203D.6 - CLAIMS AGAINST FUND. - Iowa Statutes

203D.6 CLAIMS AGAINST FUND. 1. Persons who may file claims. A depositor or seller may file a claim with the department for indemnification of a loss from the grain depositors and sellers indemnity fund. A claim shall be filed in the manner prescribed by the board. 2. Time of filing claim. a. As used in this subsection, an incurrence date is when either of the following occurs: (1) The revocation, termination, or cancellation of the license of the grain dealer or warehouse operator. (2) The filing of a petition in bankruptcy by a licensed grain dealer or licensed warehouse operator. b. To be timely, a claim must be filed within a claim period beginning on either incurrence date and ending one hundred twenty days after that incurrence date, regardless of whether a previous claim period has expired. 3. Notice. The department shall cause notice of the opening of the claim period to be published once each week for two consecutive weeks in a newspaper of general circulation in each of the counties in which the licensee maintains a business location and in a newspaper of general circulation within the state. The notice shall state the name and address of the licensee and the claim incurrence date. The notice shall also state that any claims against the fund on account of the licensee shall be sent by ordinary mail to the department within one hundred twenty days after the incurrence date, and that the failure to make a timely claim relieves the fund from liability to the claimant. This notice may be incorporated by the department with a notice required by section 203.12 or 203C.14. 4. Determination of eligible claims. The board shall determine a claim to be eligible for payment from the fund if the board finds all of the following: a. That the claim was timely filed. b. That the incurrence date was on or after May 15, 1986. c. That the claimant qualifies as a depositor or seller. d. That the claim derives from a covered transaction. For purposes of this paragraph, a claim derives from a covered transaction if the claimant is a seller who transferred title to the grain to a licensed grain dealer other than by credit-sale contract within six months of the incurrence date for a claim period as provided in subsection 2, or if the claimant is a depositor who delivered the grain to a licensed warehouse operator. e. That there is adequate documentation to establish the existence of a claim and to determine the amount of the loss. f. A claim has not been paid for the same loss. 5. Value of loss -- warehouse claims. The board shall determine the dollar value of a claim incurred by a depositor holding a warehouse receipt or a scale weight ticket for grain that the depositor delivered for storage to the licensed warehouse operator. If the department has been appointed by the court as receiver of the grain assets of the warehouse operator, the value shall be presumed to be as stated in the plan of disposition approved by the court. If the warehouse operator has filed a petition in bankruptcy, the value shall be presumed to be based upon the fair market price, free-on-board from the site of the warehouse operator, being paid to producers for grain by the grain terminal operator nearest the warehouse operator on the date the petition was filed. If there is neither a department receivership nor a bankruptcy filing, the value shall be presumed to be based upon the fair market price, free-on-board from the site of the warehouse operator, being paid to producers for grain by the grain terminal operator nearest the warehouse operator on the date of license revocation or cancellation. If more than one date applies to a claim, the board may choose between the two. However, the board may accept an alternative valuation of a claim upon a showing of just cause by the depositor or department. All depositors filing claims under this section shall be bound by the value determined by the board. The value of the loss is the outstanding balance on the validated claim at time of payment from the fund. 6. Value of loss -- grain dealer claims. The dollar value of a claim incurred by a seller who has sold grain or delivered grain for sale or exchange and who is a creditor of the licensed grain dealer for all or part of the value of the grain shall be based on the amount stated on the obligation on the date of the sale. If the sold grain was unpriced, the value of a claim shall be presumed to be based upon the fair market price, free-on-board from the site of the grain dealer, being paid to producers for grain by the grain terminal operator nearest the grain dealer on the date of the license revocation or cancellation or the filing of a petition in bankruptcy. If more than one date applies to a claim, the board may choose between the two. However, the board may accept an alternative valuation of a claim upon a showing of just cause by the seller or department. All sellers filing claims under this section shall be bound by the value determined by the board. The value of the loss is the outstanding balance on the validated claim at the time of payment from the fund. 7. Procedure -- appeal. The board, through the department, shall provide for notice to each depositor and seller upon its determination of eligibility and value of loss. Within twenty days of the notice, the depositor or seller may request a hearing for the review of either determination. The request shall be made in the manner provided by the board. The hearing and any further appeal shall be conducted as a contested case subject to chapter 17A. A depositor or seller whose claim has been refused by the board may appeal the refusal to either the district court of Polk county or the district court of the county in which the depositor or seller resides. 8. Payment of claims. Upon a determination that the claim is eligible for payment, the board shall provide for payment of ninety percent of the loss, as determined under subsection 5, but not more than three hundred thousand dollars per claimant. If at any time the board determines that there are insufficient funds to make payment of all claims, the board may order that payment be deferred on specified claims. The department, upon the board's instruction, shall hold those claims for payment until the board determines that the fund again contains sufficient assets. 9. Subrogation of fund. In the event of payment of a loss under this section, the fund is subrogated to the extent of the amount of any payments to all rights, powers, privileges, and remedies of the depositor or seller against any person regarding the loss. The depositor or seller shall render all necessary assistance to aid the department and the board in securing the rights granted in this section. No action or claim initiated by a depositor or seller and pending at the time of payment from the fund shall be compromised or settled without the consent of the board. 10. Time limitation on claims. a. A claim shall expire if five years after the board determines that the claim is eligible, the claimant has failed to do any of the following: (1) Provide for the fund's subrogation or has failed to render all necessary assistance to aid the department and the board in securing the department's rights of subrogation as required in this section. (2) Failed to provide necessary documentation or information required by the board in order to process the claim. b. The fund shall not be liable for the payment of an expired claim.          Section History: Recent Form 86 Acts, ch 1152, § 36 C87, § 543A.6 87 Acts, ch 147, §18, 19; 89 Acts, ch 143, §908 C93, § 203D.6 2008 Acts, ch 1083, §17--19; 2009 Acts, ch 17, §2--6 Referred to in § 203.12A, 203C.12A, 203D.3          Footnotes For conditions and time limitation on payment of claims determined to be eligible on or before July 1, 2008, see 2008 Acts, ch 1083, §20 2009 amendments to this section take effect March 19, 2009, and apply retroactively to October 1, 2008; 2009 Acts, ch 17, §6