212 F. Supp. 3d 783
S.D. Iowa2015Background
- NuTech (Iowa LLC) sued farmer Brandon Roup (individually) for breach of a written credit agreement for 2013 seed corn after Roup failed to pay; the agreement listed "Brandon Roup" as the applicant and incorporated terms on labels attached to seed boxes.
- Roup answered admitting he entered into the April 30, 2013 agreement and asserted counterclaims for breach of implied contract and breach of implied warranty (UCC).
- Roup later moved (June 17, 2015) to amend his answer to substitute Roup Farms LLC for himself and to add an affirmative defense that NuTech’s warranty disclaimer is unconscionable; the scheduling-order deadline to amend was December 1, 2014.
- Seed boxes and bags bore written label terms: an express warranty, an express disclaimer of implied warranties (mentioning merchantability), a limitation of remedies, and a forum-selection/choice-of-law clause applying Iowa law. Roup accepted and planted the seed and never paid.
- NuTech moved for summary judgment on its contract claim and on Roup’s counterclaims; the court denied Roup’s motion to amend for lack of good cause and granted summary judgment to NuTech on all claims, finding: (1) Roup is bound (admission and ratification); (2) NuTech performed and Roup accepted but did not pay; and (3) NuTech’s written disclaimer was conspicuous and effectively disclaimed implied warranties.
Issues
| Issue | Plaintiff's Argument (NuTech) | Defendant's Argument (Roup) | Held |
|---|---|---|---|
| 1. Timeliness/good cause to amend answer | Motion to amend filed well after deadline should be denied absent good cause | Signature not Roup’s; he only discovered at deposition and therefore seeks substitution of Roup Farms LLC | Denied — Roup lacked diligence; signature and agreement were in complaint and he had earlier admitted entering agreement (no good cause) |
| 2. Who is contracting party / agency/ratification | Agreement names "Brandon Roup" and Roup admitted the agreement; acceptance of seed ratified any agent signature | Roup claims he acted on behalf of Roup Farms LLC and not personally; signature purportedly not his | Held for NuTech — admission plus ratification by acceptance and conduct binds Roup personally |
| 3. Breach of contract / recovery of price | NuTech performed, goods were accepted, payment due date passed, Roup did not pay — entitled to price under UCC | Roup contends he could withhold payment if product defective and disputes personal liability | Granted for NuTech — elements under Iowa UCC §554.2709 met; no notice or lawful setoff shown by Roup |
| 4. Validity of warranty disclaimer (conspicuousness / unconscionability) | Disclaimer in writing, mentions merchantability, and is conspicuous on labels; course of dealing supports notice | Roup says labels were not reasonably visible during busy planting (on high boxes) and industrywide disclaimers are unconscionable | Held for NuTech — disclaimer conspicuous under Iowa law and not unconscionable; implied-warranty counterclaim fails |
Key Cases Cited
- Ferguson v. Cape Girardeau Cnty., 88 F.3d 647 (8th Cir.) (denial of leave to amend may be affirmed for undue prejudice or futility)
- Sherman v. Winco Fireworks, Inc., 532 F.3d 709 (8th Cir.) (good-cause/diligence standard under Rule 16 for scheduling-order amendments)
- Life Investors Ins. Co. of Am. v. Estate of Corrado, 838 N.W.2d 640 (Iowa 2013) (principal may ratify unauthorized agent signature by conduct and acceptance of benefits)
- Bruce v. ICI Americas, Inc., 933 F. Supp. 781 (S.D. Iowa) (written disclaimer in bold/capital heading is conspicuous and effective to exclude implied warranties)
- Giese Const. Co. v. Randa, 524 N.W.2d 427 (Iowa) (express contract precludes an implied contract claim)