First National Bank v. Profit Pork, LLC

820 N.W.2d 592, 78 U.C.C. Rep. Serv. 2d (West) 602, 2012 WL 3792175, 2012 Minn. App. LEXIS 96
CourtCourt of Appeals of Minnesota
DecidedSeptember 4, 2012
DocketNo. A11-1732
StatusPublished

This text of 820 N.W.2d 592 (First National Bank v. Profit Pork, LLC) is published on Counsel Stack Legal Research, covering Court of Appeals of Minnesota primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
First National Bank v. Profit Pork, LLC, 820 N.W.2d 592, 78 U.C.C. Rep. Serv. 2d (West) 602, 2012 WL 3792175, 2012 Minn. App. LEXIS 96 (Mich. Ct. App. 2012).

Opinion

OPINION

BJORKMAN, Judge.

On appeal from summary judgment, appellant Wilmont-Adrian Cooperative argues that the district court erred in holding that it has a production-inputs lien, inferior to respondent First National Bank’s (FNB) security interest, and therefore cannot prevail on its Uniform Commercial Code (UCC) and conversion claims against FNB. Because we conclude that Wilmonb-Adrian has a production-inputs lien under Minn.Stat. § 514.966, subd. 3, rather than a superior feeder’s lien under Minn.Stat. § 514.966, subd. 4, we affirm.

FACTS

Profit Pork, LLC is a now-defunct company that formerly engaged in the business of raising and selling hogs. FNB 1 extended a $1,300,000 line of credit to Profit Pork, protected by a security interest in Profit Pork’s hog inventory, which FNB perfected on January 6, 2006. Over the next few years, FNB repeatedly increased the credit line. In return, Profit Pork provided additional security agreements. Profit Pork defaulted on the final “change in terms” agreement in March 2010.

From August 31, 2008, to June 15, 2010, Wilmont-Adrian provided feed and related services to Profit Pork. The undisputed record demonstrates that Wilmont-Adrian rolled and cracked grain to industry size; mixed the grain with materials such as corn, minerals, and antibiotics based on Profit Pork’s requests; delivered the feed to Profit Pork’s facilities; recorded hog performance; and recommended a stage feeding program based on hog growth. Profit Pork became indebted to Wilmont-Adrian in the amount of $587,496.21. On June 21, 2010, Wilmont-Adrian filed a UCC financing statement and a statutory-lien notice on the hogs.

FNB commenced this replevin action to foreclose on its security interest in Profit Pork’s hogs. FNB then moved for prejudgment recovery of the hogs. The district court granted the motion, permitted FNB to sell the hogs in accordance with article 9 of the UCC, Minn.Stat. §§ 336.9-101-.9-709 (2010), and directed FNB to deposit the proceeds into an escrow account pending the resolution of competing claims. FNB sold the hogs, deducted sale expenses, and deposited $514,510.10 in proceeds into an escrow account.

[594]*594Wilmont-Adrian answered FNB’s complaint and moved for summary judgment, arguing, among other things, that (1) Wil-monb-Adrian holds a feeder’s lien on the hogs that is superior to FNB’s security interest; (2) FNB’s sale of the hogs was commercially unreasonable in violation of the UCC, Minn.Stat. § 336.9 — 610(b); and (3) FNB’s sale of the hogs constituted a conversion of Wilmont-Adrian’s lien. FNB also moved for summary judgment, asserting that (1) Wilmont-Adrian holds a production-inputs lien that is inferior to FNB’s security interest; (2) FNB’s lien is superior to all others, aside from respondent New Vision Coop’s alleged lien; and (3) FNB is therefore entitled to an order releasing to it the portion of escrowed funds exceeding New Vision’s alleged lien.

In a well-reasoned decision, the district court determined that Wilmonb-Adrian has a production-inputs lien, inferior to FNB’s security interest, and it therefore cannot prevail on its UCC and conversion claims. Accordingly, the district court granted summary judgment in favor of FNB and denied Wilmont-Adrian’s motion. This appeal follows.

ISSUE

Does Wilmont-Adrian have a production-inputs lien under Minn.Stat. § 514.966, subd. 3, or a feeder’s lien under Minn. Stat. § 514.966, subd. 4?

ANALYSIS

This case presents a question of statutory interpretation, which we review de novo. See ILHC of Eagan, LLC v. Cnty. of Dakota, 693 N.W.2d 412, 419 (Minn.2005). “The primary objective of statutory interpretation is to ascertain and give effect to the intention of the legislature.” Greene v. Comm’r, Minn. Dep’t of Human Servs., 755 N.W.2d 713, 721 (Minn.2008). We first determine whether the statutory language is clear. See ILHC, 693 N.W.2d at 419. In doing so, we “take[] into account the whole structure of the statute and the context of the challenged language.” In re Robledo, 611 N.W.2d 67, 69 (Minn.App.2000). If the language is clear, we must apply its plain meaning. ILHC, 693 N.W.2d at 419. If the language is ambiguous, we then “apply other canons of construction to discern the legislature’s intent.” Brua v. Minn. Joint Underwriting Ass’n, 778 N.W.2d 294, 300 (Minn.2010). We presume the legislature intends to effectuate all provisions of a statute, and “no word, phrase, or sentence should be deemed superfluous, void, or insignificant.” Am. Family Ins. Grp. v. Schroedl, 616 N.W.2d 273, 277 (Minn.2000) (quotation omitted); see also Minn.Stat. § 645.17(2) (2010).

Minnesota law establishes special priorities for agricultural livestock liens. Minn.Stat. § 514.966 (2010). The issue here is which of the section 514.966 lien provisions applies to Wilmont-Adrian’s activities. Subdivision 3 grants a production-inputs lien to a “supplier furnishing livestock production inputs in the ordinary course of business.” Minn.Stat. § 514.966, subd. 3(a). “Livestock production input” is defined as “feed and labor used in raising livestock,” including “commercial feeds, feed ingredients, mineral feeds, drugs, animal health products, [and] customer-formula feeds used for feeding livestock.” Minn.Stat. § 514.965, subds. 6, 8 (2010). Subdivision 4 grants a feeder’s lien to one who “(1) stores, cares for, or contributes to the keeping, feeding, pasturing, or other care of livestock, including medical or surgical treatment and shoeing, and (2) does so in the ordinary course of business, at the request of the owner or legal possessor of the livestock.” Minn.Stat. § 514.966, subd. 4(a). A perfected feeder’s lien always takes priority over a previously perfected security interest, whereas a produc[595]*595tion-inputs lien only does so if the supplier satisfies strict notice requirements that Wilmont-Adrian did not fulfill.2 Minn. Stat. § 514.966, subds. 3(f), 8(c), 8(f)-(i) (2010).

To determine which of the two lien provisions applies to Wilmont-Adrian, we first consider whether the statutory language is clear. Wilmont-Adrian argues that the language of the feeder’s lien provision is clear and that one who simply supplies feed to another is entitled to a feeder’s lien because the supplier “contributes to the ... feeding ... of livestock.” The legislature did not define “contributes,” but we observe that the common definition of the word is broad. See Webster’s Third New International Dictionary 496 (1993) (defining “contribute” as to “have a share in any act or effect”). Accordingly, when viewed in isolation, the phrase, “contributes to the ... feeding ... of livestock” could extend to anyone in the feeding chain, including those who supply feed to a livestock owner.

But consideration of this one phrase does not end our plain-meaning inquiry. See Robledo, 611 N.W.2d at 69 (explaining that plain meaning takes account of statutory context).

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Related

Karlstad State Bank v. Fritsche
374 N.W.2d 177 (Court of Appeals of Minnesota, 1985)
ILHC OF EAGAN, LLC v. County of Dakota
693 N.W.2d 412 (Supreme Court of Minnesota, 2005)
General Casualty Co. of Wisconsin v. Mid-Continent Agencies, Inc.
485 N.W.2d 147 (Court of Appeals of Minnesota, 1992)
Greene v. Commissioner of the Minnesota Department of Human Services
755 N.W.2d 713 (Supreme Court of Minnesota, 2008)
Brua v. MINNESOTA JOINT UNDERWRITING ASS'N
778 N.W.2d 294 (Supreme Court of Minnesota, 2010)
American Family Insurance Group v. Schroedl
616 N.W.2d 273 (Supreme Court of Minnesota, 2000)
In Re Robledo
611 N.W.2d 67 (Court of Appeals of Minnesota, 2000)
In re the Risk Level Determination of R.B.P.
640 N.W.2d 351 (Court of Appeals of Minnesota, 2002)

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Bluebook (online)
820 N.W.2d 592, 78 U.C.C. Rep. Serv. 2d (West) 602, 2012 WL 3792175, 2012 Minn. App. LEXIS 96, Counsel Stack Legal Research, https://law.counselstack.com/opinion/first-national-bank-v-profit-pork-llc-minnctapp-2012.