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Farmers Cooperative Society, Sioux Center v. Leading Edge Pork LLC

United States District Court, N.D. Iowa, Western Division

July 20, 2017

FARMERS COOPERATIVE SOCIETY, SIOUX CENTER, IOWA Plaintiff,
v.
LEADING EDGE PORK LLC & BRENT LEGRED, Defendants. LEADING EDGE PORK LLC & BRENT LEGRED, Counter Claimants,
v.
FARMERS COOPERATIVE SOCIETY, SIOUX CENTER, IOWA, Counter Defendant.

          ORDER

          LINIA R. READE, UNITED STATES DISTRICT COURT JUDGE

         TABLE OF CONTENTS

         I. INTRODUCTION .......................................2

         II. PROCEDURAL HISTORY ................................3

         III. SUBJECT MATTER JURISDICTION .........................5

         IV. RELEVANT FACTUAL BACKGROUND .......................5

         A. The Credit Agreement ................................ 5

         B. Relationship Under Credit Agreement ..................... 6

         C. Billing Dispute .................................... 8

         V. MOTION TO STRIKE .................................... 9

         VI. MOTION FOR SUMMARY JUDGMENT ...................... 13

         A. Summary Judgment Standard ......................... 13

         B. Analysis ........................................14

         1. Breach of contract ............................14

         a. Documentation modification .................16

         b. Hog care modification .....................18

         c. Dispute resolution modification ................19

         d. Personal guaranty ........................21

         2. Damages ...................................22

         VII. MOTION TO VACATE .................................. 25

         VIII. CONCLUSION ....................................... 28

         I. INTRODUCTION

         The matters before the court are Plaintiff Farmers Cooperative Society, Sioux Center, Iowa's (“FCS”) Motion for Summary Judgment (“Motion”) (docket no. 53) and Defendants Leading Edge Pork, LLC and Brent Legred's (collectively, “Leading Edge”) Motion to Vacate the Prejudgment Attachment Lien (“Motion to Vacate”) (docket no. 70)[1]and Motion to Strike (docket no. 77).

         II. PROCEDURAL HISTORY

         On April 11, 2016, FCS filed a petition (docket no. 3) in the Iowa District Court for Sioux County, alleging two claims against Leading Edge: (1) seeking damages for breach of contract; and (2) seeking an order directing Leading Edge to pay such damages from checks co-payable to FCS and Leading Edge. On May 3, 2016, Leading Edge removed the case, bringing the petition before the court. See Notice of Removal (docket no. 2).

         On July 25, 2016, on FCS's motion, the court ordered that funds previously attached by the Iowa District Court be transferred to the court for attachment in the instant case. See July 25, 2016 Order (docket no. 11). The attached funds existed in the form of ten checks issued by Tyson Fresh Meats (“Tyson”), which were purportedly co-payable to FCS and Leading Edge, in the amount of $97, 657.73. See Ex. C to Motion for Order to Deliver Co-Payee Checks (“Tyson Checks”) (docket no. 8) at 12-23. On September 15, 2016, FCS informed the court that the Tyson Checks previously held under attachment by the Iowa District Court were rendered void because they had not been cashed within ninety days of issue. See Report to the Court (docket no. 16). On September 16, 2016, the court ordered the parties to instruct Tyson to reissue a single check in the amount of $97, 657.73, representing the total of the ten Tyson Checks under attachment, and to deposit the check with the Clerk of Court. See Sept. 16, 2016 Order (docket no. 17) at 2. On October 7, 2016, a check in the amount of $94, 688.98 was deposited with the Clerk of Court, pursuant to the attachment order. On the same date, FCS informed the court that it was unable to deposit the full $97, 657.73 amount ordered by the court because Tyson had reissued one of the Tyson Checks-in the amount of $2, 968.75-to Leading Edge pursuant to a “‘lost check' replacement request.” See Second Report to the Court (docket no. 25) at 2. The details surrounding the reissue of this check remain unknown to the court.

         On November 29, 2016, FCS filed a Second Amended Complaint (docket no. 44), seeking the following relief from Leading Edge: (1) judgment on a claim of breach of contract; (2) an order directing Leading Edge to pay damages from checks co-payable to FCS and Leading Edge; (3) damages for collection costs, including attorney's fees, contemplated by the contract at issue; and (4) joint and several liability for all damages as to Legred as guarantor of the contract at issue. On December 13, 2016, Leading Edge filed an Answer (docket no. 46), denying liability, pleading affirmative defenses and alleging four counterclaims against FCS.

         On April 28, 2017, FCS filed the Motion. On May 19, 2017, Leading Edge filed a Resistance (“Resistance to Motion”) (docket no. 66). On June 2, 2017, FCS filed a Reply (“MSJ Reply”) (docket no. 73). On June 12, 2017, Leading Edge filed the Motion to Strike, challenging certain evidence produced in the MSJ Reply materials. On June 19, 2017, FCS filed a Resistance (“Resistance to Motion to Strike”) (docket no. 78).

         On February 13, 2017, Leading Edge filed a prior Motion to Vacate the Pre-Judgment Attachment Lien (docket no. 47). On May 2, 2017, the court struck the motion after determining that, at the time it was filed, the attorneys that had signed and filed the motion were not admitted to practice before the court. See May 2, 2017 Order (docket no. 54). On May 26, 2017, shortly after its attorneys secured admission to practice before the court, Leading Edge filed the present Motion to Vacate, which “largely mirrors the [prior] motion.” Motion to Vacate at 1 n.1. On June 1, 2017, FCS filed a Resistance (“Resistance to Motion to Vacate”) (docket no. 72). On June 8, 2017, Leading Edge filed a Reply (“Motion to Vacate Reply”) (docket no. 76).

         Leading Edge requests oral argument on the Motion and the Motion to Vacate, but the court finds that oral argument is unnecessary. The matters are fully submitted and ready for decision.

         III. SUBJECT MATTER JURISDICTION

         FCS is an Iowa agriculture cooperative with its principal place of business in Sioux Center, Iowa. Notice of Removal ¶ 5. Leading Edge is a Minnesota limited liability company owned by Legred, who is a citizen of Minnesota. Id. The court has original jurisdiction over the claims at issue because complete diversity exists between FCS and Leading Edge and the amount in controversy exceeds $75, 000. See 28 U.S.C. § 1332(a)(2) (“The district courts shall have original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $75, 000, exclusive of interest and costs, and is between . . . citizens of different States . . . .”).

         IV. RELEVANT FACTUAL BACKGROUND

         Viewing the evidence in the light most favorable to Leading Edge and affording it all reasonable inferences, the ...


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