Agricredit Acceptance Corporation, LLC (AAC) (plaintiff) provided a loan to Thomas Hendrix that was secured by his cotton crop. Hendrix was to retain possession of the cotton and sell the cotton through Sea Island Cotton Trading (Sea Island). Various warehouses issued electronic warehouse receipts (EWRs) for the cotton. Several cotton merchants (merchants) (defendants) purchased the cotton and paid Sea Island. The EWRs were then transferred into the merchants’ names. However, Sea Island never paid AAC or Hendrix for the sold cotton. AAC sued the merchants for possession of the cotton based on AAC’s security interest in the cotton. The merchants moved for summary judgment, arguing that (1) their interest in the cotton had priority over AAC’s and (2) AAC waived the priority of its security interest by entrusting the cotton to Hendrix.