Crooked Creek Corp v. Primebank et al

Filing 25

ORDER Accepting 24 Report and Recommendation which recommends the entry of an order certifying the two questions of law set forth within the order to the Iowa Supreme Court pursuant to Local Rule 83 and Iowa Code section 684A.1. Signed by Senior Judge Donald E OBrien on 05/07/2015. (Certified copies to IA Supreme Court and all counsel of record) (src)

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF IOWA
WESTERN DIVISION
OYENS FEED & SUPPLY, INC.,
Appellant and
Cross-Appellee,

No. 14-CV-4114-DEO

vs.
PRIMEBANK,
Appellee and CrossAppellant,
ORDER ON REPORT AND
RECOMMENDATION

and
CROOKED CREEK CORP.,
Plaintiff,
vs.
PRIMEBANK AND OYENS FEED &
SUPPLY, INC.,

Defendants.
____________________
Currently
Supply,

Inc.’s

pending

before the

Bankruptcy

Appeal

Court

is

(Docket

Oyens
No.

Primebank’s Cross Appeal (Docket Nos. 2 and 9).

Feed
1),

&

and

On February

19, 2015, this Court referred those matters to United States
Magistrate Judge Leonard T. Strand (Docket No. 17). On May 5,
2015, Magistrate Strand filed a Report and Recommendation
(R&R, Docket No. 24). Neither party has filed an Objection to
that R&R.

I.

BACKGROUND
Judge Strand set out the relevant background and facts in

his Report and Recommendation, and they need not be repeated
here.

In short, this case has an extremely long procedural

history.

Crooked Creek Corporation [hereinafter CCC], a farm

operation dealing with hogs, filed for Chapter 12 bankruptcy
in 2009.

Oyens is a supplier who sold feed to CCC, and

Primebank is a bank that lent money to CCC.

CCC owed both

Oyens and Primebank money, and both entities had an interest
in the hogs owned by CCC.

Oyens and Primebank disputed which

party had the superior interest in the hogs.
Court

initially

ruled

appealed to this Court.

in

in

Oyens’

favor,

and

Oyens’

This Court certified the question to

the Iowa Supreme Court.
answer

Primebank’s

The Bankruptcy

The Iowa Supreme Court issued an

favor.

The

Iowa

Supreme

Court

stated

Primebank’s lien was superior insofar as it covered the
purchase price of the hogs, but Oyens’ had the superior
interest in the amount of the value the hogs increased after
they were acquired by CCC.

Since the Iowa Supreme Court

answered the relevant question, this Court remanded the case
back to the Bankruptcy Court for trial.

2

Going into the trial, $358,841.10 remained in escrow to
pay the claims against CCC.

After listening to the evidence,

the Bankruptcy Court concluded that Oyens has a super-priority
claim for $156,367.43, and an unsecured claim for $186,004.35,
while Primebank’s secured claim is limited to $315,270.19.
Following the Bankruptcy Court’s findings, the parties again
appealed the case to this Court.
On appeal, Oyens raised one main question:
Whether the Bankruptcy Court erred in
determining that, under Iowa Code Chapter
570A [specifically Iowa Code § 570A.4(2)5],
Oyens Feed was required to file a financing
statement every 31 days in order to
maintain perfection of its Agricultural
Supply Dealer's Lien as to feed supplied
within the preceding 31 day period.
Doc. No. 11 at 4.

Meanwhile, Primebank argues that the

Bankruptcy Court erred by finding that because the hogs were
born at CCC’s facility, CCC had an acquisition price of zero.
II.

STANDARD
Pursuant to statue, this Court’s standard of review for

a magistrate judge’s Report and Recommendation is as follows:
A judge of the court shall make a de novo
determination of those portions of the
report or specified proposed findings or
recommendations to which objection is made.
A judge of the court may accept, reject, or

3

modify, in whole or in part, the findings
or recommendations made by the magistrate
[judge].
28 U.S.C. § 636(b)(1).
Similarly, Federal Rule of Civil Procedure 72(b) provides
for review of a magistrate judge's Report and Recommendation
on

dispositive

motions

and

prisoner

petitions,

where

objections are made as follows:
The district judge to whom the case is
assigned shall make a de novo determination
upon the record, or after additional
evidence, of any portion of the magistrate
judge's disposition to which specific
written
objection
has
been
made
in
accordance with this rule.
The district
judge may accept, reject, or modify the
recommendation decision, receive further
evidence, or recommit the matter to the
magistrate judge with instructions.
FED. R. CIV. P. 72(b).
Additionally,

failure

to

object

to

the

Report

and

Recommendation waives the right to de novo review by the
district court of any portion of the Report and Recommendation
as well as the right to appeal from the findings of fact
contained therein.

United States v. Wise, 588 F.3d 531, 537

n.5 (8th Cir. 2009).

4

III.

ANALYSIS
The Court has reviewed the Report and Recommendation,

along with the entire file. As discussed above, neither party
objected to Magistrate Strand’s Report and Recommendation.
The Court is persuaded that the Magistrate’s analysis is
correct, and his R&R should be adopted in its entirety.
Specifically, Judge Strand determined that since both
issues raised in this appeal deal with question of statutory
interpretation of Iowa law, and since Iowa state courts have
not addressed these issues, the questions presented should be
certified to the Iowa Supreme Court.

In coming to that

conclusion, Judge Strand considered the seven factor test used
to

determine

if

certification

is

appropriate.

See

Lieberkneckt v. Bridgestone/Firestone, Inc., 980 F. Supp. 300,
310-11 (N.D. Iowa 1997).

Judge Strand found that six of the

seven factors weigh in favor of certification, while the
seventh factor, which asks if there is split of authority on
the issue presented, is not applicable to the present case.
See Docket No. 24, p. 8-10.

This Court is persuaded that

Judge Strand’s analysis is correct.

Accordingly, pursuant to

Local Rule 83 and Iowa Code § 684A.1, the following two
questions are certified to the Iowa Supreme Court:

5

1) Pursuant to Iowa Code Section 570A.4(2),
is 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) Pursuant to Iowa Code Section 570A.5(3),
is the “acquisition price” zero when the
livestock
are
born
in
the
farmer’s
facility?
See Docket No. 24, 10-11.
IV.

1

CONCLUSION
For the reasons set out above, the Court accepts Judge

Strand’s Report and Recommendation (Docket No. 24). The Court
hereby certifies the two questions, set out above, to the Iowa
Supreme Court.
IT IS SO ORDERED this 7th day of May, 2015.
__________________________________
Donald E. O’Brien, Senior Judge
United States District Court
Northern District of Iowa

1

These two questions were articulated as a result of
Judge Strand’s discussion with the parties, and the parties
agree that these are the two questions that should be resolved
by the Iowa Supreme Court.
6