Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Philmar Dairy, LLC v. Armstrong Farms

United States District Court, D. New Mexico

January 29, 2019

PHILMAR DAIRY, LLC; ARCH DIAMOND, LLC; MOONSTONE DAIRY, LLC; and HENDRIKA DAIRY, LLC; Plaintiffs,
v.
ARMSTRONG FARMS and RANDY ARMSTRONG, Defendants, and RANDY ARMSTRONG, Counterclaimant,
v.
PHILMAR DAIRY, LLC; ARCH DIAMOND, LLC; MOONSTONE DAIRY, LLC; and HENDRIKA DAIRY, LLC; Counter-defendants.

          MEMORANDUM OPINION AND ORDER DENYING PLAINTIFFS' MOTION FOR PARTIAL SUMMARY JUDGMENT

          STEPHAN M. VIDMAR, UNITED STATES MAGISTRATE JUDGE

         THIS MATTER is before the Court on Plaintiffs' Motion for Partial Summary Judgment [Doc. 43], filed on December 5, 2018. Defendants responded on December 27, 2018. [Doc. 55].

         Plaintiffs replied on January 10, 2019. [Doc. 60]. The parties consented to have the undersigned conduct dispositive proceedings in this matter. [Doc. 13]. The Court held oral argument on the Motion on January 14, 2019. [Doc. 62] (clerk's minutes). The Court has considered the briefing, the oral argument, the relevant portions of the record, and the relevant law. Being otherwise fully advised in the premises, the Court will DENY Plaintiffs' Motion.

         I. BACKGROUND[1]

         Plaintiffs are dairies located in Portales, New Mexico. [Doc. 1-1] at 13. Defendant Armstrong Farms, owned by Defendant Randy Armstrong, is a farm near Dell City, Texas, that orally agreed to sell Plaintiffs approximately 9, 232 tons of hay for the 2017 growing season. [Doc. 43] at 4; [Doc. 43-1] at 1-2. Over eight months, Plaintiffs incrementally paid Defendants for the hay whenever Defendants presented them with invoices for it. [Doc. 43-1] at 1-2; [Doc. 43-3] at 1. Defendants then incrementally delivered it to Plaintiffs. See [Doc. 43-3] at 2-4. Plaintiffs paid $1, 352, 391.46 in total for the hay. [Doc. 43-1] at 1-2. Defendants stored the hay on open-air stack lots on their farm until delivery. [Doc. 55] at 4. Defendants claim that when Armstrong negotiated the contract with Plaintiffs' representative, Aaron Douma, Douma orally agreed that Plaintiffs, upon payment for the hay, would assume the risk of loss for it while Defendants stored it on their farm. [Doc. 55] at 6; [Doc. 55-2] at 2-3. Plaintiffs disagree. They argue that Douma neither discussed nor agreed to those terms. [Doc. 60] at 5; [Doc. 60-3] at 2.

         From May 2017 through February 2018, Defendants delivered approximately 6, 585 tons of hay to Plaintiffs. [Doc. 1-1] at 15. Defendants claim that on August 23 or 24, 2017, a fire on part of the farm destroyed some of the stored hay. [Doc. 43-1] at 7-8. Plaintiffs nevertheless continued to pay for hay, and Defendants continued to deliver it to them, after the fire. [Doc. 43-3] at 1-4. Defendants did not notify Plaintiffs of the fire until at least one week after the fire. [Doc. 43-1] at 7-8. Plaintiffs never received 2, 647 tons of hay, a loss Defendants attribute to the fire. [Doc. 55] at 3. Defendants refused to refund the payment for the missing hay. [Doc. 1-1] at 16; [Doc. 55] at 4.

         II. PROCEDURAL HISTORY

         Plaintiffs sued Defendants in New Mexico state court on April 26, 2018. [Doc. 1-1] at 1. Count II of the Complaint alleges that Defendants breached the oral contract by failing to deliver the remaining 2, 647 tons of hay. Id. at 17. Defendants removed the action to this Court on June 7, 2018. [Doc. 1]. On December 5, 2018, Plaintiffs moved for partial summary judgment with respect to their breach-of-contract claim in Count II. [Doc. 43].

         III. LEGAL STANDARD

         “The court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). A court must deny summary judgment if a reasonable jury could find for the non-movants. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). When applying this standard, the court must construe the evidence in the light most favorable to the non-moving parties. Tolan, 572 U.S. at 657. The party moving for summary judgment has the initial burden of establishing that there is an absence of evidence supporting the opposing party's case. Celotex Corp. v. Catrett, 477 U.S. 317, 323-25 (1986). If the movant meets this burden, the parties opposing summary judgment must come forward with specific facts, supported by admissible evidence, which demonstrate the presence of a genuine issue for trial. Comm. for First Amendment v. Campbell, 962 F.2d 1517, 1526 n.11 (10th Cir. 1992).

         IV. ANALYSIS

         Plaintiffs claim they are entitled to summary judgment on two grounds. First, they argue that the risk of loss for the destroyed hay remained with Defendants until delivery. Id. at 7-8. Plaintiffs relatedly contend that, even if the parties shifted the risk of loss upon payment for the hay, they paid for the destroyed hay after the fire occurred, meaning that the risk of loss remained with Defendants. [Doc. 43] at 8. Second, Plaintiffs argue that, under Uniform Commercial Code (“UCC”) § 2-613, the fire did not excuse Defendants' nonperformance of the contract. Id. at 9- 11. Defendants counter that Plaintiffs orally agreed to assume the risk of loss for the destroyed hay upon payment. [Doc. 55] at 6-7. Additionally, Defendants argue that local trade usage established that Plaintiffs assumed the risk of loss while the hay was stored at Defendants' farm. Id. at 7-8. For the following reasons, the Court holds that a reasonable jury could find that the parties orally agreed to shift the risk of loss upon payment for the hay, making summary judgment improper.

         A genuine issue of material fact exists over whether the parties orally agreed to modify the default rule that the risk of loss passes from a merchant seller to the buyer only upon receipt of the goods. Because this was a contract for the sale of goods, the UCC governs.[2] § 55-2-102. UCC § 2-509, as codified in N.M. Stat. Ann. § 55-2-509, allocates the risk of loss among parties in the absence of breach:

(3) In any case not within Subsection (1) or (2) of this section, [3] the risk of loss passes to the buyer on the buyer's receipt of the goods if the seller is a merchant; otherwise ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.