Jamestown Farmers Elevator, Inc., Formerly Mutschler Grain Company v. General Mills, Inc.

552 F.2d 1285, 21 U.C.C. Rep. Serv. (West) 783, 1977 U.S. App. LEXIS 13615
CourtCourt of Appeals for the Eighth Circuit
DecidedApril 29, 1977
Docket76-1434
StatusPublished
Cited by37 cases

This text of 552 F.2d 1285 (Jamestown Farmers Elevator, Inc., Formerly Mutschler Grain Company v. General Mills, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Eighth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Jamestown Farmers Elevator, Inc., Formerly Mutschler Grain Company v. General Mills, Inc., 552 F.2d 1285, 21 U.C.C. Rep. Serv. (West) 783, 1977 U.S. App. LEXIS 13615 (8th Cir. 1977).

Opinions

BRIGHT, Circuit Judge.

From February 18 through April 8, 1974, appellant Jamestown Farmers Elevator, Inc., previously known as Mutschler Grain Company,1 a corporation owned by Donald Mutschler and his father, Fred Mutschler, essentially completed the balance of deliveries on a sale of 30,000 bushels of barley to General Mills for $1.22 per bushel at a time when that delivered grain was worth more than $3 per bushel on the open market. Jamestown Farmers Elevator contends it made those deliveries by reason of economic duress exercised against it by General Mills. Appellant seeks to recover the difference between $1.22 per bushel and the market price of the grain on various dates of delivery. General Mills denies any coercive conduct on its part and contends that Jamestown Farmers Elevator delivered the grain to. General. Mills pursuant to a contract entered into the previous year. The district court rejected the economic duress issue as a matter of law and submitted the case to the jury to award damages to Jamestown Farmers Elevator if the jury determined that General Mills had breached the 1973 grain sales contract,' otherwise to dismiss the action. Jamestown Farmers Elevator appeals from a judgment of dismissal entered upon a jury verdict.2

For the reasons stated herein, we reverse and direct that the issue of economic duress be submitted to a jury. Our jurisdiction rests on diversity of citizenship and the requisite amount in controversy. The case is governed by North Dakota substantive law.

I. Facts and Proceedings in the District Court.

We briefly summarize the facts. In a telephone conversation on February 1,1973, Donald Mutschler, manager of Mutschler Grain, agreed with Patrick Kluempke, a grain buyer for General Mills, that Mutschler Grain would sell 30,000 bushels of No. 2 barley, weight 45 pounds per bushel or better, for $1.22 per bushel, f. o. b. Jamestown, North Dakota, with delivery to be made during March and April of 1973. The means of transportation became a matter of dispute. Donald Mutschler testified that Kluempke agreed to arrange for commercial grain trucks to pick up the barley in Jamestown. Kluempke testified that the parties agreed to shipments by rail.

Following this telephone conversation, General Mills forwarded a confirmation of the order to Mutschler Grain. The confirmation specified “rail” shipment over the Burlington. Northern Railway. Mutschler did not acknowledge or return the confirmation form. This same confirmation procedure had been followed in a January 1973 contract for the sale of 10,000 bushels of barley entered into by these parties. That confirmation also called for rail shipment. Mutschler Grain shipped that barley by rail [1288]*1288and fully performed its obligations under the January contract.

Mutschler Grain delivered only 3,734 bushels of grain to General Mills during March and April of 1973 under the February 1973 grain contract. It shipped the barley by rail. Kluempke testified that during the next several months, he contacted Donald Mutschler and received assurances that the grain would be shipped as soon as transportation was available. The testimony, however, indicated that in 1973 railroad boxcars were in short supply.

Kluempke also testified that during this period of time, he discussed with Donald Mutschler the alternative of obtaining truckers who might “backhaul” the grain which was destined for delivery to General Mills’ terminals at Great Falls, Montana, or Portland, Oregon, at a freight rate equal to the existing favorable rail rate.3 Kluempke testified that after May 1, 1973, he orally advised Donald Mutschler that the contract would be extended4 to give Jamestown Farmers Elevator the opportunity to fulfill its obligations under the contract and' that Kluempke confirmed the extension by an undated letter written in July or August of 1973.

Following a telephone conversation on October 5, 1973, Kluempke wrote to Mutschler Grain demanding the balance of barley due under the February contract and adding:

We have given you more than sufficient time to ship the remaining open balance. If we do not receive application on this contract within the next thirty days, we will deem it necessary to buy in the remaining balance and charge the additional cost back to you.

Upon receiving no reply from Mutschler Grain Company,. General Mills wrote the appellant on November 8, 1973, as follows:

Mr. Kluempke’s letter to you of October 5, 1973 explained that you must start applying barley to this contract within thirty days or we will deem it necessary to buy-in the remaining balance on this contract and to charge the additional cost back to you. On October 26, 1973, Mr. Kluempke contacted you by telephone concerning this matter and you told him you would begin shipping barley to apply on our purchase contract 426. To date we have received only the two cars mentioned above.
We áre now charging you for the balance of the contract based on today’s value of $1.94 per bushel net Jamestown.
The attached invoice for $18,905.40, is due and payable upon receipt of this letter.

On November 16, 1973, Donald Mutschler responded to this demand by repudiating the contract, expressing disagreement with Kluempke’s version of the parties’ agreement, and denying any liability for damages claimed by General Mills as follows:

On February 1,1973 I sold 30,000 bushels of feed barley to Mr. Kluempke. In this sale agreement Mr. Kluempke agreed to send me 20 to 25 trucks, which would load with barley to be applied on this contract. Only one truck contacted me on this agreement; however, failed to come to Jamestown to load. The two cars that were applied would have filled the contract if the promised trucks would have arrived. As everyone must know railroad cars have been in a demand for quite some time. We would not have sold this grain if a trucking agreement had not been made.
Since no trucks were delivered to our elevator for shipment of the barley, I felt that our original agreement was terminated.

[1289]*1289Donald Mutschler admitted that between the April 30th deadline for delivery and his November 16th letter, he had not-protested continuance of the contract or sought cancellation. He characterized the continuance of the agreement for delivery by truck during this period as a “good deal.” ■ <

Notwithstanding the parties’ previous correspondence of November 8 and November 16, 1973, Kluempke continued by telephone to demand delivery of the balance of barley under the February 1, 1973 contract. The final telephone conversation occurred on February 18, 1974, when Mutschler Grain agreed to resumé shipments under the February 1973 barley contract. Fred Mutschler, Donald’s father, quoted Kluempke, as follows: • '

We’re General Mills; and if you don’t deliver this grain to us, why we’l! have a battery of lawyers in there tomorrow morning to visit you and,, and then we are going to the North Dakota Public Service [Commission]; we’re going to the Minneapolis Grain Exchange and we’re going to the people in Montana and there will be no more Mutschler Grain Company. We’re going to take your license[.]

Appellant’s economic duress claim rests on this conversation.

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Bluebook (online)
552 F.2d 1285, 21 U.C.C. Rep. Serv. (West) 783, 1977 U.S. App. LEXIS 13615, Counsel Stack Legal Research, https://law.counselstack.com/opinion/jamestown-farmers-elevator-inc-formerly-mutschler-grain-company-v-ca8-1977.