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Hardi North America, Inc. v. Schindler

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

January 3, 2019

HARDI NORTH AMERICA, INC. PLAINTIFF
v.
CHARLES JOSEPH SCHINDLER II. ET. AL. DEFENDANTS

          ORDER

          JANE M. VIRDEN, UNITED STATES MAGISTRATE JUDGE

         This matter is before the Court on plaintiff Hardi North America Inc.’s (hereinafter “Hardi” or “supplier”) motion for summary judgment[1] against Delta Southern Chemical Company, LLC for a lump sum judgment in the amount of $1,471,742.98 together with attorney’s fees and interest at $439.06 per day from and after September 1, 2018, through the date of judgment, as well as post-judgment interest and costs. For the reasons discussed below the motion will be GRANTED in part and DENIED in part.

         Background

         In or around June 2017, Hardi, a farm equipment manufacturer, entered into a Dealer Agreement with Delta Southern Chemical LLC, hereinafter referred to as “dealer or retailer,” to facilitate the continued[2] retail sale of Hardi manufactured agricultural sprayers from the dealer’s Clarksdale, Mississippi facility.

         According to the relevant portions of the Dealer Agreement, which was in force for a period of three (3) years from the Effective Date of June 9, 2017 unless sooner cancelled:

HARDI may terminate this Agreement at any time upon the occurrence of a Good Cause Event… a Good Cause Event shall mean any one or more of the following:… Dealer defaults under any chattel mortgage or other security agreement with HARDI or floor plan provider... Hardi does not sale on consignment. Any and all inventory available to DEALER must be invoiced to the DEALER for the DEALER to be able to utilize it.… All self-propelled sprayers sold and delivered to a retail customer are due and payable immediately. Settlement must be paid to HARDI within 24 hours after delivery… In the event of cancellation, all machines and parts which are in new, current and salable condition may be returned to HARDI subject to a restocking charge and subject to state legislative buy-back laws where dealership resides and where applicable.

Doc. #1-1 at 3.

         Further, a security agreement executed by the dealer in conjunction with the Dealer Agreement provides, in relevant part:

[Dealer] grants to Hardi… a security interest in… All inventory of new and used farm and industrial goods,… which is manufactured and/or distributed by Secured Party …[T]o secure payment of the indebtedness evidenced by this Agreement, and also any and all liabilities… hereafter arising … Debtor agrees to pay Secured Party in accordance with the terms as prescribed by Hardi North America, Inc. invoices, and to pay service charges from the past due date on unpaid balances at the highest legal rate and maturing, and to pay on demand reasonable cost of collection, including reasonable attorney’s fees.… The collateral will be kept at Clarksdale, MS… Debtor will keep the collateral free from any adverse lien,… and in good order and repair and will not waste or destroy the Collateral or any part thereof… Until default Debtor may have possession of the Collateral and use it in any lawful manner not inconsistent with this Agreement… Debtor shall be in default under this Agreement upon the happening of… Default in the payment or performance of any obligation contained or referred to herein… Upon such default and at any time therefore Secured Party may decline (sic) all Obligations secured hereby immediately due and payable and shall have the remedies of a Secured Party under the Uniform Commercial Code.

Doc. #1-2 at 1-2.

         Standard and Governing Law

         Summary judgment shall be granted if “the movant shows that there is no genuine dispute as to any material fact and that the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). A dispute of fact is genuine if “the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A fact is material if it “might affect the outcome of the suit under the governing law.” Id.; see also Cooper Indus., Ltd. v. Nat'l Union Fire Ins. Co. of Pittsburgh, Pennsylvania, 876 F.3d 119, 128 (5th Cir. 2017). “Where the record taken as a whole could not lead a rational trier of fact to find for the non-moving party, there is no ‘genuine issue for trial.’ ” Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). In determining whether there are genuine disputes of material fact, the Court “must ‘resolve all ambiguities, and credit all factual inferences that could rationally be drawn, in favor of the party opposing summary judgment. Abarca v. Metro. Transit Auth., 404 F.3d 938, 940 (5th Cir.2005) (citing Coleman v. Houston Indep. Sch. Dist., 113 F.3d 528, 533 (5th Cir.1997)).

         The purpose of summary judgment is to isolate and dispose of factually unsupported claims or defenses. Unida v. Levi Strauss & Co., 986 F.2d 970, 976 (5th Cir.1993); Chrisman Mfg., Inc. v. Rowan-Cornil, Inc., 859 F. Supp. 2d 842, 845 (S.D. Miss. 2012). A party seeking summary judgment bears the initial burden of identifying those portions of the pleadings and discovery, together with any affidavits, which it believes demonstrate the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986). The burden then shifts to the nonmovant to show that summary judgment should not be granted. Id. at 324–25, 106 S.Ct. 2548. To rebut a properly supported motion for summary judgment, the opposing party must show, with “significant probative evidence,” that there exists a genuine issue of material fact. Hamilton v. Segue Software, Inc., 232 F.3d 473, 477 (5th Cir.2000) (citing Conkling v. Turner, 18 F.3d 1285, 1295 (5th Cir.1994)).

         Discussion

         The Dealer Agreement’s reference to state buyback laws is, in the State of Mississippi, a reference to, as noted above, those laws codified at Miss. Code. Ann. § 75-77-1 through Miss. Code. Ann. § 75-77-19. In relevant part, those statutes provide:

Repurchase of Inventory by Supplier. Whenever any retailer [meaning any person engaged in the business of selling farm implements…] enters into an agreement, evidenced by a written or oral contract, with a supplier wherein the retailer agrees to maintain an inventory of parts and to provide service and the contract is terminated, then the supplier shall repurchase the inventory as provided in this chapter. The retailer may keep the inventory if he desires. If the retailer has any outstanding debts to the supplier, then the repurchase amount may be setoff or credited to the retailer's account. Miss. Code. Ann. § 75-77-3 (West).
Repurchase Price. The supplier shall repurchase inventory previously purchased from him and held by the retailer on the date of termination of the contract… [at] one hundred percent (100%) of the current net price of all new, unsold, undamaged and complete farm implements… and… ninety percent (90%) of the current net price on new, unused and undamaged and superseded repair parts… [E]quipment leased primarily for demonstration or lease, shall also be subject to repurchase under this law at its agreed depreciated value, provided such equipment is in new condition and has not been abused. Miss. Code. Ann. § 75-77-5 (West).
Transfer of Title and Right of Possession. Upon payment of the repurchased amount to the retailer, the title and right of possession to the repurchased inventory shall transfer to the supplier… Miss. Code. Ann. § 75-77-7 (West).
Exempt Items. The provisions of this chapter shall not require the repurchase from a retailer of: … Any farm… equipment… which are not current models, or which are not in new, unused, undamaged, complete condition, provided that the equipment used in demonstrations or leased as provided in Section 75-77-5 shall be considered new and unused… Miss. Code. Ann. § 75-77-9 (West).
Liability for Failure or Refusal to Repurchase. If any supplier shall fail or refuse to repurchase and pay the retailer for any inventory covered under the provisions of this chapter within sixty (60) days after shipment of such inventory, he shall be civilly liable for one hundred percent (100%) of the current net price[3] of the inventory, plus any freight charges paid by the retailer, the retailer’s attorney’s fees, and court costs and interest on the current net price computed ...

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