Wine Grape Growers: Don't Lose Your Super-Priority Wine Producer Lien Status
Washington wine grape growers enjoy automatic super-priority lien status on wine grapes they sell to wine producers; however, this priority
can be lost if growers fail to timely file wine producer lien statements. Therefore, as we come to the end of another successful wine grape harvest in Washington State, it is important for wine grape growers to closely track the payment terms of their grape sale contracts to protect their wine producer lien rights.
Washington’s wine producer lien statute, RCW 60.13.038, provides wine grape growers a super-priority statutory lien over the inventory and accounts receivable of their grape buyers. We refer to the wine producer lien as a “super-priority” lien because it is superior to most other liens or security interests over the buyer’s inventory and accounts receivable. In effect, the wine producer lien jumps ahead of all other previously filed liens and security interests, including security interests granted to commercial and private lenders.
The wine producer lien is automatically effective at the time of delivery and will stay in effect for at least 60 days after delivery without filing any notices with the state. However, to maintain the lien’s super-priority status, a grape grower must file a statement of lien with the Washington State Department of Licensing within 60-days after payment for the grapes comes due. If a wine grape sale contract does not have clear payment terms, payment will be deemed due within 30 days of delivery of the wine grapes. Because time is of the essence when filing wine producer lien statements, it is very important to ensure your wine grape sale contracts contain clear pricing, delivery and payment terms.
If a wine producer lien statement is timely filed with the Department of Licensing, the lien will retain its super-priority status for up to 12 months following its filing. However, if a grape grower fails to file a statement of lien within the appropriate timeframe, the wine producer lien will lose its super-priority status after 60 days and will become subordinate to any lien that attached to the delivered wine grapes, inventory or accounts receivable before the grower’s wine producer lien became effective, as well as any other perfected security interests in the delivered wine grapes, inventory and accounts receivable.
To avoid losing your super-priority lien status, wine grape growers should closely track the payments for wine grapes delivered to its wine producers and file a properly prepared statement of lien with the Washington Department of Licensing within 60 days after payment for the grapes comes due.
If you have any questions about how to file a wine producer lien, or if you would like assistance in reviewing your grape sale contract, please contact Charissa Johnston or Dustin Yeager at (509) 853-3000.