Court Opinion

ID: 4205993
Source: CourtListenerOpinion
Date Created: 2017-09-25 16:01:04.446944+00
Date Added: 2024-06-11T14:40:39.990645
License: Public Domain

FILED
                                                          United States Court of Appeals
                                                                  Tenth Circuit

                                                              September 25, 2017
                                      PUBLISH                 Elisabeth A. Shumaker
                                                                  Clerk of Court
                   UNITED STATES COURT OF APPEALS

                               TENTH CIRCUIT

 EARL OLDHAM,

             Plaintiff - Appellant,

 v.                                                     No. 16-7069

 O.K. FARMS, INC.,

             Defendant - Appellee.

        APPEAL FROM THE UNITED STATES DISTRICT COURT
           FOR THE EASTERN DISTRICT OF OKLAHOMA
                  (D.C. No. 6:15-CV-00384-RAW)

Brian R. McLaughlin of McLaughlin Law Firm, PLLC, Stigler, Oklahoma, for
Plaintiff-Appellant.

Clayton E. Bailey of Bailey Brauer PLLC, Dallas, Texas, for Defendant-Appellee.

Before LUCERO, McKAY, and HARTZ, Circuit Judges.

McKAY, Circuit Judge.

      Plaintiff Earl Oldham appeals the district court’s entry of summary

judgment in favor of Defendant O.K. Farms in this contract case. Because the

district court’s ruling was based on a theory that was not raised by Defendant or

briefed by either party, we reverse and remand for further proceedings.
                                         I.

      Plaintiff has been raising chickens for O.K. Farms since 1995. On March

21, 2014, he and O.K. entered into the chicken-growing contract at issue in this

case. Under the contract, O.K. would provide Plaintiff with chickens to raise, the

chickens would remain O.K.’s property, and Plaintiff would be paid for providing

for their care. The chickens—also referred to as broilers—would ultimately be

processed for human consumption. The contract had a three-year duration, but

O.K. retained the right to terminate the contract for certain specified reasons,

including “[b]reach of any term or condition of this contract,” “[a]bandonment or

neglect of a flock,” and “[f]ailure to care for or causing damage to [O.K.’s]

equipment or property.” (Appellee’s Suppl. App. at 94.)

      Early in the morning of May 20, 2016, Plaintiff discovered that one of his

three chicken houses had flooded after an overnight rainstorm. He contacted O.K.

and requested help. The O.K. field service technician who was assigned to his

area arrived at Plaintiff’s farm at about 6 a.m. Plaintiff told him he would need

help, and the technician got on the phone to discuss the problem with his

supervisor, O.K.’s broiler manager. While he was doing so, Plaintiff briefly left

the farm to open his tire shop, returning fifteen to twenty minutes later. During

the phone call, the broiler manager told the field technician that this was

Plaintiff’s problem, not O.K.’s, and that Plaintiff would have to handle it.

                                         -2-
      At about 9 a.m., Plaintiff spoke on the phone with the broiler manager. The

manager asked him how many of the chickens had survived the flooding and what

he planned to do to address the problem. Plaintiff responded that about eighty

percent of the chickens were alive and that his grandson was present to assist him.

The manager asked if Plaintiff was planning on getting additional help because

the groundwater flooding in the house was an animal-welfare violation.

According to the manager, Plaintiff then became irritated and complained about

the lack of help provided by O.K. When the manager asked what Plaintiff wanted

O.K. to do, Plaintiff told him to “come get these birds out of the house.” (Id. at

347.) According to the manager, he reminded Plaintiff that it was Plaintiff’s

responsibility to raise and care for the chickens, but Plaintiff interrupted him and

said that O.K. “could just come get all these goddamn birds.” (Id.) In his

deposition, Plaintiff denied ever saying this, but testified that, when the manager

asked him what he wanted O.K. to do, he said, “I want you to come and catch

them.” (Id. at 64.) He testified that he needed O.K. to get the chickens out of the

flooded henhouse so he could clean it up and make it habitable again.

      An O.K. catch crew arrived at Plaintiff’s farm at about 11 a.m. Because

their equipment wouldn’t work in the mud of the flooded henhouse and because

they didn’t want to spend all day working in wet clothing, they decided to remove

the chickens from the two dry henhouses first. After removing the chickens from

the second and third henhouses, they then removed the chickens—most of them

                                         -3-
dead by now—from the flooded house, finishing up at about 9 p.m. that night.

The live chickens were brought to a nearby farm to be raised by a different

farmer. Plaintiff was paid for the work he had done in raising the surviving

chickens to this point, reduced by various expenses such as the costs of catching

and moving the chickens.

      On June 3, 2015, O.K. sent Plaintiff a letter providing him with a ninety-

day notice of contract termination. After describing the events of May 20, O.K.

summarily asserted that it was entitled to terminate for three separate contractual

reasons: (1) Plaintiff’s “[b]reach of any term or condition” of the contract; (2)

Plaintiff’s “[a]bandonment or neglect of a flock, failure to provide care or follow

directions and instructions regarding the care and maintenance of the flock by

[O.K.’s] representatives”; and (3) Plaintiff’s “[f]ailure to care for or causing

damage to [O.K.’s] equipment or property.” (Id. at 237.)

      Plaintiff filed suit in state court, alleging that O.K. breached the contract by

terminating the agreement without adequate cause. O.K. removed the action to

federal court and filed a motion for summary judgment.

      In its motion for summary judgment, O.K. provided its reasoning behind

each of the three contractual reasons identified in the termination letter. First,

O.K. argued that Plaintiff breached the terms and conditions of the contract by

failing to adequately provide for the animal welfare of the chickens in his care.

Second, O.K. argued that Plaintiff “abandoned and neglected the flock to open his

                                         -4-
tire shop when the broilers were encountering a threat to their welfare.”

(Appellant’s App. at 34.) Finally, O.K. argued that the flooding in the chicken

house “damaged O.K.’s property—that is, broilers.” (Id.) With the exception of

the single-sentence argument that Plaintiff abandoned his flock by briefly leaving

to open his tire shop, O.K.’s motion for summary judgment was premised entirely

on its contention that the flooding problems in the henhouse were the result of

Plaintiff’s neglect and that the harms caused by this neglect justified O.K.’s early

termination of the contract. In response, Plaintiff contended that the flooding was

the result of an “act of God,” not neglect, and he cited for support to the

deposition testimony of the O.K. field technician—the only O.K. employee who

was at the scene from the beginning—that this was an act of God and that

Plaintiff did nothing wrong. As for O.K.’s abandonment argument, Plaintiff

argued that he did not abandon his chickens by leaving for fifteen to twenty

minutes while the field technician was at the scene telephoning his supervisor to

determine what they should do about the situation.

      The district court held a hearing on the summary judgment motion on

August 18, 2016. At this hearing, the district court indicated that it found all of

O.K.’s arguments to be unpersuasive. The court then said:

      I had a revelation, I was coming in here, well, as of yesterday even
      planning on denying the motion for summary judgment and
      proceeding to a trial. Probably would have been a one-day bench
      trial, and I was actually looking forward to it, would have been very
      interesting. And one reason I – it was – this is a revelation is

                                          -5-
      because you didn’t really argue – the defendants didn’t really argue
      this point except in the broadest possible way.

(Id. at 87.) The district court stated that it had looked at the undisputed material

facts from the summary judgment pleadings and found “questions of fact galore”

on all of the arguments raised by O.K. in its motion. (Id. at 90.) “But,” the court

continued, “all that doesn’t matter,” because Plaintiff “didn’t say come take away

the chickens from the flooded henhouse. He said come take them all.” (Id.) The

court reasoned that because there was “nothing in the evidentiary material

showing [that the chickens in the other henhouses] were in danger at all, he

abandoned them” by telling O.K. to come pick them all up. (Id.) The court told

O.K.’s attorney that he wished the attorney had raised this argument in his

summary judgment motion and spared the court the time it spent preparing for

trial on the issues that were briefed by the parties. The court then granted O.K.’s

motion for summary judgment on the basis that Plaintiff abandoned the flock by

telling O.K. to take all of the birds, thus permitting O.K. to terminate the contract.

      Although the district court engaged in some discussion with O.K.’s attorney

in making this ruling, the court never gave Plaintiff’s attorney any opportunity to

address the court’s “revelation” about this sua sponte theory of the case. Rather,

the court simply announced its reasoning during a colloquy with OK.’s attorney,

then entered judgment in favor of O.K. and ended the summary judgment hearing.

      This appeal followed.

                                          -6-
                                         II.

      As an initial matter, we will briefly address O.K.’s argument that the

district court’s summary judgment ruling was in fact based on an argument that

had been raised by O.K. and briefed by the parties. O.K. argues that it raised this

argument by pointing out “that the Contract authorized O.K. to terminate the

Contract with [Plaintiff] if he abandoned or neglected the flock.” (Appellee’s Br.

at 20.) However, merely mentioning a contractual provision is a far cry from

arguing that a particular action breached this contractual provision. The only

argument regarding abandonment that O.K. raised in its summary judgment brief

was the one-sentence argument that Plaintiff abandoned his flock by leaving for

fifteen to twenty minutes to open his tire shop after the field technician arrived at

his farm. O.K. never even hinted at any argument that Plaintiff might instead or

additionally have abandoned his flock by telling the broiler manager a few hours

later that O.K. should come get all of the birds. O.K.’s citation to the contractual

provision and reliance on the tire-shop theory of abandonment did not put

Plaintiff on notice of the separate and distinct theory of abandonment on which

the district court ultimately granted judgment. After carefully reviewing the

summary judgment record and the parties’ arguments, we are persuaded that the

district court granted judgment on a basis that was not raised by O.K. or briefed

by either party (as, indeed, the district court’s own language at the summary

judgment hearing reflects).

                                         -7-
      The rules of civil procedure permit a district court to grant a summary

judgment motion “on grounds not raised by a party,” but only “[a]fter giving

notice and a reasonable time to respond.” Fed. R. Civ. P. 56(f)(2). Thus,

“[t]hough we generally don’t favor the granting of summary judgment sua sponte,

a district court may do so if the losing party was on notice that she had to come

forward with all of her evidence.” Johnson v. Weld County, 594 F.3d 1202, 1214

(10th Cir. 2010) (internal quotation marks and brackets omitted). “[E]ven if such

notice is lacking, we will still affirm a grant of summary judgment if the losing

party suffered no prejudice from the lack of notice.” Id. If such prejudice is

shown, however, then we will reverse.

      In this case, the district court gave no notice that it intended to grant O.K.’s

summary judgment motion on a basis that was not raised by O.K. Nor did the

district court give Plaintiff any time to respond to this decision, much less a

reasonable amount of time to consider the court’s sua sponte theory and to

develop the legal and factual arguments to dispute it. Moreover, our review of

the record and of the arguments raised by the parties persuades us that Plaintiff

was prejudiced by this lack of notice and opportunity to respond.

      For instance, Plaintiff argues in his appellate brief that the reason he asked

O.K. to pick up all of the chickens, not just the chickens in the flooded henhouse,

was that the weather forecast predicted substantial additional rainfall and he was

concerned that the other henhouses would also flood. Thus, he argues, his request

                                         -8-
for O.K. to take all of the chickens reflects his attempt to ensure the chickens’

welfare, which is the opposite of abandonment. O.K.’s only response to this

argument is to contend that we should ignore it because it is not supported by the

record. This response is both factually incorrect and beside the point. First, this

argument does indeed find support in the record. (See Appellee’s Suppl. App. at

361 (“[The manager] asked about the other two (2) barns. I told him that he could

catch them too, because we had more rain forecasted, and I didn’t want the other

two (2) barns to flood as well.”).) And, more importantly, a party who was

prejudiced by the lack of advance notice of a sua sponte summary judgment

decision generally will not have come forward with all of his evidence or

arguments in the district court proceedings; indeed, it is the very fact that the

losing party did not develop and present his evidence and/or arguments below that

will help to establish prejudice from the lack of notice. See Scull v. New Mexico,

236 F.3d 588, 601 (10th Cir. 2000); see also Malhotra v. Cotter & Co., 885 F.2d
1305, 1310 (7th Cir. 1989) (“When a party moves for summary judgment on

ground A, his opponent is not required to respond to ground B—a ground the

movant might have presented but did not.”). Of course, to establish the requisite

prejudice, the losing party must, at the least, identify for the appellate court what

additional arguments he could have made or evidence he could have produced or

relied on to undermine the district court’s ruling. Cf. Johnson, 594 F.3d at 1214

(affirming the district court’s sua sponte grant of summary judgment where the

                                          -9-
plaintiff “relie[d] on exactly the same evidence and arguments” on appeal that she

made before the district court and “identifie[d] no way in which she was

prejudiced by the district court’s chosen procedural course”). But Plaintiff has

sufficiently done so here.

      As previously noted, the district court granted summary judgment in this

case on a sua sponte basis it announced only in the summary judgment hearing.

Plaintiff was given no advance notice that the court might grant judgment based

on his statement to the broiler manager that O.K. should come catch all of the

birds, which was mentioned in O.K.’s summary judgment brief only as a

background fact and not as a basis for entering judgment. Nothing about O.K.’s

summary judgment brief put Plaintiff on notice that he might need to come

forward with all of his evidence regarding precisely what he said to O.K. about

coming to catch all of the chickens, and why he said it, in order to rebut a

possible abandonment finding. And Plaintiff’s evidence that he was motivated by

concern for the other chickens’ welfare might indeed have been relevant to the

district court’s holding that Plaintiff legally abandoned the chickens by telling

O.K. to come get them.

      In Johnson v. Weld County, we held that a plaintiff had not demonstrated

prejudice where “she relie[d] on exactly the same evidence and arguments she

made before the district court, and identifie[d] no way in which she was

prejudiced by the district court’s chosen procedural course.” 594 F.3d at 1214.

                                        -10-
Here, by contrast, Plaintiff has raised different arguments than he raised

below—arguments that directly address the district court’s sua sponte reasoning

and that he was not provided an opportunity to make below—and has argued that

he was prejudiced by the district court’s entry of judgment on this basis without

considering any of the contrary arguments he might have made given notice and a

reasonable time to respond. We are persuaded that Plaintiff had shown prejudice

from the court’s sua sponte summary judgment decision. We therefore reverse

and remand for further proceedings in accordance with this opinion.

                                        III.

      REVERSED AND REMANDED.

                                        -11-