016) (holding 31‑day perfection rule and discussing legislative intent to protect feed market fluidity)
- Bearinger v. Iowa Dep’t of Transp., 844 N.W.2d 104 (Iowa 2014) (statutory interpretation principles: give effect to statute as a whole)
- JPMorgan Chase Bank, N.A. v. Johnson, 719 F.3d 1010 (8th Cir. 2013) (forum precedent on predicting state supreme court decisions)