Glacial Plains Cooperative, formerly known as United Farmers Elevator, Respondent,
Chippewa Valley Ethanol Company, LLLP, successor to Chippewa Valley Ethanol Company, LLC, Appellant.
of Appeals Office of Appellate Courts
G. Lina, Fluegel, Anderson, McLaughlin & Brutlag,
Chartered, Morris, Minnesota, for respondent.
J. Pitz, Michael Best & Friedrich LLP, Madison,
Wisconsin; and Andrew S. Birrell, Gaskins Bennett Birrell
LLP, Minneapolis, Minnesota, for appellant.
order to create a contract of perpetual duration, the
unambiguous terms of the contract must express an intent to
do so. Any ambiguity is construed against perpetual-duration
contracts. If the contract is not of definite duration, and
does not unambiguously express an intent to be of perpetual
duration, the contract is of indefinite duration and is
terminable at will by either party after a reasonable time
and with reasonable notice.
Whether a "reasonable time" has passed to allow
termination at will by either party of a contract of
indefinite duration must be decided by the district court
based on the circumstances.
Valley Ethanol Company, LLLP and Glacial Plains Cooperative
entered into a grain-handling contract that was to
"continue indefinitely." Chippewa Valley sought to
end the contract with Glacial Plains Cooperative on the
ground that it was a contract of indefinite duration,
terminable at will by either party. Glacial Plains
Cooperative argued that the contract was perpetual in
duration, not indefinite, and was therefore not terminable at
will. The district court held that the contract was
perpetual, not indefinite, and the court of appeals affirmed.
We hold that the contract does not unambiguously express an
intent to form a contract of perpetual duration, and is thus
a contract of indefinite duration. Accordingly, it is
terminable at will upon reasonable notice once a reasonable
time has passed. We therefore reverse and remand to the
district court for further proceedings consistent with this
case centers on a dispute over a grain-handling contract
between Chippewa Valley Ethanol Company, LLLP (CVEC) and
Glacial Plains Cooperative (GPC). The contract, signed in
1994, provided that GPC would invest in the ethanol plant for
which CVEC was seeking financing. In return, CVEC provided
GPC with land to build a grain-processing plant next to the
new ethanol plant, and agreed that GPC would be the
"exclusive handler of grain to the [CVEC] ethanol plant,
as long as it [was] complying with all warranties and
agreements" and "continue[d] to be able to handle
the full capacity of corn" CVEC required to run the
1 of the contract states that "this agreement shall
continue indefinitely until either terminated by the terms of
this agreement, or by the mutual agreement of both
parties." Paragraph 5 of the contract states that if GPC
"default[s] or fail[s] to perform any of its
obligations" under the contract, CVEC may declare,
through written notice, that the contract has been breached.
GPC then has 30 days to correct the breach. If GPC fails to
correct the breach within 30 days, it is obligated to deed
the land and the grain-processing plant back to CVEC.
Disputes over whether GPC is in breach of the contract under
paragraph 5 are required to be submitted to an arbitrator.
The contract contains no other terms that would terminate the
contract after the ethanol plant was built.
signing the contract, CVEC and GPC had a productive working
relationship for more than 10 years. The two organizations
have "very significant overlap" in members,
estimated to be 60-70 percent. In 2009, a new general manager
took over at CVEC, and the relationship between the two
organizations deteriorated almost immediately. In 2009, the
two litigated disputed grain-storage charges, and the court
of appeals eventually ordered judgment in favor of GPC on the
issue. Glacial Plains Coop. v. Chippewa Valley Ethanol
Co., No. A10-869, 2011 WL 382710, at *1, *5 (Minn.App.
Feb. 8, 2011), rev. denied (Minn. Apr. 19, 2011). In
2011, CVEC sued GPC, seeking termination of the contract for
alleged breaches. The matter went to arbitration, where CVEC
was awarded damages for one material breach, but the
arbitrators found that GPC had not materially breached the
contract in any other way. The arbitrators did not order that
the contract be terminated. After the final award by the
arbitration panel, CVEC notified GPC of its intent to
terminate the contract. GPC filed this suit against CVEC,
seeking to block the termination of the contract.
bench trial, the district court issued extensive findings of
fact and found that CVEC had wrongfully terminated the grain
handling contract. CVEC appealed the district court's
published opinion, the court of appeals affirmed the district
court's decision. Glacial Plains Coop. v. Chippewa
Valley Ethanol Co., 897 N.W.2d 834, 836 (Minn.App.
2017). The court of appeals ruled that the intent of the
parties should prevail over the general rule that contracts
without definite duration are terminable at will upon
reasonable notice. Id. at 840. The court was
unpersuaded by the argument that the term
"indefinitely" in the contract was intended to
incorporate that general rule, ...