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American Seeds, LLC v. Daily Feed & Grain, Inc.

United States District Court, S.D. Indiana, Indianapolis Division

January 12, 2018

DAILY FEED & GRAIN, INC., Defendant.


          Matthew P. Brookman United States Magistrate Judge

         This matter involves a dispute between a seed supplier, American Seeds, LLC, d/b/a Stewart Seeds (“Stewart Seeds[1]”), and its seed dealer, Daily Feed & Grain, Inc., (“DFG”). On January 7, 2015, Defendant, DFG, signed a hand written document (“the Document”) requesting it be removed from a grain account with Plaintiff, Stewart Seeds, “effective immediately.” After, the parties were unable to agree as to the effect of the document, namely, if it released DFG from past account liability. Stewart Seeds filed a Complaint alleging that DFG owed monetary damages for: (1) Action on Account; (2) Breach of Contract; (3) Unjust Enrichment/Quantum Meruit; and (4) Theft. (Docket No. 10). DFG, in turn, filed a counterclaim for (1) Fraud and (2) Conversion.

         The parties now move for summary judgment. DFG has filed a Motion for Summary Judgment on all of Plaintiff's Claims (Docket No. 64). Stewart Seeds has filed a Motion for Summary Judgment on all of its claims, excluding theft, and all of DFG's Counterclaims. (Docket No. 70). Finally, Stewart Seeds has filed a Motion for Sanctions and Supplemental Motion for Summary Judgment (Docket No. 83). For the reasons herein, DFG's Motion for Summary Judgment is DENIED, Stewart Seeds' cross motion is GRANTED in part and DENIED in part, and Stewart Seeds' Motion for Sanctions and Supplemental Motion for Summary Judgment is DENIED.

         I. Factual and Procedural Background

         In their motions for summary judgment, the parties attempt to describe a rather convoluted business relationship leaving significant factual gaps in the record. A summation of the parties' respective, albeit confusing, positions follows.

         Stewart Seeds sells seed to dealers who then resell the seed to customers of the dealer. (Docket No. 72-1 at ECF p. 1). DFG was a Stewart Seeds dealer at least from 2012 through 2014. (Docket No. 72-2 at ECF p. 7). Chad Sims, an employee of DFG, assisted Greg Daily with DFG's seed business from 2012 through 2014. (Docket No. 72-5 at ECF p. 3) (Docket No. 72-6 at ECF p. 4). Carol Brooks, Stewart Seeds' district sales manager, worked with Mr. Daily and Mr. Sims when DFG ordered and received seed for its customers.

         From 2012 to 2014 Stewart Seeds would send monthly statements to all dealers, including DFG, showing the amount of seed sold, amount of seed returned, payments received from customers, any applicable discounts and the balance currently owed on each dealer's account. (Docket No. 72-1 at ECF p. 3). Throughout DFG and Stewart Seeds' dealer/supplier relationship, DFG and DFG customers made payments to Stewart Seeds based on these invoices and statements. (Docket No. 72-1 at ECF p. 10). It was ultimately DFG's responsibility for making payments for the seed it ordered on its account regardless of whether DFG collected from all of its customers. (Docket No. 72-4 at ECF p. 4).

         In early January, 2015, Mr. Daily indicated to Ms. Brooks that DFG wanted to end its relationship with Mr. Sims in the seed business. (Docket No. 72-2 at ECF p. 4). What happened next is disputed by the parties. Stewart Seeds asserts that DFG, through Mr. Daily, had expressed its desire to no longer be associated with the same account number as Chad Sims and, as a result, Ms. Brooks drafted the below document on behalf of Mr. Daily who was busy with the grain elevator. (Docket No. 69-1 at ECF p. 5). Jim Stewart, lead of the brand for Stewart Seeds, gave some direction as to the document's creation. (Docket No. 72-2 at ECF p. 6).

         DFG asserts, via testimony of Mr. Daily, that Stewart Seeds said, through Carol Brooks, that the below document would release DFG from financial liabilities because otherwise DFG would be responsible for another $150, 000 from bad sales Chad Sims had made that were associated with the account number. (Docket No. 69-2 at ECF p. 9). DFG asserts that Ms. Brooks agreed that, in conjunction with the below document, Stewart Seeds would give DFG a new account number and it would be permitted to retain its clients it serviced prior to Chad Sims becoming involved in the account. (Docket No. 66-5 at ECF p. 2). Brooks' deposition testimony contradicts Daily's, asserting that a new account was not part of the discussion before drafting the below document and that Daily often changed his position on whether or not he wanted to continue to be a Stewart Seeds' dealer. (Docket No. 66-4 at ECF p. 11).

         On January 7, 2015, Brooks drafted a handwritten document signed by Daily, which stated, in full:

         To Whom It May Concern:

I would like to remove my name, Greg Daily, and Daily Feed & Grain from account #3294783 [“the Account”] effective immediately. All account financial affiliation and liability may be transferred to Chad Sims. I no longer want to be associated with this account # 3294783 in any regard.

(Docket No. 66-1 at ECF p. 2).

         After the document was signed, DFG was removed from the account number and Henry Farm Seed Service, LLC, with Chad Sims was added to the account number. (Docket No. 66-4 at ECF p. 6). Subsequently, Sims, on behalf of Henry Farm Seed Service, LLC, signed a dealership agreement in March, which was post-dated back to January 7, 2015, to coincide with Daily's document. (Docket No. 66-4 at ECF p. 7).

         At the end of the 2015 fiscal year, commonly referred to as “seed year” within the industry, during the Account's annual reconciliation, it became apparent to Stewart Seeds that the Account had a residual balance due from the 2014 seed year. (Docket No. 72-3 at ECF p. 5). Subsequently, Robertson, Brooks, and Sims, identified whether payments on the account were for 2014 or 2015 seed sales. (Docket No. 72-3 at ECF p. 6). This process of assigning payments to sales did not entail simply assigning customers' payments to their orders as DFG was a “non-billable” dealership, so some customers would send payments directly to Stewart Seeds whereas other customers would send payments to DFG and DFG would then send a check to Stewart Seeds, which could no longer be assigned to a specific customer's order. (Docket No. 72-3 at ECF p. 6). It was the responsibility of a non-billable dealer to accurately keep those records for himself. Id. At the end of Stewart Seeds' reconciliation, Robertson, Brooks, and Sims determined that the Account balance for pre-January 7, 2015 transactions was $189, 268.00. (Docket No. 72-12 at ECF p. 3); (Docket No. 72-1 at ECF p. 3).

         There is no evidence that Greg Daily was involved in these reconciliations. Robertson called Daily to let him know the results of the reconciliation and that it appeared that $189, 268.00 of the Account's liabilities were pre-January 7, 2015 responsibilities of DFG. (Docket No. 72-3 at ECF p. 143).

         II. Legal Standard

         Federal Rules of Civil Procedure 56 provides that summary judgment should be granted when the evidence establishes that “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a); Celotext Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 3548, 91 L.Ed. 265 (1986). The purpose of summary judgment is to “pierce the pleadings and to assess the proof in order to see whether there is a genuine need for trial.” Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). Disputes concerning material facts are genuine where the evidence is such that a reasonable jury could return a verdict for the nonmoving party. See Id. at 255, 106 S.Ct. 2505. However, neither the “mere existence of some alleged factual dispute between the parties, ” id. at 247, 106 S.Ct. 2505, nor the existence of “some metaphysical doubt as to the material facts, ” id. at 586, 106 S.Ct. 1348, will defeat a motion for summary judgment. Michas v. Health Cost Controls of Ill., Inc., 209 F.3d 687, 692 (7th Cir. 2000). The court cannot weigh evidence or make credibility determinations on summary judgment as those tasks are left to the fact-finder. O'Leary v. Accretive Health, Inc., 657 F.3d 625, 630 (7th Cir. 2011).

         Courts frequently confront cross motions for summary judgment. In such situations, courts must consider each party's motion individually to determine if that party has satisfied the summary judgment standard. “The existence of cross-motions for summary judgment does not . . . imply that there are no genuine issues of material fact.” R.J. Corman Derailment Servs., LLC v. Int'l Union of Operating Eng'rs, 335 F.3d 643, 647 (7th Cir. 2003).

         III. Discussion

         There are three motions before the court: (1) Plaintiff's Motion for Summary Judgment on Defendant's Counterclaims and its Cross-Motion for Summary Judgment on Plaintiff's Claims, Counts I-III (action on account, breach of contract, unjust enrichment/quantum meruit, respectively); Defendant's Motion for Summary Judgment on each of Plaintiff's counts; and (3) Plaintiff's Supplemental Motion, requesting both summary judgment and sanctions

         However, before the Court addresses the merits of Plaintiff's Motion for Summary Judgment, we must consider Plaintiff's request that this Court strike both Defendant's Brief in Opposition of Stewart Seed's Motion for Summary Judgment (Docket No. 77) and Defendant's Reply Brief in Support of its Motion for Summary Judgment (Docket No. 78). (Docket No. 82 at ECF p.2 n.2). Stewart Seeds' basis for its request was that both briefs were filed on October 18, 2017, two days after the deadline passed and without seeking leave. DFG subsequently explained it was due to a miscalculation. (Docket No. 80). The Court has chosen to consider the briefs as an exercise of judicial discretion. See Buggs v. Elgin, Joliet & E. Ry. Co., 852 F.2d 318, 322 (7th Cir. 1988) (explaining that a trial court has discretion to accept late-filed documents). Stewart Seeds motion to strike DFG's Response in Opposition to Plaintiff's Motion for Summary Judgment and DFG's Reply in Support of its Motion for Summary Judgment is DENIED.

         a. Plaintiff's Motion for Summary ...

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