Farmers Coop. Co. v. Swift Pork Co.
| Decision Date | 16 March 2009 |
| Docket Number | No. C 07-3056-MWB.,C 07-3056-MWB. |
| Citation | 602 F.Supp.2d 1095 |
| Parties | FARMERS COOPERATIVE COMPANY, Plaintiff, v. SWIFT PORK COMPANY and LOL Finance Company, Defendants. |
| Court | U.S. District Court — Northern District of Iowa |
Joseph A. Peiffer, Ronald Curtis Martin, Day, Rettig, Peiffer, PC, Cedar Rapids, IA, for Plaintiff.
Gregory M. Lederer, Lederer Weston Craig PLC, Cedar Rapids, IA, Kasey A. Meyer, Robert E. Youle, Sherman & Howard LLC, Denver, CO, Jonathan C. Miesen, Stoel & Rives, LLP, Minneapolis, MN, Lora L. McCollom, Skinner, Nielsen & McCollom, PLC, West Des Moines, IA, for Defendants.
One question common to all of the parties' motions for summary judgment in this case, and potentially dispositive of the plaintiff's claims that the defendants disregarded its agricultural supply dealer's lien pursuant to IOWA CODE CH. 570A, is whether the applicable statute of limitations for the plaintiff's claims is IOWA CODE § 614.1(4) (five years) or IOWA CODE § 614.1(10) (two years). That question, in turn, depends upon whether an agricultural supply dealer's lien pursuant to IOWA CODE CH. 570A is a "secured interest in farm products" within the meaning of IOWA CODE § 614.1(10). The parties have identified, and the court has found, no decisions of Iowa courts addressing these questions, but the parties declined the court's invitation to certify these questions to the Iowa Supreme Court pursuant to N.D. IA. L.R. 83 and IOWA CODE § 684A.1. Therefore, the court turns to consideration of these questions, and such others, if any, as the court must still resolve on the parties' motions for summary judgment after the court answers the statute of limitations questions.
The court will not attempt here an exhaustive dissertation on the undisputed and disputed facts in this case. Rather, the court will set forth sufficient of the facts, both undisputed and disputed, to put in context the parties' arguments concerning the parties' motions for summary judgment. Indeed, the facts necessary to explain the context of the parties' statute of limitations dispute, which is necessarily the first dispute that the court must address, are a relatively small subset of the facts that might otherwise be relevant to the plaintiff's claims and the defendants' defenses. Additional factual allegations and the extent to which they are or are not disputed or material will be discussed, if necessary, in the court's legal analysis.
Plaintiff Farmers Cooperative Company (FCC) is an Iowa cooperative with its principal place of business in New Hartford, Iowa. More specifically, FCC is the local farm cooperative located in Dike, New Hartford, and Parkersburg, Iowa, and a member cooperative of Land O' Lakes, Inc., engaged in the business of supplying feed to local livestock producers. Defendant LOL Finance Company (LOLFC) is a Minnesota corporation with its principal place of business in Arden Hills, Minnesota. LOLFC is a subsidiary of Land O' Lakes, Inc., in the business of financing agricultural businesses, including livestock producers. Defendant Swift Pork Company (Swift) is a Delaware corporation with its principal place of business in Greeley, Colorado. Swift owns and operates a hog processing facility in Marshalltown, Iowa.
In late 2002 or early 2003, FCC informed LOLFC that a feed customer, non-party William Root, was seeking financing to purchase and raise a large number of pigs. LOLFC eventually provided Root with an operating line of credit for his pig feeding operation. To secure payment on the line of credit, LOLFC entered into a security agreement with Root pursuant to which Root granted LOLFC a security interest in certain personal property, including pigs and the proceeds from the sale of pigs. The parties do not dispute that LOLFC perfected its security interest in Root's pigs.
After a large number of Root's first group of pigs died in the summer of 2003, Root obtained a second group of pigs beginning in August 2003, also with financing from LOLFC. It is this second group of pigs, approximately 9,000 to 9,400 head that is at issue in this case. Root had been purchasing feed for his pigs during 2003 from FCC, but stopped paying FCC for feed in September 2003. FCC contends that, in late October 2003, Paul Nielsen, a loan officer for LOLFC, met with representatives of FCC at the cooperative's board room in New Hartford. LOLFC contends that Root was also present at the meeting. FCC contends that, during this meeting, Nielsen informed FCC's representatives that LOLFC would be advancing additional funds to Root for bedding for the next group of feeder pigs. FCC asserts that, when a representative of FCC asked Nielsen why he would advance funds for bedding when FCC had not been paid for the feed that Root had purchased, Nielsen represented that FCC should not worry, because FCC would be paid. LOLFC acknowledges that such a meeting took place, but contends that it occurred in November 2003, not October 2003. Contrary to FCC's contentions, however, LOLFC denies that Nielsen made any assurances of any kind to FCC that Root's feed bill would be paid. Root did not pay for $134,358.51 worth of feed delivered by FCC to Root from September through November 21, 2003.
On November 17, 2003, FCC's board of directors addressed Root's outstanding feed bills. The board apparently believed that LOLFC had a prior perfected security interest in Root's pigs, so the minutes of the meeting reflect the following action:
Motion to file for a second position on pigs owned by William Root to cover feed bill owed. Seconded. Motion carried.
LOLFC's Appendix at 64 (emphasis added). FCC now disputes that the board's belief that LOLFC had a superior position to FCC's agricultural supply dealer's lien is incorrect as a matter of law. FCC took steps to perfect its lien against Root's pigs by filing a UCC Financing Statement on November 25, 2003, covering the feed sold to Root during October and November 2003, and by filing a UCC Financing Statement on November 26, 2003, covering the feed sold to Root during September 2003. FCC contends, and neither Swift nor LOLFC disputes, that FCC gave actual notice of its agricultural supply dealer's lien to Swift and LOLFC by letters from FCC's attorney dated December 2, 2003. LOLFC contends that it did not receive the letter in question until December 15, 2003, however. In addition to seeking a secured position as to Root's unpaid feed bills, FCC also stopped supplying feed to Root on November 21, 2003. Thereafter, Root apparently obtained feed from another cooperative, Readlyn Cooperative, with financing from LOLFC.
Root's second group of pigs began maturing in December 2003. Beginning in December 2003, Root sold the finished pigs from the second group to Swift and Unique Swine Systems, and may have sold a small group of those pigs to IBP. FCC now asserts, and Swift and LOLFC agree, that 5,614 of the pigs in the second group were sold to Swift. Swift made out checks for its purchases of pigs from Root between December 13, 2003, and March 25, 2004, made payable to William Root, David Root (William's brother), and LOLFC, but did not include FCC as a payee.1 Root endorsed the checks over to LOLFC to pay down his line of credit, and LOLFC did, in fact, apply the proceeds to Root's line of credit.
In late 2003 or early 2004, FCC learned that Swift had not included its name as a payee on the checks issued to Root. During February and March 2004, FCC's attorney sent three separate letters to Swift claiming that Swift had violated FCC's agricultural supply dealer's lien by not including FCC's name on the checks. On March 25, 2004, FCC's board of directors again met to discuss Root's unpaid feed bills. FCC's board passed a motion at that meeting to "proceed with action against Swift" if Root did not take action to pay his feed bill. Root's feed bill remained unpaid.
In litigation between FCC and Root in state court in 2003 and 2004, FCC obtained a judgment...
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