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Helena Chemical Co. v. Double Y Farms, Inc.

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

February 27, 2017




         This matter is before the Court on the motion of the Plaintiff Helena Chemical Company for summary judgment against the Defendants, Double Y Farms, Inc. and Richard J. Young, Jr [30]. For the reasons explained hereafter, summary judgment is granted in favor of the Plaintiff.


         The following facts are undisputed: On February 24, 2011, Defendant Young executed an irrevocable Guaranty Agreement in favor of Helena for payment of credit extended to Double Y Farms, a Mississippi corporation, (“Double Y”).[1] On January 17, 2013, Double Y 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 . . . Double Y Farms . . . 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 18: This Agreement shall be governed by Tennessee law without regard to choice of law rules. . . . 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.[2]

         On January 23, 2015, Double Y executed an Extended/Future Terms Request - Variable Prime Plus.[3] 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 $450, 000, which is marked through and handwritten in is the figure $275, 000]. The agreement further provides that:

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.[4]

         The Extended Terms Request was approved by the Division Credit Manager on February 6, 2015. On July 25, 2015, Double Y's purchases on credit rose to $348, 570.60. No further purchases on credit were permitted by Helena thereafter, and a balance of $335, 817.61 remained owning by Double Y 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 $355, 249.29, plus additional interest, remained unpaid. Helena brought suit for payment on April 29, 2016. The CSSA was not attached to the complaint. Only the Extended Terms Request, Guaranty Agreement, and a payment demand letter dated March 18, 2016, were attached to the complaint (and later the amended complaint). In addition to suing Double Y for the unpaid balance, Helena also sued Young personally as a guarantor of the balance.

         On June 30, 2016, Double Y and Young answered the amended complaint. Answer [14]. 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 that Helena had unclean hands, and that Helena failed to mitigate its damages, which Defendants also asserted made them subject to set off.

         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 [22]. On November 7, 2016, Double Y moved to extend the discovery deadline until January 19, 2017, and the dispositive motions deadline to February 6, 2017. Motion to Extend CMO Deadlines [29]. The motion was granted by text only order on that same day.

         On December 6, 2016, Helena filed a motion for summary judgement [30]. In its memorandum in support of the motion [31], Helena asserts that the credit limit pursuant to the Extended Terms Agreement attached to the motion was $275, 000, and that Double Y exceeded the credit limit. According to Helena, “there are no facts to support the allegation (made by Young at the deposition) that Helena's hands were unclean because it would not extend additional credit to Double Y (beyond July 2015).”[5] Helena also asserts that because Young is a guarantor of Double Y's debt, he is personally liable for the debt sued on.

         On January 10, 2017, Defendants filed a memorandum in response to the motion for summary judgment [35]. 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 finish the crop year on credit from Helena, and that because it did not do so on this occasion, Mr. Young was forced to procure financing elsewhere. 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 $450, 000 which is lined through and beside it the number $275, 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 time to get additional credit for the farm year because Helena tortuously interfered with Double Y's business by telling a competitor that Double Y owed it money.

         Young does not assert he is not liable pursuant to the Guaranty. Nor does either Defendant 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 2015 had “always extended my credit to finish the crop, even sometimes above my credit limit”[8] and 2) an alleged statement made to Young by an employee of a competitor of Helena's that Double Y was in debt to Helena-information Young surmises could only have come from an employee of Helena.

         In reply to the response of Defendants, Helena asserts it had a contractual right to revoke Double Y's privilege to purchase on credit at any time pursuant to paragraph 7 of the CSSA. In addition, there is no claim of tortious interference of business pled in the answer, and no evidence to support same if there were. Further, Helena asserts that there is no claim for breach of the duty of good faith and fair dealing pled in the answer, and if there were, no viable proof in support of such claim, or even a breach of contract claim to which to ...

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