Quality Plus Feeds, Inc. v. Compeer Financial, FLCA

Summary

The Iowa Supreme Court addressed a priority dispute between an agricultural feed supplier and a financial institution holding previously perfected blanket security interests in livestock and milk proceeds. The court held that the feed supplier established a superpriority lien as to proceeds from one dairy operation, while a genuine issue of material fact remained concerning the acquisition price of livestock from another operation. The court vacated the court of appeals decision, affirmed in part and reversed in part the district court judgment, and remanded.

Holdings

1. Quality Plus established a superpriority lien of $108,868.49 as to the EFI cattle and milk proceeds, as EFI's livestock had an acquisition price of zero and proceeds sufficient to cover the lien were undisputed.
2. Quality Plus did not establish a superpriority lien on the EFF proceeds as a matter of law because the acquisition price of the 677 cattle that consumed Quality Plus feed was not established, making it impossible to determine if the difference between acquisition price and sale price exceeded the lien amount.
3. The agricultural supply lien extends to proceeds of the livestock.
4. The lien is a single lien that attaches to all livestock consuming the supplier's feed, not an animal-by-animal pro rata lien.
5. Quality Plus's postpetition perfection of its agricultural supply lien did not violate the automatic stay.
6. Compeer was entitled to the $113,553.31 in Elmwood milk proceeds because Quality Plus's EFI lien would be fully satisfied from EFI proceeds, making its claim to Elmwood proceeds moot.

Questions Presented

1. Whether Quality Plus established its entitlement to a superpriority agricultural supply lien on the proceeds from the sale of livestock and milk as a matter of law under Iowa Code chapter 570A.
2. Whether the agricultural supply lien extends to proceeds.
3. Whether the lien applies per animal or as a single lien to all livestock consuming the feed.
4. Whether Quality Plus's postpetition perfection of its lien violated the bankruptcy automatic stay.
5. Whether Compeer was entitled to the milk proceeds from the Elmwood farm.

Disposition

reversed_and_remanded