## Facts

- Roger Schuh operated a farm business that kept and pastured livestock owned by other parties for a daily per-head fee.
- Schuh pastured cattle owned by Schuh Cattle Company, LLC (SCC), whose members included Schuh’s son and daughter-in-law.
- SCC agreed to pay Schuh $1.10 per animal per day, a rate consistent with what Schuh charged other customers.
- SCC failed to pay Schuh for an extended period despite repeated requests; by the time of suit, SCC owed Schuh about $15,934.
- In 2006, SCC obtained a loan from Premier Community Bank (Premier) and granted Premier a security interest in the cattle pastured on Schuh’s farm; Premier perfected its security interest.
- After SCC defaulted on the loan, Premier demanded that Schuh turn over the cattle so Premier could enforce its security interest.
- Schuh refused to surrender the cattle, asserting a statutory livestock keeper’s lien under Wis. Stat. § 779.43(3) and relying on his continued possession of the cattle to secure payment of the unpaid pasturing charges.
- Premier sued Schuh to enforce its security interest; Schuh moved for summary judgment, asserting that his lien was a possessory lien with priority over Premier’s perfected security interest.

## Issues

1. Whether Schuh’s statutory lien under Wis. Stat. § 779.43(3) met the definition of a “possessory lien” under Wis. Stat. § 409.333(1), including whether the lien’s effectiveness depended on Schuh’s possession of the cattle.
2. If Schuh’s lien was a possessory lien under § 409.333(1), whether it had priority over Premier’s perfected security interest under Wis. Stat. § 409.333(2).
3. Whether summary judgment was improper because there was a genuine issue of material fact as to whether Schuh provided pasturing services to SCC “in the ordinary course” of his business given the family relationship.

## Decision

- The Wisconsin Court of Appeals affirmed the circuit court’s order granting summary judgment to Schuh.
- The court held that Schuh had a statutory lien under Wis. Stat. § 779.43(3) for pasturing/keeping the cattle and that the lien qualified as a “possessory lien” under Wis. Stat. § 409.333(1).
- The court rejected Premier’s argument that the lien was not possessory because it was not contingent on possession, concluding that the lien’s effectiveness (as a possessory lien) depended on Schuh’s continued possession as contemplated by § 779.43(3).
- Because Schuh’s lien was a possessory lien and the statute creating it did not provide that it was subordinate to a security interest, Schuh’s lien had priority over Premier’s perfected security interest under Wis. Stat. § 409.333(2).
- The court concluded there were no genuine disputes of material fact about Schuh’s pasturing services being provided in the ordinary course of his business; the family connection did not, by itself, create a triable factual issue on that point.

## Legal Principles

- Under Wis. Stat. § 409.333(1), a “possessory lien” is a non–security interest, non–agricultural lien interest that: (a) secures payment for services or materials furnished with respect to goods by a person in the ordinary course of the person’s business; (b) is created by statute or rule of law in favor of that person; and (c) depends on the person’s possession of the goods.
- Wis. Stat. § 779.43(3) grants a lien to a person who pastures or keeps animals and allows the lienholder to retain possession of the animals until the amount due for their keep and care is paid.
- Under Wis. Stat. § 409.333(2), a qualifying possessory lien has priority over a security interest in the same goods, even if the security interest is perfected, unless the statute creating the lien expressly provides otherwise.
- “Ordinary course” under § 409.333(1)(a) may be satisfied on undisputed facts showing the lienholder regularly provides the same type of service to others and charges a consistent commercial rate; a family connection between the service provider and the animal owner does not alone prevent a finding that the services were provided in the ordinary course.
- Summary judgment is appropriate when the material facts are undisputed and the remaining questions—such as whether a statutory lien fits § 409.333 and how the statutes rank competing interests—are questions of law.

## Conclusion

The Court of Appeals held that Schuh’s livestock keeper’s lien under Wis. Stat. § 779.43(3) was a possessory lien within Wis. Stat. § 409.333(1) because it secured payment for pasturing services provided in the ordinary course of his business and depended on his continued possession of the cattle, and it therefore had priority over Premier’s perfected security interest under § 409.333(2); with no material fact disputes, summary judgment for Schuh was affirmed.


Premier Community Bank v. Schuh, 789 N.W.2d 388, 329 Wis. 2d 146 (2010)