Fanucchi & Limi Farms v. United Agri Products
United States Court of Appeals for the Ninth Circuit
414 F.3d 1075 (2005)
Fanucchi & Limi Farms (Fanucchi) (plaintiff) borrowed more than $1,000,000 from United Agri Products Financial Services (United) (defendant) in 1994 to finance Fanucchi’s 1995 crop. The loan agreement set out repayment terms and gave United a security interest in Fanucchi’s crops. Fanucchi’s 1995 crops failed, and Fanucchi was unable to repay the loan. According to Fanucchi, United had persuaded Fanucchi not to file for bankruptcy and orally promised to: (1) subordinate United’s debt to any new lenders of Fanucchi’s for up to five years, (2) split any future crop proceeds so that United would receive 60 percent and Fanucchi’s new lenders would receive 40 percent, and (3) forgive Fanucchi’s remaining debt at the end of the five-year period if Fanucchi paid the debt down to either $300,000 or $400,000. Fanucchi found new lenders for its 1996 and 1997 crops, and the crop proceeds from those years were split accordingly between United and Fanucchi’s new lenders. In 1998, United refused to subordinate its security interest in Fanucchi’s crops to one of Fanucchi’s new lenders. Fanucchi sued United for breach of contract, arguing that the oral agreement either modified or novated the original loan agreement. The district court entered summary judgment in favor of United. Fanucchi appealed.
Rule of Law
Holding and Reasoning (Fletcher, J.)
Concurrence (Beezer, J.)
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