Court Opinion

ID: 2893369
Source: CourtListenerOpinion
Date Created: 2015-09-07 22:42:05.866599+00
Date Added: 2024-06-11T13:33:04.739690
License: Public Domain

NO. 07-05-0234-CV

                             IN THE COURT OF APPEALS

                       FOR THE SEVENTH DISTRICT OF TEXAS

                                     AT AMARILLO

                                        PANEL C

                                SEPTEMBER 22, 2006
                          ______________________________

        REMUDA RANCH, a partnership of THOMPSON AGRIPLEX 1, a trust,
        THOMPSON AGRIPLEX 2 , a trust, THOMPSON AGRIPLEX 3, a trust,
           THOMPSON AGRIPLEX 4, a trust, and BRUCE THOMPSON,

                                                                    Appellants

                                            v.

        ARCHER-DANIELS-MIDLAND COMPANY and ADM/FARMLAND, INC.,

                                                                    Appellees
                        _________________________________

             FROM THE 69TH DISTRICT COURT OF HARTLEY COUNTY;

                      NO. 4090H; HON. RON ENNS, PRESIDING
                        _______________________________

                               Memorandum Opinion
                         _______________________________

Before QUINN, C.J., and REAVIS and HANCOCK, JJ.

      Remuda Ranch, a partnership of Thompson Agriplex 1, a trust, Thompson Agriplex

2, a trust, Thompson Agriplex 3, a trust, Thompson Agriplex 4, a trust, and Bruce Thompson

(Remuda) appeal from a final summary judgment denying them recovery against Archer-

Daniels-Midland Company and ADM/Farmland, Inc. (ADM). Remuda sued ADM for breach

of its purported contract to buy Remuda’s 2000 and 2001 corn crop. ADM moved for

summary judgment, contending that it had no contract with Remuda and that any purported
oral agreement was unenforceable against it due to the statute of frauds. As previously

mentioned, the trial court granted the motion, which act resulted in this appeal. We reverse

and remand the cause.

       Background

       Given that the appeal is one from a final summary judgment, we construe the

evidence of record in a light most favorable to the non-movant, i.e. Remuda. Great

American Reserve Ins. Co. v. San Antonio Plumbing Supply Co., 391 S.W.2d 41, 47 (Tex.

1965) (stating that the summary judgment evidence must be construed in a light most

favorable to the non-movant). That evidence so construed depicts the following.

       Mark Glawe of Farmland Industries (Farmland) approached Remuda about the

acquisition of Remuda’s corn crop for the years 2000 and 2001. According to the record,

he was empowered to buy and sell food corn on behalf of his employer, Farmland. The two

entered into negotiations culminating in an agreement. However, Glawe told Remuda that

the sale had to be completed through AgriFarm Industries (AFI).          The latter was a

cooperative owned in part by Farmland and described by another Farmland employee “as

an agent of Farmland.” Apparently, AFI was used as a conduit through which Farmland

bought corn from local growers. Once employees of Farmland (such as Glawe) negotiated

the terms of the purchase, AFI would simultaneously execute corresponding contracts with

the grower and Farmland. That is, through one contract it would buy the corn from the

grower. Through the other, it would sell the corn to Farmland, in exchange for a commission

of 2%. But, it had no authority to negotiate the terms because they were dictated to AFI by

Farmland. And, this was the very procedure used to acquire the Remuda crop.

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        After AFI was told by Glawe that “‘we have a deal with [Remuda],” an employee of

AFI drafted and signed the requisite contracts. Those sent to Farmland were executed by

that entity. Those sent to Remuda were not because they contained errors regarding “carry”

and “storage.” Effort was made to correct them, which efforts went for naught. Instead,

according to the AFI employee, Remuda and Glawe “got tired of my incompetence . . . [and]

bypassed me.” At that point, Glawe told him ‘”not to worry about it,’” “‘this is my project, and

I’ll take it from here.’”

        In time, Farmland began receiving shipments of Remuda’s corn. This continued until

ADM acquired the assets of Farmland. After that acquisition, ADM received and paid for

various shipments of the corn delivered by Remuda. However, it approached the grower

in attempt to relieve itself from the contractual agreement. When that effort failed, it then

opted not to complete further purchases. The decision resulted in Remuda suing ADM for

breach of contract. ADM moved for summary judgment contending that it had no written

contract with Remuda to buy the corn and that any oral contract was rendered

unenforceable by the statute of frauds. The trial court granted ADM’s motion.

        No Contract

        We address the initial contention that there existed no contract between Remuda and

ADM to buy corn. The contention is founded upon the propositions that 1) Remuda did not

contract directly with Farmland, and 2) if it did so contract, the contract was not one of the

written agreements assumed in the ADM acquisition of Farmland’s assets. According to

Remuda, material questions of fact existed regarding both contentions, which questions

precluded summary judgment. We agree.

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      The summary judgment motion propounded by ADM was traditional in nature. Thus,

the burden lay with it to prove its entitlement to summary judgment as a matter of law.

Kimber v. Sideris, 8 S.W.3d 672, 674-75 (Tex. App.–Amarillo 1999, no pet.). This is a

weighty burden given that all reasonable inferences from the evidence must be made in

favor of the non-movant. Id. at 675. Moreover, it matters not how we may construe the

evidence if we were the factfinder; what matters is whether there exists some evidence of

record which reasonable minds could interpret in a manner leading to different results. Id.

at 676. If the latter situation exists, then so does a material issue of fact precluding

summary judgment.

      Of record, we find evidence illustrating that an employee of Farmland who was

authorized to buy and sell food corn on behalf of that entity negotiated various purchases

of corn from Remuda on behalf of Farmland. While consummation of the agreement

normally required the use of a middleman, i.e. AFI, the step was “bypassed” by Glawe, the

Farmland employee. Instead, he informed AFI that he had struck a “deal” with Remuda and

that he would “take if from here.” Thus, there is some evidence suggesting that Farmland

contracted, albeit orally, with Remuda to purchase food corn.

      Next, admittedly the evidence established ADM was not originally a party to the

purported verbal agreements between Remuda and Farmland.                 Nonetheless, the

agreements were open grain contracts. Moreover, in acquiring the assets of Farmland, the

acquisition included, according to the “Purchase Agreement” signed by ADM and Farmland,

“Farmland’s rights under its open grain contracts as of the Closing Date.” Furthermore, and

contrary to the suggestions of ADM, nothing in that provision required the open grain

contracts to be written. And, to the extent that the grain contracts contemplated were to be

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listed in “Schedule 1.03(b)” of the purchase agreement, the burden lay with ADM to prove

as a matter of law that none of the agreements itemized in that schedule encompassed the

grain contracts between Remuda and Farmland. In other words, because it contended in

its traditional motion for summary judgment that it was not bound by any contract to

purchase grain from Remuda, ADM had to disprove all potential avenues of contract. And,

we are cited to no evidence disproving, as a matter of law, that the open grain contracts

encompassed in Schedule 1.03(b) included the agreements Glawe (on behalf of Farmland)

orally struck with Remuda.1

       In sum, ADM failed to carry its burden of proof. The evidence of record fell short of

establishing, as a matter of law, that no contract bound the corporation to purchase corn

from Remuda.

       Statute of Frauds

       Next, Remuda contends that ADM also failed to prove each element underlying its

affirmative defense based upon the statute of frauds. We again agree.

       A contract for the sale of goods equal to or exceeding $500 is unenforceable “unless

there is some writing sufficient to indicate that a contract for sale has been made between

the parties and signed by the party against whom enforcement is sought or by his

authorized agent or broker.” TEX . BUS . & COM . CODE ANN . §2.201(a) (Vernon 1994). That

the writing “omits or incorrectly states a term agreed upon” is of no consequence. Id.

        1
          Nor are w e cited to any evid ence esta blish ing that the “contract nu mbers” m entioned in the sch edule
referred only to written agreements or that oral con tracts co uld not have been or were not assigned a number
for inclusion in the list. The testimony of Tim Daugherty, Mark Beemer, and Glen Hofbauer (to which ADM
alluded) did not so establish; indeed, the comments to which we were cited do not pertain to the contents or
scope of Schedule 1.03(b). And, while it may be sensible to assume that only written contracts were included,
business practices do not necessarily comport with common sense. For this reason, ADM had the burden
to prove that the Remu da/G lawe/Fa rmla nd a gree me nts w ere n ot included .

                                                        5
       Appearing of record is 1) some evidence of oral agreements being struck by Remuda

and Grawe/Farmland and which we previously discussed, 2) evidence of the various

written contracts drafted and signed by AFI purportedly incorporating the terms of the oral

agreements, and 3) evidence of AFI’s status as Farmland’s agent. These circumstances

liken to those in Tryad Serv. Corp. v. Machine Tool Center, Inc.. 512 S.W.2d 785 (Tex. Civ.

App.–Houston [14th Dist.] 1974, writ ref’d n.r.e.).

       In Tryad, Tryad negotiated the purchase of a thread mill from Reed Tool. However,

Reed designated Machine Tool as the middleman through which the sale was to be

consummated. That is, Machine was to buy the mill from Reed and then sell it to Tryad for

the price agreed upon by Tryad and Reed. Machine and Tryad then executed a written

memorandum memorializing the terms of the sale, and a representative of Machine signed

the document. Thereafter, Reed refused to sell the mill. Upon being sued by Tryad, Reed

contended that any agreement it had with Tryad was unenforceable under §2.201 of the

Business and Commerce Code. The appellate court rejected the contention, however. It

found of record evidence indicating that Reed granted Machine authority to bind it viz the

sale of the mill. Id. at 788-89. Given that evidence, the written memorandum between

Tryad and Machine was sufficient to defeat Reed’s invocation of the statute of frauds,

according to the court. Id.

       Like Machine Tool, AFI acted as the broker or agent of Farmland in purchasing the

Remuda corn, or at least some evidence indicates. So, like Tryad, Remuda can use the

contract executed with the broker or agent (AFI) to satisfy the statute of frauds, assuming

of course, the factfinder ultimately determines that AFI was the agent or broker of Farmland.

And, that the AFI contracts may contain inaccurate information about some of the terms of

                                              6
the sale, such as those relating to carriage and storage, is of no consequence given the

directive of §2.201(a); again, the statute dictates that “a writing is not insufficient because

it omits or incorrectly states a term agreed upon . . . .” TEX . BUS . & COM . CODE ANN .

§2.201(a) (Vernon 1994). So, having agreed to acquire Farmland’s open grain contracts

and unless it is proven that the Remuda/Glawe/Farmland agreements were not part of

Schedule 1.03(b) of the Farmland/ADM Purchase Agreement, we cannot say that ADM was

entitled to judgment, as a matter of law, on its claim of statute of frauds.

         Having determined that ADM fell short of carrying its burden regarding both of its

grounds for summary judgment, we hold that the trial court erred in executing the decree.

Accordingly, the summary judgment is reversed, and the cause is remanded to the trial

court.

                                                  Brian Quinn
                                                  Chief Justice

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