Golden Peanut Co. v. Bass

• Citation: 547 S.E.2d 637,249 Ga. App. 224
• Decision Date: 30 March 2001
• Docket Number: No. A00A2362.,A00A2362.
• Parties: GOLDEN PEANUT COMPANY v. BASS et al.
• Court: United States Court of Appeals (Georgia)

547 S.E.2d 637

249 Ga. App. 224

GOLDEN PEANUT COMPANY v. BASS et al.

No. A00A2362.

Court of Appeals of Georgia.

March 30, 2001.

Reconsideration Denied April 13, 2001.

Alston & Bird, Jay D. Bennett, Candace N. Smith, Paul J. Kaplan, Bondurant, Mixson & Elmore, Emmet J. Bondurant, Michael B. Terry, Frank M. Lowrey IV, Atlanta, for appellant.

King & Spalding, Griffin B. Bell, Atlanta, Benjamin F. Easterlin IV, Americus, Michael C. Russ, John P. Brumbaugh, Atlanta, for appellee.

Watson, Spence, Lowe & Chambless, Evans J. Plowden, Jr., Dawn G. Benson, Albany, Charles K. Wainright II, amici curiae. MIKELL, Judge.

Golden Peanut Company ("Golden Peanut") appeals a judgment in favor of Neon Earl Bass, Jr., Dry Branch Farms, Inc., and Varner Bass Enterprises ("plaintiffs") on a breach of contract claim. Following a two-week trial, the jury returned a large verdict in favor of the plaintiffs. The trial court denied Golden Peanut's motions for directed verdict and judgment notwithstanding the verdict, and this appeal followed. Because the trial court committed harmful error in refusing to give Golden Peanut's requested jury charge on accord and satisfaction, we reverse.

This case involves contracts for the sale of unshelled peanuts. Golden Peanut is a "sheller," and plaintiffs are peanut farmers. It is undisputed that under federal regulations, each farm is assigned a limited quantity of "quota peanuts" that may be sold for domestic consumption. All peanuts produced in excess of the quota are labeled "additional peanuts," which generally must be exported or crushed for oil. Contracts for the sale of additional peanuts are subject to regulation and must be approved by a federal agency. 7 CFR § 1446.107(a) (1990).

At issue in this case are contracts for the sale of plaintiffs' 1990 crops to Golden Peanut. Viewed in the light most favorable to upholding the jury's verdict, the evidence adduced at trial demonstrates that Golden Peanut agreed to pay a "floor price" for plaintiffs' quota peanuts and additional peanuts, with the understanding that a final price could be "lock[ed] in" later in the year. Witnesses for both sides testified that a floor price is simply a minimum price. The parties reduced their agreement to writing in April 1990, when they signed fifty-five contracts, one contract for each individual peanut farm. The words "floor price" were typed next to the term "firm price" on each of the form contracts. See Estate of Sam Farkas, Inc. v. Clark, 238 Ga.App. 115, 120(2), 517 S.E.2d 826 (1999) (terms added to a contract prevail over terms in a preprinted form). See also OCGA § 13-2-2(7) ("When a contract is partly printed and partly written, the latter part is entitled to most consideration"). The contracts were approved by the local Agriculture Stabilization & Conservation Service ("ASCS") office in each of the counties where plaintiffs' farms were located.

After the contracts were signed, each party partially performed their contractual obligations. For example, as the peanuts were harvested on each of the plaintiffs' 55 farms, they were delivered to Golden Peanut to be processed for resale. Upon each delivery, Golden Peanut paid the plaintiffs at the following rate: (1) for quota peanuts, the plaintiffs were paid the higher of the agreed-upon floor price of $675 per ton or the market "spot" price for that particular day; and (2) for additional peanuts, they were paid the floor price of $401 or $440 per ton, depending on the type of peanut. The deliveries and payments continued into the fall of 1990. Meanwhile, the parties negotiated regarding the final prices of the quota peanuts and additional peanuts.

The prescribed method for "locking in" the actual price would be slightly different for quota peanuts and for additional peanuts. For quota peanuts, the plaintiffs had the right to designate as the sale price for all deliveries during the crop year Golden Peanut's "spot price" on whatever date the plaintiffs wished to "lock in" a price. The parties anticipated that the "spot prices" would rise as the harvest continued and the effects of the drought were felt. As to additional peanuts, the plaintiffs' evidence was that they could "lock in" a price by reference to the "market price" on the date of their choosing.

The parties were unable to agree on the final prices. In mid-October, after a series of unsuccessful negotiations, Gaylord Coan, the president of Golden Peanut, unilaterally made what he deemed to be a final offer to pay plaintiffs $875 per ton for all quota peanuts and the previously agreed-upon floor price for additional peanuts ($401 or $440 per ton, depending on the type of peanut). Immediately following Coan's offer, Golden Peanut sent plaintiffs a payment of approximately $900,000 which brought the amount that had previously been paid for quota peanuts to $875 per ton. The payment was accompanied by the "Varner Bass Settlement Report," which was a spreadsheet showing the calculation of the offered price for the quota peanuts. Plaintiffs accepted and negotiated the payment. Golden Peanut continued to pay plaintiffs $875 per ton for each subsequent delivery of quota peanuts and the floor price of $401 or $440 per ton for additional peanuts. Plaintiffs accepted the payments and never attempted to "lock in" a different price in accordance with the procedure regarding "spot prices," "market prices," and Rotterdam prices, et cetera. It is undisputed that plaintiffs never complained to Golden Peanut about the amount paid for the 1990 crops during the period between November 5, 1990, and the filing of this lawsuit in 1994. The plaintiffs explained that Golden Peanut had prevented them from "locking in" a price by its unilateral actions in October and that Varner Bass could not sue Golden Peanut in 1990 or 1991 because they were highly leveraged and hence compelled to accept the payments. In this action plaintiffs contend that they accepted the $875 per ton price for quota peanuts and the floor price for additional peanuts merely as partial payment of the total amount due.

Plaintiffs' complaint alleges that Golden Peanut breached the parties' contracts by refusing to allow plaintiffs to lock in a higher market price for peanut crops in 1990 and, as a result, that Golden Peanut grossly underpaid them. After hearing the evidence, the jury returned a verdict in favor of plaintiffs and awarded compensatory damages and interest for the quota peanuts and additional peanuts, as well as attorney fees for Golden Peanut's bad faith.

On appeal, Golden Peanut enumerates two errors with respect to the jury charge given by the court and argues that the court erred in denying its motions for directed verdict and j.n.o.v. Because our decision regarding the jury charge on accord and satisfaction is dispositive of the case, we will address it first.

1. In its answer to the complaint, Golden Peanut raised the affirmative defense of accord and satisfaction. At trial, Golden Peanut requested two pattern jury instructions on the subject, the charges found on page 24 of the Suggested Pattern Jury Instructions, Vol. I, Civil Cases. The trial court gave only one of the two charges requested by Golden Peanut, defendant's request to charge no. 20, which is part A of the pattern charge on accord and satisfaction:

When a new agreement takes the place of an old one, this ends the old agreement. The legal words for such an end to an old agreement are accord and satisfaction. It takes place where the parties satisfy one agreement by making and carrying out a new one; where they expressly agree that the new one takes the place of the old; or where there is a new consideration for a new promise in place of the old one.

Despite Golden Peanut's written request, the court declined to give its second requested charge on the subject, defendant's request to charge no. 21, which is part B of the pattern charge:

When a party makes an offer of a certain sum to settle a claim, the amount of which is the subject of a bona fide dispute, with the condition that the sum offered, if taken at all, must be received in full satisfaction of the claim, and the party receives the money, he takes it subject to the condition attached to it, and it will operate as an accord and satisfaction.

Although we are most reluctant to disturb any jury's verdict, and especially a verdict rendered after a lengthy and expensive trial, we conclude that court's failure to give request no. 21 was reversible error.

It is the duty of the court to charge the jury on the law as to every controlling, material, substantial[,] and vital issue in the case. Where the court fails to give the benefit of a theory of the defense which is sustained by the evidence, a new trial must be granted.

Pritchett v. Anding, 168 Ga.App. 658, 663(6), 310 S.E.2d 267 (1983).

After a verdict and judgment, an appellate court must construe the evidence with every inference and presumption in favor of upholding the verdict in the face of motions for a new trial or motions for j.n.o.v. See, e.g., Cohen v. Lowe Aviation Co., 221 Ga.App. 259, 470 S.E.2d 813 (1996). On the other hand, when we decide whether a jury instruction should have been given, we do not allocate inferences and presumptions but merely examine the record to see if evidence was presented which created a substantial, material, and controlling issue in the case. See generally Pritchett, supra at 663, 310 S.E.2d 267; King v. Luck Illustrating Co., 21 Ga.App. 698, 94 S.E. 890 (1918). The test for whether such an issue was created is whether the evidence, if believed by a jury in accordance with the disputed jury instruction, would have affected the outcome. It is also necessary to decide whether the law given in the disputed charge was adequately explained by other portions of the trial court's instruction.

In the case at bar, if the court's giving of part A of the pattern charge, defendant's...