Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-arwd-6_05-cv-06005/USCOURTS-arwd-6_05-cv-06005-0/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1332 Diversity-Breach of Contract

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IN THE UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF ARKANSAS

HOT SPRINGS DIVISION

BOLESLAW EWASKIEWICZ and

SANDRA EWASKIEWICZ, husband and wife PLAINTIFFS

VS. Civil No. 05-6005

DEL MESA FARMS DEFENDANT

MEMORANDUM OPINION AND ORDER

On this 22 day of December 2005, there comes on for nd

consideration Defendant’s Motion for Summary Judgment (Doc. #10-12,

17), Plaintiff’s Response (Docs. #13-15) and Defendant’s Reply

(Doc. #16). For reasons stated herein, the Court finds that

Defendant’s Motion for Summary Judgment should be and hereby is

GRANTED and Counts 1 and 2 of Plaintiffs’ Complaint are DISMISSED.

Plaintiffs’ breach of contract claim remains set for jury trial the

week of January 23, 2006. 

I. Background

Plaintiff presents state law claims of intentional

interference with contractual relations or business expectancies,

promissory estoppel and breach of contract. Plaintiff seeks

compensatory and exemplary damages as well as attorney’s fees and

costs. This Court has diversity jurisdiction pursuant to 28 U.S.C.

§ 1332.

Plaintiffs were pullet growers who owned and operated a farm

in Pike County, Arkansas. Beginning in 1994, Defendant entered

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Farm Credit Services was Plaintiffs’ lender, and the 1

Turners attempted to obtain financing from Farm Credit

when they were considering purchasing Plaintiffs’ farm.

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into a series of pullet growing contracts with Plaintiffs. Each

contract covered the housing of one flock of pullets to be placed

on Plaintiffs’ farm until they reached maturity. Such contracts

are referred to as flock-to-flock and provided they could be

terminated without cause by either Plaintiffs or Defendant. By

correspondence dated March 8, 2002, Defendant advised Plaintiffs

that it would not be placing anymore pullets in Plaintiffs’ farm.

(Doc. 15, Ex. 3). However, on April 1, 2002, Defendant advised

Farm Credit that it intended to place pullets on Plaintiffs’ farm 1

provided that the farm was updated to Defendant’s standards. (Doc.

15, Ex. 4). Defendant provided a list of ten improvements to be

made in order to meet Defendant’s standards. Plaintiffs made the

improvements and continued to produce pullets for Defendant until

advised in April 2004, that the next flock would be the last. The

contract entered into by Plaintiffs and Defendant on April 28, 2004

again provided that either party could terminate the agreement

without cause by providing written notice at least two weeks prior

to the pick-up date for the flock. 

On August 24, 2004, Plaintiffs executed a real estate offer

and acceptance contract with Clifford W. and JoDee Turner where the

Turners agreed to purchase Plaintiffs’ farm for $340,000 with

Plaintiffs carrying a second mortgage for 40 percent of the

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purchase price. The Turners applied for financing with Farm Credit

who requested a letter of intent from Defendant for the placement

of pullets on the farm with the Turners. In correspondence dated

August 2, 2004, Defendant advised Farm Credit of its intent to

place pullets on Plaintiffs’ farm if purchased by the Turners

provided that another list of requested improvements be completed

prior to placement of the pullets. (Doc. 15, Ex. 5). On October

4, 2004, Defendant advised Plaintiffs it would not be placing any

pullets on Plaintiffs’ farm. (Doc. 15, Ex. 6). Defendant later

withdrew the letter of intent, and the Turners did not purchase the

farm.

II. Discussion

A. Standard of Review

In reviewing a summary judgment motion, the court must view

the facts and inferences from the facts in the light most favorable

to the non-moving party, and the burden is placed on the moving

party to establish both the absence of a genuine issue of material

fact and to establish that it is entitled to judgment as a matter

of law. See FED.R.CIV.P. 56(c); Matsushita Elec. Indus. Co. v.

Zenith Radio Corp., 475 U.S. 574, 586-87, 106 S.Ct. 1348, 1356

(1986); Nat'l. Bank of Commerce of El Dorado, Arkansas v. Dow Chem.

Co., 165 F.3d 602 (8th Cir. 1999). Once the moving party has met

this burden, the non-moving party may no longer rest on the

allegations in its pleadings, but must set forth specific facts by

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affidavit and other evidence, showing that a genuine issue of

material fact exists. See FED.R.CIV.P. 56(e). Plaintiff "must do

more than simply show that there is some metaphysical doubt as to

the material facts," Matsushita, 475 U.S. at 586, 106 S.Ct. at

1356, rather, he must convince the court that there is sufficient

evidence to support a jury verdict in his favor. See National Bank

of Commerce, 165 F.3d at 607. In order to withstand Defendant's

motion for summary judgment, Plaintiff must substantiate his

allegations with "sufficient probative evidence that would permit

a finding in his favor on more than mere speculation, conjecture,

or fantasy." Gregory v. Rogers, 974 F.2d 1006, 1010 (8th Cir.

1992).

B. Intentional Interference Claim

In order to prevail on their claim of intentional

interference, Plaintiffs must prove: (1) they had a valid

contractual relationship or business expectancy; (2) Defendant had

knowledge of the relationship or expectancy; (3) intentional and

improper interference by Defendant inducing or causing a breach or

termination of the relationship or expectancy; and (4) resultant

damage to Plaintiffs. See Mason v. Wal-Mart Stores, Inc., 969

S.W.2d 160 (Ark. 1998). Improper means, for purposes of

intentional interference with contractual relations or business

expectancy, are those means which are independently wrongful,

notwithstanding injury caused by the interference. W. Prosser, Law

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of Torts, § 129 at 936-37 (4 ed. 1971). Plaintiffs must show that th

Defendant’s conduct prevented a third person from entering into or

continuing a contractual relationship with them. McNeill v.

Security Benefit Life Insurance Company, 28 F.3d 891, 894 (8 Cir. th

1994). Moreover, the interference must be undertaken to obtain a

pecuniary or competitive benefit that formerly belonged to

Plaintiffs. Id.

Plaintiffs claim they were unable to sell their poultry farm

as the result of intentional and improper interference by

Defendant. Specifically, Plaintiffs claim that because Defendant

refused to contract with the prospective buyers of their poultry

farm, Plaintiffs were unable to sell the farm. The issue is

whether Plaintiffs have demonstrated that a genuine issue of

material fact exists if Defendant induced or caused the Turners to

breach their real estate agreement with Plaintiffs by using

intentional and improper interference in order to obtain a

pecuniary or competitive benefit that formerly belonged to

Plaintiffs. 

In order to determine whether Defendant’s actions were

improper, we consider the following factors: (1) the nature of

Defendant’s conduct, (2) Defendant’s motive, (3) Plaintiffs’

interests with which Defendant’s conduct interferes, (4) the

interests sought to be advanced by Defendant, (5) the social

interests in protecting the freedom of action of Defendant and the

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contractual interests of Plaintiffs, (6) the proximity or

remoteness of Defendant’s conduct to the interference and (7) the

relations between Plaintiffs and Defendant. Mason v. Wal-Mart

Stores, Inc., 333 Ark. at 14, 969 S.W.2d at 165 (Ark. 1998). 

Defendant claims that its decision to withdraw its letter of

intent was a business decision based upon its lack of need for

pullets at the time and that the Turners had not as yet made any

investment to improve the farm. (Fuller depo., p. 39). Mr.

Ewaskiewicz testified that he did not know why Defendant elected

not to place pullets with the Turners and never talked to anyone

from Del Mesa about the decision or about the potential sale of the

farm to the Turners. (Doc. 15, Ex. 8, pp. 10-11). Liability under

a tortious interference theory cannot be predicated upon

speculation, conjecture, or guesswork, and no fact essential to

submissibility can be inferred absent a substantial evidentiary

basis. Wash Solutions, Inc. v. PDQ Manufacturing, Inc., 395 F.3d

888 (8 Cir. 2005)(citation omitted). th

Without question, Plaintiffs had an interest in finding a

purchaser for their farm. Similarly, Defendant had an interest in

choosing on which farms and with which growers it placed its

flocks. While there is an interest in preventing third parties

from intentionally and improperly interfering with contractual

relationships, there is likewise an interest in having the freedom

to choose with whom to contract. There is no evidence that

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Defendant’s decision to withdraw its Letter of Intent was improper

or intended to induce the Turners to refuse to buy Plaintiffs’

farm. Wes Turner testified that despite the alleged statements by

Defendant’s employee Carrol Loy that Mr. Turner interpreted as

attempts to dissuade him from buying Plaintiffs’ farm, he still

intended to purchase the farm and executed the offer and acceptance

after his comments. (Doc. 15, Ex. 11, p. 8). Mr. Turner stated

that Carrol Loy attempted to get him to purchase another farm or

start a new farm in lieu of buying Plaintiffs’ farm but that he

continued to pursue the purchase of Plaintiffs’ farm despite the

fact that he could not borrow all of the money that he needed. Id.

at 10-11. 

While the Court is concerned that Defendant issued the letter

of intent and later withdrew it, this cannot be said to rise to the

level of tortious interference with the relationship between

Plaintiffs and the Turners. See Quintana v. First Interstate Bank

of Albuquerque, 737 P.2d 896 (N.M. App. 1987)(mere refusal to deal

with a party cannot support a claim for tortious interference with

contractual relations); In Vermont National Bank v. Dowrick, 481

A.2d 396 (Vermont 1984), the court found that refusing to loan a

prospective buyer money so a seller can escape foreclosure is not

tortious interference with a business expectancy where the lender

is under no obligation to make the loan. In reaching this

conclusion, the court noted:

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The rationale for this rule rests upon fundamental

assumptions in free business enterprise. Each business

enterprise must be free to select its business relations

in its own interest.

Id. at 400-01. One who has an existing economic interest in

another’s business affairs is privileged to interfere with a

business expectancy to protect his own economic interest and is not

liable for such interference if his action was one which he had a

definite legal right to take without any qualification. Central

Bank of Lake of the Ozarks v. Shackleford, 896 S.W.2d 948 (Mo. Ct.

App. 1995)(citation omitted). Protecting one’s economic interest

constitutes justification for interference with a business

expectancy unless one employs improper means to protect that

interest. Id. (citation omitted). The Court can only conclude

that the decision to withdraw the letter of intent from the Turners

was a business decision Defendant was entitled to make to protect

its own interests.

After considering all relevant factors, the Court finds no

intentional or improper interference on the part of Defendant.

Plaintiffs have failed to demonstrate the existence of a genuine

issue of fact. Specifically, they have failed to show any

intentional and improper actions by Defendant directed at

Plaintiffs’ relationship with the Turners. Plaintiffs’ intentional

interference claim, therefore, cannot withstand summary judgment.

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In its Motion, Defendant contends its decision to 2

withdraw its letter of intent was privileged. However,

the Court does not reach this issue as it finds that

Plaintiff failed to establish a prima facie case of

their intentional interference claim.

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2

C. Promissory Estoppel Claim

Plaintiffs contend that they made improvements to their

facilities based upon the defendant’s representations and promises

that it would continue to supply them with contracts and poultry.

It is clear that Plaintiffs’ contract with Defendant provided that

either party could terminate the contract without cause.

Additionally, Mr. Ewaskiewicz testified that Defendant made no

representations to him that would alter the flock-to-flock terms

pursuant to the contract. Plaintiffs point to the letter from

Defendant to Mr. Shane Meador at Farm Credit Services dated April

1, 2002, which stated Defendant intended to place pullets on

Plaintiffs’ farm based upon performance provided certain

improvements were performed. However, the letter also stated that

the contract would remain on the flock-to-flock basis and could be

terminated with or without cause by either party. Plaintiffs were

aware of this when they made the improvements to the farm. Mr.

Ewaskiewicz testified that he improved the farm after contracting

with Defendant by adding two chicken houses but that he understood

that the contracts were flock-to-flock and that the contract did

not require Defendant to provide him with another flock despite the

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improvements. (Doc. 11, Ex. 4, p. 7). Plaintiffs have provided no

evidence of any promise or representation by Defendant to continue

to provide Plaintiffs with pullets on anything other than on a

flock-to-flock basis. Accordingly, Plaintiffs claim they were

damaged based upon a promise by Defendant to continue providing

pullets to them is without merit and must be dismissed. 

D. Breach of Contract Claim

Defendant’s summary judgment motion did not address

Plaintiffs’ claim for breach of contract having to do with

Plaintiffs’ allegation that they did not receive proper payment

from Defendant pursuant to the contract. In a supplemental brief

filed on December 2, 2005, Defendant indicated that the allegations

surrounding the breach of contract claim had been resolved.

Plaintiffs have not responded to Defendant’s supplemental brief,

but the breach of contract claim has not been resolved and remains

set for jury trial the week of January 23, 2006.

III. Order

For the reasons stated above, the Court finds that Defendant’s

Motion for Summary Judgment should be and hereby is GRANTED.

Accordingly, Counts 1 and 2 of Plaintiff’s Complaint should be and

hereby are DISMISSED, and the breach of contract claim remains set

for jury trial the week of January 23, 2006. All parties are to

bear their own fees and costs.

 

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IT IS SO ORDERED.

/s/ Robert T. Dawson

Honorable Robert T. Dawson

United States District Judge

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