Starling v. Valmac Industries, Inc.

• Citation: 589 F.2d 382
• Decision Date: 10 January 1979
• Docket Number: No. 78-1583,78-1583
• Parties: Mrs. C. T. STARLING, Individually and as Guardian of C. T. Starling, Appellant, v. VALMAC INDUSTRIES, INC., Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals (8th Circuit)

Page 382

589 F.2d 382

Mrs. C. T. STARLING, Individually and as Guardian of C. T.

Starling, Appellant, v. VALMAC INDUSTRIES, INC., Appellee.

No. 78-1583.

United States Court of Appeals,

Eighth Circuit.

Submitted Dec. 15, 1978.

Decided Jan. 10, 1979.

Bill R. Holloway, Lake Village, Ark., for appellant.

Rick Beard, Pine Bluff, Ark., argued, Bridges, Young, Matthews & Davis, Pine Bluff, Ark., filed brief, for appellee.

Before LAY and HENLEY, Circuit Judges, and WANGELIN, District Judge. ^*

HENLEY, Circuit Judge.

This is an appeal by Mrs. C. T. Starling, Guardian of her incompetent husband, C. T. Starling, from an order of the United States District Court for the Eastern District of Arkansas, dismissing plaintiff's complaint for damages for breach of contract and fraud in which complaint Valmac Industries, Inc. was named as the defendant. The dismissal came after the district court (The Honorable Oren Harris, Senior District Judge) granted a defense motion In limine to suppress certain parol evidence that the plaintiff intended to introduce in a scheduled and imminent jury trial. When the motion In limine was granted, counsel for the plaintiff indicated that he would not proceed to trial before the jury without the suppressed evidence. However, he sought and obtained leave to make a full proffer of proof to the district court, and that proffer was made. After the proffered testimony and certain exhibits were received, the trial court entered an order of dismissal and this appeal followed.

We look first at the historical facts.

Mr. and Mrs. Starling, residents of Ashley County, Arkansas, which county is located in the southwest part of the state, were married in 1964. As of that time and for some twenty years prior thereto Mr. Starling had been engaged in the business of "growing out" broiler chickens. That business involves receiving baby chicks on credit from a processing concern, feeding and medicating them on feed and medicines supplied by the processor on credit, and ultimately reselling the birds to the processor after they have attained the desired size and weight. From time to time, much money has been made in the business, and much has been lost.

The business involves substantial transportation costs borne by the processor, and for that reason distances between a processor and his respective growers constitute a significant economic factor that is taken into consideration by processors in determining whether to deal or to continue dealing with individual growers.

Prior to 1970 Mr. Starling was receiving birds, feed and medicines from the defendant, Valmac, and for many years prior to 1970 Starling had dealt with Valmac or its corporate predecessors, including a concern operating out of Greenville, Mississippi, which is a relatively short distance from Ashley County, Arkansas. ¹ The relations between Mr. Starling on the one hand and Valmac and its predecessors on the other hand were mutually satisfactory.

In the broiler business agreements between processors and growers are evidenced by written contracts. Each contract is geared to a particular "batch" of baby chicks placed with the grower. Ordinarily, the contract is renewed automatically "from batch to batch" unless terminated by one of the parties. A renewed contract between Valmac and a grower is signed by Valmac but is not necessarily signed by the grower who is simply given a copy of the document when a new batch of chicks is placed. Where contract terms are changed substantially, it is required that both sides sign the new contract. In its contracts Valmac specifically reserved the right to terminate or not to renew if grower performance became unsatisfactory or if severance of the relationship should be dictated by market conditions. However, Valmac's right to terminate an arrangement was not limited to the two situations just mentioned.

As of 1970 Starling conducted his broiler operation in three small, old and apparently deteriorating chicken houses which had become or were becoming unsuitable for the growing out of broilers. Mr. and Mrs. Starling, with the encouragement of Valmac, applied to the Farmers Home Administration (FHA), an agency of the United States, for a substantial loan to enable them to construct a new and modern chicken house and to have a deep water well drilled on their premises. The loan applied for amounted to $17,500, and repayment of it was to be secured by a mortgage on forty acres of land in Ashley County owned by Mr. Starling or by both Mr. and Mrs. Starling.

Naturally, before making such a loan FHA desired to know whether Mr. and Mrs. Starling were going to be able to continue to receive baby chicks to be grown out, and that question was not without interest to Mr. and Mrs. Starling. Accordingly, the lending agency and the Starlings contacted a representative of Valmac and were advised in general terms that if the Starlings continued to be satisfactory producers there was no reason to believe that Valmac would not continue to supply them with baby chicks. However, Valmac's representative, Jack Nelson, did not purport to bind his company to furnishing chicks to Mr. and Mrs. Starling as long as Valmac stayed in business, or over the life of the anticipated loan, or for any other particular length of time. The County Supervisor of FHA evidently did not consider that the Starlings or the agency had any such commitment; he did feel, however, that he could count on continued delivery of chicks by Valmac to the Starlings for a substantial period of time during the life of the loan.

The loan was made in due course, and presumably the new chicken house was built and the deep well drilled.

Things moved along smoothly from 1970 to about the middle of July, 1974 at which time Mr. Starling was the victim of an accident that left him totally and permanently disabled. ²

After her husband's injury, Mrs. Starling undertook to continue the broiler operation and was supplied birds by Valmac until 1975, in which year she was notified that no further birds would be supplied. The reason given by Valmac for its action was the distance between the Valmac plant in Pine Bluff, Arkansas and the location of the Starling operation in Ashley County. Valmac has never contended that either Mr. or Mrs. Starling was not a satisfactory producer, and, indeed, Valmac has recognized that Mrs. Starling has been an above average operator. When Mrs. Starling was unable to find another source from which to obtain baby chicks, she commenced this action.

In stating the facts we have viewed the case as though the defendant prior to the trial date had filed a motion for summary judgment pursuant to Fed.R.Civ.P. 56(b) with the motion being granted by the district court. This approach requires us to view the case in the light most favorable to the plaintiff,...