Farmland Industries, Inc. v. Andrews Transport Co.
| Decision Date | 24 November 1989 |
| Docket Number | No. 88-1946,88-1946 |
| Citation | 888 F.2d 1066 |
| Parties | FARMLAND INDUSTRIES, INC., Plaintiff-Appellant, v. ANDREWS TRANSPORT CO., Defendant-Appellee. |
| Court | U.S. Court of Appeals — Fifth Circuit |
Donald M. Hunt, Carr, Evans, Fouts, & Hunt, Lubbock, Tex., for plaintiff-appellant.
Joseph W. Spence, Gandy, Michener, Swindle, Whitaker & Pratt, Fort Worth, Tex., for defendant-appellee.
Appeal from the United States District Court for the Northern District of Texas.
Before JOHNSON, WILLIAMS and GARWOOD, Circuit Judges.
Farmland Industries appeals the district court's judgment allowing recovery for only one of two lost loads of fuel under a theory of conversion, awarding prejudgment interest at the rate of 8.32 percent and disallowing the recovery of attorney's fees by Farmland. For the reasons cited herein, we reform the judgment to allow Farmland to recover under a breach of contract theory for both loads of fuel. Additionally, we reform the judgment to reflect prejudgment interest at the rate of ten percent per year. Finally, we reform the judgment to allow Farmland to recover attorney's fees.
Farmland Industries, Inc. (hereafter Farmland) is a Missouri Corporation which sells fuel, fertilizer, feed and related agricultural products to farming cooperatives throughout the Midwest. Since 1972, Farmer's Co-op Gin Company (hereafter Co-op) had been buying fuel from Farmland. The method of purchase employed by Co-op was relatively simple; Co-op would call in an order to Farmland; Farmland would then ship the fuel to Co-op by common carrier. A day or two after Co-op took delivery of the fuel, Farmland would invoice Co-op for the purchase price of the particular commodity delivered. Such was the procedure in effect at the time the instant controversy arose.
On April 2, 1985, Farmland reportedly received a request from Co-op to deliver a load of diesel fuel to Co-op. 1 On that same day, Farmland reached an agreement with a common carrier, Andrews Transport, to transport the diesel fuel to Co-op. Andrews Transport thereafter took possession of the diesel fuel from Farmland and Farmland tendered $247.69 to Andrews Transport in satisfaction of the transportation charges. More than a month later, on May 14, 1985, Farmland claims that it received another request from Co-op for a split load of regular and unleaded gas. 2 As before, Andrews Transport took possession of the fuel and was paid $227.45 in transportation charges by Farmland.
Co-op alleges that it never received, and indeed never ordered, either load of fuel. Andrews Transport disputed Co-op's nondelivery claims and asserted that both loads were delivered to Co-op. Farmland, having not received payment from Co-op for either load of fuel, demanded payment from both Co-op and Andrews Transport. After both Co-op and Andrews failed to pay Farmland for the fuel, Farmland filed the instant suit in the district court against Andrews Transport and Co-op.
After a jury trial, the jury found in favor of Farmland and determined the value of both loads of lost fuel as well as Farmland's reasonable trial and appellate attorney's fees. The district court, however, applying a conversion theory rather than a breach of contract theory, entered judgment for Farmland against Andrews for the market value of the second load of fuel only. The district court denied recovery for the first load of fuel on the basis of the two year statute of limitations which governs conversion actions. Additionally, the district court awarded prejudgment interest to Farmland at the rate of 8.32 percent. Finally, the district court declined to award Farmland attorney's fees as determined by the jury. Farmland appeals.
On appeal, Farmland first contends that the district court erred by treating Farmland's claims against Andrews Transport and Co-op as a conversion rather than a breach of contract action. 3 Importantly, the statute of limitations for breach of contract actions is a four year period whereas the statute of limitations for a conversion action is a two year period. Alternatively, Farmland claims that even if the district court properly applied a conversion theory of recovery, damages for both loads of fuel should be recovered since the actual date of conversion was never established as part of a statute of limitations defense.
Our resolution in this case of whether Farmland's cause of action against Co-op and Andrews Transport sounds in contract or tort is guided by the tenor of Farmland's pleadings. In paragraph four of Farmland's original complaint, which names both Co-op and Andrews Transport as defendants, Farmland asserts that "[t]his is a suit based in contract." Nowhere in Farmland's original complaint does one find language indicating that Farmland's cause of action sounds in tort for conversion. Moreover, the district court's pretrial order which, incidentally, was prepared by Farmland, Co-op, and Andrews Transport, contains the following language:
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