# U ni te d S ta te s Co ur t of A pp ea ls For the Eig hth Circu it

__ __ __ __ __ __ __ __ __ __ __ __ __ _
No. 1 6- 43 91

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Fi rs t Dak ot a Nat io na l Ba nk

ll ll ll ll ll ll ll ll ll ll l Pla in ti

ff - App el la nt

v.

Eco Ener gy, L LC, a Ten ne ss ee l im it ed li ab il it y co m pa ny form erl y

kn own as Eco Ene rg y , Inc

.

ll ll ll ll ll ll ll ll ll ll l Defe nd

an t - Ap pe ll ee

__ __ __ __ __ __ App eal fro m

Uni te d S ta te s Di st ric t Co ur t fo r th e Dis tri ct of Ne br as ka - Om ah a

__ __ __ __ __ __
Su bm it te d: Nov em

be r 16 , 20 17 Fil ed : Fe br ua ry

1, 2 01 8

__ __ __ __ __ __ Befo re BENTON, SHEPHERD, and KELLY , Cir cu it Ju dg es

.

__ __ __ __ __ __ BENTON, Circu it Ju dg e.

Fi rs t Dak ot a Nati on al Ban k su ed Eco -Ene rg y , LLC, fo r br each of co nt ract

. The di st ric t co ur t ru le d fo r Eco -Ene rg y

. Fi rs t Dak ot a ap pe al s. Hav in g juri sd ic ti on un de r

1
28 U.S.C. § 1 29 1, t hi s co ur t af fir m s.

The Hon or ab le Jo hn M. Gerra rd
, Uni te d St at es Dis tri ct Ju dg e fo r th e Dis tri ct 1 of Nebr as ka

.I.

Eco -Ene rg y co nt ract ed wit h Ned ak Eth an ol
, LLC. Und er a Mar ke ti ng Co nt ra c t , Ec o- Ene rg y pr om is ed to bu y al l Ned ak ’s et ha no l an d to tra ns po rt it by rai lc ar. Eco -Ene rg y

lea se d t he rai lc ars fro m a rai lc ar co m pa ny u nd er a Ca r Serv ic e Agr eem en t. Ned ak p r om is ed to su bl eas e th e rai lc ars fro m Eco -Ene rg y if th e Mar ke ti ng Co nt ract were t erm in at ed for an y reas on

.

The ne xt y ear, Ned ak as si gn ed it s rig ht s un de r th e Mar ke ti ng Co nt ract an d th e Su bl eas e to it s le ad le nd er, AgC ou nt ry Fa r m C r e di t Serv ic es , FLCA. Eco -Ene rg y

co ns en te d t o t he Ass ig nm en t, ag reei ng “ to gi ve [AgC ou nt ry ] pr om pt writ te n no ti ce of an y de fau lt un de r th e Ass ig ne d Doc um en ts an d to al lo w [Ag Co un try] a reas on ab le

pe rio d o f ti m e to cu re an y su ch de fau lt s . . . .”

Abo ut th ree y ears la te r, th e pa rti es te rm in at ed th e Mar ke ti ng Co nt ract

. As

pr om is e d
, N ed ak su bl eas ed th e rai lc ars fro m Eco -Ene rg y

. Ned ak ev en tu al ly de fau lt ed

. Eco -Ene rg y no ti fie d Ned ak —b ut no t AgC ou nt ry

—o f th e de fau lt

. Eco

Ene rg y te rm in at ed th e Su bl eas e, en de d Ned ak ’s us e of th e ra i l cars , an d de ni ed Ned ak ’s att em

pt to cu re.

Fi rs t Dak ot a Nati on al Ban k own ed an in te res t in th e lo an fro m AgC ou nt ry to Ned ak

. Fi rs t Dak ot a la te r acq ui red th e co nt ract ua l rig ht s of AgC ou nt ry an d Ned ak

ag ai ns t E co -E ne rg y

. Fi rs t D ak ota su ed
, cl ai m in g Eco -Ene rg y te rm in at ed th e Su bl eas e wit ho ut gi vi ng (1 ) Ned ak no ti ce an d a su ffi ci en t op po rtu ni ty to cu re, an d (2 ) AgC ou nt ry

no ti ce an d a n o pp or tu ni ty to cu re Ned ak ’s def au lt

.

Fi rs t Dak ot a an d Eco -Ene rg y bo th m ov ed fo r su m m ary jud gm en t. The di st ric t

co ur t gr an te d Eco -Ene rg y ’s m ot io n in pa rt, ru li ng th at Eco -Ene rg y di d no t br each th e Su bl eas e. The co ur t ru le d th at th e Su bl eas e di d no t req ui re Eco -Ene rg y to gi ve Ned ak

no ti ce an d op po rtu ni ty to cu re. The co ur t al so ru le d th at Eco -Ene rg y di d br each th e Ass ig nm en t. It reas on ed th at th e Ass ig nm en t re qui re d E co -E ne rg y to gi ve AgC ou nt ry

-2

-no ti ce an d op po rtu ni ty be fo re te rm in at in g th e Su bl eas e, be cau se it was an “ Ass ig ne d

Doc ume n t

. ” B ut , acco rd in g to th e di st ric t co ur t, “ is su es of fact rem ai n reg ard in g

cau sa ti on whi ch pr ecl ud e su m m ary ju dg m en t fo r ei th er pa rty” on th e Ass ig nm en t cl ai m

.

The be nc h tri al fo cu se d on whe th er Eco -Ene rg y ’s br each cau se d da m ag es

. The ke y di sp ut e: W ou ld AgC ou nt ry ha ve cu red if Eco -Ene rg y ha d gi ve n it no ti ce an d

op po rtu ni ty? Acco rd in g t o Fi rs t Dak ot a, cu rin g wou ld ha ve be en “ th e on ly

reas on ab le ch oi ce.” Eco -Ene rg y co un te red th at AgC ou nt ry wou l d n ot ha ve cu red be cau se , fo r ex am

pl e, AgC ou nt ry ha d fro zen Ned ak ’s acco un ts an d ke pt th em fro zen

“ ev en aft er di sc ov eri ng th at Ned ak ha d de fau lt ed on it s su bl eas e an d was in jeop ard y of lo si ng it s rai lc ars .” The di st ric t co ur t fo un d th at Fi rs t Dak ot a ha d no t “ pr ov en th at Ag Co un try wou ld ha ve ex erci se d it s rig ht to cu re Ned ak ’s de fau lt ha d it rece iv ed

pr op er n ot ic e an d o pp or tu ni ty.”

II.

Fi rs t Dak ot a arg ue s th e di st ric t co ur t er r e d i n gr an ti ng pa rti al su m m ary jud gm en t fo r Eco -Ene rg y

. Acco rd in g to Fi rs t Dak ot a, al th ou gh th e Su bl eas e by it se lf do es no t req ui re no ti ce an d op po rtu ni ty, it in co rp or at es th is req ui rem en t fro m th e Car
Serv ic e Agr eem en t. Thi s co ur t rev ie ws de no vo th e di st ric t co ur t’s in te rp ret at io n of

a co n t r a c t an d it s gr an t of su m m ary jud gm en t. And

er so n v. Hes s Co rp . , 64 9 F.3 d
89 1, 8 96 (8t h C ir. 2 01 1)

.

Und er th e Ten ne ss ee la w t h a t g o v ern s th e Su bl eas e, a “ card in al ru le of

co nt ract ua l in te rp ret at io n i s t o a sc ert ai n a nd gi ve effe ct to th e in te nt of th e pa rti es .”
Dick Br oa d. Co ., In c. v. Oak Ri dg e FM, In c. , 39 5 S.W .3d 65 3, 65 9 (Ten n. 20 13 ).

“ The li te ral m ean in g of th e co nt ract l a n gu ag e co nt ro ls if th e la ng ua ge is cl ear an d

un am bi gu ou s.” Id

. “ W he re a writ te n co nt ract refe rs to an ot he r in st ru m en t an d m ak es th e te rm s an d co nd it io ns of su ch ot he r in st ru m en t a pa rt of it
, th e two wil l be

co ns tru ed to ge th er as th e ag reem en t of th e pa rti es .” McC al l v. Tow ne Sq ua re

, In c. ,
-3

-50 3 S.W .2d 18 0, 18 3 (Ten n. 1 97 3)

. Se e Ro ge r M il le r M us ic v. So ny/

ATV Publ ’g
, 47 7 F.3 d 38 3, 39 2 (6 th Ci r. 20 07 ) (“ [U]nde r Ten ne ss ee la w, a writ in g m ay be in co rp or at ed by referen ce i nt o a writ te n c on tra ct .”).

Sect io n 4.0 7 of th e Car Serv ic e Agr eem en t pr ov id es th e ti m e-fr am e fo r no ti ce

an d o pp or tu ni ty:

If [] Less ee defa ul ts

. . . and an y su ch de fau lt co nt in ue s for fift een (1 5) da y s aft er Less or sh al l ha ve m ai le d w r it te n no ti ce to Less ee

. . . th en Less or sh al l h av e th e ri gh t . . . to

. . . te rm in at e th is Agre em en t . . . .

Fi rs t Dak ot a pr im ari ly rel ie s on se ct io n 5 of th e S u b l e a se in arg ui ng th at th e Su bl eas e in co rp or at es se ct io n 4.0 7’s no ti ce-a nd -o pp or tu ni ty pr ov is io n. Sect io n 5

sa y s, “ NEDAK .

. . ag rees an d c on fir m s t ha t i t s ha ll be bo un d by al l of th e te rm s of

an d as su m es al l of th e du ti es an d ob li ga ti on s of Eco un de r th e Car Serv ic e Agr eem en t
. . . excep t as sp eci fic al ly pro vi de d h erei n.”

Sect io n 5 cl earl y an d un am bi gu ou sl y do es no t in co rp or at e se ct io n 4.0 7’s

no ti ce-a nd -o pp or tu ni ty p ro vi si on

. Sect io n 5 sa y s th at N e da k is bo un d by al l of th e
te rm s of
, an d as su m es al l du ti es an d ob li ga ti on s of th e le ss ee un de r, th e Car Serv ic e Agr eem en t. It do es no t sa y th at Eco -Ene rg y is bo un d by al l of th e te rm s of
, or

as su m es th e du ti es an d ob li ga ti on s of th e le s so r un de r, th e Car Serv ic e Agr eem en t. Thu s, th e Su bl eas e in co rp or at es on ly th os e te rm s th at bi nd th e le ss ee, or th at im po se

a du ty or ob li ga ti on on th e le ss ee. The no ti ce-a nd -o pp or t u n i ty pr ov is io n bi nd s or im po se s a du ty or ob li ga ti on on th e le ss or : to pr ov id e writ te n no ti ce an d wait 15 da y s be fo re t erm in at in g fo r th e le ss ee’s d efau lt

.

Fi rs t Dak ot a arg ue s th at th e no ti ce-a nd -o pp or tu ni t y pr ov is io n is pa rt of th e le ss ee’s du ti es an d ob li ga ti on s, be cau se it m od ifi es th em

. The not ic e- an d- oppo rt un it y
pr ov is io n, by req ui rin g no ti ce an d op po rtu ni ty on ly if le ss ee “ de fau lt s”

— i.e. , fai ls to
pe rfo rm on e o f it s du ti es —cl earl y an d u na m bi gu ou sl y do es no t m od ify the les se e’s

-4

-du ti es

. Se e Chi ld re ss v. Sul

li va n Co unt

y Bd

. of Ed uc. , 77 1 S.W .2d 41 1, 41 6 (Ten n Ct

. Ap p

. 19 88 ) (“ Defau lt ha s be en de fin ed as ‘the om is si on or fai lu re to pe rfo rm a le ga l or co nt ract ua l du ty.’ ”), qu ot in g “ de fau lt ,” Bl ac k’ s Law Dict

io na ry 37 6 (5 th ed

. 19 79 ); “ de fau lt ,” Bl

ac k’ s Law Dict

io na ry 48 0 (9 th ed

. 20 04 ) (u nc ha ng ed si nc e 5t h 2
ed it io n)

. Se e al

so Ca rt er v. Bel l
, 27 9 S.W .3d 56 0, 57 0 (Ten n. 20 09 ) (“ Rec en tl y , th is
Co ur t sp eci fic al ly id en ti fie d Bl ack ’s Law Dict io na ry as an au th or it at iv e in fo rm at io n

so ur ce.”)

.

Fi rs t Dako ta em

ph as iz es th at Ned ak is “ bo un d by al l of th e te rm s of” th e Car
Serv ic e Agr eem en t. True
, th e no ti ce-a nd -o pp or tu ni ty pr ov is io n is a “ te rm of ” th e Car
Serv ic e Agr eem en t. Bu t Ned ak is no t “ bo un d” by a te rm th at imp o s e s no du ty or ob li ga ti on on it

. Se e “ bo un d,” Bl ac k’ s Law Dict

io na ry 21 0 (9 t h ed

. 20 04 ) (“ Co ns tra in ed by a con tra ct ua l o r ot he r ob li ga ti on ”).

Fi rs t Dak ot a al so arg ue s th at , if read as a who le
, th e Su bl eas e in co rp or at es th e

en ti re Car Serv ic e Agr eem en t. In ad di ti on to se ct io n 5 di sc us se d ab ov e, Fi rs t Dak ot a rel ie s on th e fo ll owi ng st at em en t in th e Su bl eas e: “ W HEREAS, Eco h as lea se d th e

r ai lc ars

. . . fro m [a rai lc ar co m pa ny] pu rs ua nt to a rai lc ar le as e ag reem en t ( ‘C a r Serv ic e Agr eem en t’) . . . at ta ch ed he ret o a s Ex hi bi t 2

. . . .”

Co nt ract in g pa rti es can in co rp or at e an en ti re ag reem en t by, f o r e x a m pl e, refe rri ng to an at ta ch ed ag reem en t an d sa y in g it s “ te rm s” are in co rp or at e d w i t h o ut
sp eci fy in g th e te rm s, or sa y in g “ bo th pa rti es ” are bo un d by it s te rm s. Se e St au ba ch
Ret ai l Ser vs .-Se., LLC v. H.G. Hi ll Rea lt y Co

. , 16 0 S.W .3d 52 1, 52 3- 25 (Ten n. 20 05 ) (ag reem en t i nc or

po rat ed all ter m s of a br ok erag e ag reem en t by st at in g “ [t ] he ter ms

an d pr ov is io ns of th at cer ta in Bro ker ag e Agr eemen t, an un exe c u t e d p ho to co py of wh ic h is at ta ch ed he re to

. . . an d in co rp o r a t e d b y re fe re nc e, ar e in co rp or at ed in to

The ni nt h ed it io n was cu rren t whe n th e pa rti es en te red in to th e Su bl eas e. Se e 2 St at e v. Ed m on ds on , 23 1 S .W .3d 92 5, 92 8 n.3 (Ten n. 2 00 7) (us in g t he ed it io n t ha t

was cu rren t wh en th e rel ev an t s ta tu te was e na ct ed ).

-5

-th is Lea se an d mad e a pa rt he re of ” (em ph as is in or ig in al )); Ro

ge r Mi ll er , 47 7 F.3 d

at 39 3 (ag reem en t in co rp or at ed al l te rm s of Exh ib it A, ev en th os e no t ad dr es si ng

ro y al ti es , by st at in g th at “ th e si gn in g of se pa rat e [Exh ib it A] ag reem en ts is he reb y waiv ed
, an d th e te rm s an d co nd it io ns as to ro y al ti es an d th e pa y m en t th ereo f sh al l be de em ed pa rt of th e m ai n ag reem en t,” whe re pr ev io us ag reem en ts cal li ng fo r th e

ex ecu ti on of Exh ib it A ag reem en ts s t a t e d “ b o th [p ar ti es ] ar e to be bo un d by th e
te rm s, co ve na nt s, an d co nd it io ns of [th e Exh ib it A a gr eem en t] a s if h e r e i n fu ll y se t fo rth ” (em

ph as is ad de d) ). The Su bl eas e at ta ch es a co py of th e Car S erv ic e Agr eem en t, ack no wle d g e s i ts ex is te nc e an d rel ev an ce, bu t sa y s Ned ak —n ot Eco

Ene rg y —i s bo un d by it s te rm s. Thi s cl earl y an d un am bi gu ou sl y do es no t in co rp or at e th e en ti re Ca r Serv ic e Agr eem en t.

Fi rs t Dak ot a arg ue s th at th e pa rti es ’ co nd uc t sh ows i n t e n t t o in co rp or at e al l

te rm s of th e Car Serv ic e Agr eem en t. “ [T]he pa ro l ev id en ce ru le do es no t pr oh ib it th e

co ur t fro m co ns id eri ng

. . . t he co ns tru ct io n pl ac e d u p o n th e co nt ract by t he pa rti es in carr y in g it ou t.” Ad

ki ns v. Blu eg ra ss Es ta te s, I nc. , 36 0 S .W .3d 40 4, 41 2 (Tenn

. Ct . App . 20 11 ).

The di st ric t co ur t fo un d th at th e pa rti es ’ co nd uc t in co rp or at ed th e “ Aba te m en t of Ren ta l” se ct io n o f t h e C a r Serv ic e Agr eem en t. Bu t, as th e co ur t co rrec tl y

re a s o n e d
, in co rp or at io n of th is se ct io n, pa rt of th e le ss ee’s ren ta l du ty, do es no t

su gg es t th at al l te rm s were in co rp or at ed

. Eco -Ene rg y al so te st ifi ed th at Ned ak wou ld

ge t th e be ne fit of a n y “m il eag e cred it s” fro m a rai lro ad

. Bu t th e te st im on y is h yp o t h e t i c a l. The re ha d be en no m il eag e cred it s, an d no ne were ex pe ct ed

. Thi s i s

no t ev id en ce of th e pa r t i es ’ co ns tru ct io n “ in carr y in g [th e Su bl eas e] ou t.” In an y

ev en t, th e te st im on y rel ie d o n st an da rd in vo ic in g pr act ic e, no t an y th in g in th e Car
Serv ic e Agr eem en t.

The di st ric t co ur t di d no t err in gr an ti ng pa rti al su m m ary jud gm en t fo r Eco

Ene rg y

.

-6

-III.

Fi rs t Dak ot a as se rts th at aft er tri al
, th e di st ric t co ur t erre d in de nyin g it s cl ai m fo r br each of th e Ass ig nm en t. It arg ue s th e co ur t ap pl ie d th e wro ng le ga l st an da rd on

cau sa ti on . Un de r th e Nor th Dako ta law t ha t g ov ern s t he Co ll at eral Ass ig nm en t, an

es se nt ia l el em en t of a br each -o f

- c o n t r a ct cl ai m is “ da m ag es whi ch flo w fro m th e br each .” WFND, LLC v. Fa rg o Ma rc , LLC
, 73 0 N.W .2d 84 1, 84 8 (N.D. 20 07 ). The di st ric t co ur t fo un d no cau sa ti on be cau se AgC ou nt ry , if gi ve n no ti ce, wou ld no t ha ve

cu red th e de fau lt

. Fi rs t Dak ot a be li ev es th e pr op er st an da rd is ob jecti ve , as ki ng wha t

a reas on ab le le nd er wou ld ha ve do ne

. “ Afte r a be n c h t r i a l
, th is co ur t rev ie ws a di st ric t co ur t’s

. . . le ga l co nc lu si on s de no vo .” IPSC O Tubu l a r s , I n c . v. Aj ax TOCCO Ma

gn at her m ic Co rp . , 77 9 F .3d 74 4, 7 47 (8t h C ir. 2 01 5)

.

Fi rs t Dak ot a rel ie s o n s ect io n 3 2- 03 -0 9 o f th e Nor th Dako ta Co de :

Fo r th e br each of an ob li ga ti on ari si ng f r o m c o n tra ct , th e m eas ur e of da m ag es , ex cep t whe n ot he rwis e ex pr es sl y pr ov id ed by th e la ws of th is st at e, is th e am ou nt whi ch wil l co m pe ns at e t h e pa rty ag gr ie ve d fo r al l th e de tri m en t pr ox im at el y cau se d th ereb y o r whi ch in th e or di na ry
co ur se of th in gs wou ld be li ke ly to r es ul t th eref ro m

. No da m ag es can be reco ve red fo r a br each of co nt ract if th ey are no t cl earl y as cert ai na bl e in bo th th ei r na tu re an d o rig in

.

Acco rd in g to Fi rs t Dak ot a, it is en ti tl ed to da m ag es ei th er pr ox im at el y cau se d by th e br each “ o r w h ic h in th e or di na ry co ur se of th in gs wou ld be li ke ly to res ul t th eref ro m .” Fi rs t Dak ot a arg ue s th at al th ou gh A g C o u n try m ay no t ha ve cu red if gi v e n n o t i c e an d op po rtu ni ty, “ in th e or di na ry co ur se ” a reas on ab le le nd er wou ld ha ve

.

Sect io n 32 -0 3- 09 “ is
, in effe ct , th e ad op ti on of th e co m m on la w ru le .” V

al le jo

v. Ja m es to wn Co ll

. , 24 4 N.W .2d 75 3, 75 8 (N.D. 19 76 ), ci ti ng Ha yes v. Co ol

ey , 10 0
N.W

. 25 0 (N.D. 19 04 ). It co di fie s on e st an da rd of pr ox im at e cau sa ti on

. Se e Ja lb er t

-7

-v. Ea

gl e Ri gi d S pa ns , Inc

. , 89 1 N.W.2d 1 35 , 14 1 (N.D. 2 01 7) (“ Und er N.D.C.C. §
32 -0 3- 09
, th e m eas ur e of da m ag es fo r br eac h o f c o n t r a ct is th e am ou nt whi ch wil l

co m pe ns at e th e pa rty ag gr ie ve d fo r a ll th e de tri m en t pr ox im at el y cau se d th ereb y .” ( i n t e r n al qu ot at io n m ark s om it te d) ). Thi s st an da rd req ui res as ki ng wha t “ act ua ll y”

wou ld ha ve ha pp en ed

. Se e V al le jo
, 24 4 N.W .2d at 75 9 (“ The in jure d pe rs on is
li m it ed to th e lo ss act ua ll y su ffer ed by reas on of th e br each

. He is no t to be pu t in a be tt er po si ti on by a reco ve ry of da m ag es th an he wou ld ha ve be en if th ere ha d be en
pe rfo rm an ce.”)

. The Nor th Dak ot a Su pr em e Co ur t has ex pl ai ne d th at th e ref eren ce
to th e “ or di na ry co ur se of th in gs ” co di fie s th e ru le in Had le y v. Bax en da le
, li m it in g d a mag e s to th os e “ ari si ng na tu ral ly, i. e., ac co rd in g to th e us ua l co ur se of th i n g

s , fro m su ch br each of co nt ract it se lf, or su ch as m ay reas on ab ly b e su pp o se d to ha ve be en in th e co nt em

pl at io n of bo th pa rti es at th e ti m e th ey m ad e th e co nt ract , as th e
pr ob ab le res ul t of th e br each of it .” Ha yes , 10 0 N

. W. a t 25 1 (em ph as is ad de d)
, qu ot in g Ha dl

ey v. Ba xe nd al e , 1 56 Eng . R ep . 1 45 , 1 51 (1 85 4) an d ci ti ng Gri ffi n v. Co lv er , 16 N.Y. 48 9, 49 4- 95 (1 85 8)

. Se e V al le jo
, 24 4 N.W .2d at 75 8- 59 (ap pr ov in g Hay es ). The di st ric t co ur t di d no t err in as ki ng wha t AgC ou nt ry wou ld ha ve d o n e

. W ha t a r eas on ab le len de r wou ld ha ve do ne m ay be rel ev an t, b ut no t d et erm in at iv e.

True
, an ob

jecti ve st an da rd go ve rn s so m e co nt ract -la w qu es ti on s

. S e e , e.g

. , Mo en v. Mei di ng er , 58 3 N.W .2d 63 4, 63 6 (N.D. 19 98 ) (“ The pa rti es ’ m ut ua l as se nt
to a co nt ract is de te rm in ed by th ei r ob jecti ve m an ife st at io ns of co nt ract ua l as se nt .”);
Dan Nels on Co ns t., In c. v. Nod la nd & Dick so n , 60 8 N.W .2d 26 7, 27 5 (N.D. 20 00 ) (“ [C]ou rts co ns tru in g ch an g e d co nd it io ns cl au se s ap pl y an ob jecti ve , reas on ab le

pe rs o n s t a n d a r d, in whi ch a co ur t pl aces it se lf in to th e sh oe s of a reas on ab le an d

pr ud en t co nt ract or to de ci de ho w su ch a co nt ract or w o u l d act

. . . .” (in te rn al

qu ot at i o n m ark s om it te d) ). Fi rs t Dak ot a ad vo cat es a reas on ab le -le nd er ru le he re, cl ai m in g th e su bjec ti ve in qu iry is “ sp ecu la ti ve .” Nor th Dak ot a ha s no t ad op te d th is

ru le

.

-8

-F i r s t Dak ot a em ph as iz es O’Nei l v. Co nt in en ta l Ban k, N.A.
, 66 2 N.E.2d 4 8 9
, 49 6 (Ill

. App

. Ct

. 19 96 ), an d s ect io n 2 45 of t he Res ta te m en t (S eco nd ) of Co nt ract s. In O’Nei l , t he co ur t he ld th at whe re cau sa ti on de pe n d s on ho w a jud ge wou ld ha ve

ru le d, “[w]hat th e reas on ab le ba nk ru pt cy jud ge ‘sho ul d ha ve do ne ’ is th e pr op er

cau sa ti on qu es ti on

. . . .” 66 2 N.E.2d at 49 6. Here, th e de ci si on -m ak er is a le nd er,

no t a jud ge

. Se e Co

gs wel l v. Ci ti Fi na nci al Mo rt

g. Co ., In c. , 62 4 F.3 d 39 5, 40 1 (7 th Ci r. 20 10 ) (d e s c r i bi ng O’Nei l as a “ sp eci al ru le in br each -o f-co nt ract cl ai m s whe re th e as se rte d d am ag e is cau se d b y an ad ve rs e o ut co m e o f a jud ic ia l p ro ceed in g” ).

Sect io n 24 5 sa y s, “ W he re a pa rty’ s br each by no n- pe rfo rm an ce co nt rib ut es

m at eri al ly to th e no n- oc cu rren ce of a co nd it io n of on e of hi s du ti es , th e no noc cu rren ce is ex cu se d.” Co m m en t b ex pl ai ns th at “ it is no t ne ces sa ry to sh o w t h a t [th e co nd it io n] wou ld ha ve oc cu rred bu t fo r” th e br each

. Fi rs t Dak ot a ap pl ie s se ct io n 24 5 to th i s cas e, arg ui ng Eco -Ene rg y ’s no n- pe rfo rm an ce— no t gi vi ng AgC ou nt ry

no ti ce an d op po rtu ni ty—“ co nt rib ut ed m at eri al ly” t o a no n- oc cu rren ce— no cu re b y AgC ou nt ry

. Bu t se ct io n 24 5 ad dr es se s whe th er th ere is a b r e a c h
, no t whe th er a br each cau se d da m ag es

. Se e Co gs wel l
, 62 4 F.3 d at 40 1 n.3 (“ [Sec ti on 24 5] ad dr es se s

cau sa ti on in th e co nt ex t of de te rm in in g whe n a pa rty’ s fai lu re to pe rfo rm a co nd it io n

m ean s th e pa rty ha s br each ed it s co nt ract

. . . . In th is cas e, by co nt ras t , we are

co n f r on te d wit h th e ul ti m at e qu es ti on of whe th er a de fen da nt ’s br each cau se d th e pl ai nt iff ’s da m ag es .” (in te rn a l c i ta ti on s om it te d) ). Eve n if O’Nei l an d se ct io n 24 5
were No rth Dako ta law, t he di st ric t co ur t d id no t er r.

** ** ** *

The jud gm en t i s af

fir m ed

.

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