A & R Fugleberg Farm, Inc. v. Triangle Ag, LLC

828 F. Supp. 2d 1045, 2011 U.S. Dist. LEXIS 126044, 2011 WL 5196352
CourtDistrict Court, D. North Dakota
DecidedOctober 31, 2011
DocketCase No. 3:09-cv-00007
StatusPublished
Cited by1 cases

This text of 828 F. Supp. 2d 1045 (A & R Fugleberg Farm, Inc. v. Triangle Ag, LLC) is published on Counsel Stack Legal Research, covering District Court, D. North Dakota primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
A & R Fugleberg Farm, Inc. v. Triangle Ag, LLC, 828 F. Supp. 2d 1045, 2011 U.S. Dist. LEXIS 126044, 2011 WL 5196352 (D.N.D. 2011).

Opinion

ORDER ON MOTIONS AND APPEAL OF MAGISTRATE’S ORDER ALLOWING PLAINTIFF’S THIRD AMENDED COMPLAINT TO ADD PUNITIVE DAMAGES CLAIM

RALPH R. ERICKSON, District Judge.

INTRODUCTION

Before the Court is Triangle Ag, LLC’s (hereafter “Triangle Ag”) appeal of an Order by the Magistrate Judge allowing A & R Fugleberg Farms, Inc., Randy Fugleberg, Nick Fugleberg, and Jeremy Fugleberg (hereafter collectively “the Fuglebergs”) to file its third amended complaint which added a claim for punitive damages. (Doc. # 208,186). The matter came on for hearing before the Court on September 26, 2011. (Doc. #256). Defendant Cooperative Finance Association, Inc. (hereafter “Cooperative Finance”) did not take a position on the appeal.

Additionally, defendant Triangle Ag has filed a motion seeking summary judgment in its favor on “all Plaintiffs’ claims for punitive damages.” (Doc. # 201). The Fuglebergs resist. (Doc. # 227).

Because the Court finds no evidence in the record of any independent tortious conduct or act by Triangle Ag justifying a claim for punitive damages, the Magistrate Judge’s order allowing the filing of the Third Amended Complaint (Doc. #216), which included a claim for exemplary damages, is REVERSED and the Fuglebergs’ Third Amended Complaint is ordered stricken from the record.

Also before the Court is Triangle Ag’s motion for sanctions against Plaintiff Randy Fugleberg in his individual capacity (Doc. # 198), and its motion to dismiss the Individual Claims of Randy Fugleberg (Docket # 206). Triangle Ag asserts that Randy Fugleberg has stated in his deposition that he has no claim in his personal capacity against Triangle Ag and that his refusal to dismiss his claim against Triangle Ag is subject to sanctions under Rule 11. (Doc. 198, 199). Because the Court believes that Randy Fugleberg remains a defendant in Triangle Ag’s counterclaim against him, remains personally obligated on one of the notes to Cooperative Finance and that his inclusion in the lawsuit has not resulted in any extra unnecessary expense for Triangle Ag the Court DENIES Triangle Ag’s Motion (Doc. # 198 and # 206) so as to be able to provide complete relief in the trial of this matter.

Triangle Ag also seeks summary judgment against the Fuglebergs on all claims. (Doc. # 188). As stated above, the Court finds no evidence of independent tortious acts or conduct and finds only claims arising out of an alleged breach of contract. Therefore, Triangle Ag’s Motion (Doc. # 188) for Summary Judgment on the Fuglebergs’ claims on counts 1, 2, 3, 5, and 7 is GRANTED. To the extent the motion seeks judgment on the Fuglebergs’ claim for breach of their fertilizer contract, the motion is DENIED. Similarly, the Fuglebergs seek summary judgment on the Triangle Ag contract claim to the extent that it seeks specific performance of the contract. Because the Court believes that fact questions remain on the terms of the oral contract between the Fuglebergs and Triangle Ag, the Fuglebergs’ motion is DENIED. All breach of contract claims and counter claims between the Fuglebergs and Triangle Ag survive for trial on the matter.

[1048]*1048Finally, Cooperative Finance seeks summary judgment on its promissory notes with the Fuglebergs (Doc. # 190). While the Court can find no defense to the notes that are all past due, there is conflicting evidence as to the extent and nature of the agency relationship between Triangle Ag and Cooperative Finance rendering summary judgment on the notes improper. Therefore, the Motion for Summary Judgment against the Fuglebergs and in favor of Cooperative Finance is DENIED.

FACTUAL BACKGROUND

The Fuglebergs entered into an oral contract to purchase farm fertilizer from Triangle Ag. (Doc. # 97 at ¶ 6-9; Doc. # 101 at ¶ 10). The relationship between Triangle Ag and Cooperative Finance is not plainly established in the record, but it appears that Cooperative Finance was involved in financing various transactions between Triangle Ag and its customers. The Fuglebergs signed promissory notes in favor of Cooperative Finance to facilitate the purchase of the fertilizer in question in this case. The financing documents dated July 9, 2008, consist of three “Input Finance Agreements” between Cooperative Finance and Jeremy, Nicholas, and Randy Fugleberg with A & R Fugleberg Farm Inc., a co-maker only on the Randy Fugleberg note. (Doc. # 151-6). Each Input Finance Agreement has a face amount of $150,000. Id. The notes were payable on February 16, 2010, and remain unpaid. Triangle Ag asserts it has paid Cooperative Finance $60,000 on a separate agreement. (Doc. # 151-9).

Following the execution of the financing documents, Cooperative Finance sent the loan proceeds to Triangle Ag. (Doc. # 151— 14 at p. 33). Triangle Ag then purchased fertilizer from third parties in anticipation of filling the order contemplated by the oral agreement with the Fuglebergs. Id. Some of the fertilizer purchased in anticipation of filling the contract is currently at Triangle Ag’s storage facility in Ulen, Minnesota. While the fertilizer originally contemplated in the contract consists of some 352.5 tons of urea fertilizer and 135 tons of MES-15 fertilizer, Triangle Ag reports that the MES-15 is the only identifiable fertilizer attributable to the contract in its possession, because it was ordered specially for the Fuglebergs. Id. at 56-58. While Triangle Ag has sufficient urea in storage to satisfy the contract, it regularly sells this product and specifically identifying which urea is designated to the Fugleberg contract is impossible. Id. at 56. Urea fertilizer is essentially fungible, and which physical quantity is used to fill any particular order is unknowable until the urea is actually loaded and shipped. Accordingly, the urea fertilizer in this case is not specifically identifiable to the contract, while it is possible that the MES-15 fertilizer is.

It is undisputed that Triangle Ag has offered delivery of conforming fertilizer to the Fuglebergs, which they have refused. The Fuglebergs contend that they hold a right to cancel the oral contract, the contract contained a negotiated and bargained for provision allowing them to cancel the contract at any time prior to delivery upon payment of a $50 per ton cancellation fee to Triangle Ag, together with accrued interest owed to Cooperative Finance. Under the Fugleberg version of the contract, in the event of cancellation and payment of the appropriate fees, the obligation between Triangle Ag and the Fuglebergs would be satisfied in full. (Doc. #97 ¶ 6-7). Exercising this purported right of cancellation, the Fuglebergs have sent Triangle Ag a check for $24,350, representing the “cancellation” fee, and interest payments totaling $5,295.16. (Doc. # 97, ¶ 10, Doc. # 101, ¶ 11).

[1049]*1049Certain facts can be established from the record: (1) Triangle Ag is storing some or all of the fertilizer sufficient to fill the Fuglebergs’ contract requirements; (2) The Fuglebergs have tendered the putative cancellation fee, which has been refused by Triangle Ag on the ground that no such contractual provision was encompassed in the oral agreement; (3) Triangle Ag has an account that shows the Fuglebergs have a prepaid balance for fertilizer that Triangle Ag is obligated to deliver; (4) Neither the Fuglebergs nor Triangle Ag have repaid the loans to Cooperative Finance, though Triangle Ag has apparently paid $60,000 to Cooperative Finance under the terms of a separate agreement arising out of a default provision.

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Bluebook (online)
828 F. Supp. 2d 1045, 2011 U.S. Dist. LEXIS 126044, 2011 WL 5196352, Counsel Stack Legal Research, https://law.counselstack.com/opinion/a-r-fugleberg-farm-inc-v-triangle-ag-llc-ndd-2011.