Opinion ID: 1091262
Heading Depth: 2
Heading Rank: 1

Heading: Fraudulent Inducement/Statute of Limitations

Text: ¶ 16. The Plaintiffs contend that they were fraudulently induced by SF. In the Ballard action, the Plaintiffs allege in their complaint, filed September 26, 2000, that the class of Plaintiffs on behalf of whom this action is brought consists of all Mississippi residents to whom, between, on or about November 1981[,] and the present, [the] Defendant [SF] induced into growing chickens for it and paid compensation under the so called `ranking system.' (emphasis added). ¶ 17. Similarly, the Plaintiffs in the Austin action allege in their complaint, filed August 2, 2002, that they were damaged by SF's systematic scheme of compensating Plaintiffs pursuant to [the] Defendant's method of payment. Specifically, the complaint alleges that this action ... consists of all Mississippi residents who, between June 1993, and the present, [the] Defendant [SF] has fraudulently and or negligently induced into housing, feeding and providing water for Sanderson's breeder flocks and gathering, grading, packing and storing the hatch eggs generated by said flocks and who have been compensated under the payment method established by the Defendant. (emphasis added). ¶ 18. In the Ballard action, the Plaintiffs filed their answers to interrogatories propounded by SF. Each of the Plaintiffs were asked in Interrogatory No. 10: State with as much particularity as possible [including names, dates, places, persons present, other witnesses and pertinent documents] each and every statement, illustration, hand out or other communication whatsoever [including omissions of material facts] that you claim constituted a representation by Sanderson Farms [including the persons uttering or providing same] and which you claim was (a) false, (b) misleading, (c) known by Sanderson to be such, (d) upon which Sanderson intended for you to rely, (e) what you claim that you did or refrained from doing in reliance thereon, (f) all persons with discoverable knowledge of your reliance and (g) the manner in which you claim to have been harmed by your alleged reliance on each such representation. (emphasis added). ¶ 19. Tanya Ballard responded that her dealings with SF growing and selling chickens began in 1993. According to Tanya, she was made various promises in 1993 when she started about how much money she could make. She stated: I did not find out about the ranking system until the first time I sold chickens. I did not know I would be ranked against the other growers, and for me to do good my neighbor would have to do bad, along with the other growers I sold with. I didn't understand that I would be paid on feed conversion and cost, and that would determine how much I got paid per pound. I never saw a Sanderson contract until it was time to get my birds. I wasn't told that it would be possible for me to make less than $100,000 per year back in 1993. (emphasis added). In her affidavit, Tanya stated that she entered into her first contract with SF in or near February, 1994. ¶ 20. Rann McGraw responded to the interrogatory as follows: Approximately twenty years ago, my wife and I sat down with Mr. Gibson to talk about a letter of intent and growing chickens for Sanderson Farms. Mr. Gibson pulled out papers from his desk and said that here is what one grower made, here is what another grower made and just kept on and on with some what I thought were good and reasonably high figures.... We thought we would have a good income, be at home and be our own boss. There were a lot of things we were not told before committing to this endeavor.... We were not told that we should hope our neighbors do bad, so that we can do good. (emphasis added). McGraw's affidavit provided that in or near November, 1982, he entered into his original contract with SF. ¶ 21. According to Willie McIntosh's affidavit, he entered in his original agreement with SF in or near February, 1990. McIntosh responded to Interrogatory No. 10 as follows: In the early part of 1992, my wife and I built four chicken houses under a Sanderson Farm's contract.... When we first wanted to build, we were never told of any major upgrades that would be forced upon us. We were not told how the ranking system worked, how we would compete with other growers, that chick quality would affect our performance, and most importantly we were never told that we would never be able to pay off our first loan before being required to do major upgrades.... One thing that was most noticeably left out was the fact that we would be competing against other growers that had different feed from different feed mills. (emphasis added). ¶ 22. Furthermore, the record reflects that each of the broiler growers (Ballard) signed a Broiler Production Agreement effective January 1, 1997, when the new contracts were executed. In those agreements, the payment standards schedule contain a Performance Adjustment Factor provision. In that provision, it states that there will be an adjustment to a Grower's Base Pay to reflect the Grower's performance either above or below the Weighted Average Production Cost Per Pound. ¶ 23. Each of the hatching egg growers (Austin) similarly signed a Hatching Egg Production Payment Schedule with various effective dates. Kenny Austin signed his payment schedule effective February 10, 1997; Charolett N. Hathorn signed her payment schedules effective February 10, 1997, August 11, 1998, January 1, 2000, and July 18, 2001; and Leroy Spring signed his payment schedules effective February 1, 1997, March 25, 1999, and January 1, 2000. ¶ 24. The hatching eggs growers' schedule differs from the broiler's payment schedule. However, it contains provisions addressing Hatchability Bonus and Penalty, Feed Conversion Bonus and Penalty, and Bonus/Penalty Calculations. The payment schedule contains a Minimum Base Payment For Hatching Eggs and Commercial Eggs. In the Bonus/Penalty Calculations provision, it states [i]t is understood and agreed that the bonus provisions of this Agreement shall be calculated from records maintained by Sanderson, such as total dozen graded hatching eggs produced and the percentage of hatchability and feed used by said chickens. This provision is contained in all versions of the hatching egg payment schedules, including the payment schedules effective in February 1997. ¶ 25. In SF's motion to dismiss and/or to transfer jurisdiction and/or to compel arbitration and/or for change of venue filed in the Austin action, SF requested the trial court to grant its motion to dismiss the Plaintiffs' claims for failure to state a claim upon which relief may be granted as they are barred by the applicable statute of limitations and/or the doctrine of laches. In SF's second supplement to its motion to dismiss, and/or to transfer jurisdiction and/or to compel arbitration and/or for change of venue, SF states: Plaintiffs have accepted the benefits of their respective Hatching Egg Producer's Agreements, and had done so for five and a half years prior to filing this civil action on August 2, 2002, as shown by the financial spreadsheet. Exhibit 28 received into evidence on the afternoon of November 18, 2003. Plaintiffs are estopped and precluded from challenging the HEP Agreements or any of the terms and provisions thereof. (emphasis added). ¶ 26. SF further contends that the Plaintiffs had their opportunity to complain about a lack of meaningful choice among the many poultry producers, the costs associated with arbitration and to offer their evidence to support their position. SF argues that the Plaintiffs have waited too long to now to contest the arbitration agreement in the long term contracts they entered years ago. ¶ 27. The trial court in the Ballard action denied SF's affirmative defense of statute of limitations. Without providing any explanation, the trial court stated [t]he Court also finds that none of [the] Plaintiffs' allegations as set forth in this action are barred by any applicable statute of limitation. In the Austin action, the trial court denied SF's motion to dismiss. ¶ 28. This Court uses a de novo standard of review when passing on questions of law including statute of limitations issues. ABC Mfg. Corp. v. Doyle, 749 So.2d 43, 45 (Miss.1999) (citing Ellis v. Anderson Tully Co., 727 So.2d 716, 718 (Miss.1998)). See also Sarris v. Smith, 782 So.2d 721, 723 (Miss.2001). ¶ 29. [I]n Mississippi a claim of fraud has a three-year statute of limitations in accordance with Miss.Code Ann. § 15-1-49 concerning actions without a prescribed period of limitation. Stephens v. Equitable Life Assur. Society of U.S., 850 So.2d 78, 82 (Miss.2003). Miss.Code Ann. § 15-1-49(1) provides: (1) All actions for which no other period of limitation is prescribed shall be commenced within three (3) years next after the cause of such action accrued, and not after. (emphasis added). ¶ 30. A fraud claim accrues upon the completion of the sale induced by such false representation, or upon the consummation of the fraud.... Dunn v. Dent, 169 Miss. 574, 153 So. 798 (1934). ¶ 31. The Plaintiffs claim that SF fraudulently induced them into the contract containing the arbitration agreement. Based on the record, it is clear that the Plaintiffs were aware of the matters that were allegedly misrepresented to them by SF well in excess of three years before the suits were filed. Therefore, we find that Miss.Code Ann. § 15-1-49 operates here to bar the Plaintiffs' claims. As such, there are no disputes to remand to the trial court to compel arbitration. Therefore, there is no need to address the Plaintiffs' contention that the arbitration provision is unconscionable, invalid and unenforceable.