Bartlett Grain Company, LP v. Steven Carl Sheeder and Maureen Jeanette Pace
829 N.W.2d 18
| Iowa | 2013Background
- Eight oral grain sale contracts in 2010 for 155,000 bushels of corn; signatures followed by signed two-page Purchase Confirmations containing arbitration clause; confirmations stated finality and integration and included NGFA arbitration terms; Bartlett sought adequate assurance for performance, leading to NGFA arbitration after alleged repudiation; NGFA entered default against Sheeder and Bartlett sought district-court confirmation of arbitration award; district court denied confirmation; Iowa Supreme Court reverses and directs confirmation.
- Confirmations contained NGFA arbitration clause and integration language; signatures by both parties bound them to arbitration per parol evidence and UCC rules; district court ruled no enforceable arbitration agreement existed, but Court finds evidence supports an enforceable agreement.
- UCC governs grain sale contracts; confirmations intended as final expression of agreement; parol evidence rule prevents contradictory prior terms; modifications under UCC allowed without consideration; arbitration clause estopped Sheeder from denying agreement.
- Barlett’s position: signed confirmations created enforceable arbitration agreement; Sheeder’s position: no written agreement or unconscionable terms; Court rejects due to signed writings and merger/partial-integration support.
- The decision holds there was an enforceable written agreement to arbitrate and reverses the district court’s denial of confirmation; directs district court to confirm NGFA arbitration award.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Was there a valid arbitration agreement? | Bartlett: confirmations signed by both created an agreement. | Sheeder: no written arbitration agreement; oral terms only. | Yes, an enforceable written arbitration agreement existed. |
| Do the confirmations alter prior oral terms via UCC modifications? | Bartlett: writings modified oral contracts to include arbitration. | Sheeder: prior oral terms not altered; but signed confirmations show agreement. | Confirmations validly modified and enforce arbitration terms. |
| Is the arbitration clause unconscionable? | Arbitration terms fair; no lack of negotiation; fees not prohibitive. | Alleges procedural/substantive unconscionability (power, notice, fees). | Not unconscionable. |
| Was NGFA process biased or unfair? | Process complies with NGFA rules; no direct bias shown. | Argues systemic bias due to Bartlett’s NGFA membership. | Process not shown to be biased. |
| Should the district court have confirmed the award? | Arbitration agreement valid; award enforceable. | District court erred in denying confirmation. | Reversed and remanded with directions to confirm. |
Key Cases Cited
- $99 Down Payment, Inc. v. Garard, 592 N.W.2d 691 (Iowa 1999) (arb. allowed when valid agreement exists; review for errors at law)
- St. Ansgar Mills, Inc. v. Streit, 613 N.W.2d 289 (Iowa 2000) (UCC governs contract formation in goods sale; statute of frauds applicable)
- C & J Vantage Leasing Co. v. Wolfe, 795 N.W.2d 65 (Iowa 2011) (integration factors; unconscionability considerations)
- Andersons, Inc. v. Horton Farms, Inc., 166 F.3d 308 (6th Cir. 1998) (signed confirmations bind to arbitration; Battle of the Forms analysis)
- T & R Enterprises, Inc. v. Continental Grain Co., 613 F.2d 1272 (5th Cir. 1980) (buyer-signature on written confirmations binds to arbitration; prior telephonic terms cannot negate clause)
- McCubbin Seed Farm, Inc. v. Tri-Mor Sales, Inc., 257 N.W.2d 55 (Iowa 1977) (confirmatory memoranda; writings must prove contract; not binding by silence alone)
- Margeson v. Artis, 776 N.W.2d 652 (Iowa 2009) (elements of contract; assent, consideration; supports arbitration validity)