DC Farms, LLC v. Conagra Foods Lamb Weston, Inc.
317 P.3d 543
Wash. Ct. App.2014Background
- DC Farms and Lamb Weston entered a 2009 Joint Venture/Strategic Potato Supply Agreement governing 1,300 acres for a 2009 crop with automatic renewal subject to a notice of nonrenewal by Oct. 1.
- Lamb Weston supervised and co-managed cultivation, storage, and handling of the joint venture potatoes.
- A storage cellars inspection followed a glass-related contamination incident linked to DC Farms’ cellars, including a broken light bulb attributed to DC Farms.
- Lamb Weston terminated the agreement claiming negligence/misconduct causing glass contamination and sought damages.
- DC Farms sued for breach of contract, good faith and fair dealing, and fiduciary duty, seeking to preserve the joint venture and damages, while Lamb Weston moved for summary judgment.
- The trial court dismissed DC Farms’ complaint, prompting this appeal and reversal for partial summary judgment on notice-and-cure and trial on remaining issues.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Did Lamb Weston breach the notice-and-cure provision? | DC Farms argues Lamb Weston failed to give an explicit notice of default and cure period. | Lamb Weston contends the breach was incurable, excusing notice. | Yes, Lamb Weston breached the notice-and-cure provision. |
| Is there a genuine dispute about whether the breach was curable, justifying remand? | DC Farms contends there are facts about cure and damages that preclude summary judgment. | Lamb Weston argues the breach was incurable and warrants dismissal. | Yes, there are genuine issues of material fact about cure and damages; summary judgment improper; remand for partial summary judgment and trial. |
Key Cases Cited
- Republic Investment Co. v. Naches Hotel Co., 190 Wash. 176 (1937) (notice and cure required before forfeiture; cannot assume impossibility to cure)
- Gray v. Gregory, 36 Wn.2d 416 (1950) (contractual notice-and-cure provisions prioritized over other contractual obligations)
- Stacey v. Redford, 226 S.W.3d 913 (Mo. Ct. App. 2007) (distinguishable; incurable default explicit in contract may foreclose cure)
- Filmline (Cross-Country) Productions, Inc. v. United Artists Corp., 865 F.2d 513 (2d Cir. 1989) (notice of termination not a cure notice; explicit cure provision required)