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Helena Chemical Co. v. R&E Farms

United States District Court, N.D. Mississippi, Oxford Division

February 27, 2017

HELENA CHEMICAL COMPANY PLAINTIFF
v.
R&E FARMS, ET AL. DEFENDANTS

          ORDER GRANTING MOTION FOR SUMMARY JUDGMENT

          Jane M. Virden UNITED STATES MAGISTRATE JUDGE

         This matter is before the Court on the motion of the Plaintiff Helena Chemical Company for summary judgment against the Defendants [28]. For the reasons explained hereafter, summary judgment is granted in favor of the Plaintiff.

         Facts

         The following facts are undisputed: On January 23, 2015, R&E Farms, a partnership, entered into a Credit Sales and Services Agreement with Helena Chemical (“Credit Sales and Services Agreement” or “CSSA”). In relevant part, the agreement provides:

In consideration of being extended credit, now or in the future . . . R&E Farms Ptr . . . agrees as follows: . . . Paragraph 6: . . . the purchaser shall be responsible for the payment of all costs of collection incurred by Helena, including expenses and reasonable attorney's fees . . . Paragraph 7: Helena may, at any time, revoke the purchaser's privilege of purchasing on credit with respect to future purchases of Products or Services . . . Paragraph 17: This Agreement shall be governed by Tennessee law without regard to choice of law rules. Paragraph 18: In the event that the terms of this Agreement conflict with the terms of any other document or agreement between Helena and purchaser, the terms of this Agreement shall control. . . . Paragraph 19: All provisions under this agreement, including but not limited to, the provisions of paragraphs 2 and 3 above, and 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 credit manager, director of credit, or an officer of Helena.[1]

         On the same date, R&E Farms executed an Extended/Future Terms Request - Variable Prime Plus.[2] The Extended Terms request provides the Extended Terms due Dated: [handwritten in this blank is the date 12-15-15] and Extended terms credit limit: [handwritten in this blank is the number $375, 000, which is marked through and handwritten in is the figure $225, 000]. The agreement further provides that:

Any amount owed for products and services covered by this Extended Terms Request which is not paid and credited to purchaser's account (“Extended Terms Open Balance”) within the aforesaid timeframe shall be assessed a Finance Charge. . . . This Extended Terms Request shall not be binding on either party until executed by the Division Credit Manager, and at such time the undersigned purchaser agrees that the terms hereof shall apply only to the purchases of products and services identified above. Except as expressly amended or modified in this Extended Terms Request, the terms of the Credit Sales and Services Agreement or Credit Sales Agreement, as applicable, between Helena and purchaser shall remain in full force and effect.[3]

         The Extended Terms Request was approved by the Division Credit Manager on February 6, 2015. On June 26, 2015, R&E's purchases on credit rose from $224, 690.28 to $227, 974.28. No further purchases on credit were permitted by Helena thereafter, and a balance of $227, 277.47 remained owning by R&E as of December 15, 2015, the extended terms due date.

         As of April 5, 2016, just prior to suit being filed by Helena, a balance of $237, 616.84, plus additional interest, remained unpaid. Helena brought suit for payment on April 29, 2016. The extended terms request was not attached to the complaint. Only the CSSA and a payment demand letter dated March 18, 2016, were attached to the complaint (and later the amended complaint). In addition to suing R&E Farms for the unpaid balance, Helena also sued Young, a partner in R&E, personally for the balance.

         On June 30, 2016, R&E and Young answered the amended complaint. Answer [11]. Neither denied incurring and owing the invoices sued on, but they argued variously that they were entitled to a credit in an unstated amount. Specifically, Defendants asserted Helena had unclean hands; Helena failed to mitigate its damages, which Defendants also asserted made them subject to set off; and that Young was not personally a party to the CSSA.

         A Case Management Order was entered setting an amendments deadline of October 3, 2016; discovery deadline of November 18, 2016; and motions deadline of December 7, 2016. Case Management Order [19]. On November 7, 2016, R&E moved to extend the discovery deadline until January 19, 2017, and the dispositive motions deadline to February 6, 2017. Motion to Extend CMO Deadlines [27]. The motion was granted by text only order on that same day.

         On December 6, 2017, Helena filed a motion for summary judgement [28]. In its memorandum in support of the motion [29], Helena asserts that the credit limit pursuant to the Extended Terms Agreement attached to the motion was $225, 000, and that R&E exceeded the credit limit. According to Helena, “there are no facts to support the allegation (made by Young at deposition) that Helena's hands were unclean because it would not extend additional credit to R&E (beyond June 26, 2015).”[4] Helena also asserts that because Young is a partner of R&E, a Mississippi partnership, under Miss. Code Ann. § 79-13-306, he is personally liable for the partnership's debts.

         On January 10, 2017, Defendants filed a memorandum in response to the motion for summary judgment [33]. In the memo, Defendants assert that Helena had, in the normal course of business during past farm years “allowed Mr. Young and or his various entities to exceed limits of credit at various times . . . (and) because it did not do so on this occasion Mr. Young was forced to procure financing elsewhere.”[5] Defendants contend this procurement of financing took two weeks in the middle of the crop year. This, Defendants contend, lowered the revenue from his crops in some unspecified amount. Though scattered, Defendants argue in their opposition response 1) that the duty of good faith and fair dealing obligated Helena to continue allowing them to purchase on credit until the crop year had been completed; 2) that the extended terms credit limit contains first the number $375, 000 which is lined through and beside it the number $225, 000 is written;[6] 3) that the extended due date is December 15, 2015, but Helena “called the Note early”;[7] and 4) that it took two weeks to get additional credit for the farm year because Helena tortuously interfered with R&E's business by telling a competitor that R&E owed it money.

         Young does not assert he is not liable as a matter of statute for the partnership debts in the response, nor does he offer any evidence of a Note, or that any such alleged note was called prior to December 15, 2015. All that Defendants offer as evidence in support of their opposition to the summary judgment motion is the Extended Terms Agreement and an affidavit of Defendant Young in which he asserts 1) that Helena in the years prior to 2014 had “always extended him credit to finish his crop, even sometimes above my credit limit”[8] and 2) an alleged statement made to Young ...


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