Jury Determines Contract Correctly Terminated

Center Fresh Egg Farm, L.L.P., B.E.K. Poultry, L.L.C., Dooyema & Sons, Inc. and Sioux County Egg, L.L.P. v. Natural Fertilizer Company and Hull Cooperative Association, Iowa District Court for Sioux County (August 2015)

Jason T. Madden and Bradshaw Of Counsel attorney William Sidney Smith, represented major egg producers in Sioux County in a contractual dispute with Natural Fertilizer Company (NFC) and Hull Cooperative Association (Hull Coop). The egg producers initially sought a declaration that they had properly terminated contracts for chicken litter. NFC and Hull Coop counter-claimed, asserting the contracts had not been terminated and they were entitled to all chicken litter generated by the egg producers for another four years. The egg producers faced multi-million dollars claims regarding NFC and Hull Coop’s assertions.

Following requests for declaratory relief by the parties regarding the length of the contracts and the meaning of termination provisions, the trial court initially ruled in favor of NFC and Hull Coop and held the contracts were ongoing. The ruling was appealed to the Iowa Court of Appeals and a reversal obtained, which necessitated a jury trial. With the competing claims for declaratory relief, breach of contract and damages, counsel for both sides agreed to a novel trial approach to efficiently present the case to the jury and reduce attorney fees for both sides. Counsel and the court agreed to bifurcate the case and ask the jury to first resolve the dispute concerning the length of the contracts and when they could be terminated. To the extent the first phase would not resolve the case, the same jury would later decide the breach of contract and damages claims. With that agreement, the issue of the length of the contracts and when they were terminated proceeded to trial. Following five days of testimony and evidence, the jury concluded the egg produces had timely and properly terminated the contracts. As a result of the jury’s verdict, the parties resolved any remaining disputes and the second phase of trial was unnecessary.