Opinion ID: 2083741
Heading Depth: 1
Heading Rank: 12

Heading: rcc

Text: RCC asserts under a variety of theories that the PSC erred in denying its claim in which it alleged it was the owner of 102,592 bushels of corn, with an approximate value of $192,000. The PSC determined that on March 11, 2002, RCC was neither an owner, depositor, nor storer of grain at AEI. Finding no error on the record relative to this determination, we reject RCC's arguments on appeal. RCC's claim of ownership is based primarily on two warehouse receipts issued by AEI, receipts Nos. B665911 and B665949. RCC asserts that these two receipts demonstrate it had purchased grain which was being stored at AEI on March 11, 2002. The PSC rejected this argument. The record reflects that receipt No. B665911 was issued on July 26, 2001, purportedly showing RCC's purchase of 25,000 bushels of corn from AEI. There is evidence that RCC later took delivery of 22,408 bushels of corn under receipt No. B665911, leaving a balance of 2,592 bushels of corn. The record reflects that receipt No. B665949 was issued on February 21, 2002, and purportedly showed RCC's previous purchase of 100,000 bushels of corn from AEI on January 14, 2000. In this connection, the record also contains an internal RCC document signed by J. Daniel Roberts, RCC's managing partner, that memorializes the purchase of 100,000 bushels of corn from AEI on January 14, 2000. According to this document, the corn was to be delivered to RCC whenever [it] want[ed] it, and the point of delivery was RCC. Elsewhere on the document is the notation, RCC ... prepaid this. The record also includes an affidavit from Roberts. With regard to receipt No. 665911, Roberts stated that this receipt represented RCC's purchase of 25,000 bushels of corn from AEI on July 26, 2001, and that RCC paid a total of $49,250 to AEI for the corn. In his affidavit, Roberts stated that receipt No. B665949 was a reissued receipt that was prepared by AEI to replace the original January 2000 receipt. Roberts asserted in his affidavit that the receipt was reissued at AEI's request, after AEI stated that it wanted `to make the Warehouse Receipt more current.' With regard to that particular transaction, Roberts stated that on January 14, 2000, RCC issued a check to AEI for the purchase of the corn. A copy of that check is contained in the record, and in the memo section of the check is the notation pre-pay corn. Roberts further stated that AEI agreed to waive storage charges on the purchased corn as an inducement for their arrangement and that the corn was to be delivered to RCC at RCC's request. In his affidavit, Roberts stated that RCC had routinely purchased thousands of bushels of corn [from AEI] for delivery at [RCC] facilities. In these instances, corn was paid for with delivery to follow. Roberts stated that on those occasions, he recognized that title to the grain did not pass until the grain was delivered and [RCC] was at risk until actual delivery of the grain. As to the transactions represented by receipts Nos. 665911 and 665949, however, Roberts stated that on those two occasions, RCC did not desire immediate delivery and that he and an AEI representative had discussed the topic that title to the grain would pass to RCC upon payment and the issuance of the warehouse receipts. The record also contains the testimony of Sherry Peterson, AEI's office manager, whose responsibilities included maintaining AEI's financial books, records of sales, and contracts. Peterson testified in general with regard to AEI's business practices and as to specific transactions involving various claimants. With regard to AEI's grain sales to RCC, Peterson's testimony contradicted Roberts' affidavit, in that Peterson testified to the effect that AEI did not consider title to the grain to have passed to RCC until the grain was delivered to RCC. When considering RCC's claim, the PSC stated in its order that according to the practice of the grain warehouse industry, title to grain did not pass until it had been delivered, and that when the buyer took possession of the purchased grain, the buyer turned over the warehouse receipt to the warehouse, in accordance with § 88-540 and 291 Neb. Admin. Code, ch. 8, § 002.08E. As to receipt No. 665911, the PSC found that RCC had retained the warehouse receipt notwithstanding partial delivery and that its failure to surrender the receipt denied it protection under 291 Neb. Admin. Code, ch. 8, § 001.01D. The PSC determined that RCC was a creditor as to the remaining value encompassed by receipt No. 665911. With regard to receipt No. 665949, the PSC noted numerous documents in the record reflected that the parties intended the corn purchase to be a prepay arrangement, in which RCC paid in advance for corn to be delivered at a future date. Referring to the evidence, the PSC determined that RCC had only made `advances' to AEI and did not purchase the grain `in store.' Thus, the PSC determined that notwithstanding the existence of receipts, the evidence did not demonstrate title to the corn that RCC claimed had in fact passed to it. According to the PSC, RCC was, at best ... a lender or a mortgagee [to AEI], not an owner of grain. Regarding receipt No. 665949, the PSC noted that the fact that RCC had not been assessed storage charges by AEI was consistent with its determination that title to the corn did not pass to RCC until it was delivered to RCC. The order on rehearing was to the same effect. Accordingly, the PSC determined that on March 11, 2002, RCC was not an owner, depositor, or storer of grain at AEI, and was not entitled to a pro rata distribution of the proceeds. On appeal, RCC raises various arguments challenging the PSC's determination. RCC initially claims that the PSC's decision is not supported by competent evidence. We disagree. The record contains several documents reflecting that RCC was prepaying, or paying in advance, for the corn noted on the warehouse receipts. The grain was to be delivered to RCC at some unstated future date or dates, whenever [it] want[ed] it. Roberts, RCC's managing partner, acknowledged that RCC had purchased corn from AEI on numerous occasions and that in RCC's course of dealing with PSC, RCC did not normally consider title to grain it had purchased from AEI to pass from AEI to RCC until the grain was actually delivered. Roberts stated that until that delivery occurred, RCC was assuming the risk of loss. Roberts' affidavit testimony to the effect that he and an AEI representative had discussed that title to the grain would pass to RCC upon the issuance of the warehouse receipts at issue was directly contradicted by Peterson's testimony to the effect that AEI did not consider the title to the corn had passed to RCC until RCC had taken delivery. Given the evidence, the PSC resolved the conflicts in the record and determined that RCC's transactions with AEI, represented by receipts Nos. 665911 and 665949, were not actual purchases of corn, but, rather, were the advance of sums or prepayments for corn. In reviewing a decision of the PSC, it is not the province of an appellate court to weigh or resolve conflicts in the evidence or the credibility of the witnesses; rather, an appellate court will sustain the decision of the PSC if there is evidence in the record to support its findings. See In re Proposed Amend. to Title 291, 264 Neb. 298, 646 N.W.2d 650 (2002). If there is evidence to sustain the findings of the PSC, an appellate court cannot substitute its judgment for that of the PSC. Id. Determinations by the PSC are a matter peculiarly within its expertise and involve a breadth of judgment and policy determination that will not be disturbed by an appellate court in the absence of a showing that the action of the PSC was arbitrary or unreasonable. Id. The PSC's determination that on March 11, 2002, RCC was not an owner, depositor, or storer of grain at AEI, and thus, was not entitled to share in a distribution of the proceeds is supported by competent evidence in the record, and we reject RCC's argument on appeal to the contrary. RCC also asserts that the PSC erred by failing to rely on the provisions of article 7 of the Nebraska Uniform Commercial Code pertaining to Documents of Title. See Neb. U.C.C. § 7-101 et seq. (Reissue 2001). RCC refers in particular to §§ 7-202(1), 7-207(2), and 7-401. In summary, RCC argues that under article 7, the warehouse receipts represented its entitlement to stored grain without regard to delivery. In support of this assertion, RCC argues in effect that under article 7, the receipts are sufficient to pass title. Contrary to RCC's argument on appeal, the PSC did not deny RCC's claim because of a determination that the warehouse receipts were defective, nor did the PSC deny RCC's claim because the goods were fungible and commingled. Rather, the PSC determined that based upon the evidence, AEI and RCC were involved in a prepayment arrangement for the corn, the receipts did not eclipse the arrangement, and pursuant to the arrangement and consistent with the custom in the industry, title did not pass to RCC until the corn was delivered to RCC. Assuming, arguendo, that the receipts upon which RCC relies show a future entitlement to the quantity of grain reflected therein, contrary to RCC's claim, the record does not support its assertion that such grain was, in fact, stored at AEI on March 11, 2002. Thus, even considering the receipts, which may provide RCC with a basis for relief elsewhere, the PSC's determination in this case is controlled by § 88-547 and is supported by competent evidence. Finally, RCC argues that the PSC's determination, which rejected RCC's assertion that the receipts conclusively show that title to grain transferred to it, violates public policy. We do not agree. The language of § 88-547 as written by the Legislature makes clear that a successful claimant must be an owner, depositor, or storer of grain at the time the PSC takes title to the grain stored in the warehouse. The facts failed to establish that RCC was an owner, depositor, or storer at AEI on March 11, 2002. In the absence of such a showing, the Legislature has determined there is no entitlement to the proceeds. We have previously recognized that it is the function of the Legislature through the enactment of statutes to declare what is the law and public policy of this state. State v. Warriner, 267 Neb. 424, 675 N.W.2d 112 (2004). Pursuant to the provisions of § 88-547, the Legislature has declared that it is the public policy of this state that an entity's status as an owner, depositor, or storer of grain and its entitlement to a pro rata share of the proceeds are to be determined at the time the PSC takes title to the grain. It is properly the province of the Legislature, and not this court, to make such a policy determination. Danler v. Rosen Auto Leasing, 259 Neb. 130, 609 N.W.2d 27 (2000). Thus, we find no merit to RCC's argument that the PSC's decision violates public policy.