Fayette County Farms v. Vandalia Farms

521 N.E.2d 300, 167 Ill. App. 3d 471, 118 Ill. Dec. 232, 1988 Ill. App. LEXIS 356
CourtAppellate Court of Illinois
DecidedMarch 25, 1988
Docket5-86-0528
StatusPublished
Cited by2 cases

This text of 521 N.E.2d 300 (Fayette County Farms v. Vandalia Farms) is published on Counsel Stack Legal Research, covering Appellate Court of Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Fayette County Farms v. Vandalia Farms, 521 N.E.2d 300, 167 Ill. App. 3d 471, 118 Ill. Dec. 232, 1988 Ill. App. LEXIS 356 (Ill. Ct. App. 1988).

Opinion

JUSTICE WELCH

delivered the opinion of the court:

Appellants, Fayette County Farms, Theodore A. Ruppert and Lester Matt, appeal from a judgment of the circuit court of Fayette County dismissing with prejudice their amended complaint against appellees, Vandalia Farms, Vandalia Farms, Inc., Holland Farms, Inc., and other defendants not party to this appeal. We affirm.

On May 6, 1982, appellants filed a complaint in the circuit court of Fayette County seeking resolution of a dispute with respect to ownership and possessory rights in certain real estate known as the “Wooter Farm.” On the same date, appellees also filed a complaint seeking resolution of the same dispute.

On September 9, 1983, the parties entered into an agreement in settlement of all issues raised in the two lawsuits. The settlement agreement provided that appellees were to transfer, convey and assign to appellants

“all of their respective rights, title and interests, real and personal, if any, in and to the [Wooter] Farm *** The [appellees] further represent and warrant jointly and severally that (except for participation in the U.S. Government ASCS Grain Program of which [appellants] are aware) they have not conveyed or assigned, voluntarily or involuntarily, any rights in and to the Farm ***.”

The settlement agreement also contained a mutual release

“of and from all claims of any kind or character which they or any of them has, ever had, or in the future have against the others or any of them which claims arise in whole or in part prior to the date hereof and which claims relate in any manner either to ownership and/or claims to ownership of the Farm or to the operation and/or management of the Farm (including, without limitation, the disposition of crops, and any and all dealings with any third persons or entities as regards the Farm and/or its prior operation) ***.”

All parties agreed to move for dismissal with prejudice of the complaints filed herein. The settlement agreement was signed by all parties hereto except Vandalia Farms, Inc.

On February 26, 1985, appellants filed a motion to amend their original complaint (which had not yet been dismissed pursuant to the settlement agreement) to add an additional count alleging breach of the settlement agreement by appellees. This motion was denied and the original complaint was dismissed with prejudice. However, the trial court granted appellants leave to file “additional pleadings for claimed breach of settlement agreement or to otherwise enforce settlement agreement within ten (10) days.”

On May 29, 1985, appellants filed an amended complaint, alleging a breach of the settlement agreement by appellees. The complaint alleged that appellees, or one of them, had improperly retained a portion of the United States government payment-in-kind (PIK) proceeds relating to the Wooter Farm for the crop year 1983, and despite demand by appellants, had refused to deliver said proceeds to appellants.

On September 11, 1985, appellees filed a motion to dismiss the amended complaint for the reason that all claims arising in whole or in part prior to the date of the settlement agreement and relating to the operation of the farm had been released by the terms of the settlement agreement. The motion also sought dismissal as to appellee Vandalia Farms, Inc., for the reason that it was not a party to the settlement agreement and therefore could not be held liable for its breach.

In their response to the motion to dismiss, appellants argued that the PIK proceeds for the year 1983 represented part of the property which was to be transferred by appellees to appellants pursuant to the settlement agreement. Thus, the complaint sought to enforce the terms of the settlement agreement by compelling delivery of property which was to be transferred pursuant to that agreement. Appellants argued that a release in a settlement agreement does not sensibly include a release of rights to enforce the agreement.

With respect to their claim against Vandalia Farms, Inc., appellants argued that their action sounded in tort (conversion) as well as in contract, and therefore the fact that Vandalia Farms, Inc., was not a party to the contract did not require dismissal of the complaint. Attached to appellants’ response to the motion to dismiss was an affidavit of Theodore A. Ruppert setting forth his understanding of the settlement agreement and his intent when entering into it.

Appellees filed a reply to appellants’ response to the motion to dismiss asking that the affidavit of Theodore A. Ruppert be stricken as inadmissible parol evidence of the settlement agreement’s intent. The reply also asked that, if appellants’ complaint sounded in both contract and tort, it be dismissed as alleging multiple causes of action in a single count. Appellees further argued that in any event, the complaint did not state a cause of action for tortious conversion against Vandalia Farms, Inc.

On April 29, 1986, the court entered an order dismissing appellants’ complaint with prejudice, finding that the claim to the PIK proceeds had been released by the settlement agreement, and that, as to Vandalia Farms, Inc., the complaint alleged multiple causes of action in a single count in violation of section 2 — 613(a) of the Code of Civil Procedure (Ill. Rev. Stat. 1985, ch. 110, par. 2 — 613(a)). Appellants filed a motion to reconsider the order of dismissal on May 28, 1986, which was denied after hearing on July 31,1986.

Appellants argue on appeal that the trial court erred in holding that the claim to the PIK proceeds had been released by the settlement agreement. They argue that the PIK proceeds were an interest in the farm which was to be transferred pursuant to the settlement agreement and that the complaint sought only to enforce the terms of the settlement agreement.

We do not agree that the PIK proceeds constituted a right, title or interest in the farm which was to be transferred pursuant to the settlement agreement. Under the United States government payment-in-kind program, a farmer enters into a contract with the government in which he agrees to remove a specified percentage of his farm’s acreage base and designated crops from production. He also agrees to follow certain soil conservation procedures. In return, upon full performance by the farmer, the government transfers to him a commodity equal in quantity to a percentage of what his diverted or nonproducing acreage would normally yield. The contract is entered into at the beginning of the crop year (January to March). The payment of the commodity is to be made upon request of the farmer at any time during the five-month period beginning with the normal harvest date for the commodity in the farmer’s area. Commodity Certificates, in kind payments, and other forms of payment 7 C.F.R. §770 et seq. (1987).

Appellants argue that PIK proceeds are analogous to crops grown and harvested, or presumably where the PIK commodities have already been sold, to proceeds of crops. However, this repeatedly has been held to be not so. (In re Schmaling (7th Cir.

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521 N.E.2d 300, 167 Ill. App. 3d 471, 118 Ill. Dec. 232, 1988 Ill. App. LEXIS 356, Counsel Stack Legal Research, https://law.counselstack.com/opinion/fayette-county-farms-v-vandalia-farms-illappct-1988.