AG LAW ANNALS
WHAT IS A FARM
Kuehl v. Cass County (IA 1996) (Kuehl Hog Exemption)
Facts: Kuehl wants to open a large 5 acre hog confinement under contract
Issue: Is this an agricultural purpose? If so it will be eligible for the county zoning agricultural exemption.
Holding: Yes. This is an agricultural use- exempt from zoning.
Note: Despite changing farm structure this is still ag.
Tyson Foods, Inc. v. Stevens (Ala 2004) (Tysons Flagrant Agent)
Facts: Neighbors sue Tyson Foods for nuisance
Holding: The farmer is an agent for Tyson even though the agreement states he was an Independent contractor.
Tyson can be held liable for damages (Cannot contract away environmental liability).
Factors in Finding agency
1. Weekly inspections
2. Helped design buildings
3. Awareness of problem
4. Owned hogs
5. Issued feed arrangements
Note: Cannot have all the benefits of being a farmer and escape liability.
Larsen v. D.B. Feedyards, Inc. (NEB 2002) (Whose Steer is it Anyway)
Facts: Farm hand injured roping steer  no workers comp for ag. (exemption). Is this ag?
Holding: No. Farm hand was a covered employee b/c this was a commercial enterprise.
Nature of business & nature of activity to determine whether under ag exemption  A large feedlot is a
commercial purpose .
Note: NE legis. responded by rewriting statute in 2003. Can elect to provide workers comp and if not you must
provide notice that you’re not covering worker.
Boulahanis v. Prevo’s Family Market (Mich 1998) (Boulahanis Meat Contamish)
Duty to marketplace and third parties?
(1) Meat contaminated with E.coli- USDA does not list E. Coli as an adulterant at that time
(2) Fed decision not to regulate- when they have occupied the entire field  state cannot regulate
***Preemption***
(3) Consumer bears the risk  farmer not responsible in chain of liability & can’t bring neg. tort suit
Corporation & Non-Resident Restrictions: Dormant Commerce Clause
Chapter 9I: Non-resident alien ownership
9I.3(1): A non resident alien, foreign business or foreign government, or agent, trustee or fiduciary thereof, shall not
purchase or otherwise acquire agricultural land in this state
Purpose: Development of ag. land acquired for the immediate or pending use other than farming should be
within five years of acquisition
(1) Application/Definitions:
a. Aliens- INS definition- meshes with
b. Agricultural land: land suitable for use in farming
c. Foreign business: a majority interest is owned by nonresident aliens
(2) Exceptions:
a. Owned prior to Jan. 1, 1980
b. Devise or descent
i. 9I.5- shall divest within two years
c. Bona fide encumbrance for security
d. Collection of debts
e. Research and experimental uses
f. Land for immediate non-agricultural use
i. Less than 320 and five years
(3) Procedural issues:
a. 9I.6- if status changes- divest within two years
b. 9I.7: Registration Requirements:
c. Covered entities shall register within 60 days of July 1, 1980
d. 9I.8: Reports
i. Reports required yearly before March 1- narrow requirement- only land after 1980
(4) Enforcement:
a. 9I.11: Escheat- if acquired in violation shall be sold in the manner provided for foreclosure
b. Only in amount not exceeding cost (so if they paid 500 and sell for 3000- they only get 500)
c. 558.344- Mandatory Recordation of Conveyances and Leases of Agricultural land
i. Contemplates incentive to hide ownership
ii. 100 dollars a day fine
iii. Also applies to leases over five years
iv. Beneficial ownership must be recorded
Lehndorf Geneva, Inc. v. Warren (Wis 1976) (Lendhorf Aliens In Court)
(1) Challenge to Wisconsin alien ownership ban for a violation of EQP and violation of treaty w/ West Germany
(2) Treaty- doesn’t exempt- states have authority to restrict land ownership (Ex. Netherlands treaty)
a. The right of the sovereign to restrict land ownership by aliens is deeply imbedded in our law
(3) Plaintiffs do not possess the characteristics which merit heightened protection
a. Challenger cannot show that the classification has no legit purpose.
i.  Prevention of absentee ownership not arbitrary  limit ag. to those who share in the
responsibilities and interests of residency
(4) States have authority to ban non-resident alien ownership  prevent absentee ownership
Corporate or Partnership Farming
Chapter 9H Corporate Farming Ban
(1) 9H.4 (Corporate Farming Ban)
o A corporation. . ., shall not, either directly or indirectly, acquire or otherwise obtain or lease any
agricultural land in this state.
o Does not apply to obtaining leasehold for research/experimental purposes - & breeding stock production
cannot have more than 640 acres w/ 12 yr. or shorter non-renewable lease that must be recorded w/ Sec’y
of State
(2) Goals:
o Promote family ownership of farm ground and animal ownership
o Allows small closely held corporations to operate
(3) Enforcement:
o Civil penalty less than $25,000
o Divestment within one year
o Injunction can be obtained to prevent further violations
(4) Exceptions:
o 9H.5: Authorized Farm Corporation
 Less than 1500 acres- a doctors and lawyers exception- provides limited release valve for
investment demand
 If goes over 1500, divestment and civil penalty possible
EQP Challenges to Corporate Farming Ban
State ex rel. Webster v. Lehndorff Geneva, Inc. (1988) (Corporate Ban Betters Webster)
(1) Middle Eastern corp. investors tried to buy up thousands of acres
(2) Failed on EQP grounds  Corp. not a suspect class
(3) Rational basis- prevent concentration of agricultural land
MSM Farms, Inc. v. Spire (NEB 1991) (Overturned by Jones v. Gale) (MSM Goes When Jones Arose)
(1) Nebraska constitutional referendum on corporate ban
(2) Holding: Rational basis- protection of family farms is legit govt. interest
Dormant Commerce Clause
South Dakota Farm Bureau, Inc. v. Hazeltine (SD 2003) (Hazeltine Begins DCC Theme)
(1) SD Const. amendment banning corporate farm ownership held unconstitutional
(2) Legit interest (competition and environmental concerns)
(3) Discrim’y purpose against out-of-staters  Less restrictive alternatives exist  Violates DCC
(4) Less restrictive alternatives
a. Labor organization to optimize resources
b. Oversight to reg. contracts
c. Enforce existing, and enact more stringent environmental regs.
d. Set limits on # of livestock that could be fed in an area
(5) Implications
a. DCC analysis destroys presumption of deference to state leg
b. Burden is now on state to justify ag restrictions
Jones v. Gale (2006) (Jones Arose MSM Goes)
(1) Challenge to NE const. amendment prohib. farming or ranching by corps. or syndicates except family
farm/ranch corps or limited partnerships (at least one residing on/actively engaged in farming)
(2) Revisited MSM & struck down Const. amendment  facially discriminatory against out-of-staters under
DCC
(3) Compelling govt. int & least restrictive alternative  corp. farming ban not the least restrictive altern. b/c
Ct. suggested that land use & environ. regs. could have been a solution to absentee ownership
(4) Unconst. parts could NOT be severed from const. parts
Chapter 202B Swine and Beef Processors
Packer Ban
(1) Purpose
o § 202B.201: It is unlawful for any processor of beef or pork. . . to own, control or operate a feedlot
in Iowa in which hogs or cattle are raised for slaughter
o Processor shall not directly own or control the manufacturing, processing or preparation for sale of
any hogs if the processor contracted for care in this state
(2) Enforcement:
o 9H.3- Penalties:
 Injunctive Relief
 Civil Penalty- of less than $ 25,000
(3) Exceptions:
o Does not apply to cooperatives or educational facilities
o Does not preclude contracting for purchases if the contract sets a date for delivery which is more than
twenty days after the making of the contract
o Also does not prevent the packers from owning and operating facilities to care for ten days prior to
slaughter
Smithfield cases
Smithfield Foods, Inc. v. Miller (S.D. IA 2003)
(1) Smithfield, a packer, owns an operation in violation of 9H.2 (packer ban) ***Now § 202B.201***
a. Transferred farm to former employee  sham
(2) Holding: Noble cause to protect farmers but still violates DCC
a. Facially discriminatory purpose. Hard to explain IA Cooperative exception.
Smithfield on Appeal
Appeal to the 8th Circuit  but in the meantime IA amended the Packer ban statute to take out the
cooperative exception so Ct. of Appeals remanded…then they settled
(1) Implications
a. Such statutes must go through lengthy analysis in Hazeltine
(2) IA corp. farming ban probably will not survive
(3) Most recent case- 2005 (DCC and Ag): Granholm v. Heald
a. Michigan case- state regulation and impact on interstate commerce- (wine)
b. State defended on 21st amendment  rejected
c. States never had power to discriminate and favor own residents in ways that disfavor non.
Smithfield Settlement
(1) State had to acknowledge the power of DCC
(2) At end of the day big victory for state to get a major integrator to settle and the corporate farming law
survives for now.
(3) Smithfield concessions:
a. No mandatory arbitration clause
b. Right to organize without being discriminated against
c. Right to be a whistleblower
d. Cannot include provisions of confidentiality (have to be able to have lawyers and accountants look
at K) under 202.3
e. Right to disclose contract terms 202.3
f. Lien law- can file a lien to get paid if they don’t pay you (state common law lien) 579B
g. Right to watch weighing (PSA already gives)
h. Big deal?
i. Right to disclose is good
ii. Market access- 25% of their slaughtered hogs must be sold on open market to nonSmithfield sellers (currently buying more)
iii. Promise to keep plants open in Iowa (hollow)- just provides notice of closing to AG 
who agrees not to enforce §202B.201 against them.
Johanns v. Livestock Marketing Association (SCT 2005)
(1) Producers challenge govt. check off program  Government speech theory survives
(2) Opinion: Scalia
a. Sec’y has control over ad campaign- the generic advertising is a form of government speech “Beef,
It’s What’s For Dinner” funded by $1 checkoff
b. Clearly these messages are the responsibility of the government and the people who make these
decision because the secretary is involved
c. Record indicates sec’y has final approval over every word
d. Not troubled with the level of funding or at the attribution
(3) Dissent: Souter
a. Doesn’t seem public service related- this is commercialized
b. Idea of inter-competition
i. Can the government tell us to eat more of one thing (i.e. eat more beef, but less catfish)
and also may be counter to USDA dietary guidelines
ii.  Scalia’s counter: the ads do not insist that beef is also What’s for Breakfast, Lunch,
and Midnight Snack- moderate use fully in line
c. Big concern: If this is govt speech hold govt accountable for it
i. May conflict with other messages- Food pyramid
Contract Production of Livestock
(1) IA leg designed a model K in ’89 when transitioning into K production  req’d potential hog grower is
shown the model K along with the one proposed K so they could see the difference in terms (IA pork
producers resisted b/c didn’t want state control)
(2) Attempt to eliminate the imbalance of info btw. growers and suppliers (no Adhesion K)
Example Hog Production Contract
(1) Supplier (person who owns the pigs) can enter onto Grower (person who contracts to feed & care for pigs)
operation to perform inspections if grower is fuckin up
a. All expenses charged to Grower
(2) Burden on Grower to comply with State regs. for manure, waste and dead animal disposal
(3) Supplier has to pay a certain amount per day per head of swine if not all delivered to capacity
a. Prorated amounts
(4) Mandatory arbitration clauses
(5) Disclaimer that grower is “employee” of supplier (***contrary to what they found in Tyson***)
Example Tyson Production Contract
(1) Chicks will be randomly placed in facilities *Tournament System*
(2) Names grower specifically as an “Independent Contractor”
(3) Puts on notice that they could be subject to “Intensified Management” status if performance is not consistent
with company’s grower guide
(4) If co. defaults grower could become an unsecured creditor
Agricultural Industrialization: It’s Inevitable
 President of Pioneer Hybrid (Thomas Urban) speaking about the coming industrialization of even
commodity production
 Doesn’t think that “Sun-downers” small family farms should be disturbed by this process (finding off-farm
income as a supplement or increasing value-added production/identity preserved)
 Lower amount of capital investment may attract younger farmers to the profession b/c more accessible &
lower risk/more stability
Chapter 202 Commodity Production Contracts  No Confidentiality (such K provisions void)
Chapter 202A Livestock Marketing Practices  Confidentiality prohibited
Minnesota Code Agricultural Contracts 1792
(1) Implied promise of good faith
(2) Written disclosure of risks
(3) Prod. K must include provision requiring Mandatory mediation or arbitration to resolve disputes
(4) Require farmer to purchase start-up equipment, etc. & breach K  must reimburse
(5) Can have the K reviewed by the Commissioner to declare whether complies with Statute
South Dakota Agricultural Contracts  Mandatory mediation instead of arbitration before going to Ct.
Crowell v. Campbell Soup Co. (8th Cir. 2001) (Campbell Soup Compensates Coup)
Facts: Campbells required producers to purchase buildings upon statement that they were going to keep processing
there  after constructed Campbell’s breached K
Holding: Campbells could terminate K any time for any reason when flocks not present in bldgs., but must reimburse
for cost of construction/not for lost profits
 Rejected Processor’s argument that the K “expired”
 MN statute protecting producers who have production K terminated & have made capital investment of
over $100,000
 Read your K
Federal Protections for Ag Producers – *but have to be able to show clear evid. of discrimination by
Contracting Supplier
Adkins v. Cagle Foods (11th Cir. 2005) (Adkin Discrim. Claim Sent Packin)
Facts
(1) Good Growers, 10+ bldgs., Millions invested,  GIPSA found had weighing problems w/ diff. scales so
reimbursed
(2) Growers complained to GIPSA
(3) Fewer but bigger bird were delivered
(4) New K w/ arbit. clause  gave option of signing  Ppl who signed got higher rate
(5) Producer joined UGA  claimed retaliation (bad birds & feed)  Claimed violated the Ag Fair Practices
Act
Holding
(1) Couldn’t prove supposedly discrim’y conversations tried to keep from organizing or participating in
Grower’s Assn. or any retaliatory violation of Packers & Stockyards Act
(2) Plaintiff must show unfair, unjust or deceptive trade practice adversely affects competition or likely to
adversely affect
TECHNOLOGY TRANSFER CONTRACTS & INTELLECTUAL PROPERTY
Before protections, when cross-breeding  companies would capitalize on their investment by either producing as
much as possible & sell end product, OR sell @ the beginning for a really high price before people started
reproducing
Congress passed the Plant Patent Act
(1) First leg designed to protect asexually reproducing plants
(2) Next it protects hybridization
(3) Not based on IP law but rather trade secrets
(4) Only worked for corn and yields jumped significantly
Congress Passed the Plant Variety Protection Act in the ‘70s (PVPA)
(1) Allows for a Variety Protection Certificate  Form of private property. Limited time period where owner
can collect license fees  private seed companiess expands outside of corn.
(2) Decline in publicly funded plant breeding (ISU for instance)  moved to private companies funding &
shifting investment onto the consumer
(3) Breeders:
a. allows materials to be used w/out permission to come up with a new variety which does not require
sublease. USDA would decide whether it was distinct enough to be a new variety.
b. Save Seeds: farmers had the right to save seeds for replanting of future crops  they could save
seeds for replanting and sell up to ½ of the new seeds (brown bag exemption). Farmers would
rarely buy new seeds. Supreme Court in Winterbower reinterpreted save seed exemption to say
that only what is legally saved from purchased seed and not planted could be sold. Cannot plant
seed w/ intention to sell excess.
Diamond v. Chakrabarty: Supreme Court Case over bacteria that is used to clean up oil spills ruling that living
materials can be patented  Proliferation of creation patenting. No breeder exception. Licensing allows for enabling
technology cross licensing.
IA J.E.M. Case went to Sup. Ct. held that PVPA and patent law are not mutually exclusive and contractor is not req
to use PVPA instead of patents.
Roundup Ready Contract
Monsanto contract is the most common k in the history of Ag.
Monsanto did not come up with agronomic traits but rather one genetic trait that everyone wants: Roundup Ready
(herbicide resistance).
Wheat growers have been resistant to Roundup Ready and commercialization of wheat engineering.
Anti-trust element  What if Monsanto licenses the tech. to everyone on the same terms
Monsanto Agreement Terms
(1) Forum selection: litigation limited to Missouri
(2) Data control  allows Monsanto to inspect personal records, receipts, and FSA records
(3) Reqs adherence to Technology Use Guide (TUG)
(4) Requires refuge area  prevention of pollen drift
(5) Forbids sale to anyone else or sale into uncertified markets (export markets)
(6) Dictates rights and responsibilities
(7) No saving, transfer, and reqs Roundup Ready herbicide
a. This provision seems to be problematic in regard to patent “tying”
b. K says no reps or warranties about what will happen if generic herbicide is used
c. In any case if something goes wrong claims are limited to a new bag of seeds or cost of seeds
(8) Very aggressive enforcement process  huge judgments
(9) Grower Agrees Provision  allow Monsanto to review dealer reports to verify that seeds are not being
saved. Allow Monsanto to enter property and collect seeds/tissue samples.
FDA guidance in 1990s makes it almost impossible to use non-gmo label. Creates difficulty for those seeking to
make a mark by marketing organic products. From a safety standpoint gmo verses non-gmo is not supposed to be an
issue.
Camborough Total Herd Contract (CAMC)
(1) Forbids grower to sell, slaughter, replicate or breed the pigs. Grower is in the business of growing pigs and
contractor is in the business of slaughtering them.
(2) Intellectual property rights limit the ownership of the pigs.
(3) Line of pigs is sold to supplier or breeding is allowed for a licensing fee and then grower is paid by supplier
to grow them.
Monsanto Company v. McFarling (Fed Cir. 2002) (McFarling Read the K Darling)
(1) McFarling ***look at the K you’re signing – didn’t turn it over***
(2) Forum selection clause was valid & enforceable
(3) Could not save seeds to replant:
(4) McFarling claims
a. First Sale and PVPA preemption
i. “First sale” Doctrine (patent exhaustion) - not implicated- new seeds grown from original
batch had never been sold
1. PVPA preemption does not apply to plants w/ utility patents
Financing the Acquisition of Farmland
***Need capital  financing for inputs, equipment, etc.
Farmers secure financing with the land, equipment and most importantly the crop and livestock. Farmers also bring
govt./payments and subsidies to the table.
Creditor Expectations
(1) money loaned will be paid back plus interest
(2) Expectation of legal security  In case of default expectation that they will have access to the underlying
asset used to secure the debt.
(3) Expectation that expense for suits will be covered by debtor.
(4) Debtor will not use crop/livestock to secure other money from other people.
Farmers expectations
(1) lowest interest possible
(2) access to more money (continuing relationship)
(3) minimum interference: want to be left alone
(4) expectation that creditor will follow the law.
Four Pillars: Operating costs, access to land, Equipment to work, market to sell.
8 Stages of Debt Creation and Enforcement
(1) Pre-Loan Eligibility: borrower asks w/ detailed plan for creditor backing
(2) Signing creation (disclosure): Height of signors power. Law may require disclosures. Legal provisions
designed to address eventualities that parties assume will never become eventual.
(3) Filing & Perfection: process req to make sure debt is enforceable and on record in order to maximize claim
against all others.
(4) Performance (servicing): some relationship required to continue communication
(5) Default (delinquency): failure to perform – terms in K of what can do w/ land when in default & what
constitutes default. Default Law may provide remedies for delinquent such as right to cure. Is decline in the
value of the asset such that the creditor feels insecure at default? Perhaps depending on the provisions.
Triggers options for the creditor.
(6) Debt enforcement/collection  may be able to satisfy but discretionary
(7) Liquidation  may have continuing rights on land foreclosed on (homestead***)
(8) Post-Liquidation (right of 1st refusal)
***80’s had changes in the Farm Credit Banks/co-op. banks that were chartered by the govt. but privately-owned by
the members  This is where the prices fell dramatically from the huge export prices that had soared during the 70’s
when also the land values were high and interests rates low – causing middle-level farmers to drastically indebt them
selves by expanding and banking on commodity prices to continue rise. Then the land values fell nearly 60% in the
80s, trade embargo on Soviet’s for invading Afghanistan and our export prices were still higher than others b/c of
market price supports
Mortgages
(1) What is a fixture?
(2) Rents and profits.
a. Conservation Security Program (CSP) or Conservation Reserve Program (CRP) contracts: are the
future payments from the govt. considered rents, issues, or profits where the mortgagee has first
claim to them.
(3) To have and to hold provisions.
(4) Promissory note/mortgage: evidence of indebtedness
a. If property goes down in value and can’t cover the note borrower in default is responsible for the
difference
(5) Clear Title: representation and warranties
(6) Pay and perform obligations made in the note that are incorporated into mortgage.
a. Pay taxes and special assessments
b. No liens
c. Insurance: borrower must have insurance which is typically bought from creditor and integrated
into mortgage payments.
d. If insurance or tax is unpaid creditor will probably treat as default
(7) Agree to comply with future laws
(8) Waste provisions
(9) Inspection.
(10) Acceleration payments: once there is a concern someone is in default then lender wants to wrap up all legal
cost in one remedy.
(11) Redemption: provision for reclaiming property after default
(12) Cost of enforcement: borrower will pay lenders legal fees in enforcing the debt.
(13) Waiver and forbearance
(14) Further Assurances
(15) Boldface waiver of the homestead claims.
Short term loans for operating costs rollover against the land (renewals, extensions, modifications)
Chapter 654 Foreclosure of Real Estate Mortgages
(1) First, decide if you’re going to foreclose. Debtor must first be in default. Banker must prove they are not in
compliance.
(2) What are we going to do next? Banker can give more time, call and see what’s going on, banker can decide
to enforce the debt.
(3) What can you collect on? Land, wages, other collateral, etc.
(4) Let farmer know you’re going to foreclose.
(5) 654.2A – Agricultural land – notice, right to cure default
a. What is the purpose of the right to cure?
b. Could farmer go to another bank and refinance the loan?
c. If you’re the other bank, why would you lend the farmer money?
d. Voluntary deed in lieu of foreclosure can be used to obtain release. No deficiency judgments  Farmer
might give land to bank but would want to negotiate release of the rest of the debt.
(6) Must allow right to cure  only if you have not had 2 and you have not had one within last 12 months
(7) Have to enter into mediation – go through mediation – it’s mandatory. (need a release saying you went
through mediation if you want to go to district court).
a. Iowa Supreme Court – held laws requiring mediation could be applied retroactively  no
obligation to settle it is just a procedural step
Graham v. Baker: Parties didn’t want to be there; mediator was not happy about this  Ct held that
mediator cannot require good faith negotiations (statute has been tweaked to give mediator more
discretion)
c. Must comply with new triggers (i.e. mediation) before you can seek enforcement.
(8) 654.4: Separate actions can be brought on note and mortgage. Creditor must decide whether any
deficiencies will be sought by suing for underlying debt on note or just seek the property.
(9) 654.5 – Judgment – sale and redemption: this is where defenses come in (i.e. say banker didn’t satisfy the
procedures; say bank defrauded farmer, changed terms of documents, failed to service the debt; failed to
offer recalculation of debts under fed land bank procedure of 87 Ag Credit Act) 
a. Continuance or Moratorium (654.15): Continuance reqs; drought, flood, heat, hail storm, or
governor declares a state of emergency. Moratorium only eligible when Gov declares economic
emergency.
(10) Judgment
b.
Debt Enforcement – Land Contracts and Forfeiture: Timeline/Continuum
Default
(1) Right to cure § 654.2A (have 45 days from notice)
(2) Mediation § 654.2C – mandatory before foreclosure
o Expanded to nuisance and production contracts
Foreclosure/Judgment §654.5
(3) Settle Debt, Deed in lieu of foreclosure § 654.19 (give to the bank w/ right to purchase up to 5 yrs. & may
entitle mortgagor to lease) *must record agreement*
(4) Mortgage FC Moratorium §654.15 (may apply for a continuance of foreclosure action if due to extraneous
circumstances *climate)
(5) Settle
(6) File for bankruptcy
(7) Defenses
Sheriff’s Sale [redemption period]
(8) Right to Redemption Chap. 628
 People who buy it get a sheriff’s certificate (not a deed – they own the property subject to period of
redemption)
(9) Preference in Receivership § 654.14
 *In action of foreclosure – receiver appointed preference should be for owner or person in possession*
(10) Separate Redemption of Homestead § 654.16 (Arnold)
 Can redeem less than the whole farm (homestead including residence & 40 or less acres) within a year
 Key provision for creditor: to redeem, the farmer must pay amount bid against it or fair market value
(usually say you can redeem it for what you owe – but is different here)
 Substantive change in potential rights of debtors
o Expression of political and cultural importance of farmers’ connection to the property (protection of
small family farmers) (at least give them the chance to buy back the home)
(11) Deficiency § 654.6 (Lockard)
(12) Sheriff’s Deed
 Right of first refusal § 654.16A (Must notify mortgagor of intent to sell and give opportunity to purchase it
at the proposed price & terms/conditions)
Chapter 654A Farm Mediation—Farmer-Creditor Disputes
Mandatory mediation before creditor tries to enforce debt proceeding against debtor
Also, 654B requires mandatory mediation between farm resident & other person when want to file suit for
performance under feeding contract or want to file nuisance claim.
Graham v. Baker (IA 1989) (Graham Mediation Sham Stands)
Mandatory mediation prior to forfeiture mediator must sign off if they show up
Klinge v. Bentien (IA 2006) (Klinging to mediation)
Mediation mandatory  tried to file suit before did
Federal Land Bank of Omaha v. Arnold (IA 1988)
(1) Ct. held: Legis didn’t have rational basis for passing separate Right of Redemption for FDIC members and
nonmembers
(2) Credit unions (non-members) protested retroactively altering Ks w/ req’d redemption at FMV for 2 yrs.
(3) Legislative goal was to make RoR longer  so Ct. held that RoR should be 2 yrs but then legis. changed it
to one
Federal Land Bank of Omaha v. Lockard (IA 1989)
(1) Leg. only applied moratorium to certain types of lenders (land banks/farmer-member credit unions)
(2) Ct. declared moratorium unconst. and gave those specified lenders 2 yrs. like normal to enforce foreclosure
Land Contracts & Forfeiture
Real Estate Contract (Installment Ks)
(1) Does not contain provisions about taking care of the soil
(2) Default under forfeiture
(3) Restrictive terms, easements, or covenants may affect property value
(4) Notice of Forfeiture of Real Estate Contract  makes the Buyer (in default) perform the terms & conditions
seller says are in default within 30 days
May v. Oakley (IA 1987) (DisMay at no Easement in Installment K)
(1) Husband died & question is whether house is divisible from rest of farm under Installment K
(2) No deed even though had paid $50K first for residence – K split it up and said that was what paying toward
first but then when went into default for other part said that wasn’t hers – forfeited the whole thing
(3) Both parties were getting a tax benefit, only one deed was placed in escrow for whole purchase and legal
description of just the residence was not provided in the K
Lett v. Grummer (IA 1981) (Lett the Installments Continue)
Divorce changes expectations of the parties. Also land goes up in value significantly. Buyer starts missing
payments. Allows the hog house to go into disrepair but he is not raising hogs in it. Only owed $16,000, ct found
that default was not appropriate and declared forfeiture null and void. Default was diminimus. Ct refused to enforce
prepayment.
Jamison v. Knosby (IA 1988) (Jamison Notice Possession the Focus)
Court *interp. very strictly*: Had to give notice to the person “in possession” that forfeiture initiated otherwise not
valid b/c had “constructive notice” since had recorded lease. Had to pay back the tenant (brother-in-law) for
wrongfully dispossessing him of crop but not lost profits.
Farm Leasing
(1) Question of Access/Alternatives for Owner
(2) Productivity
(3) Stewardship
(4) K relationship w/ manager/day-to-day decisions & what owner wants in property when comes back to him
(5) Payment/value  overpriced then system does not operate smoothly
(6) legal relationship  have remedies, flexibility w/ obligations
(7) Outside payments (CRP) who go to? T or L? Benefit back into the land or out to ppl actually farming the
land?
(8) *****55% of IA’s cropland under lease*****
 Included in lease: termination/notice (how, when, why, if); damage to property/standard of care (duty);
Method of payment – secured (statutory landlord lien); rent/how to change; renegotiation, renewal, question
of obligation; what if sold while the T is on the land? Does the lease survive? Death of one of the parties?
Chariton Feed and Grain, Inc. v. Harder (Iowa 1985) (Chariton Grain’s Partnership Feign)
(1) Landlord cannot be sued as a partner for tenant defaults to third party
(2) TX guy bought land in IA & got a T to do stock share lease with him – written into the K that T was
responsible for ½ of the expenses & full management control over the cattle
(3) *No joint account. No partnership  K expressly stated he was a tenant
(4) When grain was bought from Chariton T (Davidson) led them to believe that all the cows were his and paid
for with own personal checks/on his account
(5) Distinguishing from a partnership
a. Never referred to it as a partnership
b. Landlords rarely retain control over the land
c. Critical issue: Court is willing to say that what they did does not amount to sharing profits or losses
i. Even if tenant does not profit landlord still get paid
ii. Sharing of profits is a common business activity only when profits are considered after all
expenses
iii. Two separate businesses: money not in the same pot
(6) Davison did not act as agent for Landlord Harder. He was acting as an entrepreneur, minimization of
expenses was done for his own sole business reasons.
Notice of Termination of Farm Tenancy and Demand for Possession
Chapter 562 Owner-Lessor and Tenant-Lessee
(1) Applies to T not just on farm/commercial too but not residential (has its own Statute)
(2) §562.6 Farm T gets notice by Sept. 1 to end on March 1  could argue DP/takings to have to have tenant
didn’t want for another year if fail to give notice by Sept. 1
(3) Life Estates* statutory protection for T & for those remaindermen who get Fair Market Rental for holdover
T if Life Estate dies btw. Sept. 1 & March 1
Benschoter (1943):
(1) legislature was designed to fix evils of farm tenancy system in interest of public welfare
(2) old concept of duties and responsibilities of farm land has changed. B/c they control food supply they are
within the sphere of the states police power in controlling exploitation and waste.
(3) Landmark opinion providing constitutional basis for soil conservation legislation
(4) can’t waive something in K that required in statute
Pollack v. Pollack (IA 1955) (Notice Runs from Pollack to Pollack)
(1) LL wants T to continue b/c didn’t give notice/holdover  unusual – T usually trying to stay (Rental market
must have gone down)
(2) Ct. holds: Tenants are also req’d to give notice
McElwee v. DeVault (IA 1963) (McHusbandelwee)
 Multi-yr. lease (uncommon) w/ very specific husbandry clauses incorp. into the lease
 Ct. holds: Not ok to throw off T during mid-crop year and couldn’t even terminate for the following one due to multiyr. lease (Under §562.6 notice can only be avoided due to breach)
 kicked him off at the end of the crop year though b/c breaching the husbandry provisions
Dopheide v. Schoeppner (IA 1968) (Oral Schoeppner Not a Cropper)
 Oral lease  Cropper? Tenant? *Legislature put into Statute “mere cropper”
 Ct. more likely to find a T-L relationship b/c more equitable to both parties (remanded for jury trial though)
 Here T paid L the ½ crop amount instead of the other way around (looks like the T owned the crop from the
start instead of the L) *still entitled to notice or would holdover for another year even if oral lease*
Morling v. Schmidt (IA 1980) (Morling Pasture No Notice Factor)
 Pasture year  notice not needed
 Statutory protection for cultivated land not covered w/ pasture
 Written lease trumps & Bar lease incorporated § 562 (Amended* took out occupying/cultivating  now just
req’s 40 acres)
Exceptions to Notifying T
Laughlin et al. v. Hall (IA 1945) (Laughlin Noticed Waiver Happen)
(1) Talks to T & says seem like don’t want to be there  responds that he didn’t
(2) Went and found another T & started fixing up the place *no protest by old T
(3) Other T brought stuff over to move in  clearly though knew & didn’t need formal notice that she was
terminating the old T
(4) ***Consent/waiver/estoppel***
(5) Consent to end T  Waiver of the right to notice  Estoppel from complaining now
(6) Wouldn’t have had to give notice anyway b/c in default on rent payments
Schmitz v. Sondag (IA 1983) (Schmitz K Waived but Notice Stays)
(1) Assigned but no assignment clause in lease
(2) Brothers so LL probably knew they were farming together
(3) Void b/c assigned? Consent/waiver/estoppels run the other way?
(4) Holding: Lease continued for another yr. b/c was not given notice by the LL of termination by the statutorily
estab. date
Ganzer v. Pfab (IA 1985) (Statute in Ganzer trumps Common Law Answer)
IA statute v. C.L. balancing = Statute wins
Denton v. Moser
(1) Leg amended statute  Notice req on Sep. 1 instead of Nov. 1
(2) Gave notice on Sept. 8  fight over when rights should be defined = T stays on for another yr. b/c law
became effective July 1 so should be aware of law
(3) Lease could renew for 5 yrs. based on language but statute turns into yr. by yr. under same terms &
conditions
(4) Comment: If they die before Sept. 1 no notice req.
Emblements  annual crops produced by cultivation legally belonging to the tenant with the implied right for its
harvest, and are treated as the tenant's property.
 In Re Luke  Remainderman gets the property but not proceeds of crop subject to emblements
Husbandry?????
Knapp v. Simmons (IA 1984) (Knapp Suitably Collapse)
(1) Let cattle go out into field and they got into a bag of fertilizer and died
(2) How to allocate liability btw. parties? Don’t want LL to be guarantor of T success. NO implied warranty
of suitability.
(3) Why Ct. unwilling to impute implied covenant of sustainability? Latent Defect/Joint Control (LL put it
there???)
(4) If he is found to have control over the part where the cows were feeding – then he did have a duty to use
reasonable & ordinary care in his management of that part *Remanded*
Byers v. Evans (IA 1988) (Byers Fence Landlords Defense) *if had joint control then would have been liable
(1) General rule: Owner of property not liable for injuries caused by property’s unsafe condition arising after
owner leases the property to another without agreement to repair.
(2) Car accident w/ pig got out from fences
(3) Ct. said: LL had no duty to prevent Ts livestock from escaping T’s fences
(4) LL didn’t own, and had not constructed the fences
(5) Stock share  potential way T could have allocated risk (for the T???)
Hanson v. Boeder (ND 2007) (No Specific Hanson)
(1) Anticipatory Repudiation  T could reasonably think LL not going to fulfill his K obligations in middle of
5 yr. lease ***Duty to mitigate by finding another land***
(2) Terminated b/c wasn’t farming in a “good husband-like manner” – but no facts on that (maybe thought could
get higher rent from someone else or maybe wants to sell?)
(3) What is req’d to show failure to farm “in good husband-like manner”????
a. Not complying with environmental standards
i. Perhaps failure to comply with highly erodible soil req
b.
Didn’t pay rent, etc.
Soil Conservation Laws
Quade v. Heiderscheit (IA 1986) (Terms in Quade Carry the Day)
(1) 3 yr. written lease  specific lease provisions on erosion & soil conservation farming tactics
(2) Ct. gave damages on atrazine over-application (ruined oat harvests for following years) & erosion
a.  T said natural erosion (arg. that holding otherwise would make T guarantors of L’s land & make
liable) *inverse of Knapp  would be better protected by K term that does not make him liable as
long as he is in compliance with soil conversation laws.
(3) T liable. K provisions will be given effect.
Woodbury County Soil Conservation District v. Ortner (IA 1986)
(1) Suit brought by neighbors with no privity of K  involvement of govt. too & public b/c soil conservation is
for everyone’s benefit
(2) Cites Benschoter  for the proposition that the state has the right to protect the soil from erosion and
maintain soil and water conservation practices.
(3) Landowner tries to use constitutional taking arg. that it is unconstitutional taking to req these expensive
modifications that may result in reduced income.
(4) Police power: soil loss limits  county is allowed to force compliance  gave 2 alternatives to come into
compliance
(5) Not a takings
(6) Is an implied covenant of stewardship in T status (standing of envir. object)
(7) Very very few actions are brought by soil and water conservation districts.
Moser v. Thorp Sales Corp (IA 1981) (Moser Dissent Warranty Hence)
(1) County soil conservationist testifies to substantial erosion that will take 50 yrs to rebuild. This was due to the
way T farmed the hill.
(2) Evidence on the other side was the feed salesman. The farmer said there was almost no soil erosion. Trial ct
finds that farming was in-line with local custom and damages could not be proven. Cannot prove that
money was lost b/c the farm value went up.
Counterarg: would have been worth even more w/ out loss of soil
(3) Sup Ct affirms dist ct. that Moser failed to prove damages
(4) Five justices join in the dissent: This stands for the proposition that there is an implied duty of
stewardship for tenants. However, the dissent cites no cases for this proposition.
(5) Hamilton Dissent: Ct should have found as a matter of law there were bad practices. Feed salesman
testimony trumping soil conservationist testimony is questionable. Fact that farmland went up in value is a
different question as to whether its been damaged.
CRP
Iowa Financial Incentive Program for Soil Erosion Control Maintenance Agreement
Sierra Club v. Morton (SCT 1972)
Proposition that a tree or soil has standing is advanced. Based in Leopold land ethic. Rejected. Too many problems
if any body can sue b/c they don’t like the way someone is farming their own land.
Thompson v. Maddock 695 NW2d 505, 2005 Wl 425471
(1) Aunt tries to throw nephew tenant out in the middle of the winter. Provides notice for breach of lease and
notice for following year.  Aunt sues nephew tenant and claims breach of K  claims combine was not in
shape and nitrogen was not put on in a timely fashion
(2) Tenant counterclaims and sues for loss profits, emotional distress, wrongful removal, and wrongful issuance
of injunction.
(3) Tenant argues that there are a lot of right ways to farms  Manure was put on so nitrogen was not needed;
Everyone was late to harvest that year
(4) Story from a magazine that he was a good farmer
(5) Yields were high; Raising seed corn for someone else under K
(6) Tenant wins and is awarded damages
Continuum of oral leases and highly technical leases.
Maybe sitting down and having a conversation is the answer to communication problems.
IOWA FENCE LAW
Chapter 359A Fences
 Duty
o No legal duty to build a partition fence
o Can be compelled to build one at request of adjacent landowner
o Can be compelled to contribute on basis of a fence agreement
o Iowa is middle ground between fence in and fence out as trespassing animals statute has been repealed
 Maintaining fences
o Right Hand Rule: common law
o Fence is on the border – belongs to both parties conceptually
 What kind of fence can be required?
o Legal fence – can be rails, boards, or most commonly – three barbed wires
o If landowner pastures poultry or swine, a tight fence can also be required - add woven wires
 Fence-viewer Process
o Township trustees – elected officials
o Written request to other landowner
o Request for fence viewers to resolve
o Five days notice of hearing
o Fence viewers make allocation and split liability
 Must divide evenly regardless of who gets primary benefit
 If landowner fails to build, the fence viewers can build and collect in property taxes
 Decisions can be appealed to district court
 Constitutionality of fencing statutes
o As state becomes urban, this is brought into debate
o Several states have held violation of constitutional rights – building against will takings
Laughlin v. Franc (IA 1955) (Franc Fence Prank)
(1) Should have recorded fence agreement with previous landowner (§ 359a)
(2) 4 people inherit  charge Laughlin for ½ of each section
(3) Tries to negotiate with sisters  deal breaks down & she calls for fence viewers (town trustees) to allocate
responsibility of fence payment
o Fence viewers say she must pay ½ of each section
(4) She is held liable for tearing down fence  Tenants in Common (each equal ownership in whole fence)
Jacobs v. Stover (IA 1976) (Stover Horse Romer)
(1) Duty to public?
(2) Stover = owner of horse hit on the public highway
(3) Jacobs hit horse  Stallman owns other piece of land where horse entered highway
(4) Duty to fence for the benefit of a 3rd party?
(5) Fence viewers gave ruling that needed to erect a fence in 30 days  that time wasn’t over yet
****No C.L. duty upon adjoining landowners to fence property (statute created that duty*)  Relationship not btw.
3rd party but btw. adjoining landowners****
Gravert v. Nebergall (IA 1995) (Gravert Fence Can’t hurt)
(1) It is not unconstitutional to req. a fence even when not allowed to have animals  There is always
somebody on the other side of the boundary.
(2) Good reasons for having fences  protects from livestock trespass & property damage Chapter 169C
Trespassing or Stray Livestock
(1) Duty to prevent animals from straying is separate from duty to put up fence. Fence viewers can’t
require only farm with livestock to pay for putting up fence to prevent animals from straying.
(2) Basics:
o Make livestock owners control animals (changes back to fence-in statute)
o 169C.2 – Custody – a landowner may take custody of livestock if the livestock trespasses
o 169C.4 – Liability – will be liable for damages done to neighboring property from trespass ***unless
the landowner failed to maintain fence required under 359A***
o Distrain livestock from getting of the property onto roads
o Procedure for identifying the owner
o Pay/reward ppl for returning straying livestock
o Ajister Lien: common law concept turned in statutory lien. Allows person that services animals to put a
lien against the animals for the amount owed
Bryhan v. Pink (Wis. 2006) (Bryhan Hates to Check the Gate)
(1) *Fence-Out State*
(2) Pasture w/ cattle – gate open into ppl’s backyard & cause $12K worth of damage
(3) Ct. found equal responsibility  Homeowners respon. to close gate that was close to their house *could see
it was open
(4) Gate is the responsibility of both  ***snowmobilers opened it with farmer’s permission***
(5) Farmer didn’t know it was open, but common practice to check fences before turn cattle loose in the Spring
SURFACE DRAINING LAWS
(1) Has similarities to fence law  Common boundary; Relation btw adjoining properties
(2) Two different theories
a. Common enemy approach (like fence in)
i. Cons:
1. Water will go somewhere  cannot just push problem until someone elses
property  ripe for conflict: pitts landowners against one another
2. Moves water into artificial channels increasing volume and velocity which leads
to flooding
b. Civil Law approach
i. No right to refuse acceptance of water from your neighbor
ii. Have the right to have water drain off you property
(3) Treated like a private property issue btw landowners b/c water is a resource
(4) Closing ag. drainage well is likely to create a wetland  Creating a wetland is often a public goal
(5) IA has drainage districts since IA is mostly flat laws based on elevation unhelpful
a. Drainage district has the ability to charge landowners that benefit from drainage
(6) Best approach is to allow water to flow naturally
Moody v. Van Wechel (IA 1987) (Moody Drainage Duty)
(1) Van W. dominant estate flowed onto Moody but over yrs. formed in way that created dike on Van W’s land
made pooling effect
(2) Redirects water onto Moody’s & other 2 neighboring lands
(3) Can’t do whatever you want w/ dominant estate  servient has to accept natural flow but not redirected
Maisel v. Gelhaus (IA 1987)
(1) Maisel accuses Gelhaus of causing the drainage problems
(2) Gelhauses method of plowing against the fence through the years resulted in the raising of the fence causing
interruption of natural flow of water- resulting in a loss to Maisel (shows impact of practices on ditches)
(3) Prescriptive easement with other landowners- to straighten out ditch so could reclaim- another way to alter
rights
(4) Ct. found that had not forced more water than natural onto Gelhaus land & they had additionally plowed in
the wrong direction so as to raise the fenceline and cause more pooling of water on their own land
(5) Gelhaus loses
Iowa Surface Drainage Law and Groundwater Quality Protection: Is There Potential Landowner Liability for
Plugging Agricultural Drainage Wells and Sinkholes?
AGRICULTURAL NUISANCES AND MANURE EASEMENTS
Environment of pork industry becomes highly politicized  Only 10% of pork producers large enough that they are
req’d to have permits do. Permit reqs waste management system. State has little interest in enforcing this and
producers have little incentive to self regulate.
Gacke v. Pork Xtra, LLC (IA 2004) (Gacke Nuisance Happy)
(1) Nuisance immunity statute was declared unconstitutional in completely prohibiting recovery by property
owners for the easement it granted on their property = a takings by the nuisance  had to be able to recover
Diminution in Value
(2) Unlike in Gravert v. Nebergall – no benefit from this whatsoever
(3) As applied to these property owners who were there first, did not come to the nuisance = this violated their
right to use & enjoyment of property that police power did not legitimately have interest in depriving to
protect livestock operators from nuisance suits  effectively gave them no remedy/unduly oppressive
(4) Bormann: Had previously held ag area laws where County Board of Supervisors could declare 500
contiguous acres exempt from nuisance suits  declared unconst. (only state to strike down Right to Farm
law)
(5) Important Elements of Nuisance suit:
o Who was there 1st  Animal Feeding op. law gave statutory defense even if didn’t meet this factor
o Nature of area
o How significant of an interference is it with property rights
Chapter 657 Nuisances  amended to include protection for livestock facilities provided they meet reg. protections.
Manure Easement Agreements  have to get agreement under IA law for your Manure Management Plan *must
show you have enough land to spread it on
(1) Place to put manure for one party, fertilizer for the other
(2) Major difference btw easement on pages 441 and 444
o No payments on pg 441
o Pg 444 crop grower pays manure owner for applying the manure.
 This one is an easement as well as a binding K, manure cannot be sold to someone else
during K period
 Warranties discussion in paragraph 6 tend to show this is a binding k
Miller v. Rohling (IA 2006)
(1) Grain dust was a nuisance even though it was there first
(2) Grain elevators usually had priority of location in IA though b/c town usually grew up around it
(3) City tore down elevator to abate the nuisance
Gumz v. Northern States Power Company (Wisconsin)
(1) Cattle stray voltage case  problem in dairy states b/c particular effect on dairy cattle
(2) Could sue for nuisance  the electric co. failed on saying that the farmers were negligent in discovering the
cause of the herd’s health decline, no showing of comparative-negligence by farmer
(3) BUT could not get treble damages b/c no showing of willful, wanton, reckless disregard by the company in
controlling the electricity that damaged the herd