Agricultural Law and Rural Practice Blog: Recent Decision Gives New Guidance on Harvester's Liens:

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  • Agricultural Law and Rural Practice Blog
    March
    05
    2020

    Recent Decision Gives New Guidance on Harvester's Liens

    J David Krekeler

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    A recent U.S. District Court decision addresses time limits and other issues on harvester’s liens under Wis. Stat. section 779.50. J. David Krekeler discusses the case and the decision, and what it may mean for Wisconsin custom harvesters.

    We all know the farm economy has been a challenge for Wisconsin farmers. When farmers do not have money, related agricultural providers have a hard time getting paid. Custom harvesters must then compete with other lenders for scarce dollars.

    In the April 2018 article in this blog, Troy Schneider gave an overview of various agricultural liens. Among those was the harvester's lien available under Wis. Stat. section 779.50.

    Until recently, there has been virtually no Wisconsin case law construing this statute, but a recent decision by the U.S. District Court for the Western District of Wisconsin has now addressed some of the time limits and issues that the statute may raise.

    In CHS Capital, LLC v. Hellenbrand Farms LLC,1 U.S. District Judge William M. Conley held that the harvester had a valid and enforceable lien, even though the harvester did not foreclose on that lien within six months of the date of the last charge for services. As a result, the lender's failure to turn over to the harvester the amount owed from the crop auction constituted civil theft and conversion.

    David Krekeler J. David Krekeler, U.W. 1979, has been solving financial problems for farmers since 1983 and is a founding principal and shareholder with Krekeler Strother, S.C., Madison.

    The plaintiff had performed custom harvesting for a Wisconsin farm. The invoice was not timely paid, and the harvester filed an agricultural lien with the Iowa County Circuit Court.

    The crops subject to the lien were sold at auction, but the principle lender did not turn over the check or pay the harvester.

    The lender objected to the lien, claiming the lien was not recorded within 15 days from the date of completion of services. The lender later backed off from this position.

    The lender then contended that the lien was void and unenforceable because the harvester failed to foreclose on the lien within six months after the date of the last charge.

    The court examined section 779.50 and noted the permissive language stating that the lien holder "may" foreclose. It contrasted this language with the statute's mandatory language that the person providing agricultural services "shall" have a lien, and that such lien "shall be preferred to all other liens and encumbrances."

    The court found that the statute "does not state that the lien is terminated or somehow extinguished if the lienholder fails to take such steps."

    Having represented many Wisconsin custom harvesters, I know how difficult it can be for them to be paid. This statute has, at times, been helpful. This new guidance will likely make it even more so.

    Endnote

    1 CHS Capital, LLC v. Hellenbrand Farms, LLC, No. 18-CV-806-WMC (W.O. Wis. Oct. 9, 2019).





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