Loftness Specialized Farm Equipment, Inc. v. Twiestmeyer
742 F.3d 845
8th Cir.2014Background
- Loftness (manufacturer) met T&A (Twiestmeyer and Hood’s company) in May 2007 after T&A pitched improvements to Argentine grain‑bagging equipment; an NDA was signed between Loftness and T&A before discussions.
- NDA required Loftness to keep T&A’s "Confidential Information" confidential and not use it in a way "competitive" with T&A for 20 years; T&A alone was expressly a party to the NDA.
- In 2008 Loftness and Twiestmeyer/Hood executed a May 2008 Agreement: Loftness would pay a 2% override on dealer net price for grain‑bagging equipment for two years.
- In May 2010 Loftness told Twiestmeyer/Hood of a Brandt deal (Loftness to manufacture for Brandt); T&H testified they were told the deal was a "win‑win" and that the 2% payments would continue; they understood (without explicit discussion) the May 2008 Agreement had been extended to match the NDA term.
- Loftness continued 2% payments into early 2011, then gave notice and terminated them; Loftness sued for declaratory relief and T&H/T&A counterclaimed for unjust enrichment and breach of the NDA and the May 2008 Agreement.
- The district court dismissed unjust enrichment, granted summary judgment for Loftness on both breach claims and entered judgment for Loftness; the Eighth Circuit vacated and remanded the NDA breach ruling, affirmed dismissal of unjust enrichment, and affirmed summary judgment for Loftness on the May 2008 Agreement claim.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Loftness breached NDA non‑compete/confidentiality by making the Brandt deal and sharing info without continuing 2% payments | Loftness used T&A ideas/info competitively and failed to continue agreed payments, breaching the NDA | Loftness contends its conduct did not violate the NDA; district court applied trade‑secret test and found no breach | Vacated and remanded: court held district court applied wrong test (trade‑secret misappropriation); NDA terms must be interpreted and district court should decide breach in first instance |
| Whether the May 2008 Agreement was orally extended to ~17 more years (statute of frauds) | Plaintiffs contend Loftness’ assurances and continued payments effect an oral extension to match NDA term | Loftness argues any oral extension is unenforceable and, alternatively, payments created only a terminable implied contract | Affirmed for Loftness: any alleged 17‑year oral extension is barred by statute of frauds (not performable within one year); no breach |
| Whether continued 2% payments created an implied‑in‑fact contract with an implied nonterminable duration | Plaintiffs argue duration can be fairly implied and thus not terminable at will | Loftness argues no definite duration was agreed or implied; general rule allows termination at will with reasonable notice | Affirmed for Loftness: no definite/implied enforceable duration; implied contract terminable at will; Loftness gave reasonable notice before stopping payments |
| Whether unjust enrichment claim survives despite express contracts covering the dispute | Plaintiffs assert unjust enrichment is alternative remedy because breach claims fail | Loftness argues equitable remedy unavailable where adequate contract remedies exist | Affirmed dismissal: unjust enrichment unavailable because disputes governed by NDA and May 2008 Agreement and plaintiffs cannot use equity to rewrite their bargain |
Key Cases Cited
- Cherne Industrial, Inc. v. Grounds & Associates, Inc., 278 N.W.2d 81 (Minn. 1979) (distinguishes contract non‑compete claims from trade‑secret misappropriation and analyzes covenant‑not‑to‑compete by contract language)
- Electro‑Craft Corp. v. Controlled Motion, Inc., 332 N.W.2d 890 (Minn. 1983) (explains difference between protecting information via non‑compete clause and via trade‑secret law)
- Bolander v. Bolander, 703 N.W.2d 529 (Minn. Ct. App. 2005) (analyzes oral extension of agreement under Minnesota statute of frauds)
- Roaderick v. Lull Eng’g Co., Inc., 208 N.W.2d 761 (Minn. 1973) (oral agreements for multi‑year terms unenforceable under statute of frauds)
- Eklund v. Vincent Brass & Aluminum Co., 351 N.W.2d 371 (Minn. Ct. App. 1984) (statute of frauds: an agreement not in writing must be capable of full performance within one year to be enforceable)
- Benson v. Co‑op. Creamery Ass’n v. First Dist. Ass’n, 151 N.W.2d 422 (Minn. 1967) (general rule that contracts with no definite duration are terminable at will with reasonable notice)
- Schaaf v. Residential Funding Corp., 517 F.3d 544 (8th Cir. 2008) (unjust enrichment requires more than benefit; enrichment must be unjust or unauthorized)
- U.S. Fire Ins. Co. v. Minn. St. Zoological Bd., 307 N.W.2d 490 (Minn. 1981) (equitable relief unavailable where parties’ rights are governed by valid contract)