Miller v. Department of Agriculture

Full text

Opinions in this case

Opinion
Majority — Knecht

2022 IL App (4th) 210204 FILED April 26, 2022 NO. 4-21-0204 Carla Bender th 4 District Appellate IN THE APPELLATE COURT Court, IL

OF ILLINOIS

FOURTH DISTRICT

ROBERT MILLER, ) Appeal from the Plaintiff-Appellant, ) Circuit Court of v. ) Ford County THE DEPARTMENT OF AGRICULTURE, ) No. 19MR16 Defendant-Appellee. ) ) Honorable ) Matthew J. Fitton, ) Judge Presiding.

PRESIDING JUSTICE KNECHT delivered the judgment of the court, with opinion. Justices DeArmond and Steigmann concurred in the judgment and opinion.

OPINION

¶1 Plaintiff, Robert Miller, appeals the circuit court’s order that affirmed the decision of the director of the Department of Agriculture (Department), denying his claim for compensation from the Grain Code (240 ILCS 40/1-1 et seq. (West 2016)). Plaintiff contends, in part, the circuit court and the director erroneously interpreted section 10-15(e) of the Grain Code (id. § 10-15(e)) as triggering the automatic pricing of grain sold under a price later contract and the resulting placement of his claim outside the protections of the Grain Code. We agree with plaintiff and reverse. ¶2 I. BACKGROUND ¶3 The Grain Code’s main purpose is “to promote the State’s welfare by improving the economic stability of agriculture through the existence of the Illinois Grain Insurance Fund.” Id. § 1-5. The Grain Insurance Fund affords protections to grain producers when licensed grain dealers, those in the business of purchasing grain from producers, fail. Id. When such a failure occurs, producers may seek compensation from the Grain Insurance Fund by filing a claim with the Department. See id. § 25-10. The protections of the Grain Insurance Fund are not limitless. There are deadlines that must be strictly enforced. See, e.g., id. § 25-10(d). ¶4 Plaintiff is a grain producer who entered multiple “price later contracts” with SGI Agri-Marketing, LLC (SGI), for the sale of grain. One such contract is Price Later Contract 215, the contract that is the basis for plaintiff’s claim. Under the Grain Code, a “ ‘[p]rice later contract’ ” is an agreement to sell grain where the purchase price will be later determined pursuant to a formula in the contract. Id. § 1-10. In this case, Price Later Contract 215 is a preprinted form. It was fully executed on March 15, 2016, after the grain had been delivered. Handwritten in the form is plaintiff’s name as the seller and the number of bushels of grain involved: 15,508.25. A box is checked showing the grain was delivered between the handwritten dates of September 25, 2015, and January 26, 2016. According to Price Later Contract 215, the parties agreed to the means by which the purchase price would be determined. After this line, the box before “Basis” is checked, and plaintiff agreed to sell the grain to SGI for the contract price of July 2016 futures at the Chicago Board of Trade (CBOT), with some price variance for grain delivered on different dates, on any business day between the date of the contract and June 25, 2016. Under the terms of the contract, plaintiff, as the seller, was to select the “the contract month price.” ¶5 On the preprinted form, after the portion where the parties could write in the agreed upon terms, appears a section called “PRICE LATER DISCLOSURES—SELLER IS HEREBY CAUTIONED.” Under the title appears in parentheses and italics: “These disclosures are

-2-summaries of the Illinois Grain Code and are not intended to fully advise you of your legal rights and liabilities. Please refer to the Illinois Grain Code for the actual provisions.” These disclosures include: “The contract must be signed by both parties within 30 days after the last date of delivery or the grain will be priced on the next available business day at the closing price on that day” and “[w]ithin 5 business days of Seller selecting a price for all or any part of the grain covered by a price later contract, the Buyer shall mail to the Seller a confirmation indicating the price selected.” ¶6 On May 18, 2016, SGI sent a document entitled “Purchase Confirmation” to plaintiff, detailing the pricing of 15,508 bushels of grain. At the bottom of the purchase confirmation was a preprinted statement directing plaintiff to sign and return a copy immediately. Plaintiff signed the Purchase Confirmation on June 6, 2016. ¶7 On November 1, 2016, the Department determined a failure of SGI had occurred. The Department began the process of resolving SGI’s affairs according to the Grain Code. SGI’s grain-dealer license was revoked. On November 17, 2016, the Department’s Bureau of Warehouses (Bureau) sent plaintiff a letter notifying him of SGI’s failure. ¶8 On November 22, 2016, plaintiff filed a claim for reimbursement from the Grain Insurance Fund. Plaintiff sought compensation for 17,366.81 bushels of grain, which included grain sold pursuant to another price later contract not subject to this appeal. Because the grain was sold under a price later contract, price later contract 215, section 25-10(d) of the Grain Code applies to plaintiff’s claim. See id. § 25-10(d). Section 25-10(d) allows a valid claim to be paid at 85% of its value if the grain was delivered or priced within 160 days of the failure and the contract was executed or the grain delivered not more than 365 days before the failure. Id. Regarding plaintiff’s claim, the relevant dates are as follows: (1) November 1, 2016, the date of SGI’s failure, (2) May 25, 2016, 160 days before SGI’s failure, and (3) November 2, 2015, 365 days before the failure.

-3-¶9 The Bureau, on February 7, 2017, denied plaintiff’s claim, finding the grain sold but not paid for within 160 days of the failure. One month later, plaintiff served notice to the Department of a request for a hearing, maintaining the grain was not sold more than 160 days before the failure. The matter was assigned to the Bureau of Administrative Hearings of the Department of Central Management Services for adjudication. An administrative law judge (ALJ) was appointed. ¶ 10 The record contains proof of multiple communications between plaintiff and the Department’s counsel in November and December 2017 regarding his claim. At one point, the Department’s counsel agreed plaintiff presented a valid claim. Plaintiff disputed the amount owed, and the matter was not resolved. ¶ 11 By letter dated December 11, 2017, general counsel for the Department stated he concluded plaintiff’s claim must be denied. General counsel informed plaintiff, as a matter of law under section 10-15(e) of the Grain Code, the grain was priced 30 days after delivery and this date placed his claim outside the requisite 160-day deadline. Section 10-15(e) provides the following:

“Subject to subsection (f) of this Section, if a price later contract is

not signed by all parties within 30 days of the last date of delivery

of grain intended to be sold by price later contract, then the grain

intended to be sold by price later contract shall be priced on the next

business day after 30 days from the last date of delivery of grain

intended to be sold by price later contract at the market price of the

grain at the close of the next business day after the 29th day. When

the grain is priced under this subsection, the grain dealer shall send

-4-

notice to the seller of the grain within 10 days. The notice shall

contain the number of bushels sold, the price per bushel, all

applicable discounts, the net proceeds, and a notice that states that

the Grain Insurance Fund shall provide protection for a period of

only 160 days from the date of pricing of the grain.” Id. § 10-15(e). ¶ 12 The matter proceeded to the ALJ. Before the ALJ, as here, the parties disputed the date the grain was priced pursuant to price later contract 215. Plaintiff argued the grain was priced on June 6, 2016, when he signed the purchase confirmation. The Department countered the grain was automatically priced under section 10-15(e) on February 26, 2016, 30 days after the last grain delivery occurred as no price had been set. ¶ 13 The ALJ’s analysis regarding the date of the pricing began by summarizing the parties’ arguments. The ALJ then considered whether the parties intended to create a price later contract and, after considering the history of the transactions between SGI and plaintiff, as well as the terms of the contract, found they had so intended and had done so. The ALJ turned to the issue of pricing and found pricing did not occur on February 26, 2016, as the Department asserted: “[d]etermining that the intent was to enter into a price later contract, the pricing does not occur on February 26, 2016; rather, it occurs at a later date.” ¶ 14 Upon concluding the pricing did not occur on February 26, 2016, the ALJ found the price was set within 160 days of SGI’s failure and plaintiff was entitled to compensation from the Grain Insurance Fund. The ALJ reasoned pricing was complete on one of two dates, both after May 25, 2016. The first date, June 6, 2019, was the date plaintiff signed the purchase confirmation. The second date, May 28, 2016, is the date of the expiration of the Uniform Commercial Code’s 10-day notice period when a party may object to a written confirmation. See 810 ILCS 5/2-201(2)

-5-(West 2016). ¶ 15 In July 2018, the Department petitioned the director for reconsideration of the ALJ’s July 23, 2018, order. Plaintiff did not file a response. ¶ 16 In its October 2018 decision, the director observed, before the ALJ, both sides submitted briefs in support of their arguments. The director observed no formal hearing was held. The director then found the ALJ order improperly relied on subsection (f) in its analysis of plaintiff’s claim. Subsection (f), according to the director, applies to warehousemen, and SGI was not licensed as a warehouseman. ¶ 17 The director denied plaintiff’s claim, concluding neither delivery nor pricing occurred within 160 days of SGI’s failure. The director determined, because the parties failed to enter into a contract until March 15, 2016, the grain had been priced as a matter of law on February 26, 2016, 30 days after the last grain subject to price later contract 215, had been delivered. The director reversed the order of the ALJ and found plaintiff was not entitled to compensation from the Grain Insurance Fund. ¶ 18 Plaintiff appealed to the circuit court, which affirmed the order of the director. The court found pricing occurred on February 26, 2016, under section 10-15(e) of the Grain Code. ¶ 19 This appeal followed. ¶ 20 II. ANALYSIS ¶ 21 Although plaintiff also raises procedural arguments, the primary issue on appeal is whether the Grain Code, section 10-15(e) in particular, sets a pricing date as a matter of law when the parties do not enter a price later contract within 30 days of delivery. This is a matter of statutory interpretation, which is subject to de novo review. Marsh v. Sandstone North, LLC, 2020 IL App (4th) 190314, ¶ 63, 179 N.E.3d 402.

-6-¶ 22 In interpreting a statute, our primary objective is to ascertain and give effect to the legislature’s intent. Id. The most reliable indicator of that intent is the language of the statute. Vance v. Joyner, 2019 IL App (4th) 190136, ¶ 52, 146 N.E.3d 285. We consider the statute as a whole and do not construe words in isolation but in light of the other relevant provisions of the statute. Marsh, 2020 IL App (4th) 190314, ¶ 63. In this task, “ ‘[n]o part of a statute should be rendered meaningless or superfluous.’ ” Id. (quoting Van Dyke v. White, 2019 IL 121452, ¶ 46, 131 N.E.3d 511). The statute at issue is part of the Grain Code, which is to “be liberally construed and liberally administered in favor of claimants.” 240 ILCS 40/1-5 (West 2016). ¶ 23 In this case, the statute at issue is one administered by the Department, an administrative agency. This court on de novo review will defer to an agency’s interpretation of a statute unless the interpretation is erroneous or unreasonable or the interpretation conflicts with the statute. Medponics Illinois, LLC v. Department of Agriculture, 2021 IL 125443, ¶ 31. ¶ 24 We turn to the language of the statute. The subsection at issue here is part of section 10-15 of the Grain Code, which is titled “Price later contracts.” 240 ILCS 40/10-15 (West 2016). Section 10-15, “Price later contracts,” appears within article 10 of the Grain Code, which is titled “Duties and Requirements of Licensees.” 240 ILCS 40/art. 10 (West 2016). By definition, a licensee includes grain dealers and warehousemen, not producers. See id. § 1-10. Section 10-15 begins by mandating price later contracts contain provisions prescribed or authorized by the Department. Id. § 10-15(a). It then provides for the form, creation, and retention of price later contracts for only “licensed grain dealer[s].” See id. § 10-15(a), (h). Section 10-15 further mandates grain dealers who enter price later contracts maintain a specific number of assets when compared to the unpaid balance on obligations for grain purchased by price later contracts. See id. § 10-15(b).

-7-¶ 25 Within this section of grain-dealer obligations, subsection (e) provides the following: