Pham v. Tyson Farms, Inc.
Filing
62
ORDER granting in part and denying in part 43 Motion for Summary Judgment; denying 58 Motion to Strike for the reasons set out in the Order. Signed by Chief District Judge Daniel P. Jordan III on August 30, 2018. (SP)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF MISSISSIPPI
NORTHERN DIVISION
THANG QUOC PHAM
V.
PLAINTIFF
CIVIL ACTION NO. 3:17-CV-125-DPJ-FKB
TYSON FARMS, INC.
DEFENDANT
ORDER
Tyson Farms, Inc. (“Tyson”) seeks summary judgment [43] on Plaintiff Thang Quoc
Pham’s claims. For the following reasons, the Court grants Tyson’s motion as to the breach-ofcontract, anticipatory-breach, and negligent-infliction-of-emotional-distress claims. The motion
is otherwise denied. Finally, the Court denies Tyson’s related Motion to Strike [58].
I.
Facts and Procedural History
This case arises from Pham’s contract to raise broilers—i.e., chickens—for Tyson. In
November 2005, Pham entered into a broiler-production contract with Tyson for a seven-year
term. 2005 Contract [43-1] at 3–4. After Pham completed his first seven years, Tyson invited
him to renew his contract, and he signed the 2012 Broiler Production Contract (“Contract”).
2012 Contract [43-1] at 28–29. Pham says that his relationship with Tyson then went south. As
examples, Pham cites multiple instances where Tyson refused to allow him to use his automated
chicken feeder (“Chickmate”) and instead required him to handfeed approximately 125,000
chickens. Ultimately, around mid-July 2015, Pham asserts that Tyson representatives threatened
to pull out of the Contract unless Pham terminated it and sold his farm. Under stress from
Tyson’s purported threat, Pham located a purchaser and exited the broiler-production business.
Aggrieved by Tyson’s alleged conduct, Pham sued Tyson asserting claims for breach of
contract, tortious breach of contract, breach of the duty of good faith and fair dealing, and
negligent/intentional infliction of emotional distress. After discovery, Tyson moved for
summary judgment [43] as to all claims, and Pham responded in opposition [46, 47]. The parties
then presented their positions during oral argument, after which the Court instructed them to
submit supplemental briefs. They did so, see Def.’s Mem. [56]; Pl.’s Mem. [57], and Tyson has
further moved to strike Pham’s supplemental expert affidavit, see Def.’s Mot. [58]. The Court
has subject-matter and personal jurisdiction and is ready to rule on these pending motions.
II.
Motion for Summary Judgment
A.
Standard
Summary judgment is warranted when evidence reveals no genuine dispute regarding any
material fact and that the moving party is entitled to judgment as a matter of law. The rule
“mandates the entry of summary judgment, after adequate time for discovery and upon motion,
against a party who fails to make a showing sufficient to establish the existence of an element
essential to that party’s case, and on which that party will bear the burden of proof at trial.”
Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986).
The party moving for summary judgment “bears the initial responsibility of informing the
district court of the basis for its motion, and identifying those portions of [the record] which it
believes demonstrate the absence of a genuine issue of material fact.” Id. at 323. The
nonmoving party must then “go beyond the pleadings” and “designate ‘specific facts showing
that there is a genuine issue for trial.’” Id. at 324 (citation omitted). In reviewing the evidence,
the court resolves factual controversies in favor of the nonmovant, “but only when . . . both
parties have submitted evidence of contradictory facts.” Little v. Liquid Air Corp., 37 F.3d 1069,
1075 (5th Cir. 1994) (en banc). When such contradictory facts exist, the court may “not make
credibility determinations or weigh the evidence.” Reeves v. Sanderson Plumbing Prods., Inc.,
2
530 U.S. 133, 150 (2000). Conclusory allegations, speculation, unsubstantiated assertions, and
legalistic arguments have never constituted an adequate substitute for specific facts showing a
genuine issue for trial. TIG Ins. Co. v. Sedgwick James of Wash., 276 F.3d 754, 759 (5th Cir.
2002); Little, 37 F.3d at 1075; SEC v. Recile, 10 F.3d 1093, 1097 (5th Cir. 1993).
B.
Analysis
Pham’s summary-judgment response narrows the issues to some extent. First, he
expressly concedes his cause of action for anticipatory breach. See Pl.’s Mem. [47] at 34.
Second, Pham offers no response to Tyson’s argument regarding his negligent-infliction-ofemotional-distress claim. The Court finds Pham waived this claim and that it is otherwise due
for dismissal. See Criner v. Tex.-N.M. Power Co., 470 F. App’x 364, 368 (5th Cir. 2012) (“If a
party fails to assert a legal reason why summary judgment should not be granted, that ground is
waived and cannot be considered or raised on appeal.” (quoting Keenan v. Tejeda, 290 F.3d 252,
262 (5th Cir. 2002))). The remaining claims will be addressed in turn.
1.
Breach of Contract
Tyson says summary judgment is warranted on Pham’s breach-of-contract claim because
it has not breached any specific Contract provision. In Mississippi, a plaintiff asserting breach of
contract must show: “1. the existence of a valid and binding contract; and 2. that the defendant
has broken, or breached it; and 3. that ‘the plaintiff’ has been thereby damaged monetarily.”
Bus./Commc’ns, Inc. v. Banks, 90 So. 3d 1221, 1224–25 (Miss. 2012) (quoting Warwick v.
Matheney, 603 So. 2d 330, 336 (Miss. 1992)). When determining whether a breach occurred, the
Mississippi Supreme Court has repeatedly stated that
the “four corners” test is applied, wherein the reviewing court looks to the
language that the parties used in expressing their agreement. . . . Our concern is
not nearly so much with what the parties may have intended, but with what they
said, since the words employed are by far the best resource for ascertaining the
3
intent and assigning meaning with fairness and accuracy. Thus, the courts are not
at liberty to infer intent contrary to that emanating from the text at issue. On the
other hand, if the contract is unclear or ambiguous, the court should attempt to
harmonize the provisions in accord with the parties’ apparent intent. Only if the
contract is unclear or ambiguous can a court go beyond the text to determine the
parties’ true intent. The mere fact that the parties disagree about the meaning of a
contract does not make the contract ambiguous as a matter of law.
One S., Inc. v. Hollowell, 963 So. 2d 1156, 1162–63 (Miss. 2007) (internal citations and
quotation marks omitted). When the language is ambiguous, “the subsequent interpretation
presents a question of fact for the jury.” Neider v. Franklin, 844 So. 2d 433, 436 (Miss. 2003).
Here, Pham says Tyson breached the Contract in three ways: (1) Tyson’s threat to
terminate the Contract violated its termination provisions; (2) banning Pham from using
Chickmate violated the Contract’s best-efforts provision; and (3) Tyson’s failure to train Pham
regarding Chickmate likewise infringed on the Contract’s best-efforts provision. See Pl.’s Mem.
[47] at 21–27. Pham’s first theory falls short and the other two are not properly before the Court.
a.
Threatened Termination
The Contract included the following provisions regarding termination:
9.
Termination.
A.
In addition to the right to cancel this Contract set forth in
paragraph 1, Producer has the right to terminate this Contract at any time
with no less than ninety (90) days written notice. Company has the right
to terminate this Contract upon default by Producer. The following
constitute events of default by Producer:
i.
ii.
iii.
iv.
Use of abusive or threatening language with or threat of
physical harm to Company’s representatives.
Endangering the health or welfare of Company’s chickens,
or altering or supplementing Company’s feed, medication,
or administration schedule(s).
Selling, collateralizing, or in any manner encumbering or
preventing access of Company to Company’s chickens,
feed, or medication.
Failure to comply with any provision of this Contract,
including but not limited to compliance with all applicable
environmental and litter management laws, rules,
4
regulations, and ordinances, and all requirements and
programs contained in the attached Schedules.
B.
Company will give notice of default to Producer. If Company
exercises its right to terminate this Contract, Company will provide
a written termination notice that will become effective 90 days
from the date thereof. Upon default, Company may take
immediate possession of Company’s chickens, feed, and
medication without further notice, delay, or legal process. . . .
Company shall not be obligated to deliver chickens to Producer
subsequent to providing notice of default. No waiver by Company
of any default will operate as a waiver of any other default, and
Company’s rights and remedies are cumulative and not exclusive
of any other right provided by law of equity.
2012 Contract [1-2] at 2–3.
Pham was not in default, and Tyson never activated the termination provisions of the
Contract. Instead, it continued to perform under the Contract for an additional year after it
allegedly threatened to end the agreement. Pham Dep. [46-1] at 70–71. So technically speaking,
Tyson never breached the actual terms of the agreement.
But Pham says the alleged threats had the effect of terminating the contract without
satisfying the termination clause. Pl.’s Mem. [47] at 23. In some factual contexts, such a theory
might be relevant to an anticipatory breach, but Pham is not making that claim. Pl.’s Mem. [47]
at 34. Pham instead suggests what sounds like a constructive-breach theory. He does not,
however, cite any Mississippi cases supporting a breach-of-contract claim under these facts, and
the Court is not aware of any.1
Although Pham offered no binding authority on this point, he did cite Tilstra v. BouMatic
LLC, during oral argument. 791 F.3d 749 (7th Cir. 2015) (Posner, J.). There, a dairy-equipment
manufacturer (BouMatic) forced one of its dealerships (Tilstra) to sell to another dealer by
1
Pham spent little time in his memorandum addressing the actual breach-of-contract claim and
largely folded it into the good-faith claim, which will be addressed below.
5
threatening to shrink Tilstra’s sales territory to essentially nothing if it resisted the sale. Id. at
752. Although BouMatic did not technically violate the contract’s termination provision, the
jury returned a verdict for the plaintiff/dealership. Id. at 752. The Seventh Circuit affirmed
based on a constructive-breach theory, and Pham now urges this Court to follow suit. But it does
not appear that Tilstra actually recognized constructive termination apart from breach of the duty
of good faith and fair dealing. Before trial, the district court held that “under the facts of this
case, a breach of the duty of good faith and constructive termination are two sides of the same
coin.” Tilstra v. Bou-Matic, LLC, No. 12-CV-827-SLC, 2014 WL 4662483, at *4 (W.D. Wis.
Sept. 19, 2014). And when the Seventh Circuit analyzed the breach, the only authority it cited
related to bad faith under Wisconsin law. Tilstra, 791 F.3d at 752.
All this suggests that Pham and Tyson’s dispute over the breach-of-contract claim may be
one of semantics. While Pham has not shown that Mississippi would recognize a stand-alone
breach-of-contract claim under the circumstances, Mississippi law “suppl[ies] a term requiring
both parties to a contract to exercise what is called ‘good faith.’” Cenac v. Murry, 609 So. 2d
1257, 1272 (Miss. 1992) (citation omitted). And Pham says Tyson breached that duty. See infra
Section II(B)(2). But because Pham has not shown that Tyson breached the express contract
terms when it allegedly threatened to withdraw, that claim is dismissed.
b.
Chickmate
Pham’s other two breach-of-contract theories relate to Chickmate. As noted above,
Chickmate was a feeding tool for young chicks. Tyson told Pham he could not use Chickmate
because he was misusing the equipment, wasting food, and threatening the health of the broilers.
Pham now says Tyson breached the Contract’s best-efforts provision by failing to train him on
Chickmate and by preventing him from using it.
6
The best-efforts provisions in the Contract state as follows:
2.
Duties of Company.
A.
Company will furnish Producer with and will retain title and
ownership to chickens, feed, and medication. Company will
determine the amount, type, frequency, and time of delivery to and
pick-up from Producer of chickens, feed, and medication.
B.
Company will provide veterinary services and technical advice to
assist Producer’s production of Broilers.
C.
Company will comply with all applicable federal, state, and local
statutes, rules, regulations, and ordinances in performance of this
Contract.
....
4.
Best Efforts.
Company and Producer will use their reasonable best efforts in the
production of Broilers [i.e., chickens bred for consumption].
Contract [1-2] at 2.
Although the contract language does not mention Chickmate by name, it is at least
arguable that the best-efforts obligations would cover it. But there are two threshold
problems—Pham failed to clearly plead this claim and then waived it.
In his Complaint, Pham mentioned Chickmate and the prohibition against using it.
But he did so with respect to the original 2005 contract, stating that Tyson prevented him
from using Chickmate to “hinder and prevent Mr. Pham from being able to sufficiently
feed his poultry for proper growth under his 2005 Contract.” Pl.’s Compl. [1] ¶ 3.8. He
did not aver those same concerns under the subject 2012 Contract, stating more generally
that “Tyson breached the 2012 contract with Mr. Pham.” Id. ¶ 4.2. And when given the
opportunity to explain his breach-of-contract claim during his deposition, Pham stated
that it was based on Tyson’s alleged threat to end the Contract and nothing else. Pham
Dep. [46-1] at 78. It was not until his summary-judgment response that Pham said Tyson
had breached the best-efforts provision by prohibiting him from using Chickmate.
7
There are two approaches for addressing a new legal theory raised in response to a
dispositive motion—ignore the new theory or treat it as a motion to amend. Compare Cutrera v.
Bd. of Supervisors of La. State Univ., 429 F.3d 108, 113 (5th Cir. 2005) (“A claim which is not
raised in the complaint but, rather, is raised only in response to a motion for summary judgment
is not properly before the court”), with Debowale v. US Inc., No. 95-20031, 1995 WL 450199, at
*1 (5th Cir. July 3, 1995) (per curiam) (“[t]he district court should have construed [the
plaintiff’s] Bivens claim, raised for the first time in his response to the summary judgment
motion, as a motion to amend the complaint under [Rule] 15(a) and granted it.”).
In this case, the Court will not infer a never-made motion to amend. It might be different
had Pham merely excluded the theory from his Complaint, but he went further, testifying that he
based the breach-of-contract claim on the alleged threats and that he was “not claiming any other
kind of breach of contract.” Pham Dep. [46-1] at 305. Tyson was entitled to rely on that
testimony as it concluded discovery and prepared its dispositive motion. See Green v. JP
Morgan Chase Bank, N.A., 562 F. App’x 238, 240 (5th Cir. 2014) (affirming refusal to consider
new factual theory raised in response to summary-judgment motion). Had Pham wished to
pursue this theory, he could have pleaded it in the Complaint; clarified the issue during or
immediately after the deposition; or timely moved to amend. He did none of that, and the
deadline to file a proper motion to amend under Federal Rule of Civil Procedure 15 and the Case
Management Order has long passed. Under these circumstances, the breach-of-contract claim is
limited to the alleged threat to discontinue the Contract, and that claim is dismissed for the
reasons stated.
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2.
Breach of the Duty of Good Faith and Fair Dealing
The issues regarding Pham’s good-faith claim have evolved over the course of the
summary-judgment proceedings. Initially, Tyson said that a breach of contract is a prerequisite
to bringing a breach-of-good-faith claim under Mississippi law. See Def.’s Mem. [44] at 11. But
Cenac v. Murry forecloses that argument. 609 So. 2d at 1272.2
It is tempting to stop here and merely note that arguments raised in Tyson’s reply are not
properly before the Court. Gillaspy v. Dall. Indep. Sch. Dist., 278 F. App’x 307, 315 (5th Cir.
2008) (observing “practice of . . . the district courts to refuse to consider arguments raised for the
first time in reply briefs”). Nevertheless, the issues were argued during the hearing and
addressed in supplemental briefing. The Court will therefore consider two additional theories:
(1) that Pham must establish exceptional circumstances—including a financial motive—to
sustain a good-faith claim and (2) that Pham cannot show that his expectations under the
Contract have been injured because he sold his farm as a going concern, which included lost
profits.
2
The most direct statement supporting Tyson’s position is found in Daniels v. Parker & Assocs.,
Inc., where the Mississippi Court of Appeals stated that “to have a breach of the duty of implied
good faith and fair dealing there must first be an existing contract and then a breach of that
contract.” 99 So. 3d 797, 801 (Miss. Ct. App. 2012) (emphasis added). But that language
paraphrases Lippincott v. Mississippi Bureau of Narcotics, where the court held that “the claim
of breach of the covenant of good faith itself asserts a tort, one flowing from tortious breach of
contract.” 856 So. 2d 465, 468 (Miss. Ct. App. 2003). Lippincott does not address whether a
party can breach the implied good-faith obligations without otherwise breaching specific contract
provisions. Moreover, the quoted language from Lippincott cites Braidfoot v. William Carey
College, where the court addressed breach of contract and breach of the implied duty of good
faith separately. 793 So. 2d 642 (Miss. Ct. App. 2000). The court held: “Nothing in the record
supports a claim that this contract was breached or that the College breached its implied duty of
good faith and fair dealing.” Id. at 651 (emphasis added). All of this aside, the Mississippi
Supreme Court allowed an independent claim for breach of the duty of good faith and fair
dealing in Cenac. Cenac controls.
9
Tyson first says “the Mississippi Supreme Court would only allow a good faith and fair
dealing case to go to a jury if the case contains the exceptional facts and elements present in
Cenac,” including “evidence of bad faith financial motive” for the disputed conduct. Def.’s
Mem. [56] at 20. But Tyson acknowledges that “there admittedly is no case in Mississippi
expressly stating that a defendant’s bad faith financial motive is a required element for a claim
for breach of the covenant of good faith and fair dealing.” Id. at 18.
Tyson’s concession is correct. Mississippi courts have consistently described good-faith
claims without reference to financial motives. This Court will not introduce any additional
elements. Instead,
[t]he breach of good faith is bad faith characterized by some conduct which
violates standards of decency, fairness or reasonableness. The covenant holds
that neither party will do anything which injures the right of the other to receive
the benefits of the agreement. The covenant imposes a duty not to prevent or
hinder the other party’s performance, but may also impose a duty to take some
affirmative steps to cooperate in achieving these goals.
Ferrara v. Walters, 919 So. 2d 876, 883 (Miss. 2005) (internal citations and quotation marks
omitted).
Under this test, Pham must show some conduct that “violates standards of decency.” Id.
Tyson says Pham fails to meet that standard because the alleged acts are too pedestrian, but the
Court concludes that a fact question exists. Pham first says Tyson treated him differently from
other broiler producers by prohibiting him from using Chickmate to feed his chickens. Pham
Dep. [46-1] at 64.3 Pham was therefore forced to handfeed 125,000 chickens daily causing him
to underperform. Id. at 32, 35, 79–80. He believes the tactic was designed to cause default or to
3
Unlike the delinquent breach-of-contract claim related to Chickmate, Pham did say in his
deposition that the prohibition against using the machine breached the duty of good faith. Id. at
79.
10
force him to voluntarily terminate his contract. Second, Pham asserts Tyson strong-armed him
into selling his farm and business even though Tyson lacked a contractual basis to terminate. See
Pl.’s Mem. [47] at 20, 24. Finally, he says Tyson sent a “sham letter” suggesting that Pham
voluntarily terminated the contract. Id. at 29, 32. While Tyson has reasons for its decisions, the
record must be viewed in the light most favorable to Pham. Little, 37 F.3d at 1075. And in that
light, a question of fact exists whether Tyson fulfilled its duty to avoid hindering Pham’s
performance and to take steps to “cooperate in achieving” that performance. Ferrara, 919 So. 2d
at 883.
Additionally, under the same test, Pham must show that Tyson’s conduct interfered with
his right “to receive the benefits of the agreement.” Id. In other words, it frustrated his
expectations. Tyson says Pham falls short in this regard because the relevant expectations must
be economic. It further argues that Pham realized his economic expectations when he sold his
farm for fair-market value, including any future profits Pham would have generated had the
parties completed the Contract. See Def.’s Mem. [56] at 12–16. Awarding damages under these
circumstances would, according to Tyson, constitute a windfall. Id. at 15 (citing R.K. v. J.K.,
946 So. 2d 764, 777 (Miss. 2007) (“It is well known that this state does not endorse double
recovery.”)).
“[T]he appropriate remedy for the breach of the covenant of good faith is the measure of
expectancy type damages.” Cenac, 609 So. 2d at 1273. Generally, “damages are the favored
remedy unless damages are wholly inadequate as a remedy.” Id. at 1274. Neither party found a
Mississippi case directly answering whether the relevant expectations must be economic as
opposed to the more esoteric benefit of owning his farm and running his business under contract.
But assuming without deciding that only economic expectations count, Pham submitted an
11
expert opinion from certified public accountant H. Kenneth Lefoldt establishing lost profits from
the alleged forced termination. See Lefoldt Report [57-1] at 2–4.
Tyson now rejects Lefoldt’s opinion, but it never moved to strike it.4 Instead it makes a
legal argument that no lost profits occurred because Pham sold the business. But that legal
argument has imbedded questions of fact, and when the record is viewed in the light most
favorable to Pham, the Court finds that there is a question of fact whether Tyson frustrated
Pham’s economic expectations. The motion is denied as to the breach-of-good-faith-and-fairdealing claim.
3.
Tortious Breach of Contract
A claim for tortious breach of contract in Mississippi requires “in addition to the breach,
some intentional wrong, insult, abuse, or negligence so gross as to constitute an independent
tort.” Unity Comm., Inc. v. AT&T Mobility, Inc., 643 F. Supp. 2d 829, 839 (S.D. Miss. 2009)
(citing Wilson v. Gen. Motors Accept. Corp, 883 So. 2d 56 (Miss. 2004)). Here, Tyson says that
Pham’s tortious-breach-of-contract claim fails as a matter of law for two reasons: Tyson never
breached the contract and the claim is timed-barred under Mississippi Code section 15-1-35.
Starting with the time-bar argument, section 15-1-35 creates a one-year statute of
limitation applied to “actions for assault, assault and battery, maiming, false imprisonment,
malicious arrest, or menace, and all actions for slanderous words concerning the person or title,
for failure to employ, and for libels.” When, as in this case, the disputed claim is not enumerated
in the statute, “the relevant inquiry is whether the alleged conduct was so closely analogous to
one of the torts enumerated in the statute that it falls within the one year bar.” B&C Constr. &
Equip., LLC v. Ovella, 880 F. Supp. 2d 735, 739 (S.D. Miss. 2012) (citation omitted). Tortious
4
As discussed later, Tyson has moved to strike Lefoldt’s supplemental opinion.
12
breach of contract does not meet this test. Id. The one-year limitation does not apply; the claim
is timely.
The next question is whether Pham can show a tortious breach of contract. As noted
above, Pham has not established a jury issue as to an express breach of contract. And at this
stage, the Court would desire more research on whether Mississippi would allow a separate
tortious-breach-of-contract claim premised on the breach of the implied duty of good faith and
fair dealing. The issue will be carried over. See Kunin v. Feofanov, 69 F.3d 59, 62 (5th Cir.
1995) (holding that “even if the standards of Rule 56 are met, a court has discretion to deny a
motion for summary judgment if it believes that ‘a [sic] better course would be to proceed to a
full trial.’” (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255–56 (1986)).5
4.
Intentional Infliction of Emotional Distress
Tyson says Pham’s intentional-infliction-of-emotional-distress (“IIED”) claims fail as a
matter of law because its conduct was not sufficiently outrageous. In Mississippi, a successful
IIED claim requires proof that: “1. [The defendant] committed an act without justification or
reason; 2. The act is one which evokes outrage or revulsion in civilized society; 3. The act was
directed at or intended to cause harm to [the plaintiff]; and 4. Any resulting emotional distress
was foreseeable from this intentional act.” Pierce v. Cook, 992 So. 2d 612, 626–27 (Miss. 2008).
Regarding the outrage element,
the conduct must have been so outrageous in character, and so extreme in degree,
as to go beyond all possible bounds of decency, and to be regarded as atrocious,
and utterly intolerable in a civilized community. The liability clearly does not
5
That said, the Mississippi Supreme Court has held that a “breach of an implied covenant of
good faith and fair dealing may . . . reach[ ] the level of an independent tort.” Stewart v. Gulf
Guar. Life Ins. Co., 846 So. 2d 192, 201 (Miss. 2002). So the end result may be the same,
notwithstanding the legal label Pham attached to his claim. Finally, it remains to be seen
whether the evidence is sufficient to send the claim to the jury as an independent tort.
13
extend to mere insults, indignities, threats, annoyances, petty oppression, or other
trivialities. It is the nature of the act itself—as opposed to the seriousness of the
consequences—which gives impetus to legal redress.
Brown v. Inter-City Fed. Bank for Sav., 738 So. 2d 262, 264–65 (Miss. Ct. App. 1999) (internal
citations and brackets omitted); see also Speed v. Scott, 787 So. 2d 626, 630 (Miss. 2001)
(holding that defendant’s conduct must be “wanton and willful and it would evoke outrage or
revulsion” (quoting Leaf River Forest Prods., Inc. v. Ferguson, 662 So. 2d 648, 659 (Miss.
1995))).
Pham asserts that the alleged acts he cites for the breach-of-good-faith-and-fair-dealing
claim likewise constitute sufficiently outrageous conduct. Again, Tyson disagrees, and it may
have a point. But the record must be viewed in the light most favorable to Pham. And on this
record, the Court will allow the claim to move forward. See Kunin, 69 F.3d at 62.
III.
Motion to Strike Untimely Affidavit
In response to Tyson’s arguments during the hearing, Pham submitted an affidavit from
his expert Kenneth Lefoldt opining on Pham’s economic injuries. See Def.’s Mot. [58]. Tyson
says this affidavit should be stricken because it (1) was submitted after the deadline to designate
experts passed, (2) seeks to offer new information not included in Lefoldt’s earlier expert report,
and (3) contradicts information provided by Pham’s other expert, Benton Gibson. See id. Pham,
in turn, says the affidavit is a rebuttal affidavit in response to Tyson’s arguments or,
alternatively, a supplemental report. See Pl.’s Resp. [60] at 1–6. Further, Pham says that the
factors presented in Bradley v. United States, 866 F.2d 120, 125 (5th Cir. 1989), support the
admission of Lefoldt’s affidavit. See id. at 6–10. The Court will address each of these
arguments in turn. 6
6
Pham also claims that the issue is moot as the Court need not consider the affidavit in ruling on
the pending summary-judgment motion. See Pl.’s Mem. [60] at 1–2. While Pham is correct that
14
Pham first argues that Lefoldt’s affidavit is a properly submitted rebuttal affidavit. In
pertinent part, Federal Rule of Civil Procedure 26(a)(2)(D) states:
A party must make [expert] disclosures at the times and in the sequence that the
court orders. Absent a stipulation or a court order, the disclosures must be made:
(i) at least 90 days before the date set for trial or for the case to be ready
for trial; or
(ii) if the evidence is intended solely to contradict or rebut evidence on the
same subject matter identified by another party under Rule 26(a)(2)(B) or
(C), within 30 days after the other party’s disclosure.
As such, a rebuttal report must respond to critiques by another party’s expert. Here, Tyson has
not proffered any expert testimony attacking the reliability of Lefoldt’s initial report; rather,
Tyson is attacking only the legal sufficiency of Pham’s evidence proffered to support his claims.
Accordingly, Lefoldt’s affidavit is not a true rebuttal report as envisioned under Rule 26(a).
Alternatively, Pham says Lefoldt’s affidavit is offered merely to supplement his earlier
report under Federal Rule of Civil Procedure 26(e). As this Court noted in another case:
Rule 26(e)(1)(A) allows a party to supplement when it “learns that in some
material respect the disclosure or response is incomplete or incorrect.” The
purpose of rebuttal and supplementary disclosures is just that—to rebut and to
supplement. These disclosures are not intended to provide an extension of the
deadline by which a party must deliver the lion’s share of its expert information.
And the rule is not a basis to make material additions to an initial report.
As such, courts frequently disallow purported “supplements” offered to defeat
summary judgment when the opinions could have been offered at an earlier time.
South v. Austin, No. 3:15-CV-342-DPJ-FKB, 2016 WL 7077617, at *1–2 (S.D. Miss. Dec. 2,
2016) (internal citations omitted).
the Court did not rely on Lefoldt’s supplemental affidavit, the Court must nevertheless decide
whether Lefoldt should be allowed to supplement his opinions going forward.
15
Here, Lefoldt submitted an initial expert report opining that Pham lost $407,511 when the
Contract prematurely terminated. See Lefoldt Report [56-3] at 2. He arrived at that amount by
multiplying the monthly cash profit under the contract by the number of months it was cut short.
Id. But Lefoldt supplemented that opinion in response to Tyson’s argument that the sales price
of the farm fully accounted for the lost profits. Now he says “[t]he lost profits addressed in my
damage calculation are separate from and independent of the appraisal value of the farm.”
Lefoldt Aff. [57-1] at 1. He explains that “[i]n the event the 2012 Contract had not been
canceled by Tyson, and Pham had sold his farm at the end of his contract, it is expected that he
would have received the profits to be earned over the course of the 2012 Contract in the amount
of approximately $407,511.” Id. He reaches that opinion based on the conclusion that “[t]he
farm was sold at fair market value as land and equipment only, not including any going concern
business value” because Pham’s poultry contract with Tyson did not transfer to the new owner.
Id. Tyson says this statement materially alters Lefoldt’s initial report.
The Court finds that under the procedural history of this case, Lefoldt’s new affidavit
should be considered a supplemental report. Lefoldt has not materially altered his opinion as
Tyson argues; he merely explains why Tyson’s summary-judgment argument does not change
his opinion that Pham lost $407,511. Cf. South, 2016 WL 7077617, at *6 (“The disputed
opinions from his affidavit are more specific and detailed, offering additional liability and
causation theories to avoid summary judgment. A party cannot circumvent the disclosure
requirements in this way.”).
This finding does not end the analysis, however, as Pham’s supplementation is untimely
under Local Uniform Civil Rule 26.1(a)(5), which requires “[a] party . . . to supplement
disclosures at appropriate intervals under [Rule] 26(e) and in no event later than the discovery
16
deadline established by the case management order.” Therefore, the Court must consider
whether Pham should be allowed to supplement Lefoldt’s initial report almost five months after
the close of discovery.
In Bradley, the Fifth Circuit articulated a four-factor test for admitting untimely expert
testimony: “(1) the importance of the witness’s testimony; (2) the prejudice to the opposing
party of allowing the witness to testify; (3) the possibility of curing such prejudice by granting a
continuance; and (4) the explanation, if any, for the party’s failure to identify the witness.” 866
F.2d at 125.
The Court finds that these factors favor allowing Pham to delinquently supplement
Lefoldt’s affidavit. First, Lefoldt’s affidavit is clearly important to Pham as it addresses Tyson’s
double-recovery argument. Second, despite Tyson’s averment that it would be prejudiced
because it lacks an expert to counter Lefoldt’s damage calculation, it was Tyson’s decision to
forgo an expert in response to Lefoldt’s initial disclosure. See Def.’s Reply [61] at 8. As
identified by Pham, “Lefoldt’s affidavit defends Lefoldt’s methodologies, just as Lefoldt will
defend his methodologies and opinions when cross-examined at trial.” Pl.’s Mem. [60] at 5.
Tyson will have the opportunity to attack Lefoldt’s reliability during cross-examination. Third,
to the extent prejudice does exist in this matter, the Court finds that a continuance and counterdesignations by Tyson would cure it. Lastly, Pham’s explanation for why he did not supplement
Lefoldt’s report earlier seems logical. Tyson never moved to strike, made no counter
designations, and did not challenge Lefoldt’s damages calculations until its summary-judgment
motion. Even then, the argument was limited to the contract claim, whereas it was extended to
the good-faith claim during oral argument.
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In sum, the Court finds that the Bradley factors weigh in favor of allowing Pham to
supplement Lefoldt’s affidavit with the following caveats: (1) within 20 days of this Order,
Tyson may depose Lefoldt regarding his affidavit and (2) within 20 days of that deposition, or
the expiration of the deadline to take it, whichever occurs first, Tyson may counter-designate an
expert to address Lefoldt’s new affidavit. Tyson’s motion [58] is therefore denied.
IV.
Conclusion
The Court has considered all arguments. Those not specifically addressed would not
have changed the outcome. For the foregoing reasons, Tyson’s Motion for Summary Judgment
[43] is denied in part and granted in part. Additionally, Tyson’s Motion to Strike [58] is denied.
Tyson is nevertheless granted limited leave to designate an expert witness to address Lefoldt’s
affidavit, and it may depose Lefoldt. Once Tyson determines whether it will counter-designate,
it should confer with Pham and contact the Court to set an appropriate pretrial-conference date.
SO ORDERED AND ADJUDGED this the 30th day of August, 2018.
s/ Daniel P. Jordan III
CHIEF UNITED STATES DISTRICT JUDGE
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