Perdue Farms, Inc. v. Motts, Inc. of Mississippi

• Decision Date: 21 July 1978
• Docket Number: No. WC 75-101-S.,WC 75-101-S.
• Citation: 459 F. Supp. 7
• Parties: PERDUE FARMS, INC., a Maryland Corporation, Plaintiff-Counter-Defendant, v. MOTTS, INC. OF MISSISSIPPI, a Mississippi Corporation, Defendant-Counter-Claimant.
• Court: U.S. District Court — Northern District of Mississippi

459 F. Supp. 7

PERDUE FARMS, INC., a Maryland Corporation, Plaintiff-Counter-Defendant, v. MOTTS, INC. OF MISSISSIPPI, a Mississippi Corporation, Defendant-Counter-Claimant.

No. WC 75-101-S.

United States District Court, N. D. Mississippi, W. D.

April 21, 1978.

On Motion to Reconsider July 21, 1978.

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Will A. Hickman, Sumners, Hickman & Rayburn, Oxford, Miss., for plaintiff-counter-defendant.

John S. Throop, Jr., Water Valley, Miss., Lowell E. Grisham, Ethridge & Grisham, Oxford, Miss., for defendant-counter-claimant.

MEMORANDUM OF DECISION

ORMA R. SMITH, District Judge.

This case is before the court for consideration of (1) defendant's motion to amend and supplement counterclaim, (2) defendant's motion to amend counterclaim, and (3) plaintiff's motion to dismiss defendant's counterclaim for failure to state a claim or in the alternative for summary judgment.

Plaintiff Perdue Farms, Inc. (Perdue) sells dressed poultry under the brand name Perdue Roasters. Perdue claims that defendant Motts, Inc. of Mississippi (Motts) received, but has not paid for several deliveries of Perdue Roasters and brings this diversity action¹ to collect the amount it claims Motts owes.

Motts has filed an answer and a counterclaim. In the answer, Motts admits refusing to pay the amount demanded by Perdue but denies that it owes Perdue any amount. Motts' counterclaim seeks recovery of damages from Perdue on two grounds. Count I of the counterclaim alleges that Perdue breached two contracts it had with Motts. Count II is a claim of malicious interference with a contract where Motts alleges that Perdue interfered with and caused the breach of a contract that Motts had with another party.

Perdue's answer to the counterclaim denies all of Motts' allegations and presents the affirmative defense that the contracts relied upon by Motts in the counterclaim do not satisfy the statute of frauds and are therefore unenforceable. This statute of frauds defense is the basis of Perdue's pending motion to dismiss or for summary judgment.

I. MOTTS' MOTION TO AMEND AND SUPPLEMENT COUNTERCLAIM AND MOTION TO AMEND COUNTERCLAIM

These motions are Motts' second and third requests to amend and/or supplement its counterclaim. After Motts filed its answer and counterclaim, Perdue filed a motion to dismiss pursuant to Fed.R.Civ.P. 12(b)(6) raising the same statute of frauds defense that is raised in its pending motion. Motts opposed that motion and filed its first motion to amend and supplement its counterclaim. After considering the two motions, the court denied Perdue's motion to dismiss and granted Motts' motion to amend and supplement its counterclaim.

Motts' pending motion to amend and supplement counterclaim would amend Count I of the counterclaim by adding sentences alleging the satisfaction of certain prerequisites of the statute of frauds, discussed infra. One amendment sought by this motion, which would add the reverse side to two exhibits to the counterclaim, is redundant because the entire documents — front and rear sides — were made exhibits to the counterclaim when defendant earlier amended its counterclaim.

The other motion to amend counterclaim seeks to make a technical correction to Count I. It would correct a date that was mistakenly stated.

The court rejects the implication by Perdue that these amendments are proposed by Motts to create evidence to defeat Perdue's pending motion to dismiss or for summary judgment. The amendments do not change the substance of the counterclaim but they do serve to make it conform to the factual basis of Motts' argument against Perdue's motion. See 6 Moore's Federal Practice, ¶¶ 56.024, 56.10 (2d ed. 1974). Under the circumstances present here, the court believes that justice is best served by allowing the amendments. The court will sustain the motions and allow defendant to file an amended counterclaim.

II. PERDUE'S MOTION TO DISMISS OR FOR SUMMARY JUDGMENT

The court will treat the motion as one for summary judgment. Perdue argues that the contracts on which Motts relies in the counterclaim do not satisfy the statute of frauds and therefore are not enforceable. A summary of the facts follows. No discovery has occurred. The facts were taken from the pleadings and affidavits filed by the parties and have been viewed in the light most favorable to Motts, the party opposing the summary judgment motion. See United States v. Hangar One, Inc., 563 F.2d 1155, 1157 (5th Cir. 1977).

Motts alleges that it made two contracts with Perdue — one on October 30, 1975, and the other on November 10, 1975, — and admits that they were oral contracts. As alleged by Motts the contracts provided that Motts was to purchase and Perdue was to sell a designated amount of Perdue Roasters and that on specified dates Motts was to send its trucks to Perdue's Maryland plant to pick up the roasters. Motts states that the parties did not mention or discuss payment terms for these two contracts. Motts claims the parties assumed that the billing practice which Perdue had used for previous contracts would be followed with these contracts. Under that billing practice the roasters were invoiced the day after delivery and payment was due 7 days after the date of billing. According to Motts, this billing practice was instituted by Perdue after Motts and Perdue made their first contract and had been used with all contracts until the October 30, and November 10, 1975, contracts.

To confirm the October 30, 1975, and November 10, 1975, contracts, Motts mailed to Perdue Confirmation of Purchase No. 3384 (No. 3384) and Confirmation of Purchase No. 3422 (No. 3422), respectively. (A copy of No. 3384 and No. 3422 are attached to this opinion as Appendices A and B, respectively.) Motts alleges that each confirmation was mailed postage prepaid through the United States Mail to Perdue at its usual mailing address, that Perdue received each confirmation and that Perdue did not object to either confirmation.

Motts claims that when its trucks arrived at Perdue's Maryland plant to pick up the roasters purchased in the October 30, 1975, contract, Perdue informed Motts' drivers that the roasters would not be loaded unless complete payment was made before delivery. Perdue then informed Motts' office that credit terms were not available and that the roasters purchased in the November 10, 1975, contract would not be delivered unless Motts paid for them on the date of delivery.

Perdue's refusal to follow the above-described billing practice, which Motts claims was tacitly recognized by the parties as a term of the October 30, and November 10, 1975, contracts, is the basis for Motts' claim for breach of contract in Count I of the counterclaim. Motts contends that Perdue breached both contracts by demanding payment on the date of delivery and by refusing to load the roasters unless the advance payment was made.

In Count II of the counterclaim, Motts states that it had a contract with Dairyland, Inc. (Dairyland) which provided that Motts was to resell to Dairyland the Perdue Roasters purchased from Perdue. Motts does not state whether the contract with Dairyland was an oral or a written contract. Motts alleges that at the time Perdue breached the October 30, and November 10, 1975, contracts, Perdue informed Dairyland that Motts would not be able to deliver the roasters it had contracted to resell to Dairyland and then persuaded Dairyland to purchase the roasters directly from Perdue thereby causing Dairyland to breach its contract with Motts. This alleged action by Perdue is the basis for Motts claim of malicious interference with a contract which is presented in Count II of the counterclaim.

A. Motion for Summary Judgment on Count I.

Although Perdue denies that the October 30, and November 10, 1975, contracts exist, it contends that if, arguendo, the contracts do exist summary judgment should be granted and Count I of the counterclaim dismissed because the contracts do not satisfy the statute of frauds found in Miss. Code Ann. § 75-2-201 (1972). Specifically Perdue contends that Motts has not and cannot show satisfaction of section 75-2-201(1), (2). Subsections 1 and 2 read:

(1) Except as otherwise provided in this section, a contract for the sale of goods for the price of five hundred dollars ($500.00) or more is not enforceable by way of action or defense unless there is some writing sufficient to indicate that a contract for sale has been made between the parties and signed by the party against whom enforcement is sought or by his authorized agent or broker. A writing is not insufficient because it omits or incorrectly states a term agreed upon but the contract is not enforceable under this paragraph beyond the quantity of goods shown in such writing.

(2) Between merchants if within a reasonable time a writing in confirmation of the contract and sufficient against the sender is received and the party receiving it has reason to know its contents, it satisfies the requirements of subsection (1) against such party unless written notice of objection to its contents is given within ten (10) days after it is received.

Perdue argues (1) that section 75-2-201(1) has not been satisfied because Motts does not have a writing which was signed by Perdue and which indicates that the contracts were made and (2) that Motts cannot rely on section 75-2-201(2) because Motts has not met all the prerequisites for invoking that subsection.

Miss.Code Ann. § 75-2-201 (1972) is a verbatim enactment of Uniform Commercial Code § 2-201 (UCC § 2-201) which is the statute of frauds provision of Article 2 of the Uniform Commercial Code. Neither party questions the application of section 75-2-201 to the facts alleged in this case and the court finds it controlling.²

UCC § 2-201(1) § 75-2-201(1) deals with the basic method of satisfying the statute of frauds — by the use of a writing. In Derden v. Morris, 247 So.2d 838 (M...