Helena Chemical Co v. Williamson

Filing 31

MEMORANDUM RULING re 10 MOTION for Summary Judgment on Consequential Damages filed by Helena Chemical Co. Signed by Judge Robert G James on 3/23/15. (crt,Crawford, A)

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF LOUISIANA
MONROE DIVISION

HELENA CHEMICAL CO.

CIVIL ACTION NO. 14-0192

VERSUS

JUDGE ROBERT G. JAMES

LAVELLE WILLIAMSON

MAG. JUDGE KAREN L. HAYES

RULING
This action was brought by Plaintiff Helena Chemical Co. (“Helena”) against Defendant
Lavelle Williamson (“Williamson”) to recover amounts due for goods and services provided to
Williamson under a Credit Sales and Services Agreement. Williamson filed a counterclaim asserting
that Helena was negligent for selling him wet corn seed, which resulted in his decreased production,
loss of higher contract price, and increased farming expenses.
Pending before the Court is Helena’s Motion for Summary Judgment on Consequential
Damages [Doc. No. 10]. Williamson filed a memorandum in opposition to the motion [Doc. No.
15]. Helena filed a reply memorandum [Doc. No. 20]. Finally, Williamson filed a sur-reply
memorandum in opposition to the motion [Doc. No. 26].
For the following reasons, Helena’s motion is DENIED.
I.

FACTS AND BACKGROUND
Williamson began farming in 2010. Prior to that time, he had worked in the oilfield industry,

marked timber, and as a painter. He has a tenth grade education.
Until 2010, Williamson had never purchased seeds or chemicals for farming purposes.
During his first year of farming, he sought to purchase goods and services from Helena on credit.

Helena presented him with a Credit Sales and Services Agreement (“the Agreement”), which he
signed. [Doc. No. 1-2, Exh. A]. The terms were not discussed or explained to him.
Between 2010 and 2013, Williamson purchased seed, fertilizer, and chemicals from Helena
under the Agreement. The Agreement was not superseded or cancelled at any time.
For the 2013 crop year, Helena provided certain goods and services to Williamson, including
corn seed and soybeans and related products, for a total price of $79,188.50. After Helena’s
delivery, Williamson had difficulty getting the corn seed out of Helena’s tender. He contacted
Helena’s sales representative, Paul McKinley, to complain about this issue, but proceeded with
planting the corn seed.
Williamson’s corn seed failed to germinate, and a sufficient stand of corn was not realized
for the 2013 crop year. He avers that “it was determined” that Helena’s corn seed was wet when it
was delivered in Helena’s tender.1 [Doc. No. 16, Williamson Aff., ¶ 4]. According to Williamson,
the wet corn seed absorbed more chemicals than it would normally, resulting in a loss of “at least
eighty (80) bushels of corn per acre.” [Doc. No. 16, Williamson Aff., ¶ 3]. Helena contends,
however, that Williamson’s corn crop failure was a result of his own improper application of
fertilizer.2
Williamson made one payment to Helena, but has not made any further payments on his
account, arguing that Helena is liable to him in neglience. Helena has filed the instant motion

1

It is unclear how this was determined or by whom, but the Court accepts his statement for
purposes of this motion. The Court assumes Williamson would be prepared to present evidence to
support this claim at trial.
2

The Court also accepts Helena’s factual argument for the purpose of showing that Helena
would contest Williamson’s negligence counterclaim if the counterclaim were to proceed to trial.
2

seeking a ruling by the Court that Williamson cannot recover consequential damages based on the
exclusion/limitations of remedies provision of the Agreement. Williamson opposes the motion.
The Court is now prepared to rule.
II.

LAW AND ANALYSIS
A.

Standard of Review

Under Federal Rule of Civil Procedure 56, summary judgment “should be rendered if the
pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no
genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law.”
FED. R. CIV. P. 56(c)(2). The moving party bears the initial burden of informing the court of the
basis for its motion by identifying portions of the record which highlight the absence of genuine
issues of material fact. Topalian v. Ehrmann, 954 F.2d 1125, 1132 (5th Cir. 1992). A fact is
“material” if proof of its existence or nonexistence would affect the outcome of the lawsuit under
applicable law in the case. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A dispute
about a material fact is “genuine” if the evidence is such that a reasonable fact finder could render
a verdict for the nonmoving party. Id.
If the moving party can meet the initial burden, the burden then shifts to the nonmoving party
to establish the existence of a genuine issue of material fact for trial. Norman v. Apache Corp., 19
F.3d 1017, 1023 (5th Cir. 1994). In evaluating the evidence tendered by the parties, the Court must
accept the evidence of the nonmovant as credible and draw all justifiable inferences in its favor.
Anderson, 477 U.S. at 255. However, “a party cannot defeat summary judgment with conclusory
allegations, unsubstantiated assertions, or only a scintilla of evidence. Thus, Summary Judgment is
appropriate if a reasonable jury could not return a verdict for the nonmoving party.” Turner v. Baylor
3

Richardson Med. Ctr., 476 F.3d 337, 343 (5th Cir. 2007)(citing Anderson v. Liberty Lobby, Inc., 477
U.S. 242, 248(1986)).
B.

Consequential Damages

In his counterclaim, Williamson seeks to recover damages from Helena based on its alleged
negligence, claiming that he suffered damages in the amount of $148,964.15 for decreased corn
production, $64,439.16 for loss of a higher contract price, and $13,491.50 for increased farming
expenses for the 2013 crop year.
Helena moves the Court for judgment as a matter of law that Williamson cannot recover on
his counterclaim, arguing that the clear and unambiguous language of the Agreement prevents him
from recovering consequential damages.
Williamson opposes Helena’s motion and argues that the exclusion/limitations of remedy
provision in the Agreement is unenforceable under Tennessee law.
The Agreement contains the following pertinent provisions:
THE EXCLUSIVE REMEDY FOR ANY CAUSE OF ACTION BY OR ON
BEHALF OF PURCHASER UNDER THIS STATEMENT AND RELATED
TRANSACTION(S) IS A CLAIM FOR DAMAGES AND IN NO EVENT SHALL
DAMAGES OR ANY OTHER RECOVERY OF ANY KIND AGAINST HELENA
. . . EXCEED THE PRICE OF THE SPECIFIC GOODS OR SERVICES WHICH
CAUSE THE ALLEGED LOSS, DAMAGE, INJURY OR OTHER CLAIM.
NEITHER HELENA . . . SHALL BE LIABLE AND ANY AND ALL CLAIMS
AGAINST HELENA . . . ARE WAIVED FOR SPECIAL, DIRECT OR
CONSEQUENTIAL DAMAGES, OR EXPENSES, OF ANY NATURE
INCLUDING, BUT NOT LIMITED TO, LOSS OF PROFITS OR INCOME, CROP
OR PROPERTY LOSS OR DAMAGE, LABOR CHARGES AND FREIGHT
CHARGES, WHETHER OR NOT BASED ON HELENA’S, ITS OFFICERS’,
DIRECTORS’, EMPLOYEES’ AND/OR AFFILIATES’ NEGLIGENCE, BREACH
OF WARRANTY, STRICT LIABILITY IN TORT OR ANY OTHER CAUSE OF
ACTION.
...
4

THE FOREGOING CONDITIONS OF SALE AND LIMITATIONS OF
WARRANTY, LIABILITY AND REMEDIES MAY BE VARIED OR WAIVED
ONLY BY AGREEMENT IN WRITING SIGNED BY A DULY AUTHORIZED
REPRESENTATIVE OF HELENA.
[Doc. No. 10-1, Aff. of Gary Yochum, Exh. 001, ¶¶ 11, 14].
The Agreement’s choice of law clause provides that Tennessee law governs,3 which the
parties do not dispute.4 Under Tennessee law, “[t]he interpretation of a contract is a matter of law.”
Guiliano v. Cleo, Inc., 995 S.W.2d 88, 95 (Tenn. 1999). Consequently, “[q]uestions of contract
interpretation . . . are especially well-suited for resolution by summary judgment.” Ross Prods. Div.
Abbott Labs. v. Tennessee, No. M2006-01113-COA-R3-CV, 2007 Tenn. App. LEXIS 752, at *7
(Tenn. Ct. App. Dec. 5, 2007). “If the language [of a contract] is clear and unambiguous, the literal
meaning controls the outcome of the dispute.” Allstate Ins. Co. v. Watson, 195 S.W.3d 609, 611
(Tenn. 2006).
As a preliminary argument, Helena asserts that the Court has already decided this issue in a
previous case, Dawson Farms, LLC v. BASF Corporation and Helena Chemical Company, Civil
Action No. 06-0737 (W.D. La.). In that case, Helena filed a motion for summary judgment, arguing
that a 2002 Credit Sales and Services Agreement precluded Dawson Farms from recovering
consequential damages. Dawson Farms opposed the motion, contending that subsequent agreements,
not the Credit Sales and Services Agreement, were controlling. The Magistrate Judge issued a

3

Helena is a Delaware corporation with its principal place of business in Tennessee.

4

Louisiana law generally allows choice of law provisions. LA. CIV. CODE ANN. art 3540
(“issues of conventional obligations are governed by the law expressly chosen or clearly relied upon
by the parties, except to the extent that law contravenes the public policy of the state whose law
would otherwise be applicable under Article 3537.”). Neither party contests the application of
Tennessee law.
5

Report and Recommendation on the motion, which was adopted by the Court. In that Report, the
Magistrate Judge determined that the Credit Sales and Services Agreement, which contained a
limitations/exclusion of remedies provision, controlled and barred Dawson Farms’ recovery of
consequential damages from Helena.
At first blush, the Court’s prior decision would seem to foreclose Williamson’s arguments
in this case. Certainly, the Court finds that the Agreement at issue in this case is clear and
unambiguous and that it applies, generally, to the dispute between the parties. However, as
Williamson points out, the parties in the previous case did not dispute the enforceability of the
provisions of the Credit Sales and Services Agreement under Tennessee law; they disputed whether
the 2002 agreement controlled. Dawson Farms, Civil Action No. 06-0737 [Doc. No. 117, p.6 n.5
(“Dawson Farms does not contend that the 2002 Agreement is ambiguous, opting instead to argue
that it has been novated. Neither does Dawson Farms contest that the provisions limiting
Helena’s liability are valid and enforceable under Tennessee law. See La. Civ. Code Ann. Art.
3540 (Tennessee law could not control if it would lead to a result that violates Louisiana’s public
policy.).) (emphasis added)]; see id. at p. 7 (“It is also undisputed that [the Credit Sales and Service
Agreement’s] provisions are enforceable under Tennessee law.”)]. Thus, the Court finds that it has
not specifically addressed the issue presented by Williamson and will consider the substantive
arguments under Tennessee law.5
Tennessee Code Annotated 47-2-719 provides:
(1) Subject to the provisions of subsections (2) and (3) of this section and of the
preceding section on liquidation and limitation of damages:
5

Helena’s Credit Sales and Services Agreement was amended in 2007, but neither party
contends that there were changes affecting the issues in this case.
6

(a) the agreement may provide for remedies in addition to or in substitution for those
provided in this chapter and may limit or alter the measure of damages
recoverable under this chapter, as by limiting the buyer’s remedies to return of
the goods and repayment of the price or to repair and replacement of
nonconforming goods or parts; and
(b) resort to a remedy as provided is optional unless the remedy is expressly agreed
to be exclusive, in which case it is the sole remedy.
(2) Where circumstances cause an exclusive or limited remedy to fail of its
essential purpose, remedy may be had as provided in chapters 1-9 of this title.
(3) Consequential damages may be limited or excluded unless the limitation or
exclusion is unconscionable. Limitation of consequential damages for injury to the
person in the case of consumer goods is prima facie unconscionable but limitation
of damages where the loss is commercial is not.
(emphasis added). The comments following the statute explain:
1.

Under this section parties are left free to shape their remedies to their
particular requirements and reasonable agreements limiting or modifying
remedies are to be given effect.
However, it is of the very essence of a sales contract that at least
minimum adequate remedies be available. If the parties intend to
conclude a contract for sale within this Article they must accept the
legal consequence that there be at least a fair quantum of remedy for
breach of the obligations or duties outlined in the contract. Thus any
clause purporting to modify or limit the remedial provisions of this
Article in an unconscionable manner is subject to deletion and in that
event the remedies made available by this Article are applicable as if
the stricken clause had never existed. Similarly, under subsection (2),
where an apparently fair and reasonable clause because of
circumstances fails in its purpose or operates to deprive either party
of the substantial value of the bargain, it must give way to the general
remedy provisions of this Article.

...
3.

Subsection (3) recognizes the validity of clauses limiting or excluding
consequential damages but makes it clear that they may not operate in an
unconscionable manner. Actually such terms are merely an allocation of
unknown or undeterminable risks. The seller in all cases is free to disclaim
7

warranties in the manner provided in Section 2-316.
Tenn. Code Ann. 47-2-719 cmts. 1, 3. Thus, Tennessee permits the limitation of remedies unless
circumstances causes the remedy to fail of its essential purpose. Specifically, commercial parties
may limit or exclude consequential damages unless the limitation or exclusion is unconscionable.
The Court considers, first, whether the Agreement’s clause excluding consequential damages
is unconscionable. Whether a contract term is unconscionable is a question of law, and a
presumption of permissible dealings exists between commercial parties. See Lewis Refrigeration
Co. v. Sawyer Fruit, Vegetable & Cold Storage, , 709 F.2d 427, 435 & n. 12A (6th Cir. 1983); see
also Aquascene, Inc. v. Noritsu Am. Corp, 831 F.Supp. 602, 604-05 (M.D. Tenn.1993); Shepherd
v. Weather Shield Mfg., Inc., 2000 WL 34411064, at *5 (Tenn. Ct. App. Aug. 21, 2000). “In contrast
with failure of essential purpose, the determination of unconscionability focuses on the
circumstances as they existed when the parties entered into the contract.” Baptist Memorial
Hosp. v. Argo Const. Corp., 308 S.W.3d 337, 346 (Tenn. Ct. App. 2009).
The Tennessee Court of Appeals has discussed unconscionability in the commercial context:
Is the limitation on consequential damages unconscionable? This is a question of law
for the court in light of the commercial setting, purpose and effect of the provision.
(Citation omitted.) Unconscionability may arise from a lack of meaningful choice
on the part of one party (procedural unconscionability) or from contract terms that
are unreasonably harsh (substantive unconscionability). (Citation omitted.) In
Tennessee we have tended to lump the two together and speak of unconscionability
resulting when the inequality of the bargain is so manifest as to shock the judgment
of a person of common sense, and where the terms are so oppressive that no
reasonable person would make them on one hand, and no honest and fair person
would accept them on the other. (Citation omitted.) Where the parties possess equal
bargaining power the courts are unlikely to find that their negotiations resulted in an
unconscionable bargain, and terms that are common in the industry are generally not
unconscionable. (Citation omitted.)
Trinity Industries, Inc. v. McKinnon Bridge Company, Inc., 77 S.W.3d 159 (Tenn. Ct. App. 2001).
8

Although there are no Tennessee cases directly on point, Williamson has cited to the Court
to nine cases in other state and federal jurisdictions which have addressed this issue and found that
the exclusion or limitations of remedies provision was unconscionable.6 In many of those cases, the
seller or manufacturer held such a strong bargaining position that it could impose a provision on the
farmer which deprived him of “virtually all protection.” Martin v. Joseph Harris Co., 767 F.2d 296,
301 (6th Cir. 1985) (internal quotation marks omitted) (quoting J. WHITE & R. SUMMERS, THE
HANDBOOK OF THE LAW UNDER THE UNIFORM COMMERCIAL CODE, § 12-11, at 477 (2d ed. 1980)).7

6

Mullis v. Speight Seed Farms, Inc., 505 S.E. 2d 818 (Ga. 1998) (purchaser of tobacco seeds
for farming could not be held to warranty and limitation of remedies provisions, which were held
to be unconscionable and unenforceable under the facts of the case); Lutz Farms v. Asgrow Seed
Company, 948 F.2d 638 (10th Cir. 1991) (applying Colorado law, district court did not err in
refusing to limit buyer’s recovery to purchase price of onion seeds because the attempted exclusion
of consequential damages under a limitations of remedies provision was unconscionable); Latimer
v. William Mueller & Son, Inc., 386 N.W. 2d 618 (Mich. Ct. App. 1986) (limiting buyer to recovery
of the purchase price of bean seeds would lead to an unconscionable result); Martin v. Joseph Harris
Co., 767 F.2d 296 (6th Cir. 1985) (in a case involving the purchase of cabbage seed by two
“uncounseled laymen” commercial farmers, the Sixth Circuit affirmed the trial court’s finding
under Michigan law that a disclaimer and limitations clause was unconscionable); Schmaltz v.
Nissen, 431 N.W. 2d 657 (S.D. Sup. Ct. 1988) (limitations provision preventing buyer of sorghum
seeds from recovering consequential damages was “oppressive” and “declared unconscionable”);
Hansen v. Funk Seeds It’l, 373 N.W. 2d 30 (S.D. 1985) (provision limiting farmer to refund of his
corn seed price was unconscionable); Mallory v. Conida Warehouses, 350 N.W. 2d 825 (Mich. Ct.
App. 1984) (trial court was not clearly erroneous in finding a limitations of remedies provision was
unconscionable when the purchaser would have been limited to a return of the purchase price of
kidney bean seeds); Dessert Seed Company v. Drew Farmers Supply, Inc., 248 Ark. 858, 454 S.W.
2d 307, 311 (Ark. 1970) (“To hold Service Seed is limited to a recovery of the purchase price of the
seed in the face of established negligence would be unreasonable, unconscionable, and against sound
public policy.”); Nomo AgroIndustrial, SA DE CV v. Enza Zaden North America, Inc., 492
F.Supp.2d 1175 (D. Ariz. 2007) (purchaser of tomato seeds not barred from recovery by limitations
of damages clause where clause failed of its essential purpose, was unconscionable, and was
unenforceable under the circumstances).
7

In a later decision, the Sixth Circuit considered a case by a grain buyer against a feed corn
business and its president, in his individual capacity, under grain delivery contracts. The Sixth
Circuit declined to find a binding arbitration provision in an agreement unconscionable,
distinguishing Martin, explaining that in Martin
9

In Hanson v. Funk Seeds, Int’l, 373 N.W.2d 30 (S.D. Sup. Ct. 1985), the Supreme Court of South
Dakota reviewed and upheld a trial court’s determination that a corn seed supplier could not enforce
a remedy provision limiting the farmer/buyer to a refund of the corn seed price because the provision
was unconscionable. The Hanson Court explained:
Appellee Hanson, like most farmers, was not in a position to bargain for more
favorable contract terms, nor was he able to test the seed before the purchase. A crop
failure is inevitable if the corn seed is ineffective and to enforce the provisions here
in question, which would only allow the return of the purchase price, would leave
appellee without any substantial recourse for his loss. In essence, appellee would be
left without a remedy for another’s breach. Cf. Rozeboom v. Northwestern Bell
Telephone Co., 358 N.W.2d 241, 242 (S.D.1984). The trial court’s determination that
these provisions were unconscionable is therefore not in error and we uphold its
decision in this regard.

we held unconscionable a disclaimer of warranty and limitation of liability clause in
a sales contract between a farmer and a national seed producer. (A similar clause was
used by the seed producer’s competitors.) Therein, we relied in part on the disparity
in relative strength and the national producer’s failure to inform the farmer that the
clause altered significant statutory rights. However, in addition to giving
“considerable weight” to the district court’s opinion that Michigan law would not
permit the disclaimer to be enforced (something which we no longer do, see In re
Grand Jury ( Doe) v. United States, 932 F.2d 481, 487 (6th Cir.1991)), we made
clear that we were relying on the unique facts of the case: the producer discontinued
a seed treatment procedure that it had been using for 26 years to prevent a crop
disease called “black leg.” The sole notice of the change was provided in the corner
of one page in a catalog. A significant portion of the farmer’s crop was destroyed by
the disease. In reaching our decision, we noted that the defect was latent, that the seed
producer could have prevented it, and that the farmers had no control over it. Martin
has no applicability to the present dispute.
Andersons, Inc. v. Horton Farms, Inc., 166 F.3d 308, (6th Cir. 1998). Even if the Sixth Circuit no
longer gives considerable weight to a district court decision, its analysis in Martin is still instructive
in this case.

10

Id. at 35; cf Jones v. Asgrow Seed Co., 749 F.Supp. 836 (N.D. Ohio 1990) (limitation of liability not
unconscionable where limitation was conspicuous, buyer was experienced commercial tomato seed
buyer, and seed contained undiscoverable latent defect); Nunes Turfgrass v. Vaughan–Jacklin Seed
Co., 200 Cal.App.3d 1518, 246 Cal.Rptr. 823 (1988) (seller’s limitation of consequential damages
clause in sales confirmation for sale of commercial sod seed mix was not unconscionable where
buyer and seller were large commercial entities familiar with sod seed business and had done
business together for 20 years).
In this case, at the time the Agreement was entered, Williamson was a first-time farmer with
a tenth grade education and no apparent experience in the agricultural industry. He needed the goods
and services Helena provided to begin his farming career. Helena then presented him with an
agreement which had to be signed if he wished to purchase from Helena. Although the Agreement
was not prima facie unconscionable under Tennessee law8 and commercial parties are presumed to
have engaged in permissible dealings, this simply was not a commercial transaction between two
parties on equal footing. See Aquascene, 831 F.Supp. at 604 (The state legislature “intended to allow
merchants to allocate risks when making business contracts,” but a provision may be invalidated
“where one party is overwhelmed.”). Williamson was in no position to bargain and thus signed an
Agreement which left him without recourse, even if Helena’s action resulted in substantial damages

8

Tennessee Code Annotated 47-2-719(3) provides that “[l]imitations of consequential
damages for injury to the person in the case of consumer goods is prima facie unconscionable but
limitation of damages where the loss is commercial is not.” Helena reads this portion of the statute
to state the limitations of damages in the commercial context is not unconscionable. The Court
disagrees with Helena’s interpretation. Subsection (3) certainly assigns “greater protection under
the provision against unconscionability” for consumers, but it does not permit unconscionable
limitations or exclusion of damages in the commercial context without review by the court.
Aquascene,831 F.Supp. at 604.
11

to him. Under these circumstances and finding the decisions of every other court to consider this
issue persuasive, the Court finds that the exclusion/limitations of remedies provision is
unconscionable and unenforceable.
Further, even if the provision survived an unconscionability review, the Court also finds that
the remedy provision fails of its essential purpose. “Failure of essential purpose as codified in
Tennessee Code Annotated § 47–2–719 ‘is concerned with the essential purpose of the remedy
chosen by the parties, not with the essential purpose of the code or of contract law, or of justice
and/or equity.’” Baptist Memorial Hosp., 308 S.W.2d at 346 (quoting Arcata Graphics Co. v.
Heidelberg Harris, Inc., 874 S.W.2d 15, 28 (Tenn. Ct. App.1993) (citing 1 JAMES J. WHITE &
ROBERT S. SUMMERS, Uniform Commercial Code § 12–10 (3d ed.)). In contrast to the
unconscionability provisions, this code provision “‘is concerned only with novel circumstances not
contemplated by the parties and does not contemplate agreements arguably oppressive at their
inception.’” Id. The Tennessee Court of Appeals has explained further:
What then are “novel circumstances not contemplated by the parties” that would
cause a limited contractual remedy to fail of its essential purpose? White and
Summers note that
[t]he most frequent application of 2–719(2) occurs when under a
limited ‘repair and replacement’ remedy, the seller is unwilling or
unable to repair the defective goods within a reasonable period of
time. Thus the limited remedy fails of its essential purpose, i.e., fails
to cure the defect. A remedy also fails when the seller is willing and
able to repair, but the repairs cannot be done. This might happen
because the goods have been destroyed.
WHITE & SUMMERS 5th ed., supra, § 12–10. In this case, however, the contractual
remedy included refund of the purchase price as well as repair and replacement. This
Court has previously held that “[u]nder Tennessee law, the availability of a refund
remedy will prevent a repair remedy from failing of its essential purpose.” Arcata
Graphics Co., 874 S.W.2d at 29 (citing Int'l Talent Group v. Copyright Mgmt., 769
12

S.W.2d 217 (Tenn.Ct.App.1988)). Therefore, the Arcata Court held, “a warranty
providing for repair, replacement or refund provides a minimum adequate remedy
that cannot fail of its essential purpose.” Id. at 30.
Id. at 346.
In this case, a repair and replace remedy was not included in the Agreement and obviously
would have served no purpose. The Agreement does not use the term “refund,” but does provide that
“damages or any other recovery of any kind against Helena” may not “exceed the price of the
specific goods or services which cause the alleged loss, damage, injury or other claim.” [Doc. No.
10, Yochum Aff., Exh.001]. Thus, under the Agreement, Williamson can recover the cost of the
corn seed which allegedly caused the loss, i.e., a refund. Typically, pursuant to Tennessee law, a
refund is a minimum adequate remedy.
However, in this case, the refund of the purchase price is a “totally inadequate” remedy in
the “agricultural context.” Nomo Agroindusrial SA DE CV v. Enza Zaden North Am., 492 F.
Supp.2d 1175, 1181 (D. Ariz. 2007). “The true value of the seeds only comes from the crop yielded
which is preceded by considerable time and cost expended by the farmer. A farmer’s lost growing
season and the accompanying loss of expected profits due to the defective seeds clearly is not
compensated by simply replacing or refunding the price of the defective seeds.” Id. at 1181.
Williamson suffered the loss, not of corn seed, but of his corn crop. Thus, this Court, like the other
courts who have considered the issue, finds that the exclusion/limitations of remedies provision in
the Agreement fails of its essential purpose. If he can prove Helena’s negligence at trial, then
Williamson is not prevented by the Agreement from seeking consequential damages.
III.

CONCLUSION
For the foregoing reasons, Helena’s Motion for Summary Judgment on Consequential
13

Damages [Doc. No. 10] is DENIED. If Williamson prevails on his counterclaim, he may seek to
recover consequential damages from Helena.
MONROE, LOUISIANA, this 23rd day of March, 2015.

14