Court Opinion

ID: 4459685
Source: CourtListenerOpinion
Date Created: 2019-11-27 16:05:12.649039+00
Date Added: 2024-06-11T14:52:33.133178
License: Public Domain

IN THE COURT OF APPEALS OF IOWA

                                  No. 18-2059
                           Filed November 27, 2019

THOMAS KOHN,
    Plaintiff-Appellant,

vs.

JOSEPH MUHR,
     Defendant-Appellee.
________________________________________________________________

      Appeal from the Iowa District Court for Woodbury County, Duane E.

Hoffmeyer, Judge.

      Thomas Kohn appeals the district court’s ruling that he falls within the

definition of debtor for purposes of a harvester’s lien. AFFIRMED.

      Peter J. Leo and Bradley Nelson of Norelius Nelson Law Firm, Denison, for

appellant.

      Scott L. Halbur, Lance Lange, and Angela Morales of Faegre Baker Daniels

LLP, Des Moines, for appellee.

      Heard by Bower, C.J., and May and Greer, JJ.
                                          2

BOWER, Chief Judge.

         Thomas Kohn appeals the district court’s decision granting Joseph Muhr’s

motion for summary judgment and denying Kohn’s own motion for partial summary

judgment regarding his “debtor” status in a harvester’s lien claim. We find Kohn is

a debtor within the meaning of Iowa Code section 571.1B (2017) and affirm.

         I.       Background Facts & Proceedings

         Kohn operates a row-crop farm operation in Woodbury and Plymouth

counties, farming over 14,000 acres of land owned and rented by Kohn and his

son, Anthony.1 Kohn provides all the farming services on Anthony’s property. In

exchange, Anthony provides labor to Kohn’s farm operation and pays Kohn

approximately $400,000 per year.2

         Muhr provides farming services, including planting and harvesting, to

farmers.

         In the fall of 2016, Kohn arranged for Muhr to harvest nearly 2000 acres of

corn. Before the work started, Kohn provided Muhr with crop-insurance maps

specifying the fields to be harvested; the maps identified Anthony as the insured

party.        Kohn directed Muhr to deliver approximately 250,000 bushels of the

harvested grain to a nearby elevator in Kohn’s name. Muhr also delivered grain to

a storage bin in Cushing, Iowa, owned by Kohn and his wife, where it was stored

with Kohn’s grain.3 According to Kohn, the grain delivered to the elevator was

1
  Estimates in the record show Kohn farming between 6500 and 8100 acres, and Anthony
farming 7000 to 7500 acres of land.
2
  In bad years, Kohn would delay or forgive the cash payment from Anthony. Anthony did
not own his own harvest equipment at the time and did not budget separately to pay for
machine hire or custom harvesting.
3
  Additional deliveries were made in Anthony’s name to an ethanol plant and to private
storage bins on one of their farms.
                                            3

Anthony’s when harvested. Then, prior to delivery, he and Anthony completed an

even exchange on paper for grain Kohn had stored in the Cushing storage bin.

Kohn sold the grain immediately upon delivery to the elevator by Muhr.

       Muhr started harvesting in November 2016 and, following numerous

weather-related delays, completed his work on April 8 or 9, 2017. Upon completing

his work, Muhr went to Kohn for payment. Neither Kohn nor Anthony paid Muhr

for his harvesting work within ten days of completion.4

       On April 17, 2017, Muhr filed a financing statement with the Iowa Secretary

of State identifying both Kohn and Anthony as debtors under Iowa Code

chapter 571.

       On May 5, Kohn notified Muhr he was refusing to pay him and raised an

alleged performance issue.

       Muhr sent Kohn a demand letter on May 26.

       On June 20, Kohn and his bank requested Muhr remove Kohn’s name from

the financing statement, asserting the crop Muhr harvested was Anthony’s and the

financing statement was preventing Kohn from obtaining funds to meet a margin

call on a commodity futures trading account.5 Kohn indicated Muhr would be paid

by Anthony once they reached an agreement on “a fair and reasonable payment”

for his work.

       On June 30, Anthony paid Muhr for his harvesting services.                   Muhr

immediately terminated the financing statement.

4
  A harvester must file a financing statement within ten days of the last day of providing
harvesting services in order to perfect a harvester’s lien. Iowa Code § 571.3.
5
  There is no evidence in the record indicating Kohn filed an information statement on the
financing statement to indicate wrongful filing pursuant to Iowa Code section 554.9518.
                                        4

      In August, Kohn filed suit against Muhr for wrongfully filing a financing

statement, alleging Kohn’s commodity contracts were involuntarily liquidated and

he incurred financial damages when reestablishing his place in the grain trading

market after Muhr terminated the financing statement. Kohn requested statutory

and punitive damages.6 Muhr counterclaimed for breach of contract, seeking

reimbursement for reasonable expenses and a declaratory judgment the filing of

his financing statement was authorized under section 571.3.

      In June 2018, the parties filed cross-motions for partial summary judgment

on the question of whether, as a matter of law, Kohn was a debtor for purposes of

a harvester’s lien. The district court determined Kohn was a debtor under the

statute, granted Muhr’s motion for partial summary judgment, and denied Kohn’s

motion.     In particular, the court noted Kohn personally contracted Muhr’s

harvesting services and took possession of and commingled his own grain with

grain harvested by Muhr.

      Kohn appeals.

      II.     Standard of Review

      “We review a district court’s ruling on a motion for summary judgment for

correction of errors at law.” Westco Agronomy Co. v. Wollesen, 909 N.W.2d 212,

218 (Iowa 2017). “Summary judgment is proper when the moving party has shown

there is no genuine issue as to any material fact and the moving party is entitled

to judgment as a matter of law.” Id. at 218–19. “We view the evidence in the light

most favorable to the nonmoving party” and “draw all legitimate inferences the

6
 Kohn requested a total of $917,490.60 in damages—$305,830.20 in compensatory and
statutory damages and double that amount in punitive damages.
                                           5

evidence bears.” Banwart v. 50th St. Sports, L.L.C., 910 N.W.2d 540, 545 (Iowa

2018).

         III.   Error Preservation

         Muhr claims Kohn failed to preserve error on the three, independently-

sufficient debtor findings by the district court. Muhr argues Kohn’s statement of

error preservation did not comply with Iowa Rule of Appellate Procedure

6.903(g)(1), which      requires “[a] statement addressing how the issue was

preserved for appellate review, with references to the places in the record where

the issue was raised and decided.” To the extent each issue was decided by the

district court, error was adequately preserved. See Young v. Iowa City Cmty. Sch.

Dist., ___ N.W.2d ___, ___, 2019 WL 5275026, at *5 (Iowa 2019).

         IV.    Analysis

         Kohn argues he did not qualify as a “debtor” under Iowa Code section

571.1B as a matter of law.

         This case requires applying the well-established principles of statutory

construction:

         When the plain language of a statute . . . is clear, we need not search
         for meaning beyond the statute’s express terms. We may presume
         the words contained within a statute have the meaning commonly
         attributed to them. We can resort to rules of statutory construction,
         however, when a statute’s meaning is ambiguous. “A statute is
         ambiguous if reasonable persons could disagree as to its meaning.”

Oyens Feed & Supply, Inc. v. Primebank, 879 N.W.2d 853, 859 (Iowa 2016)

(citations omitted).

         Section 571.1B authorizes a harvester to file an agricultural lien against the

person for whom they harvest:
                                             6

       A harvester shall have an agricultural lien as provided in section
       554.9102 for the reasonable value of harvesting services.[ 7] The
       harvester is a secured party and the person for whom the harvester
       renders such harvesting services is a debtor for purposes of chapter
       554, article 9.[8] The lien applies to crops harvested by the harvester.

Therefore, the question is who qualifies as a “person for whom the harvester

renders such harvesting services.” Iowa Code § 571.1B.

       Article 9 of the Iowa Uniform Commercial Code (IUCC) governs secured

transactions, providing a party an interest in property to secure payment or

performance of an obligation. See C & J Vantage Leasing Co. v. Outlook Farm

Golf Club, LLC, 784 N.W.2d 753, 757 (Iowa 2010). The 2001 revisions to the

IUCC, found in chapter 554 of the Iowa Code, “brought agricultural liens within the

same scope and treatment as other security interests and liens under Article 9.”

Wyatt P. Peterson, Note, Revised Article 9 and Agricultural Liens: An Iowa

Perspective, 8 Drake J. Ag. L. 437, 439 (2003). “Chapter 554 contains general

provisions that act as default settings” unless the legislature supersedes the

general provisions with more specific or narrower guidelines. Oyens Feed, 879

N.W.2d at 860 (determining the relationship between chapter 554 and chapter

570A agricultural liens).

       Kohn claims he did not personally enter into a contract with Muhr but was

instead acting as agent for Anthony and, therefore, Muhr did not provide harvesting

services for him. Muhr counters Kohn never raised this agency argument in the

7
   “‘Harvesting services’ means baling, chopping, combining, cutting, husking, picking,
shelling, sacking, threshing, or windrowing a crop, regardless of the means or method
employed.” Iowa Code § 571.1A(3).
8
    “‘Debtor’ means: (1) a person having an interest, other than a security interest or other
lien, in the collateral, whether or not the person is an obligor; (2) a seller of accounts,
chattel paper, payment intangibles, or promissory notes; or (3) a consignee.” Id.
§ 554.9102(1)(ab).
                                          7

district court so error is not preserved. Even if preserved, Muhr claims Anthony

was at most a third-party beneficiary to the contract between Kohn and Muhr.

       It is undisputed that Kohn and Anthony had a custom farming arrangement

whereby Kohn’s operation would perform all farming services on Anthony’s land.

In the fall of 2016, Kohn did not have the capacity in workers or equipment to

perform all harvesting operations on both his own and Anthony’s land and hired

Muhr to perform harvesting operations Kohn was responsible for.9                Kohn

conducted the negotiations with Muhr, directed all of Muhr’s harvesting and

delivering activities, and directed Muhr to deliver significant amounts of grain under

Kohn’s name or to Kohn’s facilities.      It was Kohn who Muhr approached for

payment at the end of his harvesting activities. Indeed, the undisputed evidence

shows Muhr and Anthony never had a conversation relating to the harvesting

services.

       Instead, Kohn’s farming operation had the responsibility to harvest

Anthony’s fields and contracted Muhr to provide harvesting services in fulfillment

of Kohn’s duties to Anthony.       Kohn was not merely an agent representing

Anthony’s interests, but was more akin to a contractor hiring a subcontractor.

       Kohn’s interpretation would render toothless the protections for harvesters

the legislature sought to establish. We find Kohn was a “person for whom the

harvester render[ed] such harvesting services” and therefore falls within the

meaning of “debtor” for purposes of Iowa Code section 571.1B.

9
  Kohn had hired Muhr on previous occasions to perform agricultural work for him,
including planting and harvesting.
                                       8

      Because we find the district court correctly determined Kohn to be a debtor

under chapter 571 for the harvesting services provided by Muhr, we need not

address Kohn’s other claims. We affirm.

      AFFIRMED.