Gardiner Farms, LLC v. Advanced Agric., Inc.

258 So. 3d 769
CourtLouisiana Court of Appeal
DecidedDecember 13, 2017
Docket17–423
StatusPublished

This text of 258 So. 3d 769 (Gardiner Farms, LLC v. Advanced Agric., Inc.) is published on Counsel Stack Legal Research, covering Louisiana Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Gardiner Farms, LLC v. Advanced Agric., Inc., 258 So. 3d 769 (La. Ct. App. 2017).

Opinion

KYZAR, Judge.

The defendant, Advanced Agriculture, Inc., appeals from a trial court judgment awarding damages for lost income to the plaintiff, Gardiner Farms, LLC, as a result of its failure to use the best farming practices to cultivate sugarcane on property it leased from the plaintiff. For the following reasons, we affirm in part, reverse in part, and render judgment in favor of Advanced Agriculture.

DISCUSSION OF THE RECORD

At the outset of this opinion, we begin with a brief discussion of the manner and methods of the cultivation of sugarcane, as gleaned from the trial court record, to aid in understanding the facts of this matter and the law applicable thereto.

Sugarcane, unlike other annual crops, such as corn, soybeans, and rice, is a perennial. Thus, a single planting of sugarcane may result in yields harvested over multiple years. Additionally, sugarcane is not cultivated from seed like other annuals.

*771Rather, the sugarcane stalk, which is jointed like a bamboo stalk, is broken into sections so that each section contains a joint, known as an "eye," from which the sugarcane plant grows after being planted. This is similar to growing a plant from a cutting or a potato plant from the eye of a potato. The sugarcane plant which grows from this cutting is known as "plant cane."

As a perennial, the sugarcane plant is identified as "stubble" after being harvested, depending on the number of years it is in the ground past plant cane. Thus, it is either first stubble, second stubble, third stubble, and so on. However, the yield in tonnage of sugarcane produced from an acre of land decreases with each harvest; thus, a farmer may decide to plow the stubble under and replant with plant cane in order to increase his yield. Additionally, a farmer may use any growth of sugarcane as seed, which is known as seed cane. An acre of seed cane will realize approximately five acres of plant cane. It is in this context that the dispute between the parties arises.

Gardiner Farms, LLC (Gardiner Farms), a family-owned farm consisting of 689.5 cultivable acres in St. Landry Parish, Louisiana, entered into an agricultural lease with Advanced Agriculture, Inc. (Advanced Agriculture) in July 2002, for the purpose of cultivating sugarcane on its property. Under this five-year lease (referred to hereinafter as the 2002 lease), which commenced on June 1, 2002, and terminated on January 30, 2007, Advanced Agriculture obligated itself "to use the leased premises for the purpose of planting, cultivating and harvesting sugarcane and shall keep the maximum available acreage in cultivation consistent with approved farming practices." It further agreed "to work the land herein leased in a good and farmer-like manner, to commit no waste thereon, to maintain all roads, ditches and drains and to return the land back into the peaceable possession of the LESSOR at the termination of this lease."

The lease, which was a "cash lease," required Advanced Agriculture to pay a first-year cash rental of $10,000.00. For the remaining years of the lease, Advanced Agriculture agreed to pay $65.00 per cultivable acre, provided the cost of sugar remained below twenty-one cents per pound. In the event it exceeded that amount, the lease provided a rising scale by which the cash rental would increase based on each two-tenths of a penny above twenty-one cents per pound of sugar. Accordingly, if the price of sugar was twenty-two or twenty-three cents per pound, the cash rental per cultivable acre would be an additional $1.00 per acre. If the price of sugar was twenty-four cents per pound or greater, the cash rental per cultivable acre would be an additional $1.50 per acre.

Advanced Agriculture farmed sugarcane on Gardiner Farms' property through the end of the lease, which reconducted through the end of 2009. The rental due on the property after the initial year of $10,000.00, was $44,817.50 each year, except in 2007, when Gardiner Farms agreed to reduce the rent that year to $22,000.00 due to a freeze. Advanced Agriculture paid the following amounts in rent: $10,000.00 in 2002; $20,910.00 in 2003; $34,528.00 in 2004; and $29,942.00 in 2006; $22,000.00 in 2007. It paid no rent in 2005 and 2008.

On September 4, 2009, Raymond Allain, farm overseer and counsel for Gardiner Farms, notified Advanced Agriculture that it was behind in its rent payments to Gardiner Farms. Mr. Allain further requested that Advanced Agriculture provide him with the United States Department of Agriculture Farm Service Agency reports for the 2008 crop year and a report on the acreage in cultivation for the 2009 crop year. Thereafter, the parties negotiated a *772new one-year lease (referred to hereinafter as the 2009 lease). As part of the negotiations, Gardiner Farms agreed to forgive $88,753.00 in rental payments; and Advanced Agriculture agreed to make a cash payment of $57,840.00 and to sign a promissory note in the amount of $36,930.40, due March 2010, in settlement of all cash rentals past-due under the 2002 lease.

The 2009 lease, which was a "share lease," commenced on January 30, 2010, and terminated on January 30, 2011. The lease stated that its terms would reconduct on a year-to-year basis provided that Advanced Agriculture was in full compliance with its terms, but that either party could terminate the lease if notice was provided to the other party no later than December 31st of that year. Under the lease, Advanced Agriculture again obligated itself:

[T]o use the leased premises for the purpose of planting, cultivating and harvesting sugarcane and shall keep the maximum available acreage in cultivation consistent with approved farming practices. No less than two-thirds (2/3rds) of the cultivable acres shall be keep [sic] in sugar cane each year.

Rather than a cash rental, the share lease allowed Gardiner Farms to share in the revenue generated from the sugarcane crop harvested by Advanced Agriculture, pursuant to the following terms:

a) The payment of cash of $36,930.40, the amount due on that certain promissory note of even date with this lease agreement representing past due rent from a prior lease, plus all accrued interest to the date paid. Failure to make the payment of the amount due on this promissory note on or before the due date shall be cause for immediate termination of this lease.
b) Lessee agrees to pay Lessor a rental of fourteen and no/10 (14.0%) percent of the monies paid by the mill for all sugar cane produced, harvested and delivered to the mill from the leased premises, free of all costs and charges to Lessor, except the share of the crop retained by the mill as its charge for processing sugar cane. The rent shall be based on all payments made by the mill from the sale of sugar, molasses, or other products derived from the processing of the sugar cane grown on the leased premises. Lessor shall not share in any hauling or harvesting allowances, nor shall any charges for hauling or harvesting be deducted from the payments made by the mill in the calculation of rental due hereunder. Payment of this rental shall be made directly to the LESSOR by the mill which processes the cane. Should any governmental benefit, price support or incentive payments accrue as a result of cane grown on the leased premises a one-fifth (1/5th) share shall be paid to Lessor.

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258 So. 3d 769, Counsel Stack Legal Research, https://law.counselstack.com/opinion/gardiner-farms-llc-v-advanced-agric-inc-lactapp-2017.