2005 Idaho Code - 69-236 — NONCOMPLIANCE -- FAILURE -- REMEDIES OF DEPARTMENT

                                  TITLE  69
                                  WAREHOUSES
                                  CHAPTER 2
                             BONDED WAREHOUSE LAW
    69-236.  NONCOMPLIANCE -- FAILURE -- REMEDIES OF DEPARTMENT. (1) Whenever
it appears, after any investigation, that a warehouseman does not have in his
possession sufficient agricultural commodities to cover the outstanding
warehouse receipts, scale weight tickets, or other evidence of storage
liability issued or assumed by him, or the ability to pay producers for
contract obligations, or when the warehouseman refuses to submit his books,
papers, or property to lawful inspection, the department shall give notice to
the warehouseman to comply with all or any of the following requirements:
    (a)  Cover such shortage;
    (b)  Give an additional bond as requested by the department; or
    (c)  Submit to such inspection as the department may deem necessary.
    (2)  If the warehouseman fails to comply with the terms of such notice
within twenty-four (24) hours from the date of issuance of the notice, or
within such further time as the department may allow, not to exceed ten (10)
working days, the department shall petition the district court in the county
where the licensee's principal place of business is located (as shown by the
license application) for an order:
    (a)  Authorizing the department to seize and take possession of any or all
    agricultural commodities in the warehouse or warehouses owned, operated,
    or controlled by the warehouseman, and of all books, papers and property
    of all kinds used in connection with the conduct or the operation of the
    warehouse business, and any materials which pertain in any way to that
    business; and
    (b)  Enjoining the warehouseman from interfering with the department in
    the discharge of its duties as required by the provisions of this section.
    (3)  Upon taking possession, the department shall give written notice of
its action to the surety on the bond of the warehouseman and shall notify the
holders or producers of record, as shown by the warehouseman's records, of all
negotiable or nonnegotiable warehouse receipts, scale weight tickets, or
contracts issued for agricultural commodities, to present their warehouse
receipt or other evidence of deposits or obligation for inspection or to
account for the same. The department shall thereupon cause an audit to be made
of the affairs of such warehouse including, but not limited to, the
agricultural commodities in which there is an apparent shortage, to determine
the amount of such shortage and compute the shortage as to each depositor as
shown by the warehouseman's records, if possible. The department shall notify
the warehouseman and the surety on his bond of the approximate amount of such
shortage and notify each depositor thereby affected by sending notices to the
depositor's last  known address as shown by the records of the warehouseman.
    (4)  The department shall retain possession of the agricultural
commodities in the warehouse or warehouses, and the books, papers, and
property of the warehouseman, until such time as the warehouseman or the
surety on the bond shall have satisfied the claims of all holders of warehouse
receipts or other evidence of deposits or obligations, in case the obligations
exceed the amount of the bond, the surety on the bond shall have satisfied
such claims pro rata, or until such time as the department is ordered by the
court to surrender possession.
    (5)  If during or after the audit provided for in this section, or at any
other time the department has evidence that the warehouseman is insolvent or
is unable to satisfy the claims of all holders of warehouse receipts or other
evidence of obligations, the department shall petition the district court for
the appointment of a receiver to operate or liquidate the business of the
warehouseman in accordance with the law.
    (6)  At any time within ten (10) days after the department takes
possession of any agricultural commodities, or the books, papers, or property
of any warehouse, the warehouseman may serve notice on the department to
appear in the district court of the county in which the warehouse is located,
at a time to be fixed by the court, and show cause why the agricultural
commodities, books, papers and other property should not be restored to his
possession.
    (7)  All court costs, attorney's fees, other professional fees and
necessary expenses incurred by the department in carrying out the provisions
of this section may be recovered in any civil action brought by the department
in district court or recovered at the same time and as part of the
receivership or seizure action filed under the provisions of this chapter.
    (8)  As a part of the expenses so incurred, the department or the receiver
is authorized to include the cost of adequate liability insurance necessary to
protect the department, its officers, and others engaged in carrying out the
provisions of this section.
    (9)  The provisions and remedies of this section are not limited to a
warehouse shortage.