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Irvington Elevator Company, Inc v. Robert Jeffrey Heser

October 24, 2012

IRVINGTON ELEVATOR COMPANY, INC.,
PLAINTIFF-APPELLANT,
v.
ROBERT JEFFREY HESER, ROBERT JULES HESER, AND ANDREW JASON HESER,
DEFENDANTS-APPELLEES.



Appeal from the Circuit Court of Marion County. No. 08-L-44 Honorable Michael D. McHaney, Judge, presiding.

The opinion of the court was delivered by: Justice Goldenhersh

NOTICE

The text of this decision may be changed or corrected prior to the filing of a Petition for Rehearing or the disposition of the same.

JUSTICE GOLDENHERSH delivered the judgment of the court, with opinion. Justices Welch and Chapman concurred in the judgment and opinion.

OPINION

¶ 1 Plaintiff, Irvington Elevator Company, Inc., filed a breach of contract claim regarding grain contracts allegedly entered into with defendants, Robert Jeffrey Heser (Bobby), Robert Jules Heser (Bob), and Andrew Jason Heser (Andy). Defendants raised a statute of frauds affirmative defense. The circuit court of Marion County granted summary judgment in favor of defendants on their statute of frauds affirmative defense. The issue on appeal is whether the trial court erred in granting summary judgment in favor of defendants and against plaintiff. We reverse and remand.

¶ 2 BACKGROUND

¶ 3 Plaintiff is a Delaware corporation that operates a grain elevator in Irvington, Illinois. Defendants are a father (Bob) and two sons (Bobby and Andy) who are grain farmers. Plaintiff maintains that the parties entered into certain oral contracts concerning the sale of grain. Plaintiff alleged that it has a 25-year history of contracting with defendants for the sale of their grain. Plaintiff's grain marketer is Clark Schnitker, who is defendants' cousin. He has been employed by plaintiff for more than 25 years, and during that time he has negotiated hundreds of grain contracts with many farmers doing business in Marion County.

¶ 4 Beginning in May 2006, the parties began transacting business on the basis of verbal "hedge-to-arrive" contracts with respect to the sale of grain. A hedge-to-arrive contract is an agreement for the sale of a certain amount and type of grain from the farmer to the grain elevator at some time in the future. On the day the contract is made, the elevator hedges against the risk of falling grain prices by selling futures contracts on the Chicago Board of Trade in the contract quantity and at the initial contract price. The futures contracts expire in the month of delivery of the grain. After the contract is made, the farmer is responsible for determining the final contract price by contacting the grain elevator to select a "basis" that will be either added or subtracted from the initial contract basis. The basis is the difference, on any given day, between the futures price for the grain on the Chicago Board of Trade and the cash price offered by the elevator; thus, it can be either a positive or a negative number. Once the farmer sets the basis, the hedge-to-arrive contract becomes a cash contract, and the farmer delivers the grain and receives the final contract price.

¶ 5 According to Clark Schnitker, since 2006 Bobby has been the only person responsible for selling defendants' grain to plaintiff and has done so only via hedge-to-arrive contracts. Defendants dispute that they entered into any oral hedge-to-arrive contracts, but for purposes of this appeal, defendants agree that we are to assume that they orally entered into the hedge-to-arrive contracts, specifically contracts numbered 2699, 2703, 2704, 2709, 2717, 2718, 2728, 2746, 2747, 2753, 2765, and 2766. Plaintiff filed suit on all these contracts, but the motion for summary judgment that is the subject of this appeal pertained only to nine contracts, 2699, 2703, 2704, 2709, 2717, 2718, 2728, 2765, and 2766. Defendants did not move for summary judgment on the other three contracts, 2746, 2747, and 2753, because these contracts were followed up with written confirmations within one or two days of the contract date. All of the remaining alleged contracts that are the subject of this appeal were allegedly confirmed approximately 16 days to 4 months after the alleged oral contract date. While defendants contend they did not receive the alleged confirmations on the dates maintained by plaintiff, for purposes of this appeal, defendants allow us to assume that they received the confirmations as alleged by plaintiff.

¶ 6 Plaintiff filed its original complaint on August 4, 2008. After plaintiff amended the complaint twice, defendants filed a motion to dismiss plaintiff's fraud and negligent misrepresentation claims. The trial court granted defendants' motion, and plaintiff filed an interlocutory appeal. Plaintiff amended its complaint for a third time, and on November 6, 2009, a fourth time. Counts I and II are for breach of various grain contracts. Count III is a fraud count, and count IV is a negligent misrepresentation count. Count V is for promissory estoppel. Ultimately, this court affirmed the trial court's dismissal of the fraud and negligent misrepresentation claims in a Rule 23 order (Irvington Elevator Co. v. Heser, No. 5-09-0328 (2010) (unpublished order under Supreme Court Rule 23), so those counts are not part of this appeal.

¶ 7 Plaintiff filed a motion for summary judgment on defendants' statute of frauds affirmative defense. The trial court denied plaintiff's motion on March 8, 2010, finding that there were issues of material fact which precluded entry of summary judgment. On January 3, 2011, defendants filed a motion for summary judgment on their statute of frauds affirmative defense. After a hearing, the trial court granted defendants' motion for summary judgment, finding the previous trial judge's ruling on the matter erroneous as a matter of law. The trial court found that as a matter of law the written confirmations sent by plaintiff were unreasonable. The trial court's order is silent as to whether summary judgment was granted with respect to plaintiff's breach of contract claim and its promissory estoppel claim. Plaintiff requested clarification, but none was given. Plaintiff filed a timely notice of appeal.

¶ 8 ANALYSIS

ΒΆ 9 The issue we are asked to address is whether the trial court erred in granting summary judgment in favor of defendants. Plaintiff contends the trial court erred in granting summary judgment in favor of defendants on their statute of frauds defense because the record shows defendants placed substantial orders for the delivery of grain, plaintiff hedged in reliance on these orders, and plaintiff delivered confirmation statements within a reasonable time after the parties reached an oral agreement, consistent with the practice between the parties. Plaintiff insists that to allow defendants to escape their commitments on summary judgment is contrary to the law. Defendants respond that the confirmations are unreasonable in time as a matter of ...


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