Roe v. Cargill, Inc.

333 F. Supp. 2d 808, 2004 U.S. Dist. LEXIS 17249, 2004 WL 1950047
CourtDistrict Court, W.D. Arkansas
DecidedApril 20, 2004
Docket02-6020
StatusPublished
Cited by1 cases

This text of 333 F. Supp. 2d 808 (Roe v. Cargill, Inc.) is published on Counsel Stack Legal Research, covering District Court, W.D. Arkansas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Roe v. Cargill, Inc., 333 F. Supp. 2d 808, 2004 U.S. Dist. LEXIS 17249, 2004 WL 1950047 (W.D. Ark. 2004).

Opinion

MEMORANDUM OPINION AND ORDER

DAWSON, District Judge.

Upon motion of Plaintiffs, we issued an order on December 1, 2003 reopening this case after the resolution of arbitration proceedings. Currently before the Court is Plaintiffs’ Motion for Entry of Judgment and Confirmation of Award (Doc. 17) and Plaintiffs’ Motion for Attorneys’ Fees, Costs and Interest (Doc. 26.) Defendant has filed an Application and Motion to *811 Vacate the Award (Doc. 18.) For the following reasons, Plaintiffs’ Motion for Entry and Confirmation (Doc. 17) is GRANTED, Plaintiffs’ Motion for Attorneys’ Fees (Doc. 26) is DENIED, and Defendant’s Motion to Vacate (Doc. 18) is DENIED.

I.BACKGROUND

The following facts are not disputed.

1. In 1994, Plaintiffs began discussions with Defendant about becoming pork producers. In order to become “Pork I” producers for Defendant, Plaintiffs were required to build facilities according to Defendant’s specifications.
2. After orally agreeing to produce hogs for Defendant, Plaintiffs obtained a significant mortgage and built the required facilities. According to the agreement, Plaintiffs were to receive sows from Defendant, to breed the sows and to raise the offspring until they were weaned. In 1995, Plaintiffs entered into a three-year written contract to breed hogs for the Defendants. In 1998, Plaintiffs entered into a second three-year contract to breed hogs with Defendant. Both contracts provided for mandatory arbitration of all disputes arising out of the relationship.
3. The contracts provided that Defendant was to provide safe and productive animals to Plaintiffs, for their hog farming operation. Plaintiff was obligated to accept and breed sows delivered by Defendant.
4. In 1996, Plaintiffs , received hogs from Defendant which had leptospi-ra interrogans or leptospirosis, which causes abortions in animals and causes other problems in their offspring. It also can be contracted by humans, causing health problems. After the leptospirosis problem, Defendant provided Plaintiff with sows that were infected with Porcine Reproductive and Respiratory Syndrome (hereinafter PRRS) virus. PRRS causes a weakened immune system in animals, which may result in fatal infections.
5. Plaintiff Danny Roe contracted chronic leptospirosis, which often causes liver and kidney damage. As a result, he experienced medical expenses, pain and injuries. As a result of the PRRS virus and leptos-pirosis in their hogs, Plaintiffs experienced a lost earning ability because they were unable to produce and deliver live and healthy offspring.
6. In 2001, Plaintiffs discontinued breeding sows on their farm and refused sows shipped by Defendant to their farm for breeding.
7. Following Plaintiffs’ refusal to breed sows or to accept new sows, the parties agreed to terminate the contract. The contract was terminated on May 1, 2001, in a letter written by the president of Defendant’s pork operation; however, the parties never agreed to the terms of their separation. In December of 2001, Plaintiffs filed suit against Defendant in state court asserting breach of contract claims regarding Defendant’s breach in supplying hogs , to Plaintiffs and the Defendant’s failure to exercise good faith in dealings with Plaintiffs. Plaintiffs also asserted negligence, fraud and estoppel claims. .
8. In February of 2002, the action was removed to this Court.
9. During the pendency of the lawsuit, Plaintiffs attempted to sell their farm. Due to the hog farming facilities Plaintiffs had constructed, their farm- had no commercial or farming *812 use other than as a swine multiplier facility.
10. In early 2002, Plaintiffs found a buyer for their farm, but the buyer’s financing was contingent upon a letter of intent from Defendant to enter into a pork production contract. In March of 2002, Defendant refused to issue a letter of intent.
11. On May 1, this Court ordered arbitration and administratively terminated the suit pending resolution of the arbitration proceeding.
12. The dispute went to arbitration and the Arbitrator issued an interim award on August 8, 2003, making the following findings:
a. Plaintiffs acts in refusing to breed existing sows on his farm and refusing to accept new sows shipped to him by Defendant constituted a breach of the parties’ contract.
b. Defendant agreed to an early termination of the contract rather than pursing its remedies for the breach.
c. The Arbitrator rejected Plaintiffs’ breach of contract claims relating to Defendant supplying them with pigs and paying pigs produced by Plaintiffs. He found that “having waived or excused Roe’s breach and terminated the contract, Cargill had a good faith obligation to allow Roe the reasonable opportunity to mitigate damages.”
d. Plaintiffs’ attempt to sell their farm was an attempt to mitigate damages. Plaintiffs could reasonably expect good faith performance from Defendant during the time that it would reasonably take them to pay their mortgage debt, assuming they fulfilled their contractual duties.
e. When the contract was terminated by mutual agreement before Plaintiffs paid their mortgage debt, it was reasonably foreseeable by Defendant that Plaintiff would have to sell their farm to mitigate their damages. When Defendant refused to issue a letter of intent to Plaintiffs’ potential buyer, it did not act in good faith. (Doc. 17, Ex. A.)
13. In the Interim Award, the Arbitrator awarded Plaintiffs payment for past medical and diagnostic treatments related to Danny Roe’s lep-tospirosis symptoms but awarded no future payments. See id. He also found that Plaintiffs were entitled to an award for Defendant’s breach of its duty of good faith and fair dealing in refusing to issue a letter of intent to Plaintiffs’ buyer. The Arbitrator stated that “the award to the Roes is limited to Cargill’s breach of its duty to allow Roe to mitigate his damages after termination of the contract.” id. He reopened the arbitration hearing for the limited purpose of taking evidence on remedial elements to determine an award for Defendant’s “breach of duty to allow Roe to mitigate his damages.” id.
14. The Arbitrator made a Final Award on October 26, 2003, with additional findings to include:
a. The evidence supported the conclusion that the buyer for Plaintiffs’ farm, Willis O’Connell, was a qualified buyer.
b. Defendant did not issue O’Connell a letter of intent which he needed to obtain financing because it did not want to finance Plaintiffs’ litigation.
c. In refusing to issue the letter of intent, Defendant “frustrated Roe’s duty and opportunity to mitigate his damages.”

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Bluebook (online)
333 F. Supp. 2d 808, 2004 U.S. Dist. LEXIS 17249, 2004 WL 1950047, Counsel Stack Legal Research, https://law.counselstack.com/opinion/roe-v-cargill-inc-arwd-2004.