In the latest installment of the litigation, the Iowa Court of Appeals concluded that the Sweckers were not legally entitled to file UCC financing statements securing interests in Midland’s personal property based on the Swecker’s business relationship with Midland Power Co-op. Midland was purchasing a variable amount of electricity produced by the Sweckers’ wind generators, but the Swecker’s claimed the amount paid should have been greater. So, in early 2008, the Sweckers filed UCC-1 financing statements with the Iowa Secretary of State identifying themselves as secured parties. Midland was identified as the debtor. The Sweckers attached Midland’s equipment and fixtures, including tools, vehicles, cars, trucks, trenchers, accounts receivable, etc., as secured property. Midland did not authorize the filing of the financing statements and requested that the Sweckers immediately withdraw them. When the Sweckers failed to comply, Midland sought injunctive relief and damages. The trial court ordered the termination of the UCC-1 financing statements and enjoined the Sweckers from contacting Midland’s customers to seek joint payment. The Sweckers failed to respond to the order and the matter proceeded to trial.
At trial, the Sweckers argued that because the wind generators were located on agricultural land, the resulting electricity production was agricultural. Thus, they argued that they were authorized to file financing statements under Iowa’s ag commodity production lien statute (Iowa Code §§ 554.9509 and 579B. However, the trial court could disagreed and issued a permanent injunction against the Sweckers.
On appeal, the Sweckers argued for the first time that excluding electricity as an agricultural “commodity” under Iowa Code Ch. 579B violated the equal protection clauses of the U.S. and Iowa Constitutions. However, because they had not raised those issues at trial the issues were not preserved for appeal. On the Sweckers’ ag commodity lien argument, the court noted that a “commodity” qualifying for an agricultural lien in Iowa is defined as “livestock, raw milk, or a crop.” In addition, the court reasoned that electricity generated from private wind production facilities does not fit within the common meaning of a “crop” and it was clearly not the intent of the Iowa legislature upon enactment of ag lien protection to give additional protection for electricity production.
Finally, the appellate court warned the Sweckers that even though they were proceeding on appeal without the help of an attorney, there is no excuse for noncompliance with Iowa’s appellate procedure rules. That was, the court noted, particularly true for the Sweckers – a couple that has repeatedly used the court system without legal representation to put forth their novel legal theories. Midland Power Cooperative v. Swecker, No. 0-385/09-1218 (Iowa Ct. App., Jun. 30, 2010).