Opinion
No. C97-1018
June 8, 1999.
ORDER
This matter comes before the court pursuant to defendant's April 30, 1999 motion for summary judgment (docket number 34). The parties have consented to the exercise of jurisdiction by a United States Magistrate Judge pursuant to 28 U.S.C. § 636(c). For the reasons set forth below, defendant's motion is granted in part and denied in part.
The plaintiff in this case, Agriprocessors, Inc. (Agriprocessors) claims that the defendant, Blue Earth Rendering Company; Darling Company, d/b/a Blue Earth Rendering Company; Darling International, Inc. (Darling), breached a contract between the parties. Agriprocessors also claims that Darling is liable under theories of promissory estoppel and fraudulent nondisclosure. Darling argues that it is entitled to summary judgment on the breach of contract and promissory estoppel claims.
Summary Judgment
A motion for summary judgment may be granted only if, after examining all of the evidence in the light most favorable to the nonmoving party, the court finds that no genuine issues of material fact exist and that the moving party is entitled to judgment as a matter of law. Kegel v. Runnels, 793 F.2d 924, 926 (8th Cir. 1986). Once the movant has properly supported its motion, the nonmovant "may not rest upon the mere allegations or denials of [its] pleading, but . . . must set forth specific facts showing that there is a genuine issue for trial." Fed.R.Civ.P. 56(e). "To preclude the entry of summary judgment, the nonmovant must show that, on an element essential to [its] case and on which [it] will bear the burden of proof at trial, there are genuine issues of material fact." Noll v. Petrovsky, 828 F.2d 461, 462 (8th Cir. 1987), cert. denied, 484 U.S. 1014 (1988) (citing Celotex Corp. v. Catrett, 477 U.S. 317 (1986)). Although "direct proof is not required to create a jury question, . . . to avoid summary judgment, `the facts and circumstances relied upon must attain the dignity of substantial evidence and must not be such as merely to create a suspicion.'" Metge v. Baehler, 762 F.2d 621, 625 (8th Cir. 1985), cert. denied, 474 U.S. 1057 (1986) (quoting Impro Prod., Inc. v. Herrick, 715 F.2d 1267, 1272 (8th Cir. 1983), cert. denied, 465 U.S. 1026 (1984)).
Statement of Material Facts Not in Dispute
Agriprocessors is a Kosher meat processor located in Postville, Iowa. In early 1989 Darling and Agriprocessors entered into a sales agreement under which Darling began purchasing rendering material from Agriprocessors. The parties cannot find the contract but know that its terms were identical to a later version. Under the terms of this agreement, Agriprocessors was responsible for weighing, delivering, and dumping the rendering materials. However, because Agriprocessors did not have a scale or the necessary equipment to haul the materials, Darling transported and weighed the materials. Payment for the products was to be based upon the weight of its various components, cow offal, fat cattle offal, bones, fat, and blood. Each was to bring a separate price per pound. This agreement was renewed annually.
On February 22, 1993 the parties entered into a new written contract. In 1995, Agriprocessors began transporting the material to Darling's facility. Darling continued to weigh each load. Agriprocessors did not obtain a scale until 1997.
Throughout the duration of this relationship, the various components of the rendering materials, except for the blood, were not separated before they were accepted by Darling. Therefore, payment was based upon some estimates as to the percentage of the product that was attributable to the various components. In 1996 Agriprocessors learned that although Darling had taken actual weights of the total shipments, it was paying the plaintiff based on estimated weights.
CONCLUSIONS OF LAW Breach of Contract
Agriprocessors claims that Darling breached its contract by failing to pay for the rendering materials based upon actual weight. While Agriprocessors agrees that some system of estimates had to be employed to determine the percentage of total products attributable to various components, it contends that the contract required Darling to pay based on the total actual weight of the load. Instead, Darling made estimates of total weight based upon the number of cattle delivered. Agriprocessors was credited and paid for a specified number of pounds of bones, offal, etc. per head.
Darling argues that it cannot, as a matter of law, be liable for breach of contract because Agriprocessors failed to perform its contractual obligation to weigh the materials before transporting them to Darling. Moreover, Darling claims that it is entitled to summary judgment on Agriprocessors' breach of contract claim because there is no evidence that using estimated weights resulted in underpayment.
In order to succeed in a breach of contract claim, the complaining party must prove the following elements:
(1) the existence of a contract;
(2) the terms and conditions of the contract;
(3) that it has performed all of the terms and conditions required under the contract;
(4) the defendant's breach of the contract in some particular way; and
(5) that plaintiff has suffered damages as a result of the breach.Iowa-Illinois Gas Elec. Co. v. Black Veatch, 497 N.W.2d 821, 825 (Iowa 1993) (citing Berryhill v. Hatt, 428 N.W.2d 647, 652 (Iowa 1988)). Darling argues that Agriprocessors cannot, as a matter of law, establish the third element because it did not weigh the materials as required under the contract. The court disagrees.
It is well-settled that the failure of a party to perform according to the contract releases the other party from compliance with the contract. Hardin v. Eska Co., 127 N.W.2d 595, 597 (Iowa 1964). See also Roland A. Wilson Assocs. v. Forty-O-Four Grand Corp., 246 N.W.2d 922, 925 (Iowa 1976) ("One who seeks recovery on a contract has the burden to plead and prove the contract and his performance."). However, "[t]he right to modify a written contract by a subsequent oral one is unquestioned." Kaltoft v. Neilsen, 106 N.W.2d 597, 602 (Iowa 1960). While one party cannot unilaterally modify the terms of a contract without the consent of the other party, the requisite consent may be implied from acts and conduct. Davenport Osteopathic Hosp. Assoc. of Davenport, Iowa v. Hosp. Serv, Inc., of Iowa, 154 N.W.2d 153, 157 (Iowa 1967). Whether a contract has been modified is usually a question of fact. Id. Moreover, "strict compliance with the terms of a contract on the part of one party may be waived by the other. . . ." Capital City Brick Pipe Co. v. City of Des Moines, 127 N.W. 66, 70 (Iowa 1910). Waiver is defined as the "voluntary relinquishment of a known right." Kaltoft, 106 N.W.2d at 602. "Waiver can be shown by the affirmative acts of a party, or can be inferred from the conduct that supports the conclusion waiver was intended." Scheetz v. IMT Ins. Co., 324 N.W.2d 302, 304 (Iowa 1982). "The essential elements of a waiver are the existence of a right, knowledge, actual or constructive, and an intention to relinquish such right." Id.
The terms of the contract, which has been in place since 1989, placed the duty to weigh the materials on Agriprocessors. Agriprocessors did not obtain a scale until 1997 and Darling knew from the outset that plaintiff did not have one. However, from 1989 to 1996 Darling voluntarily weighed each load of rendering materials. The parties operated for years under this arrangement without concern or dispute over who would weigh the product. Darling cannot now claim that plaintiff breached the contract by failing to do what Darling knew it could not do. Further, the breach alleged by plaintiff is the failure to pay based on actual weight, not the failure to weigh the material. Finally, it is undisputed that the product was actually weighed and no one questions the accuracy of those weights. Under these circumstances, the identity of the party performing this function is not a material term of the contract.
Darling's argument that it is entitled to summary judgment because Agriprocessors cannot establish that payment based upon estimated weight instead of actual weight also must fail. Agriprocessors will utilize expert witness testimony and its subsequent experience at trial to estimate the amount of underpayment caused by Darling's alleged breach. Whether a loss was sustained is for the jury. Disposition of this matter in a motion for summary judgment is premature. See Lundell Mfg. Cos., Inc. v. Am. Broad. Cos., Inc., 98 F.3d 351 (8th Cir. 1996), cert denied, 520 U.S. 1186, 117 S. Ct. 1470, 137 L. Ed.2d 683 (1987) ("The level of proof required to establish the exact amount of lost profits is not as high as the level of proof required to establish that some loss occurred.").
Development of this evidence has been delayed by the expert's serious illness.
Promissory Estoppel
To recover under a theory of promissory estoppel, Agriprocessors must prove the following elements: "(1) a clear and definite oral agreement; (2) proof that the party urging the doctrine acted to his detriment in relying on the agreement; and (3) finding that the equities support enforcement of the agreement." Bradshaw v. Wakonda Club, 476 N.W.2d 743, 748 (Iowa Ct.App. 1991) (quoting In re Scheib Trust, 457 N.W.2d 4, 8 (Iowa Ct.App. 1990)). "The effect of the doctrine of promissory estoppel is to imply a contract in law where none exists in fact." DeJong v. City of Sioux Center, 980 F. Supp. 1010, 1014 (N.D. Iowa 1997), aff'd, 168 F.3d 1115 (8th Cir. 1999) (citations omitted).
Aside from a statement in its brief that it had a clear and definite agreement with Darling, Agriprocessors has presented no evidence of any oral promises outside of the written contract that undisputedly existed. The existence of a written contract makes the theory of promissory estoppel unnecessary and inappropriate to resolve this dispute. For this reason, summary judgment is appropriate.
Upon the foregoing,
IT IS ORDERED
Defendant's motion for summary judgment on plaintiff's breach of contract claim is denied. Defendant's motion for summary judgment on plaintiff's promissory estoppel claim is granted.