Rio Grande Valley Sugar Growers, Inc. v. Campesi
Decision Date | 28 February 1979 |
Docket Number | No. 1335,1335 |
Citation | 580 S.W.2d 850 |
Parties | RIO GRANDE VALLEY SUGAR GROWERS, INC., Appellant, v. Ross CAMPESI, Appellee. . On Rehearing |
Court | Texas Court of Appeals |
Neil Norquest, Ewers, Toothaker, Ewers, Abbott, Talbot, Hamilton & Jarvis, McAllen, for appellant.
Charles Murray, Atlas, Hall, Schwarz, Mills, Gurwitz & Bland, McAllen, for appellee.
OPINION ON MOTION FOR REHEARING
The appellant as well as the appellee have filed motions for rehearing. The appellant has raised matters in its motion for rehearing that relate to the partial summary judgment grouped with arguments concerning the jury-tried portion of this case. Because of the confusion raised by appellant's brief and the attempted reply to such brief, we have withdrawn our original opinion and substitute this opinion for the original. The judgment of the trial court is affirmed in part and reversed and rendered in part. Both motions for rehearing are overruled.
This appeal is from a partial interlocutory summary judgment rendered prior to a jury trial and the trial court's final judgment covering both. The primary question concerns the validity of a liquidated damage clause contained in a marketing agreement between appellant, Rio Grande Valley Sugar Growers, Inc. (Association), and appellee, Ross Campesi. Campesi, the plaintiff below, filed suit against the Association seeking to recover moneys the Association allegedly wrongfully withheld from him. The Association counterclaimed for damages resulting from Campesi's alleged breach of the marketing agreement. The trial court granted Campesi's motion for summary judgment, holding that the liquidated damage provision in the contract was invalid. The case then proceeded to trial on the Association's alternate counterclaim for damages. In response to a single special issue, the jury found the Association's actual damages to be less than the amount of money the Association had withheld from Campesi. The trial court entered judgment awarding Campesi the net sum of $68,173.64, which was the total amount ($129,349.50) withheld by the Association, plus prejudgment interest ($26,516.64) on such amount, less the amount of damages ($87,692.80) the jury found due to the Association. The Association brings this appeal, while Campesi brings forward certain cross-points of error.
The Association is a non-profit stock cooperative marketing association formed pursuant to the Texas Cooperative Marketing Act. It was formed in 1971 for the purpose of establishing a sugar cane industry in the Rio Grande Valley by harvesting, milling, processing and marketing sugar cane products from sugar cane produced and delivered to the Association by its members. One of the means used by the Association and its creditors to ensure a source of revenue and to secure repayment of a large sum of money which was borrowed by the Association was to require each member to execute a ten year marketing agreement. This required the members to grow a specific tonnage of sugar cane each year or pay damages in the event the specified tonnage was not produced. The contract provided that the Association would pay the net proceeds due each member after deducting, among other items, a sum to cover the Association's fixed overhead costs and expenses for each year's operation.
Appellee Campesi became a member of the Association at its inception and executed a 10-year marketing agreement whereby Campesi agreed to raise and to deliver to the Association 26,250 tons of sugar cane on 625 acres each "grinding season." Campesi's total ton obligation was later reduced to 26,121.9 tons in accordance with federal production quotas. During the first grinding season, October 1973 through April 1974, Campesi produced only 252 tons on six acres. The Association gave Campesi credit for the six acres of sugar cane grown and then, in May of the following year, deducted $129,349.50 as liquidated damages from the amount due Campesi for the sugar cane he produced in the 1974-1975 (second) grinding season.
Campesi then brought this suit against the Association alleging that the Association had wrongfully withheld such sum from him. The Association defended on the basis that this deduction was authorized pursuant to a liquidated damage clause contained in paragraph 15(a) of the marketing agreement between the parties. The Association also filed a counterclaim seeking to recover its actual damages in the event that the trial court found that the Association had improperly withheld the sum from Campesi.
Prior to trial, Campesi filed a motion for summary judgment on the basis that paragraph 15(a) of the marketing agreement was void and unenforceable. He also filed a supplemental summary judgment motion requesting control of the deducted sum until entry of a final judgment on the basis that the marketing agreement did not permit the Association to make any deductions for an alleged breach of the marketing agreement. Campesi's original motion for summary judgment stated, in effect, that he had a right to recover the unauthorized deduction as a matter of law because: 1) paragraph 15(a) of the marketing agreement was void and illegal because authorization for the inclusion of such provision in the Association's marketing agreement was not contained in the Association's by-laws as required by Tex.Rev.Civ.Stat.Ann. art. 5753 (1958); 2) paragraph 15(a) was void and illegal because Article 5753 authorizes cooperative marketing associations to utilize liquidated damage clauses only in the event of a specific breach of the provisions regarding the sale, delivery or withholding of products, whereas the Association had withheld such sum from Campesi only because of his failure to grow sugar cane; and 3) the liquidated damage provision was void and of no force or effect because it operated to collect a penalty rather than as an attempt to approximate actual damages that are difficult to ascertain.
Campesi's supplemental motion alleged that "the Marketing Agreement in effect between plaintiff and defendant on May 15, 1975, contains no provision allowing a deduction for actual or liquidated damages from the amounts plaintiff is entitled to receive under said Agreement." Campesi further pled that "defendant is not entitled to make deductions for Liquidated or actual damages from sums due plaintiff under the Marketing Agreement." In accordance with these allegations, Campesi prayed that the court grant to him immediate control and possession of the $129,349.50 withheld by the Association "until such date as defendant may obtain a judgment against Plaintiff for liquidated or actual damages."
These motions were supported by the Association's answers to certain interrogatories, wherein the Association admitted: 1) that Campesi was entitled to receive a total of $388,713.06 from the proceeds of the 1974-1975 (second) season; 2) that Campesi had been paid only $259,363.56 of this amount; 3) that the $129,349.50 difference was the result of Campesi's breach of the marketing agreement in the 1973-1974 (first) season; and 4) that such difference ($129,349.50) was withheld pursuant to paragraph 15(a) of the marketing agreement. Paragraph 15(a) provides, in relevant part, as follows "Inasmuch as the remedy at law would be inadequate and inasmuch as it is now and ever will be impractical and extremely difficult to determine the actual damage resulting to Association should Grower fail to deliver any sugar cane as herein provided, Grower hereby agrees to pay Association for all such sugar cane delivered, sold, consigned, withheld or marketed by or for him, or which he refuses to grow, other than in accordance with the terms hereof, the sum of FIVE DOLLARS ($5.00) per ton as liquidated damages for the breach of this contract . . ."
After a hearing, the trial court entered an order for partial summary judgment. The order granted Campesi's motion for summary judgment and declared Part 15(a) of the marketing agreement void. It also denied Campesi's supplemental motion for summary judgment, and refused him the temporary relief of recovering control of the deducted sum prior to final judgment. The case then proceeded to trial before a jury on the Association's counterclaim for actual damages. In response to the special issue, the jury found that the Association had incurred damages in the amount of $87,692.80 by Campesi's failure to plant his sugar cane.
The Association brings forward several points on appeal, primarily complaining of the trial court's order granting Campesi's partial summary judgment, but also complaining of the court's failure to allow the Association to plead or prove its attorney's fees as provided for in the marketing agreement, and the failure of the trial court to allow the Association prejudgment interest on the total damages or to allow such damages as an offset against the amount withheld prior to computing prejudgment interest awarded to Campesi. Campesi brings forward cross-assignments of error complaining of the trial court's failure to allow him to plead and prove attorney's fees and of the trial court's action in taxing the entire cost of the suit against him. Neither party complains of the jury's award of $87,692.80 as damages due the Association.
The Association's first point of error which complains of the trial court's action in granting Campesi's motion for summary judgment requires us to keep in mind the familiar rules concerning summary judgments established by our Supreme Court: Rule 166-A, Texas Rules of Civil Procedure; Valley Stockyards Company v. Kinsel, 369 S.W.2d 19 (Tex.Sup.1963); Gaines v. Hamman, 163 Tex. 618, 358 S.W.2d 557 (1962); Gulbenkian v. Penn, 151 Tex. 412, 252 S.W.2d 929 (1952).
First we consider the question of whether or not the Association is required to include a provision for liquidated damages in both: 1) the Association's marketing...
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