Farm v. Cavendish Farms Inc.

• Decision Date: 18 October 2011
• Docket Number: No. 20110025.,20110025.
• Citation: 803 N.W.2d 818,2011 ND 184
• Parties: BENZ FARM, LLP, Plaintiff and Appellant,v.CAVENDISH FARMS, INC., Defendant and Appellee.
• Court: North Dakota Supreme Court

803 N.W.2d 818

2011 ND 184

BENZ FARM, LLP, Plaintiff and Appellant,

v.CAVENDISH FARMS, INC., Defendant and Appellee.

No. 20110025.

Supreme Court of North Dakota.

Sept. 15, 2011.Rehearing Denied Oct. 18, 2011.

Rudra Tamm, Bismarck, N.D., for plaintiff and appellant.Benjamin John Hasbrouck (argued) and Todd Ervin Zimmerman (on brief), Fargo, N.D., for defendant and appellee.VANDE WALLE, Chief Justice.

[¶ 1] Benz Farm, LLP (“Benz”) appealed from a summary judgment dismissing its action against Cavendish Farms, Inc. (“Cavendish”) for breach of contract and violation of the Unlawful Sales or Advertising Practices Act, N.D.C.C. ch. 51–15, and awarding Cavendish attorney fees. We affirm, concluding: (1) the district court did not err in granting summary judgment dismissing Benz's breach of contract claims; (2) the Unlawful Sales or Advertising Practices Act does not apply to, or create a cause of action against, a purchaser; (3) the district court did not abuse its discretion in denying Benz's motion to amend its complaint; and (4) the district court did not err in awarding Cavendish attorney fees.

I

[¶ 2] Cavendish owns and operates a potato processing facility in Jamestown. Benz is a limited liability partnership that grows and sells potatoes.

[¶ 3] In 2006, Cavendish and Benz entered into written agreements for the sale and purchase of potatoes. One was a “Grower Storage Agreement,” under which Benz agreed to grow and sell, and Cavendish agreed to buy, 150,000 hundredweight of potatoes, to be stored after harvest by Benz until Cavendish directed they be delivered to its processing plant. The second agreement was a “Company Storage Agreement,” under which Benz agreed to grow and sell, and Cavendish agreed to buy, 113,000 hundredweight of potatoes, to be delivered to and stored by Cavendish. The parties also entered into a written credit agreement, whereby Cavendish agreed to provide financing for Benz's expenses in growing the potatoes.

[¶ 4] Both storage agreements contained detailed provisions specifying quality requirements for the contracted potatoes, and Cavendish was not required to purchase any potatoes that fell below certain minimum quality standards. The agreements also provided that “[t]he potatoes will be grown on the fields designated in Exhibit A, which is attached and incorporated herein.” At the time of signing the agreements there was no “Exhibit A,” and the parties had not agreed on a designation of which fields would be stored by Benz and which by Cavendish. Benz subsequently submitted “Field Detail Forms” specifying the varieties of potatoes planted and other details, including which fields would be stored under each contract, but those forms were not signed by Cavendish.

[¶ 5] In September 2006, after Benz began delivering potatoes to Cavendish under the Company Storage Agreement, testing by an independent quality grading service revealed that the potatoes were affected by rot and pink eye and did not meet the minimum quality specifications of the contract. Cavendish expressed concern about accepting the potatoes into its storage facility because the problems could spread to the other potatoes stored there. Monte Benz, one of the Benz partners, suggested they could “switch fields,” storing the potatoes from the affected fields in Benz's storage facilities and delivering better-quality potatoes from other fields for storage by Cavendish. Benz claims that the parties orally agreed to “switch fields” and that Cavendish also agreed to modify the delivery schedule and call for delivery of the deteriorating potatoes “as soon as possible” or within thirty days. Cavendish ultimately accepted delivery and paid for 80,000 hundredweight of the affected potatoes, but Benz disposed of the remaining 70,000 hundredweight as hog feed.

[¶ 6] In 2007, the parties entered into a Company Storage Agreement. Benz claims that there were numerous oral agreements regarding the dates that Cavendish would accept deliveries, but that Cavendish accepted only limited deliveries on those dates, causing inefficiencies and additional expenses for Benz.

[¶ 7] Benz brought this action against Cavendish in December 2008, alleging various claims and theories of liability. For purposes of our resolution of this appeal, Benz alleged that the parties had orally modified their 2006 written agreements and that Cavendish had breached the oral agreement by not timely calling for delivery of the deteriorating potatoes. Benz also alleged that Cavendish violated the Unlawful Sales or Advertising Practices Act, N.D.C.C. ch. 51–15, and breached oral agreements regarding delivery dates under the 2007 contract. Cavendish answered and sought attorney fees as allowed under the parties' written agreements.

[¶ 8] Cavendish moved for summary judgment dismissing Benz's claims. Benz filed a response to the motion for summary judgment and moved to amend its complaint to add new legal theories and claims for damages. The district court denied the motion to amend the complaint, ordered summary judgment dismissing Benz's claims, and awarded Cavendish attorney fees.

II

[¶ 9] Summary judgment is a procedural device for the prompt resolution of a controversy on the merits without a trial if there are no genuine issues of material fact or inferences that can reasonably be drawn from undisputed facts, or if the only issues to be resolved are questions of law. Riverwood Commercial Park, LLC v. Standard Oil Co., 2011 ND 95, ¶ 6, 797 N.W.2d 770. The party moving for summary judgment has the initial burden of showing there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. Id. The degree of response required of the party opposing the motion for summary judgment is set by the scope of the motion. Collection Ctr., Inc. v. Bydal, 2011 ND 63, ¶ 9, 795 N.W.2d 667. As we explained in Collection Ctr., at ¶ 9 (quoting Barbie v. Minko Constr., Inc., 2009 ND 99, ¶ 6, 766 N.W.2d 458):

If the moving party meets its initial burden of showing the absence of a genuine issue of material fact, the party opposing the motion may not rest on mere allegations or denials in the pleadings, but must present competent admissible evidence by affidavit or other comparable means to show the existence of a genuine issue of material fact. Rule 56 requires the entry of summary judgment against a party who fails to establish the existence of a material factual dispute as to an essential element of the claim and on which the party will bear the burden of proof at trial. When no pertinent evidence on an essential element is presented to the trial court in resistance to the motion for summary judgment, it is presumed that no such evidence exists. This Court has repeatedly cautioned that mere speculation is not enough to defeat a motion for summary judgment, and a scintilla of evidence is not sufficient to support a claim.

[¶ 10] In determining whether summary judgment was appropriately granted, we view the evidence in the light most favorable to the party opposing the motion, and that party will be given the benefit of all favorable inferences which can reasonably be drawn from the record. Riverwood, 2011 ND 95, ¶ 6, 797 N.W.2d 770. This Court decides whether the information available to the district court precluded the existence of a genuine issue of material fact and entitled the moving party to judgment as a matter of law. Id.; Collection Ctr., 2011 ND 63, ¶ 9, 795 N.W.2d 667. The determination whether the district court properly granted summary judgment is a question of law which we review de novo on the entire record. Riverwood, at ¶ 6; Collection Ctr., at ¶ 9.

III

[¶ 11] Benz contends the district court erred in granting summary judgment dismissing its breach of contract claim for the 2006 crop year. Benz alleges that the parties orally agreed on September 15, 2006, that the potatoes infected with rot and pink eye would be stored by Benz and that Cavendish would call for delivery of the potatoes as soon as possible or within thirty days. Benz further contends Cavendish breached the oral agreement by failing to call for delivery of all the potatoes within that time.

[¶ 12] The district court provided several alternative reasons explaining its conclusion that summary judgment was warranted, including the parties' express agreement that the written contracts could not be modified orally. The court provided a cogent factual summary and explanation of its reasoning on this issue:

Benz's claim for breach of contract in 2006, like its 2007 claim, hinges on whether or not Cavendish failed “to accept timely delivery of the Benz potato crop.” In other words, Benz admits that Cavendish accepted and fully paid for all the potatoes that were actually delivered, but contends that Cavendish should have taken delivery of all the potatoes sooner, when, allegedly, they remained of contract quality. This claim, however, cannot be supported under the plain language of the Agreements.

....

Both the Grower and the Company Storage Agreements provide that “Grower will deliver all ‘contracted potatoes' as directed by Cavendish Farms Inc.” and provides that time is of the essence. Additionally, the Grower Storage Agreement (which governs the potatoes stored by Benz) expressly contemplates that Benz may be required to store the potatoes into July of the year following harvest, well beyond the December, 2006, date by which Benz admits the potatoes had gone bad and the February, 2007, date when Benz disposed of them “as hog feed.” Thus, the plain language of the Grower Storage Agreement cannot support Benz's claim for breach of contract on the 2006 crop.

....

Accordingly, Benz's 2006 breach of contract claim fails, unless there was a legally binding oral modification to the 2006 Grower Storage Agreement. Despite its admission that the parties did not discuss when Cavendish must take delivery (“I don't believe at that day [the date of the alleged...