                                                                                 FILED
                                                                             Dec 21 2018, 8:46 am

                                                                                 CLERK
                                                                             Indiana Supreme Court
                                                                                Court of Appeals
                                                                                  and Tax Court




      ATTORNEY FOR APPELLANT                                    ATTORNEYS FOR APPELLEE
      Fred L. Cline                                             Curtis T. Hill, Jr.
      Danville, Indiana                                         Attorney General of Indiana

                                                                Andrea E. Rahman
                                                                Deputy Attorney General
                                                                Indianapolis, Indiana


                                                  IN THE
          COURT OF APPEALS OF INDIANA

      Dick Sears,                                               December 21, 2018
      Appellant-Petitioner,                                     Court of Appeals Case No.
                                                                18A-MI-883
              v.                                                Appeal from the Putnam Circuit
                                                                Court
      Indiana Grain Buyers and                                  The Honorable Matthew Headley,
      Warehouse Licensing Agency,                               Judge
      Appellee-Respondent.                                      Trial Court Cause No.
                                                                67C01-1706-MI-236



      Altice, Judge.


                                              Case Summary
[1]   Between 2009 and 2016, Dick Sears (Sears), an Indiana farmer, deposited corn

      and soybeans with a grain elevator, Cline Grain, Inc. (Cline), which was

      licensed with the Indiana Grain Buyers and Warehouse Licensing Agency (the

      Court of Appeals of Indiana | Opinion 18A-MI-883 | December 21, 2018                           Page 1 of 27
      IGBWLA). On April 8, 2016, Cline financially failed, and the IGBWLA took

      possession of Cline for the purpose of determining payment owed to depositors,

      including Sears. The IGBWLA determined that pursuant to Ind. Code § 26-3-

      7-2(5), which defines “claimant” under the relevant grain warehousing licensing

      law, Sears was entitled to payment for grain delivered to Cline in the twelve-

      month period prior to the elevator’s failure, but he did not qualify as a

      “claimant” for grain delivered more than twelve months prior to the failure.

      The IGBWLA, thus, denied Sears’s claim for grain delivered before April 8,

      2015.


[2]   Sears administratively appealed, and an ALJ affirmed the IGBWLA’s decision.

      Sears appealed again, and the Ultimate Authority designated by the IGBWLA

      adopted the findings and order of the ALJ, but with an adjustment based on a

      statute enacted after the ALJ’s decision, I.C. § 26-3-7-37. Based on that statute,

      the Ultimate Authority found that Sears was entitled to payment for grain

      delivered after October 8, 2014, but not for grain delivered before that date.

      Sears filed a petition for judicial review, and the trial court denied relief. Sears

      filed the current appeal, raising the following restated issue:


              Whether the trial court properly determined that the IGBWLA’s
              interpretation of the term “claimant,” defined in I.C. § 26-3-7-
              2(5), was not arbitrary or capricious.


[3]   We affirm.




      Court of Appeals of Indiana | Opinion 18A-MI-883 | December 21, 2018        Page 2 of 27
                                    Facts & Procedural History1
[4]   Before we address the facts and history specific to Sears’s case, we find that a

      brief overview of the grain warehousing licensing law is helpful to the analysis.


                                     Grain Warehouse Licensing Law

[5]   Many Indiana farmers deliver their harvested grain to a grain warehouse for

      either storage or sale. The Indiana Grain Buyers and Warehouse Licensing and

      Bonding Law, Indiana Code Chapter 26-3-7 (the Licensing Law) governs the

      licensing and regulation of Indiana grain buyers and warehouses. The

      Licensing Law contains numerous financial and reporting requirements for

      warehouse licensees in order to maintain a license with the State. The

      Licensing Law appoints the IGBWLA as the agency to administer the

      Licensing Law.


[6]   When an Indiana farmer, also referred to as a producer or depositor, delivers

      harvested grain to a licensed grain warehouse for storage, title to the grain

      remains with the producer until either he converts the grain to “grain for sale”

      or ships the grain to another location. While in storage it is the producer’s

      grain, and the producer pays a storage fee. In contrast, in a grain for sale

      situation, the grain is sold, under several contract options, to the licensee. One




      1
       We held a traveling oral argument in this case on November 8, 2018, at Purdue University at the Frances
      A. Cordova Recreational Sports Center. We commend counsel on the quality of their oral and written
      advocacy, and we thank Purdue University for hosting the event, as well as attendees for their insightful
      questions posed to the panel and counsel after the argument.

      Court of Appeals of Indiana | Opinion 18A-MI-883 | December 21, 2018                           Page 3 of 27
      arrangement is referred to as “deferred pricing,” under which a producer

      delivers the grain, title transfers to the licensee, and the price for the grain is

      determined and paid at a later date.2 The grain that is the subject of this appeal

      originated as a deferred pricing transaction between Sears and Cline.


[7]   In the circumstance where a licensed warehouse fails financially, the IGBWLA

      is charged with liquidating the failed licensee’s assets and distributing the

      proceeds through a liquidation process set forth in I.C. § 26-3-7-16.5 (Section

      16.5). During the liquidation process, producers are permitted to file claims at

      or after a hearing. I.C. § 26-3-7-16.5(c), (d). The director of the IGBWLA

      makes a determination as to the total proven storage obligation of each of the

      claimants and the loss sustained by each depositor who has proven a claim.

      I.C. § 26-3-7-16.5(e). The IGBWLA then makes distributions based upon

      certain statutory priorities and prorates the distributions to the extent there are

      insufficient funds to pay all claimants in full. I.C. § 26-3-7-16.5(g).


[8]   For those claimants whose claim is not fully satisfied under the IGBWLA

      liquidation process, there is still a possibility of recovering some of their claim

      under the Indiana Grain Indemnity Program, set out in Ind. Code Chapter 26-

      4-1. It provides further protection for farmers who experience a loss as a result

      of the financial failure of a grain warehouse. If the farmer participated in the




      2
       “‘Deferred pricing’ or ‘price later’ means a purchase by a buyer in which title to the grain passes to the
      buyer and the price paid to the seller is not determined: (A) at the time the grain is received by the buyer; or
      (B) less than twenty-one (21) days following delivery.” I.C. § 26-3-7-2(7); Appellant’s Appendix Vol. IV at 6
      (ALJ Order).

      Court of Appeals of Indiana | Opinion 18A-MI-883 | December 21, 2018                                 Page 4 of 27
       Grain Indemnity Program, he may be considered a claimant under the program

       if he possesses a claim resulting from a failure of a licensed grain buyer or

       warehouse and the claim has been adjudicated by the IGBWLA. 3 I.C. § 26-4-1-

       5.


                                                    Sears’s Claim

[9]    Sears is a farmer from New Salem, Indiana and, since at least 2009, he

       delivered harvested corn and soybeans to Cline, a grain elevator in Ladoga,

       Indiana. On April 8, 2016, Cline failed and surrendered its Indiana

       Buyer/Warehouse license to the IGBWLA. As a result, the IGBWLA,

       pursuant to Section 16.5 of the Licensing Law, took possession of Cline’s

       business and initiated a claims procedure “for the purpose of settling

       outstanding accounts.” Appellant’s Appendix Vol. III at 17.


[10]   A claims hearing was held on May 8, 2016, and potential claimants had the

       opportunity to discuss their claims with IGBWLA auditors and were permitted

       to make oral presentations regarding their claims at the hearing. On June 1,

       2016, Sears timely submitted his Proof of Loss claim form. On August 8, 2016,

       the IGBWLA issued its Findings of Fact and Final Order (IGBWLA Order).

       In determining which claims qualified for payment and which did not, the




       3
         Sears points out that “the claim adjudication process is important, not only because a claim denial prevents
       recovery from the assets of the licensee, but also recovery from the Grain Indemnity Fund.” Appellant’s
       Appendix Vol. IV at 39.

       Court of Appeals of Indiana | Opinion 18A-MI-883 | December 21, 2018                              Page 5 of 27
IGBWLA Order relied on I.C. § 26-3-7-2(5) (the Claimant Statute), which at

that time defined “claimant” as follows:


        (5) “Claimant” means a person that is unable to secure
        satisfaction within the twelve (12) months following delivery of
        the financial obligations due from a licensee under this chapter
        for grain that has been delivered to the licensee for sale or for
        storage under a bailment.


Applying its interpretation of the Claimant Statute, the IGBWLA determined

as follows with regard to claims:


        Cline Grain failed, and therefore closed, on April 8, 2016 making
        that the operative date for a number of matters including the date
        of loss being discovered, the price of grain for deferred pricing . . .
        and the twelve month limit for claims is one year earlier, April 8, 2015.


                                                ****


        Therefore, any grain deposited with Cline Grain before April 8, 2015
        does not qualify for payment.


Id. at 18 (emphasis added). Applying the Claimant Statute, the IGBWLA

bifurcated the many claims, including Sears’s, into “Allowed Claims” for grain

deposited on or after April 8, 2015, and “Denied Claims Over 12 Months” for

grain deposited before April 8, 2015. Id. at 32, 76.




Court of Appeals of Indiana | Opinion 18A-MI-883 | December 21, 2018           Page 6 of 27
[11]   With respect to Sears’s particular claim, the IGBWLA determined that Sears

       qualified for some payment4 based on his claim of $97,927.52, which

       represented 13,295.982 bushels of corn and 6232 bushels of soybeans that he

       delivered to Cline within the twelve-month period from April 8, 2015, through

       April 8, 2016. The IGBWLA determined that Sears did not qualify as a

       claimant for grain delivered between 2009 and 2014, and it therefore denied his

       claim for payment for 83,146.78 bushels of corn and 17,293.41 bushels of

       soybeans delivered to Cline between 2009 and 2014.5


[12]   On August 26, 2016, Sears informed the IGBWLA that he wished to appeal the

       IGBWLA Order to challenge the determination that he was not entitled to

       payment for the grain delivered between 2009 and 2014. The narrow issue

       before the ALJ was “whether or not Dick Sears qualifies as a ‘claimant’ for

       grain that he delivered to Cline Grain before April 8, 2015.” Appellant’s

       Appendix Vol. IV at 2. After a December 16, 2016 hearing, the ALJ issued, on

       February 15, 2017, Recommended Findings of Fact, Conclusions of Law,

       Finding of Ultimate Fact and Order (ALJ Order), in which the ALJ concluded




       4
         The IGBWLA Order advised that it only addressed the amount of loss that qualified for payment and that
       the actual amount to be paid to a claimant, or to a lienholder, would be “addressed later by a pro rata
       distribution of Cline Grain’s bond and grain assets that have been obtained by [IGBWLA].” Appellant’s
       Appendix Vol. III at 19. It continued, “The Indiana Grain Indemnity Fund distribution will be made to
       qualified recipients by the Board of the Indiana Grain Indemnity Corporation as provided for by Indiana
       Code article 26-5.” Id.
       5
         Sears had a lien against the grain because he had not been paid for the grain that he delivered to Cline under
       the deferred pricing transaction.

       Court of Appeals of Indiana | Opinion 18A-MI-883 | December 21, 2018                               Page 7 of 27
       that “Sears is not a claimant as that term is defined in Ind. Code § 26-3-7-2(5),

       for grain he delivered to Cline Grain before April 8, 2015.” Id. at 8.


[13]   In reaching this conclusion, the ALJ examined the legislative history of the

       Claimant Statute. It recognized that, prior to March 2010, “claimant” was

       defined in I.C. § 26-3-7-2(5) as follows:


               “Claimant” means a person that is unable to secure satisfaction
               of the financial obligations due from a licensee under this chapter
               for grain that has been delivered to the licensee for sale or for
               storage under a bailment.


       In March 2010, the legislature amended the definition of “claimant” so that I.C.

       § 26-3-7-2(5) read:


               “Claimant” means a person that is unable to secure satisfaction
               within the twelve (12) months following delivery of the financial
               obligations due from a licensee under this chapter for grain that
               has been delivered to the licensee for sale or for storage under a
               bailment.


[14]   The ALJ observed that the parties focused on, and disagreed about, the

       meaning of the phrase “delivery of financial obligations” within the Claimant

       Statute. The IGBWLA’s position was that “delivery of financial obligations”

       was synonymous with “delivery of grain” “because the delivery of grain creates

       a lien . . . which is a ‘financial obligation’ to either Mr. Sears or the IGBWLA.”

       Appellant’s Appendix Vol. IV at 10. The IGBWLA maintained that, under its

       reading, the amendment to the Claimant Statute established “a twelve month

       time bar” such that claims would not be paid for grain delivered earlier than the

       Court of Appeals of Indiana | Opinion 18A-MI-883 | December 21, 2018         Page 8 of 27
       twelve months before the licensee failed. Id. at 9. Sears, on the other hand,

       argued that “delivery of financial obligations” meant “when the depositor asks

       to be paid. If the depositor is not paid on demand, a financial obligation to the

       depositor arises.” Id. Under Sears’s reading, the statute excluded those

       depositors who were satisfied/paid within one year after “delivering the

       financial obligations to the licensee,” which occurred by requesting return of

       grain or requesting payment. Id.


[15]   The ALJ agreed with the IGBWLA’s position and explained:


               [A]t the time grain is delivered to a warehouse, a lien “attaches in
               favor” of claimants possessing proof of grain that is owned,
               stored, or sold by the licensee. Ind. Code § 26-3-7-16.8(a)(1)-(4).
               The lien becomes effective upon delivery of the grain for storage
               or sale. Ind. Code § 26-3-7-16.8(b)(1)-(3). If the licensee fails, a
               lien is assigned to the IGBWLA and is enforced and allocated
               against a licensee’s grain assets by the IGBWLA director. For
               that reason the delivery of grain, even in a deferred pricing
               transaction, is a legally significant event. Title transfers to the
               grain dealer and a lien right in the depositor is created. The
               delivery of grain, therefore, equates to the “delivery of financial
               obligations” and as a consequence, the twelve month time limitation
               begins when the producer delivers the grain.


       Id. at 11-12 (emphasis added). Based on that interpretation, the ALJ

       determined “that claimants seeking reimbursement from the IGBWLA or the

       Indiana Grain Indemnity Fund must have delivered their grain to the licensee

       within one year of its failure,” and it affirmed the IGBWLA’s Order that denied

       Sears’s claim for grain delivered before April 8, 2015. Id. at 13.


       Court of Appeals of Indiana | Opinion 18A-MI-883 | December 21, 2018       Page 9 of 27
[16]   Sears appealed the ALJ’s decision to the Ultimate Authority designated by the

       IGBWLA. The parties agreed that “there was a basic question of law to

       resolve, namely whether or not Mr. Sears legally qualifies as a ‘claimant’ for

       grain that he delivered to Cline Grain before April 8, 2015.” Id. at 26. On May

       4, 2017, the Ultimate Authority issued Findings of Fact, Conclusions of Law,

       and Final Order (Final Order), which adopted the overall recommendations of

       the ALJ and concluded that “Sears . . . does not qualify as a claimant for grain

       delivered before the bar date as established in Ind. Code [Chapter] 26-3-7.” Id.

       at 26. The Ultimate Authority, however, observed that since the issuance of the

       ALJ’s Order dated February 15, 2017, the Indiana legislature had amended Ind.

       Code Chapter 26-3-7 to add a new section, I.C. § 26-3-7-37 (Section 37).

       Section 37 became effective in April 20176 and provided in relevant part:


                  Notwithstanding any other law, a claimant who delivered grain
                  to a first purchaser for sale or storage under a bailment to a failed
                  licensee beginning October 8, 2014, and ending April 8, 2015,
                  shall be considered by the director or the director’s designated
                  representative in determining the total proven storage and
                  financial obligations due to depositors and the loss sustained by
                  each depositor who has proven a claim.


[17]   The Ultimate Authority determined that Section 37 was to be applied

       retroactively, and it ordered the IGBWLA to “consider Mr. Sears a claimant for




       6
           This statute was effective from April 24, 2017 until June 30, 2018.


       Court of Appeals of Indiana | Opinion 18A-MI-883 | December 21, 2018          Page 10 of 27
       all grain delivered to Cline Grain after October 8, 2014.” Appellant’s Appendix

       Vol. IV at 26. In its Final Order, the Ultimate Authority observed:


               Clearly, law makers view [the Claimant Statute] as establishing a
               twelve month time bar as argued by IGBWLA in this case and
               they chose to extend that time frame during the 2017 legislative
               session.


       Id. at 33.


[18]   On June 2, 2017, Sears filed a Verified Petition for Judicial Review of the

       IGBWLA’s denial of Sears’s claim “for all grain delivered by Sears to Cline

       Grain, Inc. prior to October 8, 2014,” arguing that “[a]ll of Sears’[s] claim

       satisfies the statutory definition of claimant found in IC 26-3-7-2(5)” and that

       “IGBWLA’s interpretation of I.C. 26-3-7 as applied to Sears’[s] claim [] is

       arbitrary, capricious, and [an] abuse of discretion, and otherwise not in

       accordance with law[.]” Appellant’s Appendix Vol. II at 11-12. Sears asked for an

       order declaring that he is a “claimant” for the portion of the claim related to

       grain delivered to Cline prior to October 8, 2014. On March 8, 2018, the trial

       court issued the following order:


               Court, upon review of the briefs and the ALJ’s decision, now
               finds and concludes that Claimant/Sears shall be considered a
               Claimant for purposes of this matter between the dates of
               October 8, 2014 through April 8, 2016.


               Court finds and concludes that the agency’s interpretation is not
               arbitrary or capricious, not contrary to constitutional rights, and
               is supported by the evidence pursuant to I.C. 4-21.5-5-14(d).

       Court of Appeals of Indiana | Opinion 18A-MI-883 | December 21, 2018      Page 11 of 27
               As such, Court den[ies] Petitioner/Claimant[’]s petition for
               interpretation different than that of the agency.


       Id. at 8. Sears now appeals.


                                        Discussion & Decision
[19]   Judicial review of an administrative decision is limited under the

       Administrative Orders and Procedures Act (AOPA). Huffman v. Office of Envtl.

       Adjudication, 811 N.E.2d 806, 809 (Ind. 2004). We may set aside an agency

       action only if it is


               (1) arbitrary, capricious, an abuse of discretion, or otherwise not
               in accordance with law; (2) contrary to constitutional right,
               power, privilege, or immunity; (3) in excess of statutory
               jurisdiction, authority, or limitations, or short of statutory right;
               (4) without observance of procedure required by law; or (5)
               unsupported by substantial evidence.


       Ind. Code § 4-21.5-5-14(d). The party seeking judicial review bears the burden

       of proving that the agency action is invalid for one of the five reasons. Jay

       Classroom Teachers Ass’n v. Jay Sch. Corp., 55 N.E.3d 813, 816 (Ind. 2016). An

       action is arbitrary and capricious only where there is no reasonable basis for the

       action. Ind. Dep’t. of Envtl. Mgmt. v. Boone County Res. Recovery Sys., Inc., 803

       N.E.2d 267, 272 (Ind. Ct. App. 2004), trans. denied.


[20]   Here, the parties agree that the issue is purely a matter of statutory

       interpretation. When reviewing an agency’s interpretation of a statute, our

       standard of review is de novo, and we “accord the administrative tribunal no

       Court of Appeals of Indiana | Opinion 18A-MI-883 | December 21, 2018        Page 12 of 27
       deference.” NIPSCO Indus. Grp. v. N. Indiana Pub. Serv. Co., 100 N.E.3d 234,

       241 (Ind. 2018). The goal of statutory interpretation is “to ascertain and give

       effect to” the intent of the legislature. 21st Amendment, Inc. v. Ind. Alcohol &

       Tobacco Comm’n, 84 N.E.3d 691, 696 (Ind. Ct. App. 2017), trans. denied. The

       best evidence of legislative intent is the statutory language itself, and we strive

       to give the words in a statute their plain and ordinary meaning. Id. (quotations

       omitted). “A statute should be examined as a whole, avoiding excessive

       reliance upon a strict literal meaning or the selective reading of individual

       words.” Id. at 696-97. We presume that the legislature intended for the

       statutory language to be applied in a logical manner consistent with the statute’s

       underlying policy and goals. Id. at 697.


[21]   We are tasked today with reviewing the IGBWLA’s interpretation of the then-

       existing Claimant Statute, which read:


               “Claimant” means a person that is unable to secure satisfaction
               within the twelve (12) months following delivery of financial
               obligations due from a licensee under this chapter for grain that
               has been delivered to the licensee for sale or for storage under a
               bailment.


       I.C. § 26-3-7-2(5). The IGBWLA Order disallowed that portion of Sears’s

       claim associated with grain that he had delivered to Cline before April 8, 2015 –




       Court of Appeals of Indiana | Opinion 18A-MI-883 | December 21, 2018         Page 13 of 27
       one year before the failure.7 Appellant’s Appendix Vol. III at 18. The ALJ

       affirmed the IGBWLA’s interpretation, as did the Ultimate Authority, but due

       to the interim passage of Section 37, the Ultimate Authority directed the

       IGBWLA to consider Sears a claimant for all grain delivered to Cline Grain

       after October 8, 2014. The trial court on judicial review concluded that the

       IGBLWA’s interpretation was not arbitrary or capricious, not contrary to

       constitutional rights, and was supported by the evidence. Although Sears urges

       that, for various reasons, the IGBWLA’s interpretation of the Claimant Statute

       was erroneous, we agree with the trial court’s decision.


[22]   We begin by observing that, effective March 2010, the legislature amended the

       definition of “claimant” by adding the words indicated in bold:


               “Claimant” means a person that is unable to secure satisfaction
               within the twelve (12) months following delivery of financial
               obligations due from a licensee under this chapter for grain that
               has been delivered to the licensee for sale or for storage under a
               bailment.


       The parties agree on appeal that the added phrase reflects an intention to add a

       limitation, but they disagree over the meaning and effect of the inserted phrase.


[23]   The IGBWLA argues that, in reference to “within twelve months following

       delivery,” what is being “delivered” is grain, such that claims would not be paid




       7
         The IGBWLA’s Order reflects that 189 producers were entitled to “some payment,” and five were entitled
       to “no payment because of the twelve month limitation.” Appellant’s Appendix Vol. III at 19, 30.

       Court of Appeals of Indiana | Opinion 18A-MI-883 | December 21, 2018                        Page 14 of 27
       for grain that was delivered more than twelve months before the licensee fails.

       Sears, on the other hand, argues that the 2010 amendment “was not seeking to

       create a bar date to exclude certain depositors’ claims.” Appellant’s Brief at 23.

       Rather, he argues that a plain reading of the statute’s language shows that what

       is being “delivered” are financial obligations, which, he explains, arise when the

       producer asks the licensee to be paid. Under Sears’s reading, a producer would

       qualify as a claimant if he was unable to secure satisfaction of financial

       obligations due from a licensee within twelve-months after asking for payment.

       As explained below, however, we find that Sears’s position strings together

       words in the Claimant Statute – “delivery of financial obligations” – which

       were not intended to be connected in such a way, and instead, we find that the

       IGBWLA’s determination was correct.


[24]   The IGBWLA’s construction, which is that the “within twelve months

       following delivery” phrase was intended to and did serve as a limitation on

       grain for which a producer could be reimbursed, is consistent with and

       supported by the legislative history of the statute, including subsequent history.

       As we have observed, “Legislative intent may be identified and effectuated by .

       . . changes made to the law since its enactment and the reasons for those

       changes.” Miller Brewing v. Bartholomew County, 674 N.E.2d 193, 205 (Ind. Ct.

       App. 1996), trans. denied. Here, after the May 2016 claims hearing, which

       limited reimbursement for grain that was delivered on or after April 8, 2015,

       and in response to the Cline warehouse failure, the legislature enacted Section

       37, which extended the time frame for which a producer could be compensated,


       Court of Appeals of Indiana | Opinion 18A-MI-883 | December 21, 2018         Page 15 of 27
       extending it from April 8, 2015 back to October 8, 2014. In full, Section 37

       provided:


               Notwithstanding any other law, a claimant who delivered grain to a
               first purchaser for sale or storage under a bailment to a failed
               licensee beginning October 8, 2014, and ending April 8, 2015, shall be
               considered by the director or the director’s designated
               representative in determining the total proven storage and
               financial obligations due to depositors and the loss sustained by
               each depositor who has proven a claim.


       (Emphasis added). The legislature’s action in this regard did two things: (1) it

       effectively recognized the existence of the one-year limitation in the Claimant

       Statute, i.e., a person was a “claimant” only for grain that was delivered within

       one year of the warehouse’s failure, and (2) it extended that look-back period

       from April 8, 2015 to October 8, 2014. The clear implication of Section 37 is

       that the Claimant Statute as written allowed a claim only for grain that was

       delivered on or after April 8, 2015 – one year before the failure – and the

       legislature wanted to extend that one-year limitation.


[25]   Also, pursuant to the same legislative action, the legislature changed the

       definition of “claimant” in the Claimant Statute, removing the previously-

       inserted “within twelve months following delivery” phrase, such that a claimant

       was defined beginning in April 2017 as “a person to whom a licensee owes a

       storage or financial obligation under this chapter for grain that has been

       delivered to the licensee for sale or for storage under a bailment.” I.C. § 26-3-7-




       Court of Appeals of Indiana | Opinion 18A-MI-883 | December 21, 2018        Page 16 of 27
       2(6).8 Further, the same bill that struck the twelve-month provision from the

       definition of “claimant” simultaneously added a separate fifteen-month time-

       bar provision in another section, codified at I.C. § 26-3-7-16.5(e) (Subsection

       16.5(e)). Thus, the legislature changed the twelve-month bar to fifteen months

       and relocated that time limitation to Section 16.5. Specifically, Subsection

       16.5(e) provides:


                (e) Only grain that has been delivered to a first purchaser licensee for
                sale or storage under a bailment not more than fifteen (15) months
                before the date of failure of the licensee may be considered by the
                director or the director’s designed representative in determining
                the total proven storage and financial obligations due to
                depositors and the loss sustained by each depositor who has
                proven a claim.


       (Emphasis supplied). The foregoing legislative action reflects that, as the

       IGBWLA had found, the “within twelve months following delivery” language

       in the Claimant Statute was intended to create a twelve-month limitation,

       precluding recovery on claims for grain deposited more than twelve months

       before the warehouse’s failure.


[26]   We find that our decision is also supported by the language used in other

       sections of the Licensing Law. Sears’s position – which maintains that the




       8
         P.L. 145-2017 (H.E.A. 1237) amended the Claimant Statute as follows: “Claimant” means a person that is
       unable to secure satisfaction within the twelve (12) months following delivery of the financial obligations due
       from to whom a licensee owes a storage or financial obligation under this chapter for grain that had been
       delivered to the licensee for sale or for storage under a bailment.

       Court of Appeals of Indiana | Opinion 18A-MI-883 | December 21, 2018                              Page 17 of 27
       Claimant Statute concerned “delivery of financial obligations,” not delivery of

       grain – fails to account for the fact that the prior version of the statute read

       “unable to secure satisfaction of financial obligations due from a licensee.” I.C. §

       26-3-7-2(5) (emphasis added). That is, it was “financial obligations” that were

       “satisfied.” Although the legislature in 2010 inserted the phrase “within twelve

       months following delivery” in the midst of the “satisfaction of financial

       obligations” phrase, we find that it is still financial obligations that are being

       satisfied and that “delivery” does not refer to delivery of financial obligations,

       as Sears suggests, but rather refers to delivery of something else. As the

       IGBWLA observes, the word “delivery” is repeatedly used throughout the

       Licensing Law in connection with the delivery of grain. See e.g., I.C. § 26-3-7-

       2(10) (“‘Depositor’ means . . . [a] person that delivers grain to a licensee”); I.C.

       § 26-3-7-18(a) (permitting licensee “to deliver grain previously received”); I.C. §

       26-3-7-22 (stating that “same type of grain delivered” may be commingled); I.C.

       § 26-3-7-26(2) (providing that “[e]very ticket issued shall embody within its

       terms . . . the date the grain was delivered”).


[27]   Similarly, we observe that, in Section 37 and in Subsection 16.5(e), grain is

       what is being “delivered” (“grain delivered to a licensee beginning October 8,

       2015 and ending April 8, 2015,” and “grain delivered not more than fifteen

       months before the date of failure”). Thus, the language of other sections within

       the Licensing Law makes clear that grain, not financial obligations as Sears

       argues, is what the legislature was referring to when in 2010 it inserted the

       “within twelve months of delivery” phrase into the Claimant Statute.


       Court of Appeals of Indiana | Opinion 18A-MI-883 | December 21, 2018        Page 18 of 27
[28]   In opposing the IGBWLA’s interpretation of the Claimant Statute, Sears argues

       that, prior to the enactment of Subsection 16.5(e), “there was no statutory

       basis” to exclude a claim based upon the date that the grain was deposited.

       Appellant’s Brief at 14. He maintains that Section 16.5 is the section of the

       Licensing Law that governs the claims process, and because that section

       contained “no mention of limiting or barring claims based upon the date grain

       was deposited,” no such bar existed. Id. at 13. We do not disagree that Section

       16.5 was the more logical location for any limitation, and indeed the legislature

       later moved it there, but the fact that the limitation appeared initially in another

       section does not preclude our determination that a twelve-month limitation

       provision existed in the Claimant Statute at the time of the IGBWLA’s

       decision.


[29]   Another argument posed by Sears is that once he was established as a claimant

       – and it is undisputed that he was, for some of his grain – “there was no

       statutory basis for the IGBWLA to reduce, disallow, or bifurcate his claim on

       the basis that the grain was deposited with Cline.” Id. at 24. His position is

       that “[i]t is an either/or proposition: a person either is a claimant as defined by

       the law or he is not. A person cannot be both a claimant and not a claimant at

       the same time[,]” and the IGBWLA’s Order should be reversed to allow his

       claim in full. Id. This argument, however, is built on the assumption that

       “within twelve months following delivery” was not intended to serve as a

       limitation or bar on claims for grain that had been delivered to the warehouse

       more than twelve months prior to its failure. We have rejected this view, as


       Court of Appeals of Indiana | Opinion 18A-MI-883 | December 21, 2018      Page 19 of 27
       explained above, and thus are not persuaded that claimant is an “all or

       nothing” proposition. Rather, we find that in the Claimant Statute the

       legislature intended to limit the IGBWLA’s exposure for repayment of claims.


[30]   Based on the above, we find no error with the trial court’s determination that

       the IGBWLA’s interpretation, which found that the Claimant Statute excluded

       claims for grain that was delivered over twelve months prior to the licensee’s

       failure, was not arbitrary and capricious, not contrary to constitutional rights,

       and was supported the evidence. Accordingly, we affirm its denial of relief to

       Sears.


[31]   Judgment affirmed.


       Kirsch, J., concurs.


       Robb, J., dissents with opinion.




       Court of Appeals of Indiana | Opinion 18A-MI-883 | December 21, 2018     Page 20 of 27
                                                  IN THE
          COURT OF APPEALS OF INDIANA

      Dick Sears,
      Appellant-Petitioner,                                      Court of Appeals Case No.
                                                                 18A-MI-883
              v.

      Indiana Grain Buyers and
      Warehouse Licensing agency,
      Appellee-Respondent,



      Robb, Judge, dissenting.


[1]   In affirming the trial court and the various entities below, the majority reads

      Indiana Code section 26-3-7-2(5) (2010) so that the definition of “claimant” acts

      as a bar to all claims for grain delivered more than twelve months immediately

      preceding a licensee’s failure. Id; slip op. at ¶ 22. The result of this interpretation

      is that only those producers who delivered grain within the twelve months

      before a licensee’s failure are compensated by the statute. As the majority

      acknowledges, however, an agency’s interpretation of a statute is entitled to no

      deference and I believe this reading of “claimant” is too narrow and serves to

      exclude producers the statute intended to compensate. Therefore, on the facts

      presented here, I would reverse the judgment of the trial court and remand for

      additional evidence.




      Court of Appeals of Indiana | Opinion 18A-MI-883 | December 21, 2018                   Page 21 of 27
[2]   The legislature added the emphasized language to the definition of “claimant”

      effective March 2010:


              “Claimant” means a person that is unable to secure satisfaction
              within the twelve (12) months following delivery of financial
              obligations due from a licensee under this chapter for grain that
              has been delivered to the licensee for sale or for storage under a
              bailment.




      Ind. Code § 26-3-7-2(5); slip op. at ¶ 23. To the extent that the majority

      concludes any producer who delivered grain in the twelve months immediately

      preceding a licensee’s failure constitutes a claimant—I agree.9 After all, if a

      licensee failed six months after delivery, the producer is “unable to secure

      satisfaction within . . . twelve months[.]” Id. However, I do not believe these

      producers are the only claimants.


[3]   Nothing in the definition of “claimant” suggests to me that once a producer

      meets the definition of claimant by having been “unable to secure satisfaction

      within the twelve (12) months following delivery[,]” that the producer then

      ceases to be a claimant after twelve months. Having determined the legislature

      added the language “within the twelve (12) months following delivery[,]”




      9
       With the caveat in deferred pricing arrangements that a producer must also request payment in addition to
      delivering the grain within those twelve months. See infra ¶ 9.

      Court of Appeals of Indiana | Opinion 18A-MI-883 | December 21, 2018                          Page 22 of 27
      though, the question becomes: why? what purpose did it serve? I believe the

      statute was amended for two reasons.


[4]   First, the language served as a means of defining when, exactly, a warehouse

      licensee was deemed to have failed. The Licensing Law defined the “failure” of

      a warehouse licensee as, among other things, “[t]he inability of a licensee to

      financially satisfy fully all obligations due to claimants.” Ind. Code § 26-3-7-

      2(13)(A) (2015). The previous version of the claimant statute, that without a

      time period, left uncertainty regarding how long a producer must wait before

      enlisting the aid of the IGBWLA to collect on outstanding financial obligations.

      The amended statute, however, resolved that uncertainty by allowing producers

      to enlist the aid of the IGBWLA once they had attempted to collect a financial

      obligation from a licensee for a period of twelve months, at which point the

      facility could be deemed to have “failed,” and the IGBWLA would be charged

      with liquidating the failed licensee’s assets through the process contained in

      Indiana Code section 26-3-7-16.5 (2010). Should a claimant be defined as only

      those who were unable to obtain satisfaction within the twelve-month period

      immediately preceding the licensee’s failure, as the majority concludes, the

      foregoing definition of “failure” becomes circular. Under that view, a

      warehouse licensee fails when they are unable to satisfy their financial

      obligations to “claimants” for a period of twelve months and “claimants” are

      only those whose were unable to secure the satisfaction of the financial

      obligations due from a licensee for the immediately preceding twelve months.




      Court of Appeals of Indiana | Opinion 18A-MI-883 | December 21, 2018       Page 23 of 27
[5]   Secondly, the language served to distinguish a “claimant” from a “depositor.”

      A “depositor” was defined as, among other things, “[a] person that delivers

      grain to a licensee under this chapter for storage or sale.” Ind. Code § 26-3-7-

      2(9)(A) (2015). The claims process provided, in relevant part:


              (c) . . . At the hearing on claims, the director may accept as
              evidence of claims the report of agency representatives who in
              informal conferences with depositors have concluded that a claim
              is directly and precisely supported by the licensee’s books and
              records. When there is disagreement between the claims of a
              depositor and the licensee’s books and records, the director or the
              director’s designated representative shall hear oral claims and
              receive written evidence of claims in order to determine the
              validity of the claim.


              ***


              (e) Following the hearing on claims, the director shall make a
              determination as to the total proven storage obligation of the
              claimants and the loss sustained by each depositor who has
              proven a claim. Depositors found to have proven their claims
              shall be proven claimants. In arriving at that loss, in accordance
              with section 19 of this chapter, the director shall apply all grain
              on hand or its identifiable proceeds to meet the licensee’s
              obligations to grain depositors of grain of that type. Initial
              determinations of loss shall be made on the amount of grain on
              hand, or identifiable proceeds, and shall reduce the amount to
              which a depositor may have a proven claim. With respect to the
              remaining unfulfilled obligations, the director shall, for the sole
              purpose of establishing each depositor’s claim under this chapter,
              establish a date upon which the loss is discovered, shall price the
              grain as of that date, shall treat all outstanding grain storage
              obligations not covered by grain on hand or identifiable proceeds
              as being sold as of that date, and shall determine the extent of

      Court of Appeals of Indiana | Opinion 18A-MI-883 | December 21, 2018     Page 24 of 27
              each depositor’s loss as being the actual loss sustained as of that
              date. . . .




      Ind. Code § 26-3-7-16.5 (2010).


[6]   The claims process clearly acknowledged a difference between a depositor and

      a claimant, i.e., “the director shall make a determination as to the total proven

      storage obligation of the claimants and the loss sustained by each depositor who

      has proven a claim[,]” but provided a means by which depositors could join

      claimants who had been denied payment for twelve months, i.e., “[d]epositors

      found to have proven their claims shall be proven claimants.” Id. In my view,

      this “once a claimant always a claimant until satisfied” interpretation of the

      statute is the only way the subsequent language of the claims process makes

      sense. Applying the majority’s time-barred definition of claimant to this section

      renders the statute’s separate discussion of depositors and claimants

      meaningless because, under that approach, a claimant is nothing more than a

      depositor who was unable to secure payment within the twelve months

      immediately preceding the licensee’s failure.


[7]   Finally, the majority interprets the fact that the legislature has since amended

      the statute to add a clear fifteen-month time bar as evidence that the previous

      definition of “claimant” intended to do the same. Slip op. at ¶ 26. I, however,

      believe this is evidence to the contrary. Had the legislature sought to change a

      twelve-month bar to a fifteen-month bar, I believe the legislature would have

      Court of Appeals of Indiana | Opinion 18A-MI-883 | December 21, 2018          Page 25 of 27
      simply amended the definition of “claimant.” Instead, as part of larger changes

      to the statute, the legislature removed several parts of the definition of

      “claimant,” not just the language “within twelve (12) months following

      delivery[,]” see slip op. at 26, n.8, and inserted the following language in the

      section detailing the claims process:


              (e) Only grain that has been delivered to a first purchaser licensee
              for sale or storage under a bailment not more than fifteen (15)
              months before the date of failure of the licensee may be
              considered by the director or the director’s designated
              representative in determining the total proven storage and
              financial obligations due to depositors and the loss sustained by
              each depositor who has proven a claim.




      Ind. Code § 26-3-7-16.5(e). Had the legislature intended to bar producers who

      delivered their grain more than twelve months before the date of failure with

      the previous version of the statute, this amended language evidences that it

      clearly knew how to do so.


[8]   In sum, I believe that once a producer became a claimant they remained a

      claimant until satisfied, regardless of the date of failure. This, I believe, is more

      congruous with the statute’s language and the statute’s overall intent to aid

      farmers—not to exclude them.


[9]   Applied here, the record reveals the grain delivered before October 8, 2014,

      some 83,146.78 bushels of corn and 17,293.41 bushels of soybeans, was


      Court of Appeals of Indiana | Opinion 18A-MI-883 | December 21, 2018         Page 26 of 27
delivered under a deferred pricing arrangement. Under such an arrangement,

“a producer delivers the grain, title transfers to the licensee, and the price for the

grain is determined and paid at a later date.” Slip op. at ¶ 6. Because the

financial obligation remains uncertain until the producer requests payment from

the licensee, however, the producer must also have requested payment in order

for such obligation to have been “due.” See Black’s Law Dictionary 609 (10th

ed. 2014) (defining “due” as “[i]mmediately enforceable” or “[o]wing or

payable”); Black’s Law Dictionary 499 (6th ed. 1990) (“The word “due”

always imports a fixed and settled obligation or liability, but with reference to

the time for its payment there is considerable ambiguity in the use of the term . .

. .”). The record is silent, however, regarding when, or even if, Sears requested

payment pursuant to the deferred pricing arrangement. If he had requested

payment and was denied for a period of twelve months or if he had requested

payment in the twelve months preceding Cline’s failure, I believe he would also

constitute a “claimant” for the purposes of the grain delivered before October 8,

2014. Therefore, I would reverse the judgment of the trial court and remand

this cause for further evidence regarding the specifics of Sears’ dealings with

Cline under the deferred pricing agreement.




Court of Appeals of Indiana | Opinion 18A-MI-883 | December 21, 2018       Page 27 of 27
