2010 WI App 111
court of appeals of
published opinion
Case No.: |
2009AP1722 |
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Complete Title of Case: |
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Premier Community Bank,
Plaintiff-Appellant, v. Roger Schuh,
Defendant-Respondent, Schuh Cattle Company, LLC, Christopher R. Schuh and Christie R. Schuh, Defendants. |
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Opinion Filed: |
July 27, 2010 |
Submitted on Briefs: |
April 4, 2010 |
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JUDGES: |
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Appellant |
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ATTORNEYS: |
On behalf of the plaintiff-appellant, the cause was submitted on the briefs of Michael C. Meyer of Michael C. Meyer Law Office, Marion. |
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Respondent |
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ATTORNEYS: |
On behalf of the defendant-respondent, the cause was
submitted on the brief of Frederick C. Wieting, of Hinkfuss, Sickel, Petitjean &
Wieting, A nonparty brief was filed by John E. Knight and Kirsten E. Spira of Boardman, Suhr, Curry & Field LLP, Madison. |
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2010 WI App 111
COURT OF APPEALS DECISION DATED AND FILED July 27, 2010 A.
John Voelker Acting Clerk of Court of Appeals |
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NOTICE |
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This opinion is subject to further editing. If published, the official version will appear in the bound volume of the Official Reports. A party may file with the Supreme Court a petition to review an adverse decision by the Court of Appeals. See Wis. Stat. § 808.10 and Rule 809.62. |
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Appeal No. |
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STATE OF |
IN COURT OF APPEALS |
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Premier Community Bank,
Plaintiff-Appellant, v. Roger Schuh,
Defendant-Respondent, Schuh Cattle Company, LLC, Christopher R. Schuh and Christie R. Schuh, Defendants. |
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APPEAL
from an order of the circuit court for
Before
¶1 BRUNNER, J. Premier Community Bank appeals an order granting summary judgment to Roger Schuh in this lien priority dispute. Premier has a perfected security interest in Schuh’s livestock. It claims its interest has priority over Schuh’s livestock lien. We disagree and affirm.
BACKGROUND
¶2 The following facts are undisputed. Schuh keeps and pastures others’ livestock on his farm. Since 2005, Schuh has pastured cattle owned by Schuh Cattle Company, LLC (SCC), whose membership includes Schuh’s son and daughter-in-law. In exchange, SCC agreed to pay Schuh $1.10 per day per animal. Although Schuh has demanded payment many times in the past, SCC has not paid him since March 1, 2006, and owes Schuh approximately $15,934.00.
¶3 In 2006, SCC used the livestock pastured on Schuh’s farm as collateral for a loan from Premier. When SCC defaulted, Premier demanded the livestock from Schuh. Schuh refused, asserting a possessory lien in the cattle. Premier then filed suit to enforce its security interest. The circuit court granted Schuh’s motion for summary judgment, concluding Schuh’s lien is possessory and has priority over Premier’s security interest.
DISCUSSION
¶4 We review the circuit court’s decision to grant summary
judgment de novo. See Green Spring Farms v.
Kersten, 136
¶5 The circuit court determined Schuh holds a lien pursuant to Wis. Stat. § 779.43(3), which provides, “[E]very person pasturing or keeping … animals … shall have a lien thereon and may retain the possession thereof for the amount due for the keep, support … and care thereof until paid.”[1] We agree the undisputed facts establish Schuh holds a statutory lien, and Premier concedes as much. Because Premier also holds a perfected security interest in the livestock, we must determine which lien receives priority.
¶6 Even though a security interest is perfected, the secured party’s interest may still be subordinate to the claims of third parties holding statutory or common law liens like possessory liens. Wis. Stat. § 409.333(2). Subsection 409.333(1) defines a “possessory lien” as an interest, other than a security interest or an agricultural lien:
(a) Which secures payment or performance of an obligation for services or materials furnished with respect to goods by a person in the ordinary course of the person’s business;
(b) Which is created by statute or rule of law in favor of the person; and
(c) Whose effectiveness depends on the person’s possession of the goods.
¶7 Premier argues Schuh’s lien is not possessory because the lien’s effectiveness does not depend on Schuh’s possession of the cattle. Instead, Premier contends Schuh has an agricultural lien, which does not require possession of the cattle, see Wis. Stat. § 409.102(b)3., and does not receive priority over Premier’s perfected security interest, see Wis. Stat. §§ 409.333(1), (2).[2]
¶8 Premier’s argument requires that we examine the statute
authorizing Schuh’s lien, Wis. Stat. § 779.43(3),
to determine whether the lien is contingent on possession. Interpretation of statutory language is a
matter of law we review de novo. Christensen
v. Sullivan, 2009 WI 87, ¶42, 320
¶9 Premier reads Wis. Stat. § 779.43(3) as establishing a lien regardless of whether the lienholder retains possession of the animals. Premier reasons the statute uses the mandatory “shall” when referring to the existence of the lien, but the discretionary “may” when discussing retention of another’s property.
¶10 However, read together, these clauses state a person pasturing
animals “shall have a lien thereon
and may retain the possession thereof
….”
¶11 Despite the plain meaning of Wis.
Stat. § 779.43(3), Premier contends M & I W. State Bank v. Wilson,
172
¶12 Premier correctly points out that the statute governing
mechanic’s liens in Wilson and the statute governing Schuh’s lien share similar
discretionary language regarding possession.
Premier further reasons that since the mechanic’s lien in
¶13 Wisconsin Bankers Association, appearing as amicus curiae,
argues that any statutory lien not clearly requiring a lienholder to retain
possession of the goods should be deemed an agricultural lien, which must be
perfected by filing a financial statement.
See Wis. Stat. § 409.310(1).
To hold otherwise, it claims, would reintroduce “the specter of secret
liens to agricultural lending” and drive up the cost of loans. We rejected a similar argument in
¶14 Premier next argues competing inferences may be drawn from the
undisputed facts, making summary judgment inappropriate. In deciding a motion for summary judgment,
the court examines the record to determine whether there are disputed material
facts, or undisputed material facts from which reasonable alternative
inferences may be drawn, sufficient to entitle the opposing party to a trial. Trinity Evangelical Lutheran Church v. Tower
Ins. Co., 2003 WI 46, ¶32, 261
¶15 Premier claims a factual dispute exists regarding whether Schuh
pastured SCC’s cattle in the ordinary course of business as required by Wis. Stat. § 409.333(1). Grounding its argument solely in the fact
that the transaction involved family members, Premier cites cases from foreign
jurisdictions purportedly establishing that a special relationship among the
parties can render a transaction outside the ordinary course of business. See Merchants & Planters Bank & Trust
Co. of Arkadelphia v.
¶16 The undisputed facts, and reasonable inferences from those facts, establish the transaction in this case occurred in the ordinary course of business. Schuh is in the business of pasturing cattle, and does not do so exclusively for SCC. Schuh and SCC agreed on the rate SCC would be charged, and there is no evidence that rate is more favorable than that charged to other individuals or groups. Although Premier emphasizes that Schuh allowed the debt to remain unpaid for years, Schuh repeatedly asked SCC for payment, and did so more frequently as the debt mounted. Other than his obvious right to legal recourse, Premier does not explain what Schuh could have done besides keep the cattle, consistent with his lien.
By the Court.—Order affirmed.
[1] All references to the Wisconsin Statutes are to the 2007-08 version unless otherwise noted.
[2] For the full definition of an agricultural lien, see Wis.
Stat. § 409.102(b).
[3] As Schuh points out, an individual might decide to release the cattle for many reasons, including to avoid the additional expenses necessary to feed and care for the animals, or to preserve customer goodwill.
[4] In its reply brief, Premier also cites a decision of the United States Court of Appeals for the Ninth Circuit applying the United States Bankruptcy Code, and a decision of the United States Tax Court. Both areas of the law are highly specialized and the decisions are therefore of limited persuasive value for the general rules Premier draws from them.