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VETERINARY LIENS The July/August 2009 issue of MVMA News featured an article on Veterinary Liens that warrants additional comments. The author, Mr. Henri Minette, outlined three potential types of liens for veterinarians to pursue: a personal property lien under Minnesota Statutes sections 514.18 and 514.19; a summary sale lien under sections 514.93 and 514.94; and a Veterinarian’s lien under sections 514.965 and 514.966. He correctly notes that the latter is the least cumbersome type of lien in terms of recovery and satisfaction and that the Veterinarian’s lien under section 514.966 is specifically for “emergency services.” But what if the veterinary service wasn’t an emergency? Is the veterinarian stuck with the more cumbersome enforcement provisions of 514.19? It is worth noting that section 514.966 actually enumerates four types of agricultural liens: (1) Veterinarian’s, (2) Feeder’s, (3) Breeder’s, and (4) Livestock Production Input liens. Under the right circumstances, any one of these four liens could be available to a veterinarian. Feeder’s Liens: A veterinarian has a Feeder’s lien on livestock if the veterinarian “contributes to the care of livestock, including medical or surgical treatment” and “does so in the ordinary course of business” and “at the request of the owner or legal possessor of the livestock.” Minn. Stat. 514.966, subd. 4(a). The definition does not require the service or treatment to be an emergency. The name “feeder” can be misleading. The most common Feeder’s lien holders are those who actually feed and tend the livestock on a daily basis, e.g., herdsmen. But the term “feed” is broadly defined within the statute to include “drugs.” MINN. STAT. § 514.965, subd. 6. For veterinarians, a Feeder’s lien could arguably be based on a doctor-patient/client relationship , a hands-on diagnostic evaluation of a herd, and regular visits to check on the health and recovery of the infected group. Breeder’s Liens: A veterinarian has a Breeder’s lien on the livestock bred, as well as the resulting offspring, if the veterinarian provided the collected semen or ova used in the fertilization, artificial insemination, or any other artificial means of impregnating the livestock, and did so in the ordinary course of the veterinarian’s business. Livestock Production Input Liens: A veterinarian has a Livestock Production Input (“LPI”) lien if the veterinarian provides feed (read “drugs”) and labor used in raising livestock. An LPI lien holder is, essentially, a mere supplier and does not have the hands-on relationship with the livestock as, say, a feeder or a breeder would have. Because of this more removed relationship to the livestock, when it comes to priority, LPI lien holders take a back seat to the other three agricultural liens defined above, as well as many other security interests. Priority: It is this notion of priority that is the real sticking point. The distinction between the four agricultural liens is a heady one because of how the statute dictates priority and, therefore, the order in which the various liens are satisfied. Certain types of liens have priority over others and then, within each type of lien, priority is determined according to the date on which the lien was effective. Veterinarian’s liens have priority over Feeder’s, which have priority over Breeder’s, which have priority over LPI liens and all other security interests. Between LPI liens and other security interests, an LPI lien only gains priority over a competing security interest if the food or labor was provided to the livestock before the secured party gave value to the debtor. It does not take much imagination to see that disputes can arise among competing lenders and agricultural lien holders as they each try to get the upper hand in the priority game. Going Forward: When Mr. Minette stated that Minnesota law on the subject is not known for being a “paragon of clarity,” he was not kidding. For example, while the general understanding in the industry is that “feeders” have a hands-on relationship with the livestock, neither the statutes nor the case law give practitioners any definitions or examples with which to work when applying the term to a veterinarian providing non-emergency medical treatment to livestock, even on a regular basis. The difficulty for attorneys and their clients arises from this lack of a case-law beacon to interpret the murky statutes and guide the way. For now, veterinarians who want to pursue an agricultural lien based on non-emergency services are faced with a business decision: Option One: Argue that the veterinarian has a Feeder’s lien to avoid the pitfalls of the LPI vs. Lender priority war; or Option Two: Acquiesce to the LPI slot and pick up the scraps from the lender’s table. A vie for the first option will send lenders kicking and screaming and will necessarily result in a more expensive process in terms of attorneys’ fees with no guaranteed outcome. However, a successful bid should create larger settlements and/or long-overdue case law to secure a solid foundation for the future of veterinary liens.
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