Pacific AG Group v. H Ghesquiere Farms

Filing

UNPUBLISHED PER CURIAM OPINION filed. Originating case number: 5:05-cv-00809-FL Copies to all parties and the district court/agency. [998554975].. [07-1993]

Case: 07-1993

Document: 32

Date Filed: 03/29/2011

Page: 1

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT

No. 07-1993

PACIFIC AG GROUP; ALLIANCE FARM GROUP, INCORPORATED,
Plaintiffs - Appellees,
v.
H. GHESQUIERE FARMS, INCORPORATED; GHESQUIERE PLANT FARMS
LIMITED; STRAWBERRY HILL, INCORPORATED,
Defendants - Appellants.

Appeal from the United States District Court for the Eastern
District of North Carolina, at New
Bern.
Louise W. Flanagan,
Chief District Judge. (5:05-cv-00809-FL)

Submitted:

January 13, 2011

Decided:

March 29, 2011

Before WILKINSON, DUNCAN, and AGEE, Circuit Judges.

Reversed by unpublished per curiam opinion.

John R. Wallace, Joseph A. Newsome, WALLACE, NORDAN & SARDA,
L.L.P., Raleigh, North Carolina, for Appellants.
Paige C.
Kurtz, SPROUSE & KURTZ, PLLC, Raleigh, North Carolina, for
Appellees.

Unpublished opinions are not binding precedent in this circuit.

Case: 07-1993

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Date Filed: 03/29/2011

Page: 2

PER CURIAM:
H. Ghesquiere Farms, Inc. (“Ghesquiere Farms”) appeals
the district court’s judgment finding it liable to Pacific Ag
Group (“Pacific Ag”) for $190,600 in damages (plus interest)
stemming from a contract dispute between the parties.

For the

reasons that follow, we reverse. *
In 2003, Pacific Ag purchased a quantity of strawberry
runner tips (infant strawberry plants) from Ghesquiere Farms.
Pacific Ag contended that the runner tips were sub-standard and
infected with a disease that made them unusable and did not
tender payment.

Ultimately, Ghesquiere Farms sued Pacific Ag in

North Carolina state court, and the action was removed to the
district

court.

See

Strawberry

Hill,

Inc.

v.

Alliance

Farm

Group, Inc., No. 5:03-cv-795-FL (E.D.N.C.).
As the federal litigation was pending, Frank Sances,
Pacific

Ag’s

principal,

Farm’s

principal,

to

met

with

discuss

Carl

Ghesquiere,

settling

the

Ghesquiere
litigation.

Ghesquiere became aware that Pacific Ag had been late planting
their fields that season, and saw an opportunity to immediately

*

On December 20, 2010, Ghesquiere Plant Farms Limited filed
a “Suggestion of Bankruptcy” notifying the court and the
opposing parties that it had filed for bankruptcy in a Canadian
court.
No party has suggested or argued that the bankruptcy
filing prevents this court from issuing its decision in this
case.

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Case: 07-1993

Document: 32

Date Filed: 03/29/2011

supply young strawberry plants to Pacific Ag.

Page: 3

At the end of

their meeting, Sances and Ghesquiere (without the assistance of
counsel)

drafted

and

executed

a

settlement

agreement

that

ultimately became the subject of the instant appeal.
The

agreement

provided

that

Ghesquiere

Farms

would

provide 500,000 strawberry runner tips to Pacific Ag free of
charge

before

Ghesquiere

July

Farms

26,

to

2004.

sell

The

agreement

additional,

high

also

quality

required

strawberry

runner tips at a discounted rate to Pacific Ag in 2004, 2005,
and

2006.

The

litigation

agreement

“following

Farms[.]”

provided

successful

for

dismissal

performance

by

of

the

Ghesquiere

Paragraph 8 of the settlement agreement contained a

provision

that

strawberry

“[i]f

runner

tips

Ghesquiere
for

Plant

[Pacific

Farms

Ag],

the

ceases
full

growing

amount

of

promised discounts will be paid by Ghesquiere to [Pacific Ag].”
The parties (now assisted by counsel) later entered an addendum
to the settlement agreement providing for more gifting of plants
in

2005

and

facilitating

the

dismissal

of

the

previous

litigation.
In late 2004, Sances and Ghesquiere began negotiations
for the purchase of strawberry runner tips for 2005.

Sances

claims that he repeatedly informed Ghesquiere that he might not
have any orders for 2005 based on the market and the quality of
Ghesquiere’s plants in 2003 and 2004.
3

Sances ultimately did

Case: 07-1993

make

two

Document: 32

identical

written

Date Filed: 03/29/2011

offers

consistent with the agreement.

to

Page: 4

purchase

runner

tips

Ghesquiere never accepted the

offers, however, as he and Sances continued to disagree on the
amount of the discount to be provided, whether payment was due
in advance, and whether inspection would occur before shipping
or after delivery.
When Sances and Ghesquiere were unable to reach an
agreement

for

the

purchase

of

runner

tips

in

2005,

Sances

informed Ghesquiere that he had no purchases from his customers
and would be doing no business with Ghesquiere Farms for the
2005 season.

Sances later confirmed in writing that Pacific Ag

would not purchase any plants from Ghesquiere Farms.
2005

memorandum,

Sances

informed

Ghesquiere

In a June

that

“the

full

amount of the discount is due” as a repayment for the damages
suffered from the sale of defective Ghesquiere Farms plants in
2003.
Ghesquiere Farms failed to tender payment in response
to Sances’s communication, and Pacific Ag brought a complaint
against

Ghesquiere

Farms

in

district

court.

The

complaint

sought damages resulting from Ghesquiere Farms’s alleged failure
to perform on the settlement agreement by providing discounted
runner tips to Pacific Ag.
court

ruled

in

favor

of

damages (plus interest).

After a bench trial, the district
Pacific

Ag

and

awarded

$190,600

in

The court based its ruling primarily
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Case: 07-1993

on

the

Document: 32

conclusions

that

the

Date Filed: 03/29/2011

term

“ceases”

in

Page: 5

the

settlement

agreement was ambiguous and that when the parties were unable to
reach an agreement for the purchase of runner tips in 2005,
Ghesquiere Farms “ceased” growing strawberry plants for Pacific
Ag.

When

discount,

Ghesquiere

agreement.

the

Farms

district

did

court

not

pay

ruled

the

that

amount

the

breached

it

of

the

Ghesquiere Farms noted a timely appeal.
This court reviews a district court’s conclusions of

law at the bench trial de novo and its factual findings for
clear error.
433

Roanoke Cement Co. v. Falk Corp., 413 F.3d 431,

(4th Cir. 2005).

“ceases”

is

Ghesquiere

unambiguous

and

Farms

should

argues

not

be

that
read

the
to

term

impose

liability on them when Pacific Ag failed to place an order for
runner tips.

Pacific Ag, on the other hand, claims that the

language is subject to more than one reasonable interpretation
when viewed in the context of the agreement as a whole.

Pacific

Ag further contends that analysis of extrinsic evidence reveals
that the parties intended for Pacific Ag to be able to elect
either to purchase runner tips at a discount or take the value
of the discount in cash.
The

parties

agree

that

contracts applies to their claims.

North

Carolina’s

law

of

“When the language of a

written contract is plain and unambiguous, the contract must be
interpreted as written and the parties are bound by its terms.”
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Date Filed: 03/29/2011

Page: 6

Atlantic & E. Carolina Ry. Co. v. Wheatley Oil Co., 594 S.E.2d
425,

429

contract

(N.C. Ct. App. 2004).
when

provisions

either

is

the

uncertain

interpretations.

An

meaning
or

ambiguity

of

words

capable

of

or

exists
the

several

in

a

effect

of

reasonable

Schnkel & Schultz, Inc. v. Hermon F. Fox &

Assocs., 658 S.E.2d 918, 922 (N.C. 2008) (citations omitted).
In determining whether a phrase is ambiguous, “words are to be
given their usual and ordinary meaning and all the terms of the
agreement are to be reconciled if possible[.]” Piedmont Bank and
Trust Co. v. Stevenson, 339 S.E.2d 49, 52 (N.C. Ct. App. 1986).
A court may not, “in the guise of construing an ambiguous term,
rewrite the contract or impose liabilities on the parties not
bargained for and found therein.”

Dawes v. Nash Cnty., 584

S.E.2d 760, 764 (N.C. 2003) (internal citation omitted).
The district court stated that “[a] reading of the
2004 [s]ettlement [a]greement which binds plaintiffs to trade in
strawberry runner tips in order to be compensated for losses
sustained as a result of purchase of tips from defendants in
2003, in the face of the facts of this case, is nonsensical.”
We do not agree.
purpose

of

the

As the court itself noted, the predominant
agreement

was

to

facilitate

the

continuing

business relationship between the parties, not merely to settle
past debts.

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Case: 07-1993

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Date Filed: 03/29/2011

Page: 7

Our review of the agreement leads us to conclude that
the reading proposed by Pacific Ag is not a reasonable one and
accordingly, the term “ceases” is not ambiguous.

“Ceases” in

the context of the settlement agreement, means just that.

There

is no indication in the agreement that the parties intended to
give

Pacific

Ag

an

election

to

seek

either

to

Ghesquiere Farms or to demand a monetary award.

trade

with

If that were

the case, Pacific Ag would have had no incentive to purchase
runner tips from Ghesquiere Farms and every incentive to simply
elect

the

cash

contemplated

option.
continuing

a

Rather,
business

the

agreement

clearly

relationship

between

Ghesquiere Farms and Pacific Ag unless Ghesquiere Farms stopped
(i.e., ceased) growing runner tips.
Because

we

conclude

that

the

agreement

was

not

ambiguous, we need not review the extrinsic evidence contained
in the record.

Furthermore, we need not address the district

court’s conclusion that parol evidence shows that the parties
intended a different outcome.

Finally, though Ghesquiere Farms

did file a counterclaim against Pacific Ag that was dismissed by
the district court, it has not sought to appeal that issue, and
it is abandoned.
We
court.
legal

therefore

reverse

the

judgment

of

the

district

We dispense with oral argument because the facts and
contentions

are

adequately
7

presented

in

the

materials

Case: 07-1993

before

the

court

Document: 32

and

Date Filed: 03/29/2011

argument

would

not

aid

Page: 8

the

decisional

process.
REVERSED

8