Premier Community Bank v. Schuh

Roger Schuh was in the business of pasturing livestock owned by other parties on his farm. The Schuh Cattle Company, LLC (the cattle company), owned by Schuh’s son and daughter-in-law, pastured its cattle with Schuh and failed to pay Schuh for years, despite Schuh’s requests for payment. The rate Schuh charged the cattle company was consistent with what he charged other parties. In 2006 the cattle company took out a loan with Premier Community Bank (Premier) and used the cattle pastured on Schuh’s farm as collateral. Premier perfected its security interest. When the cattle company defaulted on its loan, Premier insisted that Schuh surrender the cattle company’s livestock. Schuh claimed a possessory lien in the cattle company’s cattle and refused to surrender possession to the bank. Premier sued Schuh, seeking to enforce its security interest. Schuh moved for summary judgment. A circuit court determined that Schuh had a possessory lien that was superior to Premier’s security interest. Under Wisconsin law, a possessory lien was a lien (1) that secured an obligation related to goods by a person in the ordinary course of business, (2) that was a statutory creation in the person’s favor, and (3) whose existence was contingent on the person’s possession of subject goods. The circuit court granted summary judgment in Schuh’s favor. On appeal, Premier disputed that Schuh’s lien was possessory, arguing that the lien was not contingent on Schuh’s possession of the cattle. Premier also argued that summary judgment was not proper in this case because the question of whether Schuh provided pasturing services in the course of business to the cattle company, which was owned by family members, was a factual dispute. The appellate court considered whether Schuh’s possessory lien had priority over Premier’s perfected security interest.