Iowa State Commerce Com'n v. Manilla Grain Terminal, Inc.

• Citation: 362 N.W.2d 562
• Decision Date: 13 February 1985
• Docket Number: No. 84-771,84-771
• Parties: IOWA STATE COMMERCE COMMISSION, Appellee, v. MANILLA GRAIN TERMINAL, INC., Respondent, and IGF Insurance Company, Appellant.
• Court: Iowa Supreme Court

Page 562

362 N.W.2d 562

IOWA STATE COMMERCE COMMISSION, Appellee, v. MANILLA GRAIN TERMINAL, INC., Respondent, and IGF Insurance Company, Appellant.

No. 84-771.

Supreme Court of Iowa.

Feb. 13, 1985.

Larry L. Seckington and Michael J. Schroeder of Brick, Seckington, Bowers, Swartz & Gentry, P.C., Des Moines, for appellant.

Philip E. Stoffregen, General Counsel, Patrick J. Nugent, Deputy Counsel, and Joan Susan Allender, Asst. General Counsel, Iowa State Commerce Commission, for appellee.

Considered by REYNOLDSON, C.J., and McGIVERIN, LARSON, SCHULTZ, and WOLLE, JJ.

LARSON, Justice.

This is an appeal in an action brought by the Iowa State Commerce Commission seeking appointment as receiver of the Manilla Grain Terminal pursuant to Iowa Code section 543.3 (1983). The receivership action resulted from alleged shortages in the quantity and quality of grain stored in the facility. The commission was appointed as receiver and disposed of the stored grain. Net proceeds from the sale were invested through the state treasurer pending distribution to grain depositors.

The issues raised in this appeal arise from the district court's approval of the commission's proposed "plan of distribution," Iowa Code section 543.3(3). Specifically, the plan proposed: (1) that the commission be reimbursed pursuant to Iowa Code section 543.4(6) for the salary of its staff attorney in connection with the receivership; (2) that the liability of IGF Insurance Company, as surety on the warehouse bond, be determined without consideration of interest earned on the grain sale proceeds; and (3) that the surety company be required to pay interest on its liability from the date of the commission's appointment as receiver.

IGF filed objections to the plan, arguing: (1) that the fees of the commerce commission's staff attorney were not reimbursable as a receivership expense; (2) that the surety's liability should be reduced by the amount of interest earned on the receiver's sale of the grain; and (3) that no interest was due on its liability since it was, as yet, undetermined and because there was no statutory authority for such.

The trial court essentially adopted the commission's recommendations, and this appeal followed. We affirm.

I. The Attorneys Fees.

The commission asserted in its interim report that it had "incurred costs of $5198.97 which are directly attributable to the receivership." Included as a portion of these costs was the salary of its staff attorney, Ron Polle. IGF maintains that this was an improper receivership expense and could not be deducted from the receivership assets.

Iowa Code section 543.4(6), upon which the commission relied, provides:

The commission shall be entitled to reimbursement out of commodities or proceeds held in receivership for all expenses incurred as court costs or in handling and disposing of stored commodities, and for all other costs directly attributable to the receivership. The right of reimbursement of the commission shall be prior to any claims against the commodities or proceeds of sales thereof, and shall constitute a claim against the surety bond of the licensee.

The trial court found the attorney's salary to be reimbursable. In a motion for enlargement or amendment of the findings and conclusions filed under rule 179(b), the surety company requested the trial court cite the authority "upon which it relied in concluding that the time spent by Ron Polle [the staff attorney] was reasonable and reimbursable as a receivership expense." The court responded by merely citing a stipulation made by the parties to the effect that the staff attorney did in fact spend 45.5 hours on the receivership. The court did not cite any authority for the reimbursement of staff attorney expense.

The issue which confronts us at the outset is whether the issue was properly raised in the district court. In its response to the proposed report filed by the commission, the surety company merely objected to the number of hours involved in the attorneys fee claim; it did not challenge the authority of the court to provide for reimbursement.

Under these circumstances, we will not consider the matter on appeal. While under a broad reading of the rule 179(b) motion, the issue might be considered to have been raised, it was too late. As rule 179(b) clearly indicates, it is one for the enlargement or amendment of existing conclusions and findings; it does not provide a vehicle through which to raise additional issues. See Osborne v. Iowa Natural Resources Council, 336 N.W.2d 745, 747-48 (Iowa 1983).

II. The Accrued Interest Issues.

Shortly after its appointment as receiver, the commission sold the grain and invested the proceeds. The trial court ruled this interest should be distributed on a pro rata basis to depositors holding valid claims before the extent of the surety's liability was determined.

The surety contends that it was error to return the accrued interest on the grain sale proceeds to depositors. According to its theory, the interest should be credited to its obligation as surety on the warehouse bond. It bases its argument on section 543.4(4), which provides:

The plan of disposition, as approved by the court, shall provide for the distribution of the stored commodities, or the proceeds from the sale of commodities, or the proceeds from any insurance policy or surety bond, or any combination thereof, less expenses incurred by the commission in connection with the receivership, to depositors on a pro rata basis as their interests are determined. Distribution shall be without regard to any setoff, counterclaim, or storage lien or charge.

Under the surety's theory, interest earned on the grain sale receipts became part of the "proceeds" under section 543.4 and therefore must be used to satisfy receivership expenses and claims before there is a determination of the surety's liability. In other words, the accrued interest would be applied to the benefit of the surety. We do not agree.

A receiver is an officer appointed by the court to take into its custody the control and management of property or funds of another, pending...