Glacial Plains Cooperative, formerly known as United Farmers Elevator, Respondent,
Chippewa Valley Ethanol Company, LLLP, successor to Chippewa Valley Ethanol Company, LLC, Appellant.
County District Court File No. 76-CV-14-332
G. Lina, Fluegel, Anderson, McLaughlin & Brutlag,
Chartered, Morris, Minnesota (for respondent)
J. Pitz, Michael Best & Friedrich LLP, Madison, Wisconsin
Considered and decided by Worke, Presiding Judge; Johnson,
Judge; and Kirk, Judge.
the language of a contract reflects the parties' intent
to create a contract of perpetual duration, the contract is
not subject to the general rule that contracts of indefinite
duration are terminable at will.
district court does not abuse its discretion by granting
specific performance of a services contract when the district
court finds that the value of the nonbreaching party's
expectancy under the contract cannot be correctly estimated
and that specific performance is the only fair remedy.
affirm the district court's entry of judgment against
appellant following a court trial of respondent's
breach-of-contract claim because the district court did not
err by (1)rejecting appellant's argument that the
parties' contract was terminable at will or (2)ordering
appellant to specifically perform the contract.
appeal arises out of a contractual dispute between appellant
Chippewa Valley Ethanol Company LLLP (CVEC) and respondent
Glacial Plains Cooperative (GPC). The parties'
relationship stems from a grain-handling contract (the
contract) executed on November 8, 1994. At that time,
CVEC anticipated opening an ethanol plant and was seeking
additional equity to support the operation. The parties came
to an arrangement, memorialized in the contract, whereby GPC
would invest in CVEC in exchange for property next to the
plant on which to build a grain-processing facility and the
exclusive rights to handle grain for the plant.
terms of the contract created an ongoing relationship between
the parties after the ethanol plant and grain-processing
facility were built. Paragraph 1 of the contract expressly
provides: "It is the intent of the parties that this
agreement shall continue indefinitely until either terminated
by the terms of this agreement, or by the mutual agreement of
both parties." Consistent with that expressed intent,
numerous provisions of the contract provide for continuous
performance by both parties. Paragraph 1 provides an initial
per-bushel grain-handling fee of 3.2 cents, effective for the
first three years of operations, with future fees to be
negotiated for successive three-year periods. Paragraph 2
provides for GPC to purchase 200, 000 shares of CVEC for
$400, 000, resulting in its part ownership of CVEC. Paragraph
3 provides for CVEC to transfer to GPC an eight-acre parcel
for construction of the grain-handling facility and for the
parties to share road-construction costs. Under paragraph
4(H) of the contract, GPC agreed "to keep the facility
operational, always maintaining the ability to provide enough
grain to keep the ethanol plant at full capacity, in a timely
manner." And under paragraph 6(B), CVEC agreed that GPC
"shall be the exclusive grain handler to the . . .
plant, as long as it is complying with all warranties and
agreements" and "continue[s] to be able to handle
the full capacity of corn required to run the . . .
contract does not include an express termination clause.
However, paragraph 5 of the contract provides that, if GPC
fails to perform its obligations under the contract,
"[CVEC] shall have the right to declare that this
contract has been breached." In the event of a declared
breach, GPC has 30 days to cure. If the breach is unresolved,
GPC must deed the real estate and grain-processing plant to
CVEC in exchange for compensation determined by formula under
the contract. Disputes over breaches by GPC under paragraph 5
are subject to arbitration.
parties commenced operations in 1996 and proceeded under the
contract for more than a decade before their relationship
began to sour, resulting in litigation. In 2011, CVEC sued
GPC, alleging breaches of the contract and seeking its
termination. The 2011 action was submitted to arbitration,
and a panel of arbitrators awarded damages to CVEC for one
material breach but found that GPC did not otherwise
materially breach the contract and did not order termination
of the contract. In February 2015, the district court issued
an order confirming the arbitrators' determinations in
relation to ...