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Cargill Inc. v. Jorgenson Farms

August 8, 2006


Cottonwood County District Court File No. CV-05-363.


The district court is not required to make a finding of "bad faith" before imposing sanctions under Minn. Stat. § 549.211, subd. 2(1) (2004).

The opinion of the court was delivered by: Dietzen, Judge


Considered and decided by Stoneburner, Presiding Judge; Toussaint, Chief Judge; and Dietzen, Judge.


Appellant Cargill Incorporated appeals from summary judgment dismissing its breach-of-contract claim against respondent Jorgenson Farms, arguing that it was denied the opportunity to conduct necessary discovery, that genuine issues of material fact regarding the formation of a contract between the parties preclude summary judgment, and that the district court erred by denying its motion to compel arbitration and by granting respondent's motion for attorney fees under Minn. Stat. § 549.211 (2004). We affirm.


Appellant Cargill Incorporated is an international provider of food, agricultural products, and risk-management products and services. Respondent Jorgenson Farms is in the business of raising soybeans and corn for market.

Cargill commenced this action against Jorgenson Farms alleging, inter alia, that Jorgenson Farms breached its agreement to sell Cargill 80,000 bushels of corn for delivery in December 2003. Jorgenson Farms denied the existence of the contract and moved for summary judgment. Jorgenson Farms's summary-judgment motion was supported by the affidavits of Ben Presthus, a Cargill employee during the relevant period, and James Jorgenson, co-owner of Jorgenson Farms.

Presthus stated that he was the exclusive Cargill contact with Jorgenson Farms and had the authority to enter into contracts with it. His normal practice was to maintain a diary in which he kept notes of every contract entered into on Cargill's behalf and then to personally contact Cargill's accounting department for entry of those contracts into Cargill's client-records system. Thereafter, Cargill would send out written confirmation of the contract to the client for execution and return to Cargill. Presthus followed this procedure with Jorgenson Farms throughout the course of their dealings. Presthus confirmed that on July 17, 2003, he negotiated two contracts with Jorgenson Farms for 100,000 and 135,000 bushels of corn respectively, which Jorgenson Farms performed.

Presthus specifically denied that Jorgenson Farms entered into a contract with Cargill for the delivery of 80,000 bushels of corn. He stated:

At no time did Jorgenson Farms ever enter, or intend to enter, into contract MILO-AH 27985 in or about July of 2003, either verbally or in writing or otherwise. In fact, I specifically told my supervisor, Mr. Brad Morrison, that the purported contract never existed, and I have no entry in my daily journal that such contract was created. My daily records only show the 100,000 and 135,000 bushel contract that was performed by Jorgenson Farms.

Presthus concluded that the confirmation of a contract for 80,000 bushels of corn, Contract #27985, was a clerical error. Presthus stated that those present at a meeting he attended with Brad Morrison of Cargill and James Jorgenson of Jorgenson Farms to discuss the disputed contract agreed that Contract #27985 "was never entered into, and that Mr. Morrison would begin the process of deleting the contract from Cargill's accounting system." Presthus attended a second meeting in January 2004, at which he "reiterated to Mr. Morrison that Jorgenson Farms in no way, verbally or in writing or otherwise, approved the ostensible contract for 80,000 bushels of corn."

In his affidavit, James Jorgenson stated that he is a farmer and that he has entered into and performed numerous contracts for the sale of corn and soybeans to Cargill. He stated that he "did not enter into a contract for the sale of 80,000 bushels of corn to Cargill on or about July 17, 2003, either verbally, in writing or otherwise." He also stated that when he was notified of the existence of the contract, he "was partially stunned, because [he] did not enter into the contract." He acknowledged that he received a packet of information in October 2003, which included Contract #27985; but he noted that he did not notice the packet until sometime later because October is "harvest time for us and I was busy in the fields." In December 2003, he met with two Cargill employees, Presthus and Morrison, to discuss the "purported contract." He stated that everyone agreed that the contract never existed. He also stated that the "underlying contract was never delivered to [him] by Cargill." James Jorgenson also attended a January 2004 meeting with the same individuals, at which it was confirmed by all present that no agreement was made for the sale of 80,000 bushels of corn to Cargill, but that Morrison "informed me that his superiors at Cargill would not allow for the deletion of the invalid contract."

Cargill submitted the affidavits of Kurt Peterson and Brad Morrison in opposition to the motion for summary judgment. Peterson stated that he is the farm service group manager for Cargill and that he attended a meeting at Jorgenson Farms with Morrison in April 2004 to discuss the disputed 80,000-bushel corn contract. At the meeting, James Jorgenson admitted that he received an e-mail from Cargill in October 2003, notifying him of put options allowing the future sale of corn at a specific price, including the 80,000-bushel corn contract. James Jorgenson also admitted that Jorgenson Farms did not respond to the put options. Attached to his ...

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