Monsanto Co. v. Garst Seed Co., No. ED 89251.
| Court | Court of Appeal of Missouri (US) |
| Writing for the Court | Glenn A. Norton |
| Citation | 241 S.W.3d 401 |
| Parties | MONSANTO COMPANY, Respondent, v. GARST SEED COMPANY f/k/a Advanta USA, Inc., Appellant. |
| Docket Number | No. ED 89251. |
| Decision Date | 18 December 2007 |
v.
GARST SEED COMPANY f/k/a Advanta USA, Inc., Appellant.
[241 S.W.3d 403]
Gerard T. Carmody, Erwin O. Switzer, Jeffrey L. Wax, Clayton, MO, for Appellant.
Joseph P. Conran, Mark G. Arnold, Greg G. Gutzler, Steven M. Berezney, Saint Louis, Mo, for Respondent.
GLENN A. NORTON, Judge.
Garst Seed Company f/k/a Advanta USA, Inc. ("Garst") appeals from the grant of summary judgment in favor of Monsanto Company ("Monsanto") on Monsanto's claim for declaratory judgment and on Garst's three counterclaims for breach of contract. We reverse and remand.
A. Relevant Facts and Issues
The relevant facts and issues in this case concern the amount of seed services fees Monsanto owes to Garst under a soybean license and seed services agreement ("the License Agreement"), the License Agreement's corresponding amendment ("the Amendment"),1 and letters related to Garst's sale, during Fiscal Year 20042 and Fiscal Year 2005,3 of soybean seed containing patented technology licensed from Monsanto to Garst.
1. The License Agreement
In 2001, Monsanto and Garst executed the License Agreement,4 effective from September 1, 2001 until December 31, 2012, under which Monsanto licensed its patented Roundup Ready seed technology to Garst. Under the License Agreement, Monsanto agreed to pay a seed services fee to Garst, provided that Garst completed certain services when selling seed containing Monsanto's technology. Sales of this seed would generate royalties to Monsanto. The seed services fee under the License Agreement was a percentage of the royalty Garst remitted to Monsanto and the royalty was capped at a particular dollar amount.5 The services Garst was required to perform under the License Agreement included promoting, marketing, producing, and delivering licensed seed.
The License Agreement defines "Seed Services Fee" as "the fee to be paid to
2. The Amendment
In 2001, Garst and Monsanto also executed the Amendment, effective for the first four fiscal years of the License Agreement, or Fiscal Year 2001 through Fiscal Year 2004. The financial terms under the Amendment were more beneficial to Garst than the financial terms under the License Agreement: (1) the seed services fee was set at a higher percentage of the royalty Garst remitted to Monsanto; and (2) the royalty was uncapped. In order for Garst to qualify for the amended financial terms, Garst's sales had to meet certain Monsanto "loyalty" incentives.
Paragraph (2)(c) of the Amendment states in relevant part: "The financial terms set forth in attached Table 1 shall supercede and replace the financial terms of [the License Agreement] for Fiscal Years 2001, 2002, 2003 and 2004 unless terminated sooner. . . ." Paragraph (2)(d), the change of control provision, provides in pertinent part: "In the event of any change in control of [Garst], the financial terms set forth in this paragraph 3[sic] shall immediately and automatically expire and the original financial terms of the [License Agreement] shall then become immediately effective." The Amendment specifies that the amended financial terms are subject to all other provisions of the License Agreement.
3. The Royalty Notification Letters
On June 27, 2003, Monsanto sent Garst a letter that officially notified Garst of the royalty amount for Fiscal Year 2004 ("Royalty Notification Letter for FY2004"). The Royalty Notification Letter for FY2004 describes an opportunity for seed companies to earn seed services fee rates that were better than the rates available to Garst under the License Agreement, but were not as good as the rates available to Garst under the Amendment. On June 28, 2004, Monsanto sent Garst a similar letter that officially notified Garst of the royalty amount for Fiscal Year 2005 ("Royalty Notification Letter for FY2005"). The Royalty Notification Letter for FY2005 describes an opportunity for seed companies to earn seed services fee rates that were better than the rates available to Garst under the License Agreement. The rates under both letters were "designed to compensate . . . seed companies for additional reporting and collection requirements as well as reward those for performing activities beneficial to the stewardship, performance, and satisfaction of the Roundup Ready [systems]." The letters specify that the seed company could earn payment by performing certain activities: (1) complying with Exhibit G of the License Agreement; (2) complying with the terms set forth in the License Incentive Agreement; and (3) performing seed piracy and/or seamless pricing activities.
4. Fiscal Year 2004 and Fiscal Year 2005
It is undisputed that during Fiscal Year 2004, specifically from September 1, 2003 until August 31, 2004, Garst was operating under both the License Agreement and the
[241 S.W.3d 405
Amendment. It is also undisputed that Garst's Fiscal Year 2004 sales met the Amendment's "loyalty" incentives. The parties agree that on September 1, 2004, Garst underwent a change in control as defined by Paragraph 2(d) of the Amendment when Syngenta Seed Company purchased a majority stake in one of Garst's parent companies. The parties also agree that, as of September 1, 2004, Garst had not yet submitted its final sales report for seed sold in Fiscal Year 2004 or remitted payment for all of the royalties owed to Monsanto.
After Monsanto had received the full royalty payment from Garst for sales during Fiscal Year 2004, Monsanto paid Garst the seed services fee for Fiscal Year 2004, calculated at the rate provided for in the License Agreement, rather than the rate provided for under the Amendment or the rate described in the Royalty Notification Letter for FY2004. After the conclusion of Fiscal Year 2005, Monsanto paid Garst the seed services fee for sales during Fiscal Year 2005 according to the rate provided for in the License Agreement rather than the rate described in the Royalty Notification Letter for FY2005.
B. Procedural Posture
In November 2004, Monsanto filed a petition for declaratory judgment, seeking a declaration that the terms of the License Agreement applied to the calculation of the seed services fee for Fiscal Year 2004, and that Monsanto's payment to Garst represented payment in full of its contractual obligations. Garst answered and asserted three counterclaims for breach of contract, alleging that: (1) the financial terms under the Amendment governed the seed services fee rate for Fiscal Year 2004, and Monsanto breached the Amendment and License Agreement by failing to pay Garst accordingly (Count I); or (2) in the alternative, the terms described in the Royalty Notification Letter for FY2004 governed the seed services fee rate for Fiscal Year 2004 because the letter constituted a unilateral offer for an increased promotional seed services fee that Garst accepted by performance, and Monsanto breached the unilateral contract by failing to pay Garst accordingly (Count II); and (3) the Royalty Notification Letter for FY2005 governed the seed services fee for Fiscal Year 2005 because the letter constituted a unilateral offer for an increased promotional seed services fee that Garst accepted by performance, and Monsanto breached the unilateral contract by failing to pay Garst accordingly (Count III).6 Thereafter, both parties filed motions for summary judgment on Monsanto's petition for declaratory judgment and on Garst's three breach of contract counterclaims.
After several interlocutory orders, the trial court granted summary judgment in favor of Monsanto on Monsanto's claim for declaratory judgment and on Garst's three counterclaims for breach of contract. Regarding Monsanto's claim for declaratory judgment and Count I, Garst's breach of contract counterclaim with respect to the License Agreement and the Amendment, the trial court found that the financial terms of the License Agreement applied to the calculation of the seed service fee for Fiscal Year 2004. The court reasoned that payments of all royalties and submissions of a final report were conditions precedent for payment of the seed services fee under the License Agreement, and by the time Garst completed those conditions precedent, the enhanced financial terms of
the Amendment had immediately and automatically expired under the change of control provision. Regarding Counts II and III, Garst's breach of contract counterclaims with respect to the royalty notification letters, the court found that the financial terms of the License Agreement, rather than the terms discussed in the Royalty Notification Letter for FY2004 or the Royalty Notification Letter for FY2005, applied for Fiscal Year 2004 and Fiscal Year 2005. The court found that the royalty notification letters were not offers to Garst, specifically because Garst had no reasonable basis for believing that the letters were offers that it could accept.
Thereafter, Monsanto filed a motion for attorney's fees, costs, and expenses pursuant to an attorney's fees provision in the License Agreement. The trial court then awarded Monsanto $195,449.63 in attorney's fees and $22,379.61 in costs and expenses because Monsanto had prevailed on Monsanto's...
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Rosemann v. Sigillito, No. 10–CV–1165–LRR.
...will ascertain the intent of the parties from the contract alone and will not resort to construction.” Monsanto Co. v. Garst Seed Co., 241 S.W.3d 401, 407 (Mo.Ct.App.2007). A court will not find that a contract is ambiguous merely because the parties disagree as to the construction of the c......
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Rosemann v. Sigillito, No. 10–CV–1165–LRR.
...will ascertain the intent of the parties from the contract alone and will not resort to construction.” Monsanto Co. v. Garst Seed Co., 241 S.W.3d 401, 407 (Mo.Ct.App.2007). A court will not find that a contract is ambiguous merely because the parties disagree as to the construction of the c......
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Green v. Plaza in Clayton Condo. Ass'n, No. ED 98887.
...fees would be appropriate, they are not entitled to an award of attorneys' fees for this appeal. See Monsanto Co. v. Garst Seed Co., 241 S.W.3d 401, 416–17 (Mo.App.E.D.2007). Point four is denied.V. The trial court did not err in denying the Association's motion for judgment notwithstanding......
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MOTOR CONTROL SPECIALITIES INC. v. LABOR, No. WD 71586.
...prevailing party. See Wall USA, Inc. v. City of Ballwin, 53 S.W.3d 168, 173 (Mo.App. E.D.2001); see also Monsanto Co. v. Garst Seed Co., 241 S.W.3d 401, 417 (Mo.App. E.D.2007) (stating litigant must ultimately prevail on appeal to be deemed the “prevailing party” in litigation). Thus, the p......
-
Rosemann v. Sigillito, No. 10–CV–1165–LRR.
...will ascertain the intent of the parties from the contract alone and will not resort to construction.” Monsanto Co. v. Garst Seed Co., 241 S.W.3d 401, 407 (Mo.Ct.App.2007). A court will not find that a contract is ambiguous merely because the parties disagree as to the construction of the c......
-
Rosemann v. Sigillito, No. 10–CV–1165–LRR.
...will ascertain the intent of the parties from the contract alone and will not resort to construction.” Monsanto Co. v. Garst Seed Co., 241 S.W.3d 401, 407 (Mo.Ct.App.2007). A court will not find that a contract is ambiguous merely because the parties disagree as to the construction of the c......
-
Green v. Plaza in Clayton Condo. Ass'n, No. ED 98887.
...fees would be appropriate, they are not entitled to an award of attorneys' fees for this appeal. See Monsanto Co. v. Garst Seed Co., 241 S.W.3d 401, 416–17 (Mo.App.E.D.2007). Point four is denied.V. The trial court did not err in denying the Association's motion for judgment notwithstanding......
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MOTOR CONTROL SPECIALITIES INC. v. LABOR, No. WD 71586.
...prevailing party. See Wall USA, Inc. v. City of Ballwin, 53 S.W.3d 168, 173 (Mo.App. E.D.2001); see also Monsanto Co. v. Garst Seed Co., 241 S.W.3d 401, 417 (Mo.App. E.D.2007) (stating litigant must ultimately prevail on appeal to be deemed the “prevailing party” in litigation). Thus, the p......