Melford Olsen Honey, Inc v. Richard Adee, Doing Business as Adee Honey Farms

452 F.3d 956
CourtCourt of Appeals for the Eighth Circuit
DecidedJuly 5, 2006
Docket05-3458, 05-3459
StatusPublished
Cited by10 cases

This text of 452 F.3d 956 (Melford Olsen Honey, Inc v. Richard Adee, Doing Business as Adee Honey Farms) 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
Melford Olsen Honey, Inc v. Richard Adee, Doing Business as Adee Honey Farms, 452 F.3d 956 (8th Cir. 2006).

Opinion

BYE, Circuit Judge.

Melford Olson Honey, Inc. (Mel-O), a Minnesota honey wholesaler, sued Richard Adee (Richard) doing business as Adee Honey Farms (Adee Honey), a South Dakota honey farmer, in Minnesota state court for breach of contract and specific performance, alleging Adee Honey failed to provide the requisite quantity of honey set forth in a June 2002 contract. Adee Honey removed the case to federal court on diversity jurisdiction and counterclaimed for money owed under the same contract. The district court 1 denied both parties’ motions for partial summary judg *959 ment, and the case proceeded to a jury trial. The jury returned a verdict in favor of Mel-0 in the amount of $460,950 on the initial claim and a verdict in favor of Adee Honey in the amount of $695,206 on the counterclaim. The district court denied the parties’ post-trial motions, and both parties timely appealed. We affirm.

I

Adee Honey, formed by Richard in 1957, operates honey farms in California, Nebraska, Mississippi, and South Dakota. Adee Honey’s principal place of business is in South Dakota. Mel-0 is owned by William Sill, and Curt and Darcy Riess. They bought the company in 1997 and were referred to Richard by Mel-O’s prior owners.

In March 2002, Adee Honey and Mel-0 entered into an oral agreement for the sale of honey. At the time, Adee Honey possessed a sufficient inventory of honey and agreed to sell approximately thirty loads, or 1.5 million pounds, 2 to Mel-0 for 82$ per pound. Shortly thereafter, Mel-0 sent a purchase order to Adee Honey memorializing the sale of 1.5 million pounds of honey for 82$ per pound. The purchase order noted it was a contract with a “Good Thru” date of April 11, 2002. It was sent to Adee Honey’s South Dakota office although Mel-0 allegedly knew Richard was working at the Mississippi facility until mid-June.

At approximately the same time, Adee Honey called Mel-0 to discuss the possibility of selling up to twelve loads of its inventoried honey to a competitor. According to Adee Honey, Mel-0 agreed, thereby altering the quantity term of the March 2002 contract. According to Mel-O, it permitted Adee Honey to sell twelve loads of inventoried honey to another distributor, provided the terms of the March 2002 contract were fulfilled with other honey. Between the months of May and September 2002, Adee Honey sent Mel-0 eighteen loads of honey at 82$ per pound.

In May 2002, honey prices began to rise due to a contamination in major Chinese honey supplies. In June 2002, Mel-0 contacted Adee Honey about purchasing an additional 3.2 million pounds, and the parties agreed on a $1.00 per pound purchase price for the additional quantity. Mel-0 sent a contract to Adee Honey detailing the new arrangement, and Richard added a handwritten force majeure clause, specifically excusing performance in the event of “an act of God such as a drought or flood.”

Later in the summer of 2002, South Dakota was experiencing drought-like conditions, and Adee Honey unilaterally stopped performing its obligations under the June contract. According to Mel-O, Richard contacted it to discuss the possibility of increasing the price of honey by 10$ per pound to cover losses Adee Honey would suffer due to the production shortage. By the time Mel-0 grudgingly decided to accept the terms, Adee Honey instead stated the new price would be $1.55 per pound instead of $1.00 to $1.10 per pound.

In the early fall of 2002, Adee Honey began delivering honey to Mel-0 at an invoice price of $1.55 per pound. Mel-O, however, refused to pay for this honey. By November 2002, its account was roughly $1.7 million in. arrears. In November and December, Mel-0 paid Adee Honey 82$ per pound for approximately 575,000 pounds received, 3 claiming this honey ful *960 filled the terms of the March 2002 contract. 4 Mel-0 did not pay anything for an additional 602,206 pounds received. Mel-O admits owing $1.00 per pound on this quantity, subject to some adjustments. 5

II

Mel-0 initiated this lawsuit claiming a breach of the June 2002 agreement, 6 requesting specific ' performance and damages. Adee Honey counterclaimed for the balance due on Mel-O’s account. Both parties unsuccessfully moved for summary judgment, and the case proceeded to a jury trial. At trial, Mel-0 submitted the following evidence of damages owed: 1) its owner Curt Reiss stated it would cost an average of $1.34 per pound to replace the honey; 2) a former Mel-0 employee, James Jackson, computed diminished profits based on a comparison of yearly sales figures and the increased price of honey; and 3) Jackson testified as to potential accounts lost by Mel-0 due to the $1.55-per-pound price insisted upon by Adee Honey.

The district court instructed the jury on the statute of frauds. The instruction stated oral contracts for the sale of goods over $500.00 are generally unenforceable. However, if the parties agree the contract exists, “Minnesota law provides that the March 2002 oral contract is enforceable, but not beyond the quantity of goods admitted by the party against whom enforcement is sought which, in this case, is Adee Honey.” Mel-0 did not object to this instruction or request any other instructions on the statute of frauds. On the Special Verdict, the jury determined Adee Honey breached the June 2002 agreement and the breach was not excused by force majeure or commercial impracticability. Because of this breach, the jury determined Mel-0 was entitled to $235,950 for expenses and $225,000 for lost profits. With respect to Adee Honey’s counterclaim, the jury determined Mel-0 breached the June contract by paying only 82$ per pound for honey invoiced at $1.55 per pound. For this breach, the jury awarded Adee Honey $75,000. 7 Additionally, the jury determined Mel-0 owed $620,206 for the 620,206 pounds of honey for which it had never paid.

Both parties unsuccessfully moved for judgment as a matter of law and new trial. In ruling on the post-trial motions, the district court found Mel-0 had waived any argument concerning the merchant’s exception to the statute of frauds by failing to request a jury instruction on it. Additionally, the court determined Mel-0 could not satisfy the statutory standard. With respect to damages, the court upheld the jury’s determinations as reasonable, de *961 spite being imprecise. The court rejected Adee Honey’s arguments with respect to anticipatory repudiation, force majeure, and commercial impracticability, determining the jury’s determinations were supported by the evidence submitted at trial. Both parties timely appealed.

Ill

A. The Statute of Frauds

The district court refused to grant either party’s motion for summary judgment, a directed verdict, or other post-judgment relief on the basis of the statute of frauds.

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Bluebook (online)
452 F.3d 956, Counsel Stack Legal Research, https://law.counselstack.com/opinion/melford-olsen-honey-inc-v-richard-adee-doing-business-as-adee-honey-ca8-2006.