201 So. 3d 325
La. Ct. App.2016Background
- Dan and Dianne Volentine entered hatching-egg production contracts with Raeford Farms in 2004; Raeford supplied birds, feed, technical support; Volentines provided housing, labor, and upgrades per company specifications.
- Catastrophic bird losses occurred in May and June 2007 due to electrical breaker/generator failures; Raeford demanded multiple upgrades (including an alarm system) before placing subsequent flocks; Volentines spent for improvements and liquidated assets to pay.
- In August 2008 Raeford notified Volentine it was terminating the contract and forced him to find a buyer/lessee within two weeks, excluding family transfers; Raeford later sold the farms to another breeder in 2009.
- At bench trial post-remand, the trial court found Raeford acted in bad faith (failure to timely provide flocks/technical advice in 2007 and bad-faith termination in 2008), violated LUTPA, and awarded substantial damages (originally ~$4M) including lost income, capital gains taxes, recovery of improvements, mental anguish, and LUTPA attorney fees.
- On appeal the court affirmed bad-faith termination and LUTPA liability but reversed several damage components (2004 $200,000 upgrade, 2007 $116,000 upgrade award, lost cattle profits, and joint liability of House of Raeford), and adjusted tax-bunching damages and attorney-fee issues; total affirmed judgment was reduced to $1,804,630.70 plus increased appellate fee.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Raeford breached contract in 2004 by pushing $200,000 upgrades | Volentine: Raeford forced costly equipment purchases beyond contract scope | Raeford: upgrades were required/speculative but not coercive; Volentine assented | Court: No breach in 2004; $200,000 award reversed |
| Whether Raeford breached in bad faith in 2007 over demanded $116,000 upgrades and technical support for electrical system | Volentine: Raeford withheld flocks and demanded costly upgrades after causing/ignoring electrical risks | Raeford: demands were within contract specs; failures were farmer’s responsibility; actions in good faith | Court: 2007 conduct not shown to be intentional/malicious; bad-faith finding for 2007 reversed and related damages vacated |
| Whether 2008 termination was in bad faith and violated LUTPA | Volentine: termination was retaliatory, abusive (banker invited, two-week ultimatum, singling out) and unfair/deceptive under LUTPA | Raeford: termination justified by poor management and economic loss; relied on expert economic analysis | Court: 2008 termination was in bad faith; LUTPA violation affirmed; attorney fees and mental-anguish awards upheld |
| Damages — scope, causation, and computation (sale loss, capital gains tax, lost poultry income, cattle losses, tax-bunching, attorney fees) | Volentine: sought full recovery for forced sale loss, taxes, past/future income, cattle losses, tax-bunching, and contingency fee enforcement | Raeford: many awards speculative, unsupported, late-disclosed, or unrelated; contest expert methodologies | Court: affirmed damages tied to wrongful termination (sale loss, capital gains tax, lost poultry income, tax-bunching limited to poultry loss, LUTPA damages and attorney fees); reversed awards lacking proof (2004 $200k, 2007 $116k, cattle income, joint liability of House) and reduced/adjusted amounts accordingly |
Key Cases Cited
- Volentine v. Raeford Farms of La., L.L.C., 121 So.3d 742 (La. App. 2d Cir. 2013) (prior appellate opinion addressing at-will termination and good-faith standard)
- Rosell v. ESCO, 549 So.2d 840 (La. 1989) (appellate review deference to factfinder credibility determinations)
- Arceneaux v. Domingue, 365 So.2d 1330 (La. 1978) (standard for review of factual findings)
- Watson v. State Farm Fire & Cas. Ins. Co., 469 So.2d 967 (La. 1985) (when two permissible views of evidence exist, appellate court will not disturb factfinder)
- Miller v. Conagra, Inc., 991 So.2d 445 (La. 2008) (discusses good-faith requirement in termination contexts)
- Brown v. ANA Ins. Grp., 994 So.2d 1265 (La. 2008) (single-business-enterprise doctrine and factors for disregarding corporate separateness)