Frazier Nuts, Inc. v. American Ag Credit

Opinion

DAWSON, J.

Creditors of a bankrupt almond processor each claim superior rights to proceeds generated by the processor’s sale of almonds. The processor paid the proceeds to its secured lender to reduce its loan balance. Unpaid almond growers that sold their crops to the processor on credit sued the secured lender to recover the proceeds. The growers claimed California’s producer’s lien statute gave them rights to the proceeds that were superior to the lender’s security interest.

The trial court ruled in favor of the secured lender by (1) sustaining a demurrer to the growers’ claims of…