Opinion ID: 1135873
Heading Depth: 1
Heading Rank: 2

Heading: Business Entities Ineligible Under R.S. 9:451(1)

Text: After the misinterpretation of R.S. 9:4521 via the unrelated Article 3217, the majority's discussion and analysis which follows is flawed for several reasons. The basis of the holding is that Bayou Pierre cannot be a laborer because Bayou Pierre is a partnership that entered into a contract to pick the cotton. The majority holds that only individuals are eligible for first priority under R.S. 9:4521(1). [3] The majority seems to have no problem with the fact that the remaining claimants in this case are all business entities. The majority fails to even address this discrepancy. The majority, without discussion, holds that T.L. James, Inc., the corporation who leased the land to Bat Farms, and Ag Services of America, Inc., another corporation, are ranked first and second in order of priority pursuant to R.S. 9:4521(3). T.L. James, Inc., according to the appellate court, could not use the lessor's privilege of R.S. 9:4521(2) because they did not act in a timely manner. Bayou Pierre Farms v. Bat Farms Partners, III, 676 So.2d 643, 647-48 (La.App. 3 Cir.1996). The appellate court held that otherwise T.L. James, Inc. would have been eligible under R.S. 9:4521(2) as a lessor. Id. By affirming, the majority now holds that R.S. 9:4521(2), along with 9:4521(3), is applicable to business entities. How can subsections (2) and (3), and assumedly (4), include businesses, while subsection (1) only applies if there is no business organization involved? The statute itself makes no such distinction. There is nothing here to support such a disparate treatment of claimants within the same statute. Had the legislature intended such an inconsistency, it would have indicated as much. The majority, without any discussion, rewrites R.S. 9:4521, inserting individual into subsection (1) while adding individual or corporation or partnership into subsections (2) through (4). Most troubling is that the majority's analysis of R.S. 9:4521 fails to address the purpose of the statute and fails to appreciate the repercussions of their holding upon that purpose. The purpose of subsection (1) is that crops will not go unharvested for possible lack of adequate funds to pay all prior creditors. The claimants enumerated in subsection (1) are those involved in the harvest. Such claimants are chronologically last in the line of creditors. By giving the harvester the protection of first priority, the statute ensures that the crops will be harvested. Absent this privilege, the harvester will be reluctant to accept a contract with any grower who is less than absolutely financially sound. A harvester would not likely gamble that the proceeds will be sufficient to cover all previous creditors. Under today's holding, no business entity can use R.S. 9:4521 to ensure that it will be paid to harvest the crops. This will place businesses such as Bayou Pierre in the position to have to financially assess their prospective client farms before entering into a contract to harvest. The financial assessment will have to be detailed to such a degree that the business can determine that the proceeds from the potential crops will cover all previously perfected security interests with sufficient funds remaining to pay the harvesting business. If the grower is deficient, or even potentially deficient, the harvesting business will decline for fear of the loss. The crops will go unharvested. The more financially precarious a grower is, the more likely his crops will spoil in the field. The consequences are obvious. None of his creditors will be paid. Furthermore, good crops will spoil for want of harvest. Both of these are against public policy and violate the apparent intent of the statute's privilege. Additionally, the only remaining claimants eligible under the statute do not, as a practical matter, obtain security interests in crops. Today's holding is that subsection (1) refers only to individuals and does not apply to a business entity. Such an interpretation renders subsection (1) meaningless. Individual laborers do not perfect security interests in unharvested crops. [4] A farm operator is highly unlikely to consider an individual laborer as a creditor. Neither is a farm operator likely to give an individual laborer a security interest in his unharvested crops. [5] Because the majority's holding leads to the absurd result that business entities are protected under R.S. 9:4521(2), (3), and (4) while they are ineligible under R.S. 9:4521(1) despite the lack of any supporting statutory language, and because the holding ignores the purpose of R.S. 9:4521(1) and renders it meaningless, I must respectfully dissent.