Court Opinion

ID: 9362910
Source: CourtListenerOpinion
Date Created: 2023-01-13 15:03:14.555478+00
Date Added: 2024-06-11T17:15:31.259891
License: Public Domain

IN THE SUPREME COURT OF IOWA

                                   No. 21–0774

            Submitted November 17, 2022—Filed January 13, 2023

QUALITY PLUS FEEDS, INC.,

      Appellee,

vs.

COMPEER FINANCIAL, FLCA,

      Appellant.

      On review from the Iowa Court of Appeals.

      Appeal from the Iowa District Court for Monroe County, Daniel P. Wilson,

Senior Judge.

      An agricultural supply dealer seeks further review of a court of appeals

decision affirming in part and reversing in part a district court’s grant of

summary judgment in a lien priority dispute. DECISION OF COURT OF

APPEALS VACATED; DISTRICT COURT JUDGMENT AFFIRMED IN PART,

REVERSED IN PART, AND REMANDED.

      Mansfield, J., delivered the opinion of the court, in which all participating

justices joined. May, J., took no part in the consideration or decision of the case.

      Dustan J. Cross (argued) and Rick J. Halbur of Gislason & Hunter LLP,

New Ulm, Minnesota, for appellant.
                                      2

      Thomas D. Story (argued), Alexander M. Johnson, and Jennifer E.

Lindberg of Brown, Winick, Graves, Gross, and Baskerville, P.L.C., Des Moines,

for appellee.
                                         3

MANSFIELD, Justice.

      I. Introduction.

      Since the farm crisis of the 1980s, Iowa law has allowed agricultural

suppliers to claim a lien on livestock consuming their products and has granted

this lien priority over previously perfected liens in some circumstances. See Iowa

Code § 570A.5(3) (2020). Here, a supplier furnished feed to two dairy farms that

were related but separate legal entities; the supplier did not receive payment for

the feed. About a year later, the farms closed down, and all the remaining cows

and milk were sold. Relying on the agricultural supplier’s lien statute, the

supplier brought a foreclosure action to recover the amount of its unpaid bills

from the sale proceeds. The district court granted the supplier’s summary

judgment motion, rejecting the arguments of a financial institution which had a

much larger unpaid loan balance and a previously perfected blanket lien as to

both farms. The court of appeals reversed that grant of summary judgment and

remanded.

      On further review, we affirm the district court for the most part. We find

that the supplier was entitled to summary judgment enforcing its lien on the

proceeds from one of the two farms. As to the other farm, there is one issue of

fact. Under the statute, the supplier is entitled to enforce a superpriority lien

only to “the extent of the difference between the acquisition price of the livestock

and the fair market value of the livestock at the time the lien attaches or the sale

price of the livestock, whichever is greater.” Id. On this summary judgment

record, we cannot say whether the cattle sale and milk sale proceeds from the
                                        4

livestock that consumed the supplier’s feed, minus the acquisition price of those

livestock, exceeded the amount of the supplier’s unpaid bill from that farm. We

do not read Iowa Code chapter 570A as incorporating a special standard of proof

one way or another. To foreclose its lien as a superpriority, the supplier need

only offer proof enabling a fact finder to conclude that the underlying statutory

requirements have been met. The proof here does not allow that determination

to be made as a matter of law as to one of the farms.

      We further agree with the district court that the supplier was entitled to

summary judgment on the financial institution’s affirmative defenses, and we

hold that the financial institution is entitled to summary judgment as to the milk

sale proceeds generated by a third dairy farm. Accordingly, we affirm the district

court in part, reverse it in part, and remand for further proceedings consistent

with this opinion.

      II. Background Facts and Proceedings.

      Our case is a priority dispute between two creditors, Compeer Financial,

FLCA (Compeer), and Quality Plus Feeds, Inc. (Quality Plus). The debtors are

Etcher Family Farms, LLC (EFF), Etcher Farms, Inc. (EFI), and Elmwood

Farms, LLC. We refer to them collectively as the “Etcher Entities” or “Etcher.”

The Etcher Entities operated dairy farms in Henry County (EFF), Monroe County

(EFI), and the State of Illinois (Elmwood) until early 2019.

      A. Compeer’s and Quality Plus’s Dealings With the Etcher Entities.

Compeer is a federal land credit association in the business of financing

agricultural operations. From late 2014 through early 2019, Compeer extended
                                           5

credit to the Etcher Entities. The loans from Compeer were secured by both real

property and personal property, including a blanket security interest in all of the

Etcher Entities’ livestock and milk and proceeds therefrom. Compeer perfected

its personal property security interests between December 11, 2014, and

March 4, 2016, by filing UCC financing statements with the Iowa Secretary of

State.

         By late 2016, the Etcher Entities were struggling financially. The situation

deteriorated to the point that in October 2017, Compeer accelerated the entire

Etcher Entities’ debt. By then, the total sum owed exceeded $16 million. To

continue to operate, Etcher purchased feed on credit. Quality Plus sold feed on

credit to EFF and EFI, including mixes designated “calf starter,” “big heifer,” and

“dry cow.” Quality Plus filed financing statements with the Iowa Secretary of

State commencing on October 5, 2017, and continuing thereafter. Iowa Code

§ 570A.4. The financing statements identified the collateral in relevant part as

“all cows now owned by debtor,” “all milk produced from said cows,” and

“proceeds and/or product thereof.” Quality Plus provided feed to EFF for which

it wasn’t paid from September 25, 2017, through March 29, 2018, and it

provided feed to EFI for which it wasn’t paid from July 28, 2017, to March 30,

2018.

         On March 19, 2018, each of the Etcher Entities filed for Chapter 11

bankruptcy protection in the United States Bankruptcy Court for the Southern

District of Iowa. The cases were consolidated. Etcher was unsuccessful in
                                       6

reorganizing its debts, and Compeer filed a motion to dismiss the consolidated

bankruptcy case. The bankruptcy was dismissed on or about January 10, 2019.

      Meanwhile, Etcher continued to sell milk to their sole customer, Dairy

Farmers of America (DFA). DFA issued checks totaling $317,308.51 from April

to May 2019 for milk produced by cows at EFF, EFI, and Elmwood. The checks

were joint checks naming Compeer and Quality Plus as additional payees.

Compeer and Quality Plus were already disputing their relative priorities as to

the milk proceeds. Currently, the $317,308.51 in proceeds are being held in trust

pending resolution of this case. Of these proceeds, $149,683.32 came from the

sale of EFF milk, $54,071.88 came from the sale of EFI milk, and $113,553.31

came from the sale of Elmwood milk.

      Ultimately, Etcher was forced to close, and all of their remaining cattle

were sold. EFF’s 1,223 remaining cattle sold for a total of $714,764.55; EFI’s

1,055 remaining cattle sold for a total of $313,139.54. Although EFI was a

breeding facility with calves, heifers, and bulls, at least $83,185.80 of the EFI

dispersal sale proceeds came from sales of cows.

      B. The Etcher Cattle Herds Over Time. Quality Plus submitted an

affidavit from an individual who worked as a nutritionist-consultant for Etcher.

He attested that based on his experience and his review of detailed animal-by-

animal records at EFF, 677 of the 1,223 cattle that were sold by EFF in March

and April 2019 would also have been at EFF at some point from November 2017

through March 2018 and would have consumed Quality Plus feed.
                                       7

      Compeer provided an affidavit as to what happened to the Etcher herds

over time. On June 30, 2017, EFF had 1,222 cattle and EFI had 3,354 cattle. By

the end of March 2018, when Quality Plus stopped providing feed, the numbers

had declined slightly so that EFF had 1,211 cattle and EFI had 3,339 cattle.

      At the end of 2018, the EFI herd numbers had declined sharply: EFF had

1,282 cattle and EFI had only 1,559 cattle. Many cattle had died or been culled.

Compeer also provided a table showing that as of March 31, 2018, EFF had 684

self-raised cows and 527 cows purchased from EFI. By September 30, 2018, EFF

had 516 self-raised cows and 644 cows purchased from EFI. Also, at some point

EFF purchased 117 cows from an unknown source.

      Compeer also submitted a table showing that EFI’s herd was 100%

self-raised. Notably, Quality Plus provided “calf starter” feed to EFI, which was

the farm where Etcher bred and raised calves during 2017 and 2018. As EFI

heifers matured, they would be sold or transferred into the herds of cows

maintained by EFF, EFI, or Elmwood. Compeer’s table also indicated that in April

2018, EFI made an unexplained downward inventory adjustment of 259 cattle.

      C. Proceedings in the District Court and the Court of Appeals. On

March 13, 2020, Quality Plus filed a petition in the Monroe County District Court

to foreclose its feed lien on the $1,027,904.09 of cattle sale proceeds and the

$317,308.51 of milk sale proceeds. Quality Plus sought to recover a total of

$348,306.30 from the proceeds, based on an unpaid balance of $239,437.81 for

feed supplied to EFF and $108,868.49 for feed supplied to EFI.
                                         8

      Compeer answered, denying Quality Plus’s asserted right of foreclosure

and asserting affirmative defenses and a counterclaim for foreclosure of its

blanket security interest on the proceeds. As a legal matter, Compeer did not

dispute the priority of a feed lien as provided in Iowa Code section 570A.5 over

a prior perfected security interest obtained by a regular lender. However,

Compeer argued that Quality Plus had not properly established that it had a

superior feed lien totaling $348,306.30 in the proceeds. At bottom, Compeer

maintained that Quality Plus failed to trace its lien from the EFF and EFI

livestock that received its feed in the fall and winter of 2017–2018 to the livestock

that were actually sold and generated cash proceeds in March and April 2019.

Compeer also urged that Quality Plus had failed to establish the acquisition

prices of the cattle sold in 2019, noting that the lien is limited to “the difference

between the acquisition price of the livestock and the fair market value of the

livestock at the time the lien attaches or the sale price of the livestock, whichever

is greater.” Iowa Code § 570A.5(3). Further, Compeer maintained that there

should be deductions taken from Quality Plus’s feed lien for $25,000 in adequate

protection payments that Quality Plus received during the automatic stay and

for $65,870.59 based on actions taken by Quality Plus to perfect the lien in

violation of the automatic stay.

      The parties then filed cross-motions for summary judgment. After a

hearing, the court granted Quality Plus’s motion for summary judgment and

denied Compeer’s motion. It entered a judgment for $348,306.30 in Quality

Plus’s favor.
                                        9

      The district court reasoned, first, that Iowa Code section 570A.3 “does not

require a meticulous showing of the path from feed to a specific cow.” Rather, “a

party asserting a lien must show a reasonable link between the feed provided by

the supplier and the livestock.”

      Next, the court reasoned that although a dispute existed “regarding the

number or identity of cows to which the agricultural supply dealer lien could

attach,” there was no dispute that Quality Plus sold feed to the Etcher Entities

that their cattle consumed.

      The court also rejected Compeer’s affirmative defenses. It concluded that

Compeer had waived the adequate protection payments issue by failing to

counter Quality Plus’s briefing on the point; in any event, adequate protection

payments do not result in deductions from the principal amount of the lien. The

court also concluded that the automatic stay under bankruptcy law does not

prohibit a creditor from taking postfiling action to perfect a superpriority lien.

Lastly, the court denied Compeer’s cross-motion for summary judgment.

      Compeer appealed, and we transferred the case to the court of appeals.

      The court of appeals affirmed in part, reversed in part, and remanded. The

court of appeals determined that there were “too many questions left unanswered

to permit granting summary judgment to either party,” stating:

      Navigating the competing priority rules in Iowa Code chapters 554
      and 570A is a somewhat complex and fact-intensive exercise. In this
      case, it requires consideration of which entities’ cattle were supplied
      with Quality Plus’s feed and what happened to those cattle, as the
      lien attaches only to the cattle consuming the feed and their
      proceeds. To the extent Quality Plus asserts a lien in proceeds, the
      proceeds would need to be identifiable and traced to subsequent
      assets. This would not require burdensome and intensive
                                         10

      recordkeeping documenting a separate lien on each animal for the
      amount of feed that animal consumed, but it requires some level of
      identification of the proceeds. Identifying the proceeds here requires
      answers to questions about such things as whether cattle that
      consumed Quality Plus feed were sold, whether replacement cattle
      were purchased, or whether the cattle ended up in the Elmwood
      herd. An additional unsettled question is what the purchase price
      was, if any, for the cattle sold by EFF and EFI that generated the
      sale proceeds fought over here. This is important because Quality
      Plus could only get priority over Compeer’s prior, perfected security
      interest “to the extent of the difference between the acquisition price
      of the livestock and the fair market value of the livestock at the time
      the lien attaches or the sale price of the livestock, whichever is
      greater.” While some of the cattle sold may have been born into the
      herd, thus giving them an acquisition price of zero, it has not been
      conclusively established whether all or just some of the cattle sold
      were born into the herd. Whether any cattle in the herd were
      purchased and, if so, what the acquisition price was are additional
      fact questions for which no answer is definitively provided. These
      unanswered questions contribute to the need to deny summary
      judgment.

             To some degree, Quality Plus seems to acknowledge that some
      of the questions listed above remain unanswered. Quality Plus seeks
      to sidestep this problem by suggesting that resolution of these
      questions is not a material question of fact. It argues that, because
      the size of the contested pot ($1,345,212.60) is so much bigger than
      the claimed lien ($348,306.30), even if the unanswered questions
      are resolved in Compeer’s favor, all it will do is reduce the size of the
      contested pot, but not to the point that the pot is too small to cover
      the claimed lien. So, Quality Plus argues, the disputed facts are not
      material, because they will not change the outcome. While we agree
      that the end result may be that resolution of these factual disputes
      does not change the outcome, it is speculative to reach that
      conclusion based on this record. The unanswered questions create
      a genuine issue as to whether the contested pot is indeed bigger
      than the claimed lien. We will not speculate in order to grant
      summary judgment.

(Footnotes omitted.)

      Quality Plus filed an application for further review, which we granted.
                                         11

      III. Standard of Review.

      We review rulings on statutory interpretation for correction of errors at

law. Garrison v. New Fashion Pork LLP, 977 N.W.2d 67, 76 (Iowa 2022). We review

a district court ruling on a motion for summary judgment for correction of errors

at law. EMC Ins. Grp. v. Shepard, 960 N.W.2d 661, 668 (Iowa 2021).

      IV. Analysis.

      A. The Chapter 570A Agricultural Supply Lien. Iowa Code chapter 570A

creates a statutory lien in favor of agricultural suppliers. This statute was

enacted in 1984 and is generally believed to have been a response to the farm

crisis of the early 1980s. Oyens Feed & Supply, Inc. v. Primebank (Oyens I),

808 N.W.2d 188–89 (Iowa 2011). “Farmers’ assets were often encumbered by

lender security interests, making agricultural suppliers hesitant to sell seed,

feed, or other products to farmers on credit.” Id. at 189. To solve this dilemma,

and to “encourage the credit sale of agricultural supplies,” the legislature decided

to give agricultural suppliers a statutory lien in a farmer’s crops and livestock

with priority over the prior perfected security interests of financial lenders. Id.

      Iowa Code section 570A.3 states that “[a]n agricultural supply dealer who

provides an agricultural supply to a farmer shall have an agricultural lien” for

“the amount owed to the agricultural supply dealer for the retail cost of the

agricultural supply.” In the case of feed for livestock, the lien applies to

“[l]ivestock consuming the feed.” Id. § 570A.3(2). The lien has priority “over an

earlier perfected lien or security interest to the extent of the difference between

the acquisition price of the livestock and the fair market value of the livestock at
                                         12

the time the lien attaches or the sale price of the livestock, whichever is greater.”

Id. § 570A.5(3). Where the livestock were born in the farmer’s facility, their

acquisition price is zero. Oyens Feed & Supply, Inc. v. Primebank (Oyens II),

879 N.W.2d 853, 864–66 (Iowa 2016).

      In two separate cases entitled In re Schley, the United States Bankruptcy

Court for the Northern District of Iowa resolved two legal points concerning Iowa

Code chapter 570A: In re Schley (Schley I), 509 B.R. 901 (Bankr. N.D. Iowa 2014),

and In re Schley (Schley II), 565 B.R. 655 (Bankr. N.D. Iowa 2017). We agree with

both of those decisions.

      First, in Schley I, the bankruptcy court concluded that the agricultural

supply lien—like other security interests—extends to proceeds. 509 B.R. at 912.

The court reasoned,

      Giving an agricultural supply dealer a lien that can only be enforced
      against the collateral (in this case, the pigs) but not the proceeds of
      that collateral could lead in many circumstances—like this one—to
      provide little protection for the agricultural supplier. Such a reading
      certainly would encourage agricultural suppliers to engage in some
      behaviors that are contrary to the purposes of the statute noted in
      [Oyens I]. It would leave those suppliers with little or no practical
      protection and would discourage—rather than encourage—them
      from working with troubled farmers. Even if they decided to work
      with troubled farmers, their incentive would be to race to the
      courthouse for repossession before the collateral is sold and reduced
      to proceeds. This is directly at odds with the purposes of the statute
      clearly articulated by [Oyens I].

Id. at 912–13. The court also noted that by tying the lien amount to “the sale

price of the livestock,” the legislature must have recognized that the lien attaches

to sale proceeds. Id. at 914 (quoting Iowa Code § 570A.5(3)).
                                         13

      Then, in Schley II, the bankruptcy court had to decide whether the “lien

applies pro rata to each [animal] for the amount of feed each [animal] consumed,”

or whether there is a single lien extending to all the livestock of the farmer that

consumed any of the supplier’s feed. 565 B.R. at 660. The bankruptcy court

held, and we concur, that the latter interpretation of chapter 570A is the correct

one. See id. at 660–61. The statute indicates that “[t]he amount of the lien shall

be the amount owed to the agricultural supply dealer for the retail cost of the

agricultural supply,” and it applies to “[l]ivestock consuming the feed.” Iowa Code

§ 570A.3; id. § 570A.3(2). In other words, there is one lien (singular) that attaches

to livestock (singular or plural). We also agree with the bankruptcy court that

animal-by-animal pro rata liens would frustrate legislative intent:

             Here, the Bank’s proposed interpretation would frustrate the
      intent behind chapter 570A. It would discourage a fluid feed market
      because of the burden on agricultural supply dealers to document a
      separate lien on each animal for the amount of feed that that animal
      consumed. The potential limit agricultural supply dealers would face
      on their liens if unable to track the amount of feed each animal
      consumed would discourage them from supplying feed to fully
      leveraged farmers. To safely establish such a lien would involve
      burdensome and intensive recordkeeping, feed separation between
      livestock, and ongoing “detailed and elaborate records” of how much
      feed each animal consumed. These consequences would be contrary
      to the legislature’s intent.

565 B.R. at 661.

      Significantly, though, in Schley I, the court denied the feed supplier’s

motion for summary judgment seeking to enforce its superpriority lien against

livestock sale proceeds. 509 B.R. at 907. The dealer argued there was no dispute

that it had provided feed to the debtors which the debtors fed to their pigs. Id. at

906. However, the debtors had two operation sites and two feed suppliers and
                                        14

had only sold 1,490 out of their 3,061 livestock. Id. at 907. As the court

explained, “Since it is unclear whether Debtors fed WFS feed to the 1,490 pigs

Debtors sold, there is a genuine dispute of material fact whether WFS has an

agricultural lien.” Id.

       B. Was Quality Plus Entitled to Summary Judgment Enforcing a

$348,306.30 Agricultural Supply Lien Against the Proceeds from the Sales

of Cows and Milk? We must now decide whether Quality Plus established a

priority lien (or more accurately liens) in the proceeds as a matter of law. The

district court framed the issue as one of statutory interpretation and concluded

that under chapter 570A, the agricultural supply dealer need only establish

“a reasonable link” between the feed supplied and the livestock in question. The

court of appeals treated the issue as one of summary judgment proof and

identified a series of “unanswered questions” necessitating reversal and remand

for trial.

       We decline to follow either of these two paths. Unlike the district court, we

do not believe chapter 570A comes with its own relaxed standard of proof. A lien

is a lien; summary judgment is summary judgment. Nothing in chapter 570A

indicates that anything other than the customary litigation burdens of proof

apply to agricultural lien cases. But unlike the court of appeals, we do not believe

that numerous fact issues pervade this proceeding. In fact, our review of the

record discloses only one genuine issue of material fact.

       1. Framing the summary judgment issues. On summary judgment, the first

question to ask is whether Quality Plus, which would have the burden of proof
                                         15

at trial, established a prima facie case based on the affidavits and other record

evidence. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251 (1986)

(explaining that summary judgment should be granted where the evidence would

require the granting of a directed verdict for the moving party at trial). There were

two separate entities (EFF and EFI) operating at two separate locations (New

London and Lovilia, respectively) to which Quality Plus supplied feed. Quality

Plus invoiced each entity separately for the purchase price of its feed. Quality

Plus’s petition contains separate foreclosure counts against EFF and EFI.

      The EFF pot of proceeds totals $864,447.87, after combining the EFF

cattle dispersal sales and the EFF milk sales. The EFI proceeds pot comes to

$367,211.42.

      Quality Plus must first prove up its claimed liens of $239,437.81 for EFF

and $108,868.49 for EFI. Then, to establish a superpriority as to EFF, Quality

Plus must show that at least $239,437.81 of the $864,447.87 EFF proceeds pot

were derived from cattle that consumed feed it supplied to EFF (netting out the

acquisition cost of such cattle from the proceeds). For EFI, Quality Plus must

prove that at least $108,868.49 of the $367,211.42 EFI proceeds pot were

derived from cattle that consumed feed it supplied to EFI (again netting out the

acquisition cost of such cattle from the proceeds).

      We have previously decided one case dealing with the tracing of proceeds

in the context of a superpriority. In Citizens Savings Bank v. Miller, a dispute

arose as to whether the plaintiff could claim a purchase money security interest

(PMSI) in fifteen dairy cattle as against a previously perfected blanket lien.
                                         16

515 N.W.2d 7, 8–9 (Iowa 1994). A PMSI, like a feed lien, is a form of superpriority.

See Iowa Code § 554.9324(1). Special status is accorded to the PMSI based on

the familiar rationale that the PMSI holder—like the feed supplier—has provided

added value to the herd, specifically by providing funds enabling the purchase

of additional cattle. In Citizens Savings, we held that because the original fifteen

cattle subject to the PMSI were no longer in the herd, the plaintiff had the burden

of proving which cattle had been received on the disposition of those original

fifteen cattle. 515 N.W.2d at 9. As we explained:

      To successfully claim PMSI priority on this ground, however, the
      proceeds must be identifiable. This would require proof that fifteen
      cattle currently in the [defendant’s] herd are traceable to those
      originally encumbered by [the plaintiff’s] lien. Given the passage of
      time, [the plaintiff] concedes its inability to make that identification.

Id. (citations omitted). Under those circumstances, we affirmed summary

judgment for the blanket lienholder. Id.

      Assuming the record here allows tracing to occur, the next question is

whether the record, including the affidavits and evidence submitted by Compeer,

would also support a reasonable inference that less than $239,437.81 of the

proceeds were derived from cattle that consumed feed supplied to EFF (after

netting out acquisition cost) and less than $108,868.49 were derived from cattle

that consumed feed supplied to EFI (again after netting out acquisition cost).

See Iowa Code § 570A.5(3). In that event, there would be a genuine issue of

material fact.

      2. Deciding the summary judgment issues. We now turn to the record.

Quality Plus offered proof, without rebuttal, that it supplied $239,437.81 worth
                                               17

of feed to EFF for which it was not paid and $108,868.49 worth of feed to EFI for

which it was not paid. Quality Plus also offered proof that the feed it supplied to

EFF was consumed by EFF cattle. Even without separate proof, it is only logical

to infer that the feed supplied to EFI was consumed by EFI cattle.1 So Quality

Plus has established a prima facie case that it is entitled to a superpriority lien

on the cattle that were on the EFF and EFI farms from late 2017 through early

2018 when it supplied feed for which it wasn’t paid.

       Additionally,        Quality       Plus       offered       proof      through         the

nutritionist-consultant’s affidavit that just over half of the cattle liquidated by

EFF in the spring of 2019 (677 out of 1,223 cattle, or 55%) had consumed Quality

Plus feed for which Quality Plus had not been paid. The summary judgment

record likewise supports the inference that at least the same percentage of EFI

cattle sold in the spring of 2019 had consumed the Quality Plus feed previously

supplied to EFI a year or so earlier. In fact, the summary judgment record

indicates that animals were transferred out of EFI, but not into EFI, during 2018.

The only new animals would have been newborn calves.

       As for acquisition price, the record indicates that approximately half of

EFF’s cattle would have had an acquisition price of zero because they were self-

raised. Meanwhile, all of EFI’s cattle were self-raised and therefore had an

acquisition price of zero.

       1Compeer    questions whether Quality Plus’s affiants were competent to make the
statements set forth in their affidavits. We conclude they were. One was a nutritionist-consultant
who had direct experience at Etcher. The other was an accountant for Quality Plus. They both
laid foundation for certain documents and then highlighted certain information within those
documents.
                                       18

      All told, the cash proceeds from the sale of EFF cattle and milk amounted

to $864,447.87—with $714,764.55 in cattle proceeds and $149,683.32 in milk

proceeds. This is around three-and-a-half times the amount of Quality Plus’s

asserted $239,437.81 superiority lien as to EFF. Meanwhile, the cash proceeds

from the sale of EFI cattle and milk amounted to $367,211.42—with

$313,139.54 in cattle proceeds and $54,071.88 in milk proceeds. This is around

three-and-one-third times the amount of Quality’s Plus asserted $108,868.49

superpriority lien as to EFI.

      Starting with EFI, we find no genuine issue of material fact that Quality

Plus has established a superpriority lien of $108,868.49 as to the EFI cattle and

milk proceeds. EFI’s livestock had an acquisition price of zero. Further, the

record shows that at least $83,185.80 of the EFI cattle proceeds came from sales

of cows. Obviously, the $54,071.88 in EFI milk proceeds also were derived from

cows. Any animal classified as a cow would have been on the EFI farm at least a

year before, i.e., during the relevant period when Quality Plus supplied feed.

Compeer has offered no proof to the contrary. So, there is no dispute that there

are proceeds subject to Quality Plus’s EFI lien ($83,185.80 plus $54,071.88, for

a total of $137,257.68) sufficient to cover the full amount of that lien

($108,868.49). This part of the district court’s summary judgment order should

be upheld.

      Turning to EFF, Quality Plus has shown that 55% (677 out of 1,223) of the

cattle sold at the dispersal sales consumed Quality Plus feed during the relevant

time period. We can infer that about 55% of the milk also would have come from
                                         19

those cattle. Meanwhile, Quality Plus’s EFF lien only comes to 28% of the EFF

cattle and milk proceeds ($239,437.81 of $864,447.87). Therefore, at first blush,

there should be plenty of available proceeds to cover that lien.

      However, we don’t know the acquisition price of the 677 cattle. The record

indicates that some of those cattle would have been self-raised and some would

have been purchased from EFI. We are unable to conclude as a matter of law

that the sale—or market—price of the 677 cattle exceeds their acquisition price

by at least $239,437.81. See Iowa Code § 570A.5(3) (stating that superpriority is

available “to the extent of the difference between the acquisition price of the

livestock and the fair market value of the livestock at the time the lien attaches

or the sale price of the livestock, whichever is greater”).

      “Generally, in an action to enforce an agricultural lien, the plaintiff has the

burden of establishing all elements of his or her cause of action.” 3 C.J.S.

Agriculture § 151, at 249 (2013); cf. Sulzberger Excavating, Inc. v. Glass,

351 N.W.2d 188, 192 (Iowa Ct. App. 1984) (“The burden of proof is upon the

mechanic’s lien claimant.”). The wording of Iowa Code section 570A.5(3)

indicates that “the extent of the difference” between acquisition price and either

market or sale price is part of the lienor’s cause of action. This does not mean

that mathematical precision is required. It does mean that evidence would have

to be presented below, either on a renewed summary judgment motion or at trial,

from which a reasonable fact finder might conclude that the foregoing difference

as to the 677 cattle exceeds $239,437.81. We must reverse the district court’s

summary judgment as to the EFF cattle and milk proceeds.
                                              20

       We see no reason to disturb the summary judgment on Compeer’s

affirmative defenses. We agree with the district court that Compeer failed to

preserve the adequate protection payment issue by not briefing it below.2 We also

agree that bankruptcy law permitted Quality Plus to perfect its agricultural

dealer supply lien postpetition without violating the automatic stay. Section

362(b)(3) of the Bankruptcy Code allows the perfection of a lien covered by

section 546(b) even after the bankruptcy filing. See 11 U.S.C. § 362(b)(3)

(excepting from the automatic stay “any act to perfect, or to maintain or continue

the perfection of, an interest in property to the extent that the trustee’s rights

and powers are subject to such perfection under section 546(b) of this title”)

Section 546(b)(1)(A) refers to “any generally applicable law that . . . permits

perfection of an interest in property to be effective against an entity that acquires

rights in such property before the date of perfection.” This is a complicated way

of saying that the automatic stay does not prohibit a secured creditor from taking

steps after the bankruptcy filing to perfect a lien that, under generally applicable

law, would be superior to a previously perfected lien. See, e.g., In re Aznoe

Agribiz, Inc., 416 B.R. 755, 764–66 (Bankr. D. Mont. 2009) (holding that a

supplier’s postpetition actions to perfect a superpriority agricultural lien did not

violate the automatic stay).

       2Compeer   also argues on appeal that $27,304.07 should be deducted from the EFI feed
lien because no financing statement was filed within thirty-one days of those sales as required
by Iowa Code section 570A.4(2). We agree with Quality Plus that this argument was not preserved
below, either.
                                        21

      Finally, we agree with Compeer that it is entitled to the $113,553.31 in

Elmwood milk proceeds currently being held in escrow. Quality Plus argues that

some EFI cattle were transferred to Elmwood after consuming Quality Plus feed

for which Quality Plus wasn’t paid. However, we need not consider this matter

further because under today’s decision, Quality Plus’s EFI superpriority lien will

be fully satisfied out of the EFI cattle and milk proceeds.

      V. Conclusion.

      For the foregoing reasons, we vacate the decision of the court of appeals.

We affirm in part and reverse in part the district court judgment and remand for

further proceedings consistent with this opinion.

      DECISION OF COURT OF APPEALS VACATED; DISTRICT COURT

JUDGMENT AFFIRMED IN PART, REVERSED IN PART, AND REMANDED.

      All justices concur except May, J., who takes no part.