Crowell v. Campbell Soup Company

264 F.3d 756 (2001)

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Crowell v. Campbell Soup Company

United States Court of Appeals for the Eighth Circuit
264 F.3d 756 (2001)

Facts

Clifford Crowell and other poultry growers in Minnesota and Iowa (plaintiffs) entered chicken-production contracts with Herider Farms, Inc., a subsidiary of Campbell Soup Company (defendants). The contracts required the growers to build and operate poultry barns in exchange for Herider’s agreement to regularly give the growers newborn chicks to prepare for processing. The contracts specified the price that growers would be paid for finished chickens. The contracts also provided that either party could terminate the agreement for any reason at any time if the grower had no chicks in the barn and no chicks scheduled for placement. Addenda to the contracts reiterated Herider’s right of termination but provided that the grower would receive the reasonable cost of financing the construction of a poultry barn if Herider terminated the contract before the grower had received 35 or 40 flocks of chicks. In May of 1997, Herider informed the growers that it was terminating the contracts because Campbell was closing its Minnesota processing plant. The growers sued Herider and Campbell in federal court, alleging claims for breach of contract, fraudulent inducement, misrepresentation, and rescission. The growers alleged that before they entered the contracts, Herider orally committed to placing chicks with the growers throughout the useful life of the barns and promised that Herider would only terminate the contracts for cause. The growers also alleged that Herider promised them projected profits that were never realized. The growers claimed that they entered the contracts based on Herider’s alleged promises and that Herider had wrongfully terminated the contracts without cause. The district court prohibited parol evidence of Herider’s alleged precontract oral promises because it found that the contracts and addenda unambiguously allowed Herider to terminate the contracts without cause. The court dismissed the growers’ fraud claims and granted summary judgment in Herider’s favor on the breach-of-contract claim for any damages beyond the premature-termination remedy of the reasonable cost of financing construction of the growers’ barns. The growers appealed.

Rule of Law

Issue

Holding and Reasoning (Hansen, J.)

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