United States Court of Appeals

FOR THE EIGHTH CIRCUIT

___________

No. 07-2466

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Swift & Co., formerly known as *

ConAgra, Inc. doing business as Swift *

& Co., *

*

Appellant, *

*

v. * 

* 

Elias Farms, Inc., * 

*

Appellee. *

___________ Appeals from the United States

District Court for the

No. 07-2467 District of Minnesota.

___________

Swift & Co., formerly known as 

ConAgra, Inc, *

*

Appellant, *

*

v. *

*

Stan Turbes, *

*

Appellee. *

*
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___________

*

No. 07-2469 *

___________ *

*

Swift & Co., formerly known as *

ConAgra, Inc., *

*

Appellant, *

*

v. *

*

William H. Johnson, *

*

Appellee. *

*

___________ *

*

No. 07-2470 *

___________ *

*

Swift & Co., formerly known as *

ConAgra, Inc., *

*

Appellee, *

*

v. *

*

Elias Farms, Inc., *

*

Appellant. *

*

___________ *

*

No. 07-2471 *

___________ *

*

Swift & Co., formerly known as *
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ConAgra, Inc., *

*

Appellee, *

*

v. *

*

Stan Turbes, *

*

Appellant. *

*

___________ *

*

No. 07-2472 *

___________ *

*

Swift & Co., formerly known as *

ConAgra, Inc., *

*

Appellee, *

*

v. *

*

William H. Johnson, *

*

Appellant. *

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Submitted: March 10, 2008

Filed: August 25, 2008

___________

Before BYE, SMITH, and COLLOTON, Circuit Judges.

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COLLOTON, Circuit Judge.
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Swift & Co. (“Swift”), appeals an adverse grant of summary judgment on its

breach of contract claim against Elias Farms, Inc., Stan Turbes, and William H.

Johnson (collectively, “hog producers”). The hog producers cross-appeal adverse

summary judgment rulings on their counterclaims for breach of contract and violations

of the Minnesota Consumer Fraud Act (MCFA). We affirm the grant of summary

judgment on the hog producers’ counterclaims, but reverse the grant of summary

judgment on Swift’s breach of contract claim and remand for further proceedings.

I.

We first consider Swift’s breach of contract claim against the hog producers.

We review a grant of summary judgment de novo. Hope v. Klabal, 457 F.3d 784, 790

(8th Cir. 2006). The district court held that Minnesota law applies to this diversity

case, Swift & Co. v. Elias Farms, Nos. 05-2775, 05-2776, 05-2777, 2007 WL

1364691, at *4 (D. Minn. May 9, 2007), and neither party disputes this conclusion on

appeal. 

Under Minnesota law, we must first make a legal determination whether the

contract is ambiguous – i.e., “whether the language used is reasonably susceptible of

more than one meaning.” Blattner v. Forster, 322 N.W.2d 319, 321 (Minn. 1982).

“If the contract is unambiguous, the interpretation is a question of law, and is

reviewed de novo.” Winthrop Res. Corp. v. Eaton Hydraulics, Inc., 361 F.3d 465, 470

(8th Cir. 2004) (applying Minnesota law). If the contract is ambiguous, however, the

meaning of the contract becomes a question of fact, and summary judgment is

inappropriate unless the evidence of the parties’ intent is conclusive. Donnay v.

Boulware, 144 N.W.2d 711, 716 (Minn. 1966). “[T]he primary goal of contract

interpretation is to determine and enforce the intent of the parties.” Motorsports

Racing Plus, Inc. v. Arctic Cat Sales, Inc., 666 N.W.2d 320, 323 (Minn. 2003).
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In 1998, Swift entered into nearly identical contracts with the hog producers for

the supply of hogs. Under the contract, Swift would pay the hog producers a “base

price,” which was equal to the market price, except that the base price could not be

less than $40.00 per 100 pounds of live animal weight. If the market price was below

$40.00, Swift would pay the hog producers $40.00 and debit the hog producers’

adjustment account for the difference. When the contract term ended, each hog

producer had a debit balance in his account. Section 6.02 of the contract states that:

“If, at the termination of this Agreement, there is a debit balance in the Adjustment

Account, Seller shall pay to Buyer a cash amount equal to such debit balance.”

(emphasis added). The issue raised by Swift’s claim is whether the hog producers

were required to pay Swift the debit balance at the expiration of the contract. 

The parties dispute whether the expiration of the contract is the same as “the

termination of [the] Agreement.” Swift argues that “termination” in section 6.02

simply means “end,” whether by natural expiration or by some affirmative act. The

hog producers argue that termination refers only to an affirmative act – that is,

something other than natural expiration. The hog producers derive this definition

from the use of the word “terminated” in section 1.01 of the contract, which states:

“[T]his Contract shall continue and remain in full force and effect through December

31, 2004, unless otherwise extended by the parties hereto or unless terminated in

accordance with the terms hereof.” (emphasis added). The parties agree that

“terminated in accordance with the terms hereof” in section 1.01 refers to sections

9.03 and 9.04 of the contract, which define the “termination rights” of the parties as

the right to terminate the contract in the event of a default. Because section 1.01

distinguishes between the natural expiration of the contract and an earlier end by

default, and uses a form of the word “terminate” to refer only to the latter, the hog

producers argue that “termination” in section 6.02 must have the same meaning.

The district court agreed with the hog producers. The court noted that the

dictionary definition of termination includes both an end by natural expiration and an
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end by some affirmative act, but that in this case “the plain and clear language of the

Contract, read as a whole and providing full effect to all provisions, limits

‘termination’ to an affirmative act by a party, precipitated by the other party’s

default.” Swift, 2007 WL 1364691, at *8. Because neither party had exercised its

termination rights under the contract, the district court granted summary judgment in

favor of the hog producers.

We conclude, however, that the agreement is ambiguous, and that Swift’s claim

for breach of contract cannot be resolved as a matter of law. Everyone agrees that the

plain meaning of “termination” does not resolve the dispute over section 6.02.

Termination can be “the act of ending something,” or “the end of something in time

or existence.” Black’s Law Dictionary 1511 (8th ed. 2004). Moving beyond the

meaning of that word in isolation, Swift and the hog producers make several

arguments, based on the text and purpose of the contract, that their interpretation is

correct as a matter of law. After considering these conflicting arguments, however,

we conclude that the language is reasonably susceptible to either interpretation.

Both parties rely on additional textual material to support their positions. As

noted, the hog producers point to the use of “terminated” in section 1.01, which refers

exclusively to an act of termination, and argue that when a derivative use of the word

“terminate” appears in section 6.02, it must also refer to an act of termination. On the

other hand, Swift argues that because section 6.02 uses the definite article – “If, at the

termination of this Agreement” – it unambiguously demonstrates that termination in

this context is not merely a possible contingency (as with a default or other affirmative

act), but an event that the parties intend definitely to occur (as with expiration). Each

argument tends to support the interpretation favored by the party that advances it, but

neither is conclusive. Absent countervailing textual evidence, each party’s position,

standing alone, could well be dispositive. But when they are pitted against each other,

the textual cues conflict. The parties simply have signed an agreement that is not clear

on its face.
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Swift argues that termination must refer to an end, whether by an affirmative

act or by natural expiration, because the hog producers’ narrower interpretation would

lead to absurd results. Swift argues that the purpose of the adjustment account is to

protect the hog producers from market volatility. The adjustment account, Swift

contends, allows the hog producers to level their income over time, with the

adjustment account acting as a non-interest bearing loan. Therefore, they say, if there

is a balance in the adjustment account at the end of the contract, the hog producers

must repay the loan.

The hog producers, to support their narrower interpretation, argue that section

6.02 is a penalty provision, which was meant to punish the hog producers if they

defaulted and Swift exercised its termination rights. This interpretation faces some

challenge in explaining why section 6.02 also applies in the case of a default by Swift,

because it seems strange for the agreement to penalize a hog producer who terminates

the contract after the hog buyer defaults. But it is not necessarily unreasonable to

conclude that the provision was adopted because the parties were concerned with

defaults by hog producers, not with defaults by Swift, and that Swift negotiated the

agreement to discourage hog producers from exercising their termination rights in the

event of a default by Swift. A jury may well find this interpretation less likely than

Swift’s, but given the ambiguous text, we are not prepared to say it is unacceptable

as a matter of law.

Because the agreement’s use of “termination” is ambiguous, the interpretation

of the contract becomes a question of fact, and summary judgment is inappropriate

unless the evidence of the parties’ intent is conclusive. Donnay, 144 N.W.2d at 716.

Each party has submitted extrinsic evidence in support of its interpretation. Ed Brems,

a former Swift vice-president who participated in the drafting and signing of the

contracts, submitted an affidavit in which he stated that Swift intended that “the

Contracts might ‘terminate’ due to the natural expiration of its term . . . [or] through

an act of termination.” On the other hand, hog producers Stan Turbes, William
1

Swift also cites this testimony of Steven Elias: “On a low market, they’d help

us out, and on a high market, we would help them out. In the end it would be a wash.”

While the quotation could be interpreted to mean that Elias Farms would be required

to pay a debit balance at the expiration of the contract, it also could be understood as

a prediction about whether there would be any debit balance at all in light of market

fluctuations. In fact, Steven Elias testified that “a wash” is “what everybody hoped

for.”

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Johnson, and Steven Elias, a shareholder and officer of Elias Farms, submitted

affidavits claiming that when they entered into the contract, they understood that they

would not pay the balance in the adjustment account unless the contract was

terminated for default.

Swift argues that the deposition testimony of Turbes, Steven Elias, and William

Elias, who signed the contract on behalf of Elias Farms, shows that they understood

the balance of the adjustment account would be due at the expiration of the contract.

Turbes, in response to a question by a Swift employee about how he was going to

“address the issue” of the ledger balance, said that “the contract hadn’t terminated yet

as far as [he] was concerned.” Swift argues that this statement is a concession by

Turbes that he would have to pay the balance in the account at the end of the contract.

William Elias said that he discussed the adjustment account with Swift employees,

and that he and the employees predicted that the amount in the adjustment account

would likely be $10,000 to $20,000 at the end of the contract. Swift argues that if

Elias’s understanding of the contract was that Elias Farms would not pay Swift the

balance in the adjustment account unless there was a breach for default, then there

would be no need to consider how large the balance would be at the end of the

contract.1

 A reasonable jury may well consider the Turbes deposition as impeachment

of his written averment that section 6.02 was limited to terminations by default, and

the William Elias testimony as evidence of a different intent by Elias Farms than

suggested by Steven Elias. But a jury might also reasonably conclude that the

testimony can be reconciled with the affidavits because it is not explicit about the

meaning of section 6.02 and is susceptible of differing interpretations. As to William
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Johnson’s affidavit, moreover, Swift’s only argument is that it must be incredible. But

we cannot say that Johnson’s testimony is incredible as a matter of law; that is a

question of fact for the jury. This extrinsic evidence is not sufficiently clear to resolve

the ambiguity as a matter of law.

Swift also argues that the “commercial context” demonstrates that the parties

intended that the hog producers would pay the balance in the adjustment account at

the end of the contract. Swift relies on Midway Ctr. Associates v. Midway Ctr., Inc.,

237 N.W.2d 76, 78 (Minn. 1975), for the proposition that a court should consider the

“surrounding circumstances” to determine what the parties must have reasonably

contemplated, and it cites the provision of the Uniform Commercial Code that terms

of a contract may be explained by usage of trade. Minn. Stat. § 336.2-202(a). We do

not believe that usage of trade provides a clear resolution to the meaning of

“termination” in section 6.02. The UCC specifies that “the existence and scope” of

usage of trade “must be proved as facts,” Minn. Stat. § 336.1-303(c), thus suggesting

that it is for a jury to decide how much weight to give such evidence unless it is

undisputed. Swift asserts that there is no dispute that the contracts at issue are “ledger

contracts,” which were prominent in dealings between hog producers and packers in

the 1990s, and which provided for payment of debt by the producers at the expiration

of the contract. But Swift cites no undisputed evidence regarding the general industry

practice or the specific usage of the word “termination” in contracts between packers

and producers. Perhaps such evidence could be developed, but on this record, we do

not believe Swift has shown conclusively that when the parties to this particular

contract used the word “termination” in section 6.02, they necessarily meant to

implement the sort of ledger contract described by Swift.

The hog producers contend that if the contract is ambiguous, then it must be

construed against the drafter (i.e., Swift), and that the district court’s grant of summary

judgment should be affirmed on that basis. Minnesota does follow the maxim that an

ambiguous contract will be construed against the drafter, e.g., Turner v. Alpha Phi
2

Swift also contends in its reply brief that the normal rule of construction should

not apply in this case, because the parties agreed in section 16.07 of the contract not

to construe the terms against the drafter. We express no opinion on whether this

provision is enforceable under Minnesota law. Cf. Concept Rehab, Inc. v. Short, No.

F-96-019, 1997 WL 103820, at *3 n.1 (Ohio App. 1997).

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Sorority House, 276 N.W.2d 63, 66 (Minn. 1979), but this rule applies only as a last

resort, after all other evidence fails to demonstrate the intent of the parties. See 5

Margaret N. Kniffin, Corbin on Contracts § 24.27, at 297-300 (Joseph M. Perillo ed.,

rev. ed. 1998); 11 Richard A. Lord, Williston on Contracts § 32:12, at 480-82 (4th ed.

1999); 2 E. Allan Farnsworth, Farnsworth on Contracts, § 7.11, at 290 (2d ed. 1998);

Klapp v. United Ins. Group Agency, Inc., 663 N.W.2d 447, 455 (Mich. 2003). This

case involves controverted extrinsic evidence, including disputed testimony from the

contracting parties and potential evidence on usage of trade, which may aid a jury in

determining what the parties intended. A jury should be instructed to consider the rule

that ambiguous agreements are construed against the drafter only if it is unable to

determine the intent of the parties based on all of the evidence.2

In summary, the “termination” provision of section 6.02 of the contract is

ambiguous, and neither party has produced conclusive evidence that dictates one

meaning as a matter of law. We therefore conclude that summary judgment was

inappropriate, and that the case must be remanded for further proceedings.

II.

A.

The hog producers cross-appeal the adverse grant of summary judgment on

their counterclaim for breach of contract. Under the contract between Swift and the

hog producers, the price paid to the hog producers, known as the “Market Price,” was
3

“Cwt.” is an abbreviation for hundredweight. 

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to be determined by “the daily bulk top plant-delivered price per live cwt.3

 . . . as

reported by the USDA Market News Service . . . or any replacement thereof.” On

March 1, 1999, the USDA changed its price reporting from live weight to carcass

weight, thus forcing Swift to change its pricing formula. On February 27, 1999, Swift

sent a letter notifying the hog producers that because of the change in USDA

reporting, the “market price” would henceforth be determined by “the daily base

market weighted average carcass basis plant delivered price.” Swift adjusted the

pricing formula twice more in 2000, with the result that higher prices were paid to the

hog producers.

In their cross-complaint, the hog producers allege that Swift breached the

contract because the payments made under the new pricing formula were lower than

the payments that would have been made under the original formula. In response to

this claim, Swift presented expert testimony from Dr. Marvin L. Hayenga, an

economics professor at Iowa State University. Dr. Hayenga concluded that “despite

the impossibility of a clear statistical comparison of the old and new pricing systems,

it is highly likely the Swift changes in the pricing system (required due to the loss of

the USDA report specified in the contract) led to higher prices.” The district court

granted summary judgment in favor of Swift, because the hog producers failed to

produce any contrary evidence. Swift, 2007 WL 1364691, at *11.

The hog producers argue that Swift’s second and third price adjustments

demonstrate that it knew it was underpaying the hog producers. The hog producers

rely on the testimony of Swift’s vice-president, Gerald Brooks, who said that the

second price adjustment was his “best estimate” at the time. But Brooks also said that

Swift was “attempt[ing] to try to appease the producers.” We do not think these

statements can fairly be construed as an admission by Swift that it was underpaying

the hog producers. And even if Swift had intended to underpay the producers, the
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only evidence in the record comparing the pricing formulas – Dr. Hayenga’s report

– shows that the hog producers were most likely overpaid. Without evidence that the

payments Swift was making to the hog producers were less than the amount required

by the contract, the hog producers cannot show that there was a breach. We thus

agree with the district court that summary judgment was appropriate on the hog

producers’ claim for breach of contract.

B.

The hog producers also cross-appeal the adverse grant of summary judgment

on their counterclaims brought under the Minnesota Consumer Fraud Act (MCFA),

Minn. Stat. § 325F.69, subd. 1. This statute prohibits “[t]he act, use, or employment

by any person of any fraud, false pretense, false promise, misrepresentation,

misleading statement or deceptive practice, with the intent that others rely thereon in

connection with the sale of any merchandise.” Id. A separate statute, the Minnesota

Private Attorney General Statute, Minn. Stat. § 8.31, subd. 3a, provides that “any

person injured by a violation” of the MCFA may recover damages, together with costs

and attorney fees. The Supreme Court of Minnesota has held “that the Private AG

Statute applies only to those claimants who demonstrate that their cause of action

benefits the public,” Ly v. Nystrom, 615 N.W.2d 302, 314 (Minn. 2000), and the

district court held that the plaintiffs failed to satisfy this requirement. 

The hog producers, citing Collins v. Minnesota School of Business, 655 N.W.2d

320 (Minn. 2003), contend that their action would benefit the public, because the

transactions at issue were part of a broader dissemination of similar contracts by

Swift, and protection of the family farm is a public interest recognized by the

Minnesota legislature. See Minn. Stat. § 500.24, subd. 1. Assuming, arguendo, that

the claims brought by the hog producers would benefit the public within the meaning

of Minnesota law, we conclude that there is insufficient evidence to find that Swift

violated the MCFA.
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The hog producers allege that Swift violated the MCFA in several ways. They

argue first that when Swift changed the pricing formula, it misrepresented the effect

of the pricing change. Under the original contract, the market price was to be

determined by “the daily bulk top plant-delivered price per live cwt.” (emphasis

added). When Swift notified the hog producers that it was changing the pricing

formula, Swift omitted the word “top” in its description of the old pricing formula.

The hog producers argue that by omitting the word “top,” Swift sought to mislead

them into believing that the amount to which they were entitled under the old formula

was lower than it was in reality, and thereby to cast the new formula in a more

favorable (or at least similar) light. Even if this were true, however, the hog producers

must show that they were injured. Minn. Stat. § 8.31, subd. 3a. Because the hog

producers have not provided sufficient evidence to show that they were underpaid,

they cannot show that they were injured. 

The hog producers also allege that Swift violated the MCFA because it failed

to offer them a contract that did not have an adjustment account. There is evidence

that at the time the hog producers and Swift entered into the contract, Swift was

offering other hog producers the option of taking a contract without an adjustment

account. The hog producers seem to argue that because some of Swift’s customers

were allowed to choose between the two types of contract, Swift violated the

consumer fraud statute by not giving them the same choice. The hog producers have

failed to explain how Swift made a misrepresentation or fraudulent omission with

respect to the differing contracts, or why the MCFA required Swift to offer them both

types of contracts. Therefore, these claims are without merit.

Finally, Elias Farms argues that Swift employees made misrepresentations to

William Elias as to the amount that most likely would be in the adjustment account

at the end of the contract. Elias relies exclusively on one statement he made in his

deposition. When asked whether Swift employees talked with him about the

adjustment-account component of the contract, Elias said that he and two Swift
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employees “figured probably 10 – 20,000 would be the (sic) – after seven years.”

That figure, Elias said, was based on past market performance. This testimony does

not establish that any representation was made by anyone, much less that Swift made

a representation that was fraudulent. According to Elias, he and the Swift employees

were merely estimating what might occur in the market in the next few years based

on historical averages. Elias provides no other evidence of misrepresentations, and

there is insufficient evidence to create a submissible case that Swift violated the

MCFA. 

* * *

For the foregoing reasons, we affirm the summary judgment dismissing the hog

producers’ counterclaims, but reverse the summary judgment on Swift’s breach of

contract claim and remand for further proceedings on that claim.

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