Wells Fargo Bank, N.A. v. Tama Benton Cooperative (In Re Shulista)
451 B.R. 867
Bankr. D. Iowa2011Background
- Wells Fargo and Interstate Grain contend in a dispute over priority in sale proceeds from pig livestock in debtor bankruptcy cases.
- Debtors Brett and Patricia Shulista and HighSide Pork, LLC operated hogs; ownership of the Pigs at filing was resolved as the Shulistas’ property.
- Interstate Grain furnished feed; Wells Fargo held a preexisting security interest in the Shulistas’ livestock and proceeds.
- Interstate Grain filed a financing statement on December 7, 2009; the Shulistas consumed $93,141.42 of feed, of which $51,365.04 occurred within 31 days prior to filing.
- The sale proceeds totaled $250,671.50 and are held in escrow; Wells Fargo seeks to limit Interstate Grain’s lien to $51,365.04 while Interstate Grain seeks broader perfection.
- The court must interpret Iowa Code Chapter 570A to determine perfection and priority of an agricultural supply dealer lien.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Extent of Interstate Grain's perfection under 570A.4 | Interstate Grain seeks continuous perfection for all feed sold, beyond the 31-day window. | Wells Fargo contends perfection is limited to the 31-day period prior to filing. | Interstate Grain's lien is perfected only for the 31-day period preceding the filing. |
| Priority of perfected Interstate Grain lien versus Wells Fargo for the perfected amount | Interstate Grain has superior priority for the $51,365.04; Wells Fargo argues otherwise. | Wells Fargo contends its prior perfected lien is superior beyond the perfected portion. | Interstate Grain has superior priority for $51,365.04; Wells Fargo holds superior priority outside that amount. |
| Status and priority of the remaining unperfected Interstate Grain lien | Unperfected portion may be subordinated to Wells Fargo or require equitable relief. | Wells Fargo should have priority over the unperfected portion under Article 9 rules. | Unperfected portion remains to be heard; equitable lien considerations may apply. |
Key Cases Cited
- In re Crooked Creek Corp., 427 B.R. 500 (Bankr.N.D.Iowa 2010) (lays foundational interpretation for Chapter 570A rules and agricultural liens)
- In re Bernstein, 230 B.R. 144 (Bankr.D.N.D. 1999) (limits on agricultural supply liens over a defined look-back window)
- Great Western Bank v. Willmar Poultry Co., 780 N.W.2d 437 (N.D. 2010) (recognizes super priority for perfected agricultural liens in some jurisdictions)
- Stockman Bank of Montana v. AGSCO, Inc., 728 N.W.2d 142 (Mont. 2007) (discusses prioritization of agricultural liens under Montana/N.D. perspectives)
- In re Coastal Plains Pork, LLC, 438 B.R. 845 (Bankr.E.D.N.C. 2010) (interprets Iowa-like agricultural lien statutes and perfection/priority issues)
- City of Asbury v. Iowa City Development Bd., 723 N.W.2d 188 (Iowa 2006) (statutory interpretation presumption when amendments occur)