1 – Opinion and Order 

UNITED STATES DISTRICT COURT 

DISTRICT OF OREGON 

Portland Division

NORTHWEST BANK f/k/a NORTHWEST 

SAVINGS BANK, a Pennsylvania state-chartered 

savings association, 

Plaintiff, 

v. 

MCKEE FAMILY FARMS, INC., an Oregon limited 

liability company; SCHARF FARMS, INC., an 

Oregon corporation; DUSTIN WILFONG, 

individually and dba DUSTIN WILFONG FARMS; 

DENNY WILFONG, individually and dba 

WILFONG FARMS; K & J FARMS, LLC, an 

Oregon limited liability company; CREEKSIDE 

VALLEY FARMS, LLC, an Oregon limited liability 

company; ALFRED V. MULLET; SJB FARMS, 

LLC, an Oregon limited liability company; KAUER 

FAMILY FARMS, LLC, an Oregon limited liability 

company; DAN G. FANNING, individually and dba 

FANNING FARMS; CLARKE ELLINGSON; 

GILBERT & SON, INC., an Oregon corporation; 

KEN CRUICKSHANK FARMS, INC., an Oregon 

corporation; LARRY BURGER; DOERFLER 

FARMS, INC., an Oregon corporation; GOLDEN 

VALLEY FARMS, LLC, an Oregon limited liability 

company; ZEIGLER FARMS, LLC, an Oregon 

limited liability company; JANZEN FARMS, LLC, an 

Oregon limited liability company; EDIGER FARMS, 

LLC, an Oregon limited liability company; JOHN 

IMLAH and MARGY IMLAH, individually and dba 

HOOD VIEW FARMS; DARYN BRUTKE; 

ANTHONY DERAEVE; RAINBOW HILL 

RANCH, INC., an Oregon corporation; ROHDE 

GENERATIONS, INC., an Oregon corporation; M. 

GRANT RICE; KEITH B. DEJONG; MATTHEW 

J. RICE; DEAN C. DODSON; RYAN KADELL; 

ROBIN KADELL; MT. HOPE SEED CO., INC., an 

Civil No. 3:15-cv-01576-MO 

 OPINION AND ORDER 

Case 3:15-cv-01576-MO Document 170 Filed 02/09/16 Page 1 of 8
2 – Opinion and Order 

Oregon corporation; RIDDELL FARMS, INC., an 

Oregon corporation; GARY CROSSAN FARMS, 

LLC, an Oregon limited liability company; PAUL H. 

COUSSENS FARMS, LLC, an Oregon limited 

liability company; PHIL SPIESS; TIM PFEIFFER; 

KCK FARMS, LLC, an Oregon limited liability 

company; CARLTON SEED, LLC, an Oregon limited 

liability company; MEADOW RIDGE FARMS, 

INC., an Oregon corporation; MARK W. GEHRING 

and CAROL A. GEHRING, individually and dba 

GEHRING FARMS; TRIPLE K, LLC, an Oregon 

limited liability company; LARRY D. BELL; and 

INTEGRATED SEED GROWERS, LLC, an Oregon 

limited liability company; BEN VAN DYKE FARMS, 

INC., an Oregon corporation; JOHN T. BERNARDS, 

an individual; SUSAN K. BERNARDS, an individual; 

BROOKS FARM, LLC, an Oregon limited liability 

company; BRYCE CRUICKSHANK, an individual; 

MARK COX, an individual; WADE COX, an 

individual; CW FARMS, LLC, an Oregon limited 

liability company; DEERHAVEN FARMS, INC., an 

Oregon corporation; STAN GAIBLER, an individual; 

HAWMAN FARMS, INC., an Oregon corporation, 

also dba RIVERVIEW SEED COMPANY; 

HUNTONS' FARM, LLC, an Oregon limited liability 

company; JDB FARMS, LLC, an Oregon limited 

liability company; L & J VALLEY FARMS, LLC, an 

Oregon limited liability company; EDGAR F. 

LAFAYETTE, individually and dba LAFAYETTE'S 

CALAPOOIA VALLEY FARMS; MID VALLEY 

FARMS, INC., an Oregon corporation; JEFFREY 

MYRON NICHOLS, individually and dba JN 

FARMS; OAK PARK FARMS, INC., an Oregon 

corporation; MATT PARKER, an individual; MARK 

STATZMAN, an individual; and JASON 

WHITEHEAD, an individual, 

Defendants. 

MOSMAN, J., 

Defendant Hawman Farms moved for summary judgment against Northwest seeking a 

declaratory judgment that its possessory lien is a valid, first priority lien on all seeds in its 

possessions. Plaintiff argues both that Hawman waived its lien and that summary judgment is 

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3 – Opinion and Order 

not appropriate. For the reasons set forth below I GRANT Defendant Hawman’s Motion for 

Summary Judgment [131]. 

I. Background 

Hawman Farms and Cover Crop Solution (“CCS”), a Pennsylvania corporation, entered a 

contract for Hawman to plant, harvest, clean, and store a species of radish seed furnished by 

CCS. CCS was to pay Hawman based on the poundage of seed as well as for cleaning and 

testing of the seed. The payments were due on February 15, 2015 and October 15, 2015. 

Hawman has stored the seeds since August 20, 2014. 

In July 2014, Northwest made a loan to CCS of $7,000,000, secured by an interest in all 

of CCS’s assets, including the seeds in question. This interest was perfected through a financing 

statement filed in Pennsylvania; another financing statement was filed in Oregon on August 17, 

2015. Hawman now claims a possessory lien in the seeds. To realize the seeds’ value, Hawman 

would need to proceed to a foreclosure sale. It has not yet determined whether this will be a 

judicial foreclosure or a public sale. 

II. Legal Standard 

Summary Judgment is appropriate if there is no genuine issue as to any material fact. 

Bhan v.NME Hospitals, Inc., 929 F.2d 1404, 1409 (9th Cir. 1991). 

III. Discussion 

Northwest argues Hawman has waived its right to a possessory lien through its contract 

with CCS. In the alternative, Northwest argues that even if Hawman has a lien, summary 

judgment is not appropriate until the lien is foreclosed. 

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4 – Opinion and Order 

a. Summary Judgment is Appropriate 

Northwest argues summary judgment is inappropriate because it is not yet clear what 

laws would govern a foreclosure proceeding. While it is true there are two different laws that 

would govern notice requirements for foreclosure of the lien depending on the type of 

foreclosure Hawman pursues, the argument that summary judgment is inappropriate until 

foreclosure is misplaced. That argument addresses the consequences of notice on the type of 

foreclosure, but does not explain how those consequences change the validity or priority of the 

lien. 

The provision on which Plaintiff relies is ORS 87.196, which governs a public sale. If 

Hawman proceeds with a public sale, ORS 87.196 required Hawman to provide notice to any 

security interest holder by March 17, 2015, which was 30 days after the cleaning of the seeds had 

been completed. Without providing such notice and if they pursue a public sale, Hawman would 

be liable to the security interest holder, Northwest, for the fair market value of the seeds. In 

contrast, if Hawman pursues a judicial foreclosure, the notice provision would not apply. This 

uncertainty as to liability after a sale, according to Plaintiff, precludes me from determining 

which interest has precedence before a sale. 

Plaintiff’s argument fails. Even if Hawman proceeded with a public sale and Northwest 

was ultimately owed the fair market value of the seeds, Hawman’s possessory lien could still 

have precedence over Northwest’s secured interest. The public sale and failure to notice would 

simply mean Northwest may be entitled to compensation after the sale. A declaratory judgment 

that Hawman has a valid possessory lien would not change that outcome. 

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5 – Opinion and Order 

b. No Waiver Occurred 

The parties do not dispute that without the contract between CCS and Hawman, Hawman 

would have a valid possessory lien that would take precedence over Northwest’s interest. 

However, Hawman signed a contract with CCS in which it may have relinquished its right to any 

lien. The narrow question before me is whether that contract waived Hawman’s rights to a 

possessory lien. 

Paragraph 1 of the contract states “the title to all . . . seed produced hereunder shall be 

and remain in [CCS], and that [Hawman] shall have no title therein or lien thereon of the variety 

itself.” Northwest points to this language as support for the proposition that Hawman has 

relinquished all rights to any liens. However, Hawman argues Paragraph 1 must be considered 

in the context of the whole contract, with particular consideration directed at Paragraph 3, which 

states: 

CCS is producing this Variety under a Variety Licensing Agreement for a 

Licensor. The parties agree that the Variety shall at all time remain the property 

of the Licensor of the Variety. In order to enable Licensor to protect its interest in 

the Variety, [CCS] agrees that it shall not pass title to any seed provided to 

[CCS’s] growers and that such seed and the crops produced from the seed shall be 

the property of [CCS] subject only to the lien of the grower for sums due under 

the growing contract (the allowable lien follows the crop growing and production, 

not the variety).” 

Hawman argues the combination of Paragraph 1 and Paragraph 3 shows the 

limitation on liens in Paragraph 1 was intended to reflect the limitation on CCS’s rights to 

the seed under its separate licensing agreement. That is, the growers could not take what 

CCS did not possess (the licensing rights to the seed). Hawman also suggests the 

allowance of a lien in Paragraph 3 contrasts with the broad ban in Paragraph 1, 

suggesting the contract’s ban on no lien “of the variety itself” means no lien on the 

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6 – Opinion and Order 

licensing interest. To resolve this dispute, I must apply traditional principles of contract 

interpretation. 

Oregon law prescribes a three-step process for analyzing contracts. Yogman v. Parrott, 

325 Or. 358, 363, 937 P.2d 1019, 1022 (1997). First, I consider the provision of the contract at 

issue in the context of the four corners of the document. Id. If that is ambiguous, I then examine 

extrinsic evidence of the contracting parties’ intent. Id. Finally, if the meaning of the provision 

remains ambiguous, I may rely on appropriate maxims of construction. Id. Here, the provision 

“no. . .lien of the variety itself” would seem to be a prohibition against all liens. However, when 

read in the context of Paragraph 3, which allows a lien to the grower for sums due under the 

growing contract, it seems clear that “no lien” cannot mean absolutely no lien. The clearest 

explanation is to read “of the variety itself” to mean no lien on the proprietary licensing interest 

of seed the Licensor gave to CCS. Such an interpretation fits with Paragraph 3’s focus on CCS 

not passing title to any of the growers. To the extent it remains ambiguous, neither party has 

offered any extrinsic evidence to be considered at step two. 

At step three, maxims of construction are applied. One such maxim is the rule of 

interpretation against the drafter. Hoffman Const. Co. of Alaska v. Fred S. James & Co. of 

Oregon, 313 Or. 464, 470–71, 836 P.2d 703 (1992); see also Restatement (Second) of Contracts 

§ 206 (“In choosing among the reasonable meanings of a promise or agreement or a term thereof, 

that meaning is generally preferred which operates against the party who supplies the words or 

from whom a writing otherwise proceeds.”). Here, CCS was the drafter as evidenced by its 

letterhead and the blanks for different growers. Applying the maxim, the provision must be 

construed against CCS, and the lien must be allowed. 

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7 – Opinion and Order 

The language of the contract suggests neither CCS nor Hawman intended a blanket 

prohibition on all liens, but rather intended to protect the Licensor’s proprietary interest in the 

seed varietal. To the extent that ambiguity remains beyond the four corners of the document, I 

apply the maxim discussed above to find that Hawman has a valid possessory lien. 

c. Attorney Fees Are Inappropriate 

Hawman moves for attorney fees under ORS 20.105, which allows for attorney fees if the 

opposing party asserted a claim or defense without an objectively reasonable basis. OR. REV.

STAT. 20.105. While it was procedurally improper for Hawman to raise the issue in its motion 

for summary judgment, I find the answer is clear enough to address at this time. Romani v. N.W. 

Tr. Servs., Inc., 2014 WL 1072698, *1 (D. Or. Mar. 17, 2014) (noting “[w]hether pled as a 

remedy or independent claim, neither party is entitled to attorney fees without first prevailing 

and then filing a separate motion”). Northwest offered a reasonable interpretation of the contract 

between Hawman and CCS. There is plain language in the contract to suggest that no liens are 

allowed and the statutory notice requirement for public foreclosures suggests Plaintiff may, at 

some point, end up with the value of the seeds. Thus Hawman’s motion for attorney fees is 

DENIED. 

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8 – Opinion and Order 

IV. Conclusion 

The contract as a whole suggests the parties intended something other than a blanket 

prohibition on all liens. Oregon law grants possessory liens in the absence of a contract 

otherwise. As such, I find that Hawman has a valid possessory lien and GRANT its motion for 

summary judgment [131]. Because Northwest offered reasonable defenses, I DENY Hawman’s 

motion for attorney fees [131]. 

DATED this 9th day of February, 2016. 

 /s/ Michael W. Mosman 

 MICHAEL W. MOSMAN 

Chief United States District Judge 

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