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Settlement Agreement Does Not Include the Contents of the Grain Bin - January 23, 2020

Sometimes court decisions make you say “huh?”

In March 2019, the Iowa Court of Appeals made an interesting determination in the Estate of Newhall decision. A brother and sister had been in court for many years regarding farms they inherited from their parents.

Following years of litigation, the sister was deemed to have acted properly when she drilled holes in a grain bin to remove $150,000 worth of corn after receiving “all other personal property” as stated in the settlement agreement following the death of her parent.

As part of a settlement agreement, the brother received certain grain bins, the attached augers, and a grain dryer assembly. His sister received a specific tractor and “all other personal property… whether located in the house…. or located elsewhere in the farmhouse… or in any of the ancillary buildings or structures.”

The sister contended this included the corn stored in the grain bins. To get the corn out, she drilled holes into the grain bin, removed the corn, then repaired the panels. Understandably, the brother filed a motion to enforce the settlement agreement and for damages, claiming the corn in the bin was included with his ownership of the bins.

The district court and the court of appeals disagreed with him, finding corn is well established as personal property, entitling his sister to the grain according to the settlement agreement giving her “all other personal property.”

Lesson for Farmers and Counsel

Be very explicit with your intentions both in settlement agreements and in your estate plans when it comes to who will receive specific property. Crops change form throughout the growing season, creating a unique question of who is to receive the crops if the land and buildings go to a different person than the personal property. If the contents of the bin are intended to stay with the bin, include that in your documents. If the brother is to receive the bins, but the sister is to receive the corn, include that in your documents. Give some thought to how she will obtain the corn, so no one has to ruin a perfectly good grain bin.

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