Joe B. Calloway, et al v. Oakes Farms Inc.

[DO NOT PUBLISH]
In the
United States Court of Appeals
For the Eleventh Circuit
____________________
No. 21-13803
Non-Argument Calendar
____________________
JOE B. CALLOWAY,
d.b.a. C-Squared Farms,
CYNTHIA CALLOWAY,
d.b.a. C-Squared Farms,
Plaintiffs-Appellants-Counter Defendants,
versus
OAKES FARMS INC.,
a Florida limited liability company,
Defendant-Appellee-Counter Claimant.
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2 Opinion of the Court 21-13803
____________________
Appeal from the United States District Court
for the Northern District of Alabama
D.C. Docket No. 5:18-cv-01356-LCB
____________________
Before W ILSON, B RASHER , and ANDERSON, Circuit Judges.
PER CURIAM:
This appeal involves a contract dispute between a produce
farm, C-Squared Farms, and a distributor, Oakes Farm. C-Squared
appeals the district court’s judgment in favor of Oakes on its breach
of contract claim. C-Squared also appeals the district court’s pre-
trial grant of partial summary judgment in favor of Oakes. For the
reasons below, we affirm.
I.
In 2018, C-Squared, owned and operated by Joe and Cynthia
Calloway, entered into a contract with Oakes Farms, Inc. Under
the contract, C-Squared agreed to grow produce that Oakes would
sell to third parties in exchange for a fee. The contract stipulated
that Oakes was to act as the “exclusive sales agent” for the produce.
Among other things, Oakes agreed to provide a Quality Control
assistant, labor for harvesting, and “Grower Advances.” The
Grower Advances were to be issued to C-Squared on a bi-monthly
basis from April 2018 to September 2018, the end of the contract
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21-13803 Opinion of the Court 3
period. The contract also allowed for additional advances as
needed.
In late May or early June of 2018, excess rain delayed at least
one of the harvests, resulting in reduced need for harvesting labor.
Despite this setback, Oakes initially fulfilled its obligation under the
contract to provide harvesting labor and a quality control assistant,
Oscar Garcia. However, on July 12, Garcia left the farm and never
returned. On August 8, the harvesting crew also left and did not
return.
Oakes also fulfilled its obligation to issue Grower Advances.
However, it failed to issue an advance that was due on August 15.
On August 24, C-Squared sued Oakes in district court for breach of
contract, among other claims not relevant to this appeal. At that
point, C-Squared severed all communication with Oakes and hired
replacement sales agents. Oakes counter-claimed, alleging that C-
Squared had breached the contract.
The parties filed competing motions for summary judg-
ment. In its summary judgment motion, C-Squared claimed that
Oakes had breached the contract by failing to 1) provide a quality
control assistant 2) provide harvesters and 3) issue the August 15
Grower Advance. C-Squared argued that these failures amounted
to repudiation of the contract by Oakes, excusing any further per-
formance by C-Squared. In its motion for summary judgment,
Oakes argued that C-Squared was the breaching party. Oakes con-
tended that C-Squared breached the contract in one of two ways:
1) by treating the contract as continuing after it filed suit but failing
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4 Opinion of the Court 21-13803
to continue performing its obligations; or 2) by repudiating the
contract or rescinding without giving Oakes prior notice of the al-
leged breach and an opportunity to cure.
The district court awarded partial summary judgment to
Oakes. Specifically, it concluded that Oakes’s failure to provide har-
vest laborers or a quality control assistant did not amount to breach
or repudiation of the contract. The district court also concluded
that Oakes’s failure to issue the August 15 Grower Advance did not
amount to repudiation.
After summary judgment, the only remaining issue was
whether Oakes’s failure to issue the August 15 Grower Advance
amounted to breach. And if so, whether C-Squared provided Oakes
with notice and an opportunity to cure. In that case, C-Squared
could have rescinded. However, if C-Squared did not provide no-
tice and an opportunity to cure, then its decision to file suit and
sever all communications could be considered a repudiation of the
contract, excusing any further performance by Oakes.
After a bench trial, the district court ruled in favor of Oakes,
concluding that C-Squared had no right to rescind because C-
Squared failed to provide Oakes with notice and an opportunity to
cure. Thus, the district court determined that C-Squared breached
when it hired replacement sales agents. C-Squared appeals that rul-
ing in addition to the district court’s partial summary judgment rul-
ing.
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21-13803 Opinion of the Court 5
II.
We review the district court's summary judgment ruling
de
novo, using the same legal standard as the district court.
Feliciano
v. City of Miami Beach, 707 F.3d 1244, 1247 (11th Cir. 2013). Under
that standard, summary judgment is appropriate if there is “no gen-
uine dispute as to any material fact and the movant is entitled to
judgment as a matter of law.” Fed. R. Civ. P. 56(a). In conducting
our review, we view all facts and resolve all doubts in favor of the
nonmoving party.
Feliciano, 707 F.3d at 1247.
We review “factual findings made by a district court after a
bench trial for clear error, which is a highly deferential standard of
review,” and its conclusions of law
de novo.
Renteria-Marin v. Ag-
Mart Produce, Inc., 537 F.3d 1321, 1324 (11th Cir. 2008). A finding
of fact is only clearly erroneous when the reviewing court, after
reviewing all the evidence, is left with the “‘definite and firm con-
viction that a mistake has been committed.’”
In re Int’l Admin.
Servs., Inc., 408 F.3d 689, 698 (11th Cir. 2005) (quoting
Lykes Bros.,
Inc. v. United States Army Corps of Eng’rs, 64 F.3d 630, 634 (11th
Cir. 1995)).
III.
We divide our discussion in three parts. First, we consider
C-Squared’s appeal of the district court’s summary judgment in fa-
vor of Oakes regarding Oakes’s failure to provide harvesters and a
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6 Opinion of the Court 21-13803
quality control assistant. Next, we consider C-Squared’s appeal of
the district court’s summary judgment ruling that Oakes did not
repudiate the contract by failing to make the August 15 Grower
Advance. Finally, we consider the district court’s post-trial ruling
that Oakes did not breach the contract by failing to issue the August
15 Grower Advance.
A. The Harvesters
On summary judgment, the district court ruled that Oakes
did not breach by failing to provide harvesters because C-Squared
had waived that duty. The parties do not dispute that the contract
was formed in Alabama, thus Alabama law is controlling here.
See
St. Paul Fire & Marine Ins. Co. v. ERA Oxford Realty Co. Grey-
stone, LLC, 572 F.3d 893, 895 (11th Cir. 2009) (“A federal court sit-
ting in diversity, as in this case, must apply the choice of law prin-
ciples of the state in which it sits. In determining which state's law
applies in a contract dispute, Alabama follows the principle of
lex
loci contractus, applying the law of the state where the contract
was formed.”). Under Alabama law, “[a] waiver consists of a vol-
untary and intentional surrender or relinquishment of a known
right and the burden of proof in establishing a waiver rests upon
the party asserting the claim.”
Bentley Sys. v. Intergraph Corp., 922
So. 2d 61, 92 (Ala. 2005) (internal quotations and citations omitted).
“Whether there has been a waiver is a question of fact.”
Id.
Here, the district court concluded that C-Squared waived
Oakes’s obligation to provide harvesters based on a series of text
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21-13803 Opinion of the Court 7
messages between Chance Calloway, Joe and Cynthia’s son, and
Steve Veneziano, Oakes’s vice president. On August 7, 2018, Cal-
loway messaged Veneziano that C-Squared would “only need one
crew” because “[p]icking will be slow for a few weeks.” The next
day, Calloway informed Veneziano that both crews were leaving,
“[w]e needed one crew to stay and both were pulled.” A few hours
later, Veneziano replied that he was trying to find a replacement
crew. However, Calloway then responded that he had a crew of
fifteen people coming a few days later, and that this would suffice
“for a little while.” Veneziano suggested that C-Squared would
eventually need approximately thirty harvesters to which Callo-
way replied, “[b]ut we don’t need that many at the moment.” Cal-
loway also stipulated that he “d[id]n’t want to close any doors” as
to Oakes sourcing future crews.
Based on this evidence, the district court concluded that “C-
Squared affirmatively waived, at least temporarily, Oakes’s obliga-
tion to provide harvesting crews beginning on August 8, 2018.” On
appeal, C-Squared argues that text messages from Veneziano five
days later indicating he was still looking for replacement crews is
evidence that Oakes did not believe that its duty to provide har-
vesters had been waived. Even if true, Oakes’s belief is not disposi-
tive as to whether C-Squared waived its rights under the contract.
See Bentley Sys., 922 So. 2d at 91. Moreover, Veneziano’s continu-
ing efforts to locate harvesters is consistent with the existence of a
temporary waiver since both Veneziano and Calloway agreed that
C-Squared would eventually need more harvesters. However,
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Calloway confirmed that C-Squared did not need any additional
harvesters “at the moment” and would not, at least, “for a little
while.” Thus, the district court did not err in concluding that C-
Squared had waived, at least temporarily, Oakes’s duty to provide
harvesters on August 8. And as the district court pointed out, any
obligation by Oakes to provide harvesters ended on August 24,
when C-Squared filed its complaint and severed all communica-
tions, effectively repudiating the contract. Accordingly, the district
court was correct in concluding this waiver was in effect from Au-
gust 8 through August 24, and that any failure by Oakes to provide
harvesters during that time was not in breach of the contract.
B. The Quality Control Assistant
On appeal, C-Squared makes only passing references to
Oakes’s failure to provide a quality control assistant and does not
meaningfully challenge the district court’s conclusion that Oakes
did not breach in that respect. C-Squared does not address any of
the factual or legal grounds on which the district court based its
ruling. Therefore, C-Squared has abandoned this argument on ap-
peal.
See Sapuppo v. Allstate Floridian Ins. Co., 739 F.3d 678, 681-
82 (11th Cir. 2014) (an appellant abandons a claim when he makes
only passing reference to it or raises it in a perfunctory manner
without supporting arguments and authority).
Even if C-Squared had properly preserved this challenge, it
fails on the merits. The district court concluded that C-Squared
never inquired about a replacement for Garcia and never told
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21-13803 Opinion of the Court 9
Oakes that it considered his departure to be in breach of the con-
tract. In fact, Joe Calloway agreed that things “went more
smoothly” after Garcia left the farm. Thus, Oakes did not breach in
failing to provide a replacement. And, as the district court ex-
plained, even if it had, there is no dispute that C-Squared failed to
give Oakes notice and an opportunity to cure.
See Nelson Realty
Co. v. Darling Shop of Birmingham, Inc., 101 So. 2d 78, 85 (Ala.
1957) (“[W]here there is a contract involving mutual continuing
duties on the part of both parties, and one party has breached, but
has not repudiated, the contract, it is the duty of the other before
rescission to give notice and opportunity to live up to the contract
. . . .”). Accordingly, the district court did not err in concluding
Oakes’s failure to provide a quality control assistant did not
amount to breach.
C. The August 13 Conversation
In its motion for summary judgment, C-Squared argued that
Oakes repudiated the contract based on a series of text messages
between Chance Calloway and Steve Veneziano on August 13. In
those messages, Calloway said to Veneziano, “[w]e’re out of
money. Need to know what we need to do. Dad [Joe Calloway]
wants a face to face. Need you to call him.” Veneziano replied, “I’m
not advancing any more money. You guys should not have farmed
if you don’t have any money. Absolutely ridiculous.”
C-Squared claimed Calloway’s request for money was a de-
mand for payment of any past due Grower Advances. Oakes, on
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10 Opinion of the Court 21-13803
the other hand, claimed that Veneziano was not referring to the
Grower Advances. Instead, he was referring to money that Oakes
had advanced for non-harvesting labor. The district court deter-
mined that under either interpretation, the statement by Venezi-
ano that he would “not advanc[e] any more money” was not a re-
pudiation of the contract.
“A repudiation is a manifestation by one party to the other
that the first cannot or will not perform at least some of his obliga-
tions under the contract.”
Cong. Life Ins. Co. v. Barstow, 799 So.
2d 931, 938 (Ala. 2001) (quoting E. Allan Farnsworth, Contracts, §
8.21, at 633–34 (1982)). “Merely because a given act or course of
conduct of one party to a contract is inconsistent with the contract
is not sufficient; it must be inconsistent with the intention to be . .
. bound by it.”
Bd. of Water & Sewer Comm’rs of Mobile v. Bill
Harbert Constr. Co., 27 So. 3d 1223, 1258 (Ala. 2009).
In its summary judgment ruling, the district court concluded
that Veneziano’s statement did not amount to repudiation because
the parties continued to perform under the contract, thus evincing
an intent to be bound by it. For example, on August 18, Calloway
and Veneziano exchanged text messages about different types of
produce that had been harvested and logistics for shipping them.
And C-Squared continued to send harvested produce to Oakes. At
no point did C-Squared indicate that it considered Veneziano’s Au-
gust 13 statement to be a repudiation of the contract. The district
court also pointed out that C-Squared’s complaint treated the
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21-13803 Opinion of the Court 11
contract as ongoing. These actions are consistent with an intent to
be bound by the contract. Accordingly, the district court did not err
in concluding that Oakes did not repudiate the contract.
See Bd. of
Water & Sewer Comm’rs of Mobile, 27 So. 3d at 1258.
On appeal, C-Squared argues that the district court applied
the wrong test by considering C-Squared’s beliefs in determining
whether Oakes had repudiated. According to C-Squared, repudia-
tion is determined by what a “reasonable observer” would have
believed based on the words and actions of the repudiating party.
In support, C-Squared relies on
Lansing v. Carroll, No. 11 CV 4153,
2016 U.S. Dist. LEXIS 98877, at *44-45 (N.D. Ill. July 28, 2016) and
Kaiser-Francis Oil Co. v. Producer's Gas Co., 870 F.2d 563, 568
(10th Cir. 1989). But those cases are not binding here. And in any
event, the district court specifically concluded that “[e]ven when all
of the evidence is viewed in the light most favorable to C-Squared,
no reasonable factfinder could determine that Oakes repudiated
the contract” based on the August 13 message. Thus, even under
C-Squared’s reasonable observer standard, the district court did not
err in concluding that Oakes had not repudiated the contract.
After trial, the district court found that the “advances” Ve-
neziano referred to in his August 13 message were not Grower Ad-
vances, which Oakes was contractually obligated to make. Instead,
the district court concluded that he was referring to “money that
Oakes had advanced for non-harvesting labor.” Veneziano testified
that the harvesting crews soon ran out of crop to harvest due to the
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12 Opinion of the Court 21-13803
reduced crop yields. Because those workers are paid by the amount
of crop they harvest rather than an hourly wage, both Oakes and
C-Squared were concerned that the crews would leave to find
other work. To keep the crews from leaving, Oakes advanced
money to C-Squared to pay the harvesting crews an hourly wage
to perform other, non-harvesting work. Thus, the district court’s
finding is supported by the record. Reviewing for clear error, we
are not left with a “definite and firm conviction that a mistake has
been committed.”
In re Int’l Admin. Servs., Inc., 408 F.3d at 698.
Based on these facts, the district court correctly concluded that Ve-
neziano’s August 13 message did not amount to a breach because
Oakes was not obligated to make those payments under the con-
tract.
D. The August 15 Grower Advance
The parties do not dispute that Oakes failed to issue the Au-
gust 15 Grower Advance. However, C-Squared argues that the dis-
trict court erred in concluding that this failure did not amount to a
breach and that C-Squared was required to provide notice and an
opportunity to cure. “[W]here there is a contract involving mutual
continuing duties on the part of both parties, and one party has
breached, but has not repudiated, the contract, it is the duty of the
other before rescission to give notice and opportunity to live up to
the contract . . . .”
Nelson Realty Co., 101 So. 2d at 85. At trial, Joe
Calloway admitted that “C-Squared did not notify Oakes of the
missed payment as it had in the past nor did it give [Oakes] a chance
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21-13803 Opinion of the Court 13
to cure the deficiency.” And the district court concluded at sum-
mary judgment that this failure did not amount to repudiation be-
cause both parties continued to perform as if the contract was still
in effect.
See Bd. of Water & Sewer Comm’rs of Mobile, 27 So. 3d
at 1258 (conduct must be inconsistent with an intent to be bound
by the contract to amount to repudiation). Accordingly, the district
court correctly concluded C-Squared was required to provide
Oakes with notice and an opportunity to cure before rescinding the
contract.
On appeal, C-Squared argues the district court erred in con-
cluding that it was required to provide notice and an opportunity
to cure. C-Squared argues that notice and an opportunity to cure
are not prerequisites to rescission when “a fixed payment is due
under contract on a date-certain,” citing
Alabama Football, Inc. v.
Stabler, 319 So. 2d 678 (Ala. 1975). But
Stabler does not stand for
that proposition. In
Stabler, the Alabama Supreme Court explained
that “the conduct of the parties themselves” may vitiate the need
for notice and an opportunity to cure.
Id. at 554. There, the court
determined that formal notice and an opportunity to cure were not
required where the non-breaching party made “repeated demands”
for performance upon the breaching party.
Id.
Unlike in
Stabler, the conduct of the parties here did not vi-
tiate the need for notice and an opportunity to cure. C-Squared
never demanded payment after Oakes failed to issue the August 15
payment, despite doing so on previous occasions. The record es-
tablished that C-Squared previously accepted late payments from
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14 Opinion of the Court 21-13803
Oakes on at least two occasions after notifying Oakes that payment
was due. Far from vitiating the need for notice and an opportunity
to cure, the parties’ conduct signaled that the need for notice and
an opportunity to cure was particularly warranted.
C-Squared also argues that notice and an opportunity to
cure were not required because “time was of the essence.” Even
assuming this is true, C-Squared does not explain why time was of
the essence only as to the August 15 payment. As previously dis-
cussed, C-Squared accepted late payments from Oakes on more
than one occasion prior to the August 15 payment.
Finally, C-Squared argues that notice and an opportunity to
cure were not required because Oakes’s failure to issue the August
15 payment was a material breach. C-Squared relies on
Health Care
Mgmt. Corp. v. Rubenstein, 540 So. 2d 77, 78 (Ala. Civ. App. 1989)
for the proposition that notice and an opportunity to cure are not
required in cases of “material breach.” A material breach is one
“that touches the fundamental purposes of the contract and defeats
the object of the parties in making the contract.”
Sokol v. Bruno’s,
Inc., 527 So. 2d 1245, 1248 (Ala. 1988). Here, Oakes had previously
missed payment deadlines, yet the parties continued to perform
under the contract. C-Squared would notify Oakes about a missed
payment and Oakes would issue payment. Thus, C-Squared cannot
claim that missing the due date for the August 15 payment “de-
feat[ed] the object of the parties in making the contract.” Particu-
larly when it never requested payment as it had with previous late
payments.
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21-13803 Opinion of the Court 15
Based on its conclusion that Oakes had not breached, the
district court determined that the contract was still in effect when
C-Squared cut off all communication, filed suit, and hired replace-
ment sales agents. Thus, the district court concluded C-Squared
breached based on Oakes’s contractual right to be the exclusive
sales agent. And it concluded that this breach amounted to repudi-
ation, excusing Oakes from any further performance. This conclu-
sion was supported by the record, which confirms C-Squared was
looking to “pull out” from its agreement with Oakes. And Joe Cal-
loway admitted that C-Squared began using a number of replace-
ment sales agents immediately after its August 24 notice to Oakes.
These actions clearly amounted to a manifestation of C-Squared’s
unwillingness or inability to perform at least some of its obligations
under the contract. Moreover, Oakes provided notice and an op-
portunity to cure. Upon notice of C-Squared’s plans to sell its own
produce, Oakes immediately responded that it was “illegal” for C-
Squared to use another sales agent under the contract. On the other
hand, C-Squared provided no notice or opportunity to cure when
Oakes failed to issue the August 15 Advance, despite having done
so with previous late payments. Instead, C-Squared filed suit, cut
off all communications, and hired replacement sales agents. Ac-
cordingly, the district court did not err in concluding C-Squared
repudiated the contract in that respect.
IV.
Because the district court did not err in its summary judg-
ment or post-trial rulings, we AFFIRM.
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