Wells v. Lorenz Farm Services, Inc. et al
MEMORANDUM AND ORDER granting the Plaintiff Wells' 33 Motion for Partial Summary Judgment. Defendants are liable to Wells for breach of contract, as set forth in this Memorandum and Order, for an amount yet to be determined. Defendants' counterclaims are dismissed. Ordered by Judge John M. Gerrard. (MKR)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEBRASKA
RYAN D. WELLS,
MEMORANDUM AND ORDER
LORENZ FARM SERVICES, INC.,
and DENNIS L. LORENZ,
This matter is before the Court on Plaintiff Ryan D. Wells' Motion for
Partial Summary Judgment (filing 33). The Court has considered the parties'
briefs (filing 34, 49, and 50) and Wells' index of evidence (filing 35). For the
reasons discussed below, the Court grants Wells' motion.
I. FACTUAL BACKGROUND
The following facts are those stated in the parties' briefs that are
supported by the record, that the parties have admitted, or that the parties
have not properly resisted. See, NECivR 56.1(b)(1); Fed. R. Civ. P. 56(c)(1)(A)
Wells conducts business as RW Farms. Filing 1 at 1, ¶ 1. As part of
Wells' business, he regularly contracts for deliveries of hay to be made to
various locations around the country. Filing 1-1.
Accordingly, in September 2011, Wells contracted with Defendants
Dennis L. Lorenz and Lorenz Farm Services, Inc. ("LFS") for the purpose of
securing a large quantity of hay for RW Farms. Filing 1-1. The parties agreed
to enter into ten separate "Commodity Sales Contracts" in which "Wells
agreed to purchase certain quantities of hay from LFS, and LFS agreed to
sell said quantities of hay to Wells and deliver the same . . . ." Filing 1-1 at 1.
At least six of the contracts required that LFS deliver hay to Garden City,
Kansas; others required delivery to Hereford, Texas; and perhaps some of the
hay was also to be delivered to Yuma, Colorado.1 Filing 1-1 at 6-15.
While none of the Commodity Sales Contracts list Yuma as a possible destination, the
contracts do not all list a destination, and Yuma unquestionably appears on the "delivery
schedule" described below. Filing 1-1 at 6-15. Moreover, while the parties’ later contract
By March 2, 2012, however, the hay deliveries—as stipulated by the
Commodity Sales Contracts—were behind schedule. Filing 1-1 at 1.
Therefore, the parties agreed to form a new contract, the "Hay Delivery
Agreement," which clarified important details such as the quantity of hay yet
to be delivered, the specific locations for delivery,2 and the dates on which
delivery was required. Filing 1-1. These details were listed in the "delivery
schedule," which was incorporated into the Agreement, and which superseded
the Commodity Sales Contracts.3 Filing 1-1 at 3, 15. Also, the parties agreed
that, from that time on, the hay would be delivered in "strict accordance"
with the delivery schedules. Filing 1-1 at 2. Accordingly, the parties provided
dates upon which they would review and evaluate the progress of deliveries.
Filing 1-1 at 2. And Lorenz personally guaranteed LFS' performance of the
contract. Filing 1-1 at 4.
The Agreement also provided that, in the event LFS was having trouble
meeting its delivery obligations, Wells could elect to help transport the hay at
LFS' cost, through RJ's Trucking, a trucking company partly owned by Wells.
Filings 1-1 at 2 and 35-1 at 1. However, this provision also stated that "[t]o
the extent RJ does not have the capacity and/or availability to handle such
loads, this shall not in any way reduce LFS' obligations herein." Filing 1-1 at
The parties signed the Hay Delivery Agreement on March 2, 2012.
Filing 1-1 at 4. And, as required under the agreement, Wells then deposited
$150,000 with LFS to pre-pay for the commercial freight expenses that LFS
expected to incur. Filing 34 at 7, ¶ 23; filing 49 at 2-3; filing 1-1 at 4.
The parties dispute much of what took place after March 2, 2012. Wells
alleges that under the Agreement, LFS was supposed to have delivered 714
loads of hay by April 15, 2012, but had only delivered 90. Filing 1 at 2.
Throughout March and April of 2012, Wells let LFS know that he was
concerned about the status of the deliveries. Filing 35-1 at 4-7. Wells has
provided copies of several such text messages that he sent to Defendants
during March and April of 2012 which demonstrate his concern about the
deliveries. Filing 35-1 at 4-7. For example, on March 14, 2012, Wells wrote:
(the "Hay Delivery Agreement") notes that they formed ten separate Commodity Sales
Contracts, only nine are attached to Wells' Complaint. Filing 1-1.
Garden City, Hereford, and Yuma were listed as the required locations for delivery.
The Hay Delivery Agreement provides that "[t]o the extent that the delivery deadlines
and/or delivery locations set forth in the delivery schedule(s) . . . are different than those set
forth in the Commodity Sales Contracts, the delivery schedule(s) sheet shall be controlling."
Filing 1-1 at 3.
Bill what is actually going on here?? [sic] The way it is
sounding to me is there is no hay or I mean not 33700 ton [sic]
and especially not 8000 ton [sic] of 3x4 bales. I need to get 3000
ton [sic] of big squares to Hereford by 4-30-12. If this is not going
to be possible you please need to call a spade a spade . . . ."
Filing 35-1 at 4. Similarly, on March 16, 2012, Wells wrote:
Out of the 32000 ton [sic] you have left to haul you cannot
tell me there is no where I can send my trucks Dennis?? [sic] In
order for you to fulfill agreement [sic] you have to deliver 120
loads per week to me from today on Dennis. This needs to be
addresses [sic] and resolved or it is going to cause much financial
loss and responsibility to you. . [sic] Please respect my concern
and step up to the plate and deliver how you agreed [sic]. Thanks
Filing 35-1 at 5.
Defendants, on the other hand, tell a different story. In their initial
Answer, they allege that Wells breached the contract by failing to adequately
provide trucks for picking up the hay. Filing 14 at 4. Defendants argue that
Wells "refused and failed to cooperate and act in good faith regarding the use
of [his] trucks for the pick-up and delivery of hay." Filing 49-1 at 2. And while
Defendants admit that Wells did make an effort "to pick-up hay for delivery"
on a few occasions, they allege that Wells improperly "demanded that Lorenz
Farm Service pay the costs of a round trip for such truck" despite the fact
that the trucks would have only carried hay one-way. Filing 49-1 at 2.
From there, however, Defendants' side of the story becomes somewhat
confusing. In Defendants' response to Wells' Motion for Partial Summary
Judgment, they admit one version of the story, but then argue a different
one. First, Defendants admit that "[n]ot long after the Agreement was
executed, LFS' and Lorenz' failure to meet delivery requirements became
apparent." Filing 34 at ¶ 17; filing 49 at 3. However, Defendants later
suggest that they had in fact met all of the delivery requirements, but that
Wells had thwarted their attempts to deliver by improperly rejecting the hay.
Filing 49-1 at 2. Therefore, they argue, "if Plaintiff had not rejected the hay
. . . Lorenz Farm Service would have been current and not been in default of
any of the terms and conditions of the Hay Delivery Agreement." Filing 49-1
No matter what took place after March 2, 2012, however, it is clear that
by the middle of April the parties' relationship had deteriorated.
Consequently, in light of what Wells alleges was Defendants' "material
breach" of the contract, Wells "seasonably canceled the Agreement by written
notice" on April 24 and demanded a return of his $150,000 deposit. Filing 1 at
2, ¶ 11.
Then, Wells filed the present complaint in this Court alleging that the
Defendants had breached the Hay Delivery Agreement. Filing 1. Defendants
answered and filed several counterclaims, which will be discussed in more
detail below. Filing 14. Wells eventually filed the Motion for Partial
Summary Judgment (filing 33) which is now before the Court, seeking
summary judgment as to Defendants' counterclaims and their liability under
the parties' contracts.
II. STANDARD OF REVIEW
Summary judgment is proper 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. See Fed. R. Civ. P. 56(c)(2). The moving party bears the initial
responsibility of informing the court of the basis for the motion, and must
identify those portions of the record which the movant believes demonstrate
the absence of a genuine issue of material fact. Torgerson v. City of Rochester,
643 F.3d 1031, 1042 (8th Cir. 2011) (en banc). If the movant does so, the
nonmovant must respond by submitting evidentiary materials that set out
specific facts showing that there is a genuine issue for trial. Id.
On a motion for summary judgment, facts must be viewed in the light
most favorable to the nonmoving party only if there is a genuine dispute as to
those facts. Id. Credibility determinations, the weighing of the evidence, and
the drawing of legitimate inferences from the evidence are jury functions, not
those of a judge. Id. But the nonmovant must do more than simply show that
there is some metaphysical doubt as to the material facts. Id. The mere
existence of a scintilla of evidence in support of the nonmovant's position will
be insufficient; there must be evidence on which the jury could conceivably
find for the nonmovant. Barber v. C1 Truck Driver Training, LLC, 656 F.3d
782, 791-92 (8th Cir. 2011).
Furthermore, an affidavit or declaration used to support or oppose a
motion must be made on personal knowledge, set out facts that would be
admissible in evidence, and show that the affiant or declarant is competent to
testify on the matters stated. Fed. R. Civ. P. 56(c)(4). The nonmovant "may
not merely point to unsupported self-serving allegations, but must
substantiate allegations with sufficient probative evidence that would permit
finding in [the nonmovant's] favor." Davidson & Associates v. Jung, 422 F.3d
630, 638 (8th Cir. 2005). Where the record taken as a whole could not lead a
rational trier of fact to find for the nonmoving party, there is no genuine issue
for trial. Torgerson, 643 F.3d at 1042.
Wells argues that there are no genuine issues of material fact with
regard to Defendants' counterclaims, and Defendants' liability under the
Commodity Sales Contracts and/or the Hay Delivery Agreement. The Court
will address each issue in turn.
A. Defendants' Counterclaims Against Wells
Defendants bring several counterclaims against Wells. Filing 14 at 4.
And while Defendants' claims are put in the form of ten numbered
paragraphs, Defendants essentially make one claim. Filing 14 at 4. Put
simply, they allege that the Hay Delivery Agreement required "both parties
to cooperate in various matters in the delivery of quantities of hay to Wells."
Filing 14 at 4. Defendants contend that because Wells "failed and refused to
cooperate in coordinating the pick-up and delivery of hay provided by Lorenz
Farm," Wells breached the contract. Filing 14 at 4.
Under Nebraska law,4 courts interpreting a contract must give effect to
the parties' intentions at the time the writing was made. Volquardson v.
Hartford Ins. Co. of the Midwest, 647 N.W.2d 599, 604 (Neb. 2002). When the
terms of a contract are clear, they should be accorded their plain and
ordinary meaning as an ordinary or reasonable person would understand
them. Misle v. HJA, Inc., 674 N.W.2d 257, 264 (Neb. 2004). "In such a case, a
court shall seek to ascertain the intention of the parties from the plain
language of the contract." Id.
Turning to the contract at issue, the Court finds that the terms of the
Hay Delivery Agreement plainly show that Wells had no duty to pick up and
deliver the hay. The relevant portion of the Agreement provided:
If, at any one or more of the evaluation periods, the
aggregate number of loads delivered to date is not within ten (10)
of the total required loads established for said period as set forth
on the delivery schedule(s) sheet (Exhibit "11"), LFS shall (at its
Because this is a diversity case, state substantive law applies. Emp’rs Reinsurance Co. v.
Mass. Mut. Life Ins. Co., 654 F.3d 782, 789 (8th Cir. 2011). Also, because neither party has
raised the choice of law question, and because Nebraska is the "forum state" in this
instance, Nebraska contract law and Nebraska’s Uniform Commercial Code apply by
default. BBSerCo, Inc. v. Metrix Co., 324 F.3d 955, 960 n.3 (8th Cir. 2003).
own cost) pay RJ's Trucking, LLC5 ("RJ") to pick up and deliver
the load shortages at RJ's freight rate then in existence.
Provided, further, however, that the parties understand and
acknowledge that RJ shall only pick up and deliver said loads to
the extent it has the capacity and availability so to do. To the
extent RJ does not have the capacity and/or availability to handle
such loads, this shall not in any way reduce LFS' obligations
Filing 1-1 at 2. Several points are worth highlighting here.
At the outset, it is important to view this provision in its proper
context. As explained above, under the parties' original agreement (the
Commodity Sales Contracts), LFS and Lorenz were solely responsible for
transporting the hay to Wells. See filing 1-1 at 1. However, by the end of
February 2012, LFS had failed to deliver much of the hay, causing Wells to
question LFS' ability to perform. Filing 1-1 at 1. The parties then entered
into the Hay Delivery Agreement, which provided Wells with several
assurances that LFS would deliver the hay. Filing 1-1 at 1. First, the parties
set out a clear schedule for LFS to follow. Filing 1-1 at 15. Second, Wells
agreed to prepay LFS $150,000 for freight charges. Filing 1-1 at 4. Third, the
parties agreed that Lorenz would be personally liable in the event that LFS
failed to deliver the hay. Filing 1-1 at 4. And fourth, the parties agreed to the
provision at issue. Filing 1-1 at 2.
It is apparent, therefore, when this provision is read in context, that it
was intended to give Wells the option to pick up the hay himself if LFS could
not deliver it—not to require Wells to do so. It would make little sense for
Wells to bind himself (or RJ's Trucking) to transport any portion of the hay
after paying LFS a substantial sum for delivery and securing Lorenz's
personal guarantee that LFS would perform.
Beyond that, RJ's Trucking is not a party to the contract. Filing 1-1 at
4. While Wells is a partial owner of RJ's Trucking, no one disputes that the
two are separate entities. Filing 34 at 3. If the parties really intended to
require RJ's Trucking to cooperate in transporting the hay, it would have
been a party to the Agreement.
But most importantly, the plain language of the provision simply does
not require that Wells or RJ's Trucking transport the hay. Instead, the
provision expressly states the opposite by emphasizing, first, "RJ shall only
pick up and deliver said loads to the extent it has the capacity and
RJ’s Trucking LLC is a Nebraska limited liability company, of which Wells is a partial
owner. Filing 34 at 3.
availability so to do" and, second, "this shall not in any way reduce LFS'
obligations herein." Filing 1-1 at 2.
In short, Defendant's counterclaims depend upon a construction of the
Hay Delivery Agreement that is contradicted by its plain terms. Therefore,
Wells' Motion for Summary Judgment is granted insofar as it relates to
Defendants' counterclaims, and those counterclaims will be dismissed.
B. Defendants' Liability Under the Contracts
Turning to the other half of Wells' Motion, Wells asserts that there are
no genuine issues of material fact with regard to Defendants' liability under
the Commodity Sales Contracts and/or the Hay Delivery Agreement. After
construing the facts in a light most favorable to Defendants, the Court
Under Nebraska law, to prove that Defendants are liable, Wells must
establish "the existence of a promise, its breach, damage, and compliance
with any conditions precedent that activate the defendant's duty." Henriksen
v. Gleason, 643 N.W.2d 652, 658 (Neb. 2002). Furthermore, in order to
recover, Wells must defeat Defendants' affirmative defenses.
The parties agree that there was a promise in the form of several valid
contracts. Filing 1 at ¶¶ 6, 14; filing 14 at ¶¶ 6, 14. The parties also agree
that Wells can show damages of at least the amount of the deposits he paid to
LFS. Filing 34 at ¶¶ 5, 23; Filing 49 at 2-3. Moreover, the parties agree that
Wells satisfied all conditions precedent to LFS' performance under the
contract.6 Filing 1 at ¶ 15; filing 14 at ¶ 15. This leaves only one requirement:
As to breach, Defendants have told two different stories at various
points in this litigation. Essentially, Defendants first said, "We couldn't
deliver the hay because Wells wouldn't help pick it up," and then later said
"We tried to deliver the hay but Wells refused it." And while it may be
possible to reconcile the Defendants' various assertions, the fact that
In their brief on summary judgment, Defendants purport to change their minds as to
whether Plaintiff satisfied this factor. Filing 49 at ¶ 16. But once a defendant admits an
item in a pleading, this admission is "in the nature of judicial admissions binding upon the
part[y], unless withdrawn or amended." Missouri Housing Development Commission v.
Brice, 919 F.2d 1306, 1314 (8th Cir. 1990) (citations omitted). It does not matter here,
though, because—despite their best efforts to confuse matters—Defendants do not actually
attempt to refute an earlier admission. Wells' acceptance of hay is not a "condition
precedent." Under Nebraska law, "[a] condition precedent is a condition which . . . must be
fulfilled before a duty to perform an existing contract arises." Cimino v. FirsTier Bank,
N.A., 530 N.W.2d 606, 613 (Neb. 1995). As Plaintiff notes, in this instance, "as a matter of
logic, Wells could not reject hay based on poor quality before LFS and Lorenz had the
obligation to deliver it." Filing 50 at 9.
Defendants did not adopt the second version until nearly 5 months after the
start of this litigation certainly raises questions. See filing 49-1 at 2.
Even so, Defendants' assertions might have been enough to survive
summary judgment—but they are also unsupported by the record and
contrary to Defendants' own admissions. To begin with, in the same filing in
which Defendants introduce Wells' supposed rejections of hay, they also
admit that "[n]ot long after the Agreement was executed, [their] failure to
meet delivery requirements became apparent . . . ." Filing 34 at ¶ 17; filing 49
at 3. Defendants do not try to explain away this contradiction; nor is the
Court required to do so on their behalf. Under NECivR 56.1(b)(1):
The party opposing a summary judgment motion should include
in its brief a concise response to the moving party's statement of
material facts. The response should address each numbered
paragraph in the movant's statement and, in the case of any
disagreement, contain pinpoint references to affidavits,
pleadings, discovery responses, deposition testimony (by page and
line), or other materials upon which the opposing party relies.
Properly referenced material facts in the movant's statement are
considered admitted unless controverted in the opposing party's
(Emphasis in original.)
More importantly, Defendants also fail to offer any evidence
persuasively establishing that Wells actually rejected deliveries of hay—even
in the face of the evidence Wells has placed in the record supporting the
opposite conclusion. Filing 35-1 at 4-7. Lorenz asserted in his affidavit that
hay was refused. Filing 49-1 at 2. But his statement is conclusory, and
unsupported by any foundation. Lorenz does not explain when Wells
supposedly rejected any hay deliveries, or aver any facts supporting the
conclusion that the hay supposedly delivered was satisfactory. Nor is there
any basis for Lorenz's conclusion that the Defendants' failure to deliver
substantial quantities of hay was entirely attributable to such rejections. Or,
stated another way, there is no foundation for Lorenz's conclusions. While
Lorenz avers that his conclusory assertions are based on "personal
knowledge," he never identifies the source of that knowledge—he never says
that he witnessed these events, or how else he might have learned of them.
To survive a motion for summary judgment, parties must provide the
court with more than mere speculation or conjecture. Barber v. C1 Truck
Driver Training, LLC, 656 F.3d 782, 791-92 (8th Cir. 2011). And it is well
established that "unsupported self-serving allegations" are similarly
insufficient. Davidson & Associates v. Jung, 422 F.3d 630, 638 (8th Cir.
2005). Lorenz's affidavit is the very definition of unsupported and selfserving. Therefore, because Defendants' allegations are conclusory, at odds
with the record, and contradicted by Defendants' own admission under
NECivR 56.1(b)(1), the Court finds that Defendants' breach of the contract is
established as a matter of law.
Finally, in order to demonstrate that there are no genuine issues of
material fact regarding Defendants' liability under the contract, Wells must
also survive Defendants' affirmative defenses. Defendants raise three
affirmative defenses. First, Defendants contend that "Plaintiff is estopped
from claiming a default under [the contract] . . . [because he] fail[ed] to
comply with the terms and conditions of said contract." Filing 14 at 3. While
Defendants do not explain how Wells failed to comply with the contract, they
are apparently referring to their allegation that Wells failed to cooperate in
transporting the hay. Filing 14 at 3-4. As already discussed, however, there
was no requirement in any contract between the parties that Wells cooperate
in transporting the hay. Therefore, this defense is meritless.
Second, Defendants assert that "Plaintiff has waived any and all
defaults . . . [by] acquiescence to the Defendant's [sic] compliance with
contract terms." Yet Defendants fail to provide any evidence supporting this
assertion. Instead, the record supports the opposite conclusion. Wells has
provided several pages of text messages and emails clearly demonstrating his
anxiety about whether Defendants were going to perform. Filing 35-1 at 4-7;
filing 35-2 at 4-13. This defense is also meritless.
Finally, Defendants argue that Wells has failed to state a claim upon
which relief can be granted under Fed. R. Civ. P. 12(b)(6). Put simply, Rule
12(b)(6) requires that Wells' complaint contain factual allegations that are
sufficient to "state a claim to relief that is plausible on its face." Bell Atl.
Corp. v. Twombly, 550 U.S. 544, 570 (2007). In making this determination,
the Court takes as true all facts alleged in the complaint. E-Shops Corp. v.
U.S. Bank Nat. Ass'n, 678 F.3d 659, 662 (8th Cir. 2012).
Here, Wells has stated a claim for relief. As discussed above, in order to
recover, Wells must establish the existence of a promise, its breach, damage,
and compliance with any conditions precedent to Defendants' duty.
Henriksen, 643 N.W.2d at 658. Wells' complaint alleges facts supporting each
of these elements, and Defendants have admitted all of these requirements.
The Court finds that Wells is entitled to partial summary judgment.
Lorenz and LFS have failed to present evidence from which a reasonable jury
could find that their counterclaims are successful or that they are not liable
under the contracts between the parties.
IT IS ORDERED:
Plaintiff Wells' Motion for Partial Summary Judgment
(filing 33) is granted.
Defendants are liable to Wells for breach of contract, as set
forth in this Memorandum and Order, for an amount yet to
Defendants' counterclaims are dismissed.
Dated this 15th day of November, 2012.
BY THE COURT:
John M. Gerrard
United States District Judge
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