Justia Agriculture Law Opinion Summaries

This case involves a dispute within the Hora family over the operation of their family farm, Hora Farms, Inc. (HFI). Two brothers, Brian and Gregg Hora, brought a derivative action as minority shareholders against their father, Keith Hora, and brother, Kurt Hora, alleging breach of fiduciary duties based on their management of the farming operation. The brothers claimed that Keith and Kurt mismanaged the farm's operations, resulting in financial losses and unaccounted-for corn inventory. They also alleged that Keith used HFI's credit card for personal expenses.The case was initially heard in the Iowa District Court, where it was determined that neither Keith nor Kurt breached fiduciary duties owed to the corporation. The court found that the brothers' concerns were primarily related to poor recordkeeping and longstanding business practices, rather than intentional wrongdoing. The court also concluded that Keith's use of the corporate credit card for personal expenses was part of his compensation and was fair to HFI.The brothers appealed the decision to the Iowa Court of Appeals, which reversed the district court's decision on two specific issues. The appellate court concluded that Keith engaged in self-dealing by using HFI's credit card for personal expenses and that he enabled Kurt to misappropriate corn from the farm. The court also found that Kurt breached his duty to HFI by misappropriating corn for his personal use.The case was then reviewed by the Supreme Court of Iowa. The court vacated the decision of the Court of Appeals and affirmed the judgment of the District Court. The Supreme Court found that Kurt, as an employee and not an officer or director of HFI, did not owe fiduciary duties to the corporation. The court also concluded that Keith did not violate any fiduciary duties owed to HFI in his oversight of Kurt. The court determined that the brothers failed to prove that Keith or Kurt violated fiduciary duties owed to HFI. View "Hora v. Hora" on Justia Law

The Supreme Court affirmed in part and reversed in part the judgment of the district court granting summary judgment for an agricultural supplier in its foreclosure action to recover the amount of its unpaid bills from the sale proceeds of the two dairy farms it furnished with feed, holding that the supplier was entitled to summary judgment for the most part.The farms at issue were related but separate legal entities. The supplier did not receive payment for the feed, and later the farms closed down and all the remaining cows and milk were sold. The supplier brought a foreclosure action under the agricultural supplier's lien statute. The trial court granted summary judgment for the supplier, thus rejecting the arguments of a finical institution that had a larger unpaid loan balance and a previously perfected blanket lien as to both farms. The Supreme Court reversed in part, holding (1) the supplier was entitled to summary judgment on the financial institution's affirmative defenses; and (2) the financial institution was entitled to summary judgment as to the milk proceeds generated by a third dairy farm. View "Quality Plus Feeds, Inc. v. Compeer Financial, FLCA" on Justia Law

The Supreme Court reversed and remanded the case to the district court for further proceedings, holding that because the district court did not make specific findings of fact relative to any plaintiff when concluding that Iowa Code 657.11(2), as applied to Plaintiffs, violated Iowa Const. art. I, 1, the issue could not be resolved on this record.Plaintiffs, the owners and/or residents of real estate located near the confined animal feeding operations (CAFOs), brought this action claiming that Defendants were negligent in their operation of the CAFOs and that the CAFOs constituted a nuisance, entitling Plaintiffs to damages. Defendants filed a motion for summary judgment on the nuisance claims, asserting that section 657.11(2) barred the claims because Plaintiffs could not meet the requirements under the statute to recover the requested special damages against the CAFOs. The district court denied the motion, finding that section 657.11(2) was unconstitutional as applied to Plaintiffs because it denied Plaintiffs access to a remedy for their alleged injuries. The Supreme Court reversed and remanded with directions that the district court engage in a fact-based analysis by applying the three-prong test set forth Gacke v. Pork Xtra, LLC, 684 N.W.2d 168 (Iowa 2004). View "Honomichl v. Valley View Swine, LLC" on Justia Law

A federal district court certified two questions of law to the Iowa Supreme Court in a priority dispute between competing creditors of a bankrupt hog operation. Crooked Creek Corporation operated a farrow-to-finish hog facility where it bred gilts and sows and raised their litters for slaughter. After the company filed for bankruptcy, the hogs were sold, but the sale did not generate enough money to pay off competing liens asserted by two of Crooked Creek’s creditors: Oyens Feed & Supply, Inc. and Primebank. Oyens Feed held an agricultural supply dealer lien because it sold Crooked Creek feed “on credit . . . to fatten the hogs to market weight.” Primebank had a perfected article 9 security interest in the hogs to secure two promissory notes predating Oyens Feed’s section 570A.5(3) agricultural supply dealer lien in the hogs. At trial, Oyens Feed claimed it was entitled to all of the escrowed funds because its agricultural supply dealer lien had superpriority over Primebank’s earlier perfected security interest. The bankruptcy court concluded the plain meaning of section 570A.4 created a “discrete window of time,” beginning with the farmer’s purchase of feed and ending thirty-one days later, within which an agricultural supply dealer must file a financing statement to perfect its lien. The bankruptcy court concluded Oyens Feed had only perfected its lien as to amounts for feed delivered in the thirty-one days preceding the filing of each of its financing statements. In reaching its decision on the extent of Oyens Feed’s lien in the escrowed funds, the bankruptcy court reasoned the acquisition price of the hogs was zero because Crooked Creek raised hogs from birth rather than purchasing them. The court concluded “the ‘purchase price’ comprises the vast majority, if not all of, the ‘acquisition price’ for . . . purposes of Iowa Code § 570A.5(3).” The United States District Court for the Northern District of Iowa asked the Iowa Supreme Court: (1) whether, pursuant to Iowa Code section 570A.4(2), was an agricultural supply dealer required to file a new financing statement every thirty-one (31) days in order to maintain perfection of its agricultural supply dealer’s lien as to feed supplied within the preceding thirty-one (31) day period?; and (2) whether pursuant to Iowa Code section 570A.5(3), was the “acquisition price” zero when the livestock are born in the farmer’s facility? The Supreme Court answered both certified questions in the affirmative. View "Oyens Feed & Supply, Inc. v. Primebank" on Justia Law