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Oldham v. O.K. Farms, Inc.

United States Court of Appeals, Tenth Circuit

September 25, 2017

EARL OLDHAM, Plaintiff - Appellant,
O.K. FARMS, INC., Defendant-Appellee.


          Brian R. McLaughlin of McLaughlin Law Firm, PLLC, Stigler, Oklahoma, for Plaintiff-Appellant.

          Clayton E. Bailey of Bailey Brauer PLLC, Dallas, Texas, for Defendant-Appellee.

          Before LUCERO, McKAY, and HARTZ, Circuit Judges.

          McKAY, Circuit Judge.

         Plaintiff Earl Oldham appeals the district court's entry of summary judgment in favor of Defendant O.K. Farms in this contract case. Because the district court's ruling was based on a theory that was not raised by Defendant or briefed by either party, we reverse and remand for further proceedings.


         Plaintiff has been raising chickens for O.K. Farms since 1995. On March 21, 2014, he and O.K. entered into the chicken-growing contract at issue in this case. Under the contract, O.K. would provide Plaintiff with chickens to raise, the chickens would remain O.K.'s property, and Plaintiff would be paid for providing for their care. The chickens-also referred to as broilers-would ultimately be processed for human consumption. The contract had a three-year duration, but O.K. retained the right to terminate the contract for certain specified reasons, including "[b]reach of any term or condition of this contract, " "[a]bandonment or neglect of a flock, " and "[f]ailure to care for or causing damage to [O.K.'s] equipment or property." (Appellee's Suppl. App. at 94.)

         Early in the morning of May 20, 2016, Plaintiff discovered that one of his three chicken houses had flooded after an overnight rainstorm. He contacted O.K. and requested help. The O.K. field service technician who was assigned to his area arrived at Plaintiff's farm at about 6 a.m. Plaintiff told him he would need help, and the technician got on the phone to discuss the problem with his supervisor, O.K.'s broiler manager. While he was doing so, Plaintiff briefly left the farm to open his tire shop, returning fifteen to twenty minutes later. During the phone call, the broiler manager told the field technician that this was Plaintiff's problem, not O.K.'s, and that Plaintiff would have to handle it.

         At about 9 a.m., Plaintiff spoke on the phone with the broiler manager. The manager asked him how many of the chickens had survived the flooding and what he planned to do to address the problem. Plaintiff responded that about eighty percent of the chickens were alive and that his grandson was present to assist him. The manager asked if Plaintiff was planning on getting additional help because the groundwater flooding in the house was an animal-welfare violation. According to the manager, Plaintiff then became irritated and complained about the lack of help provided by O.K. When the manager asked what Plaintiff wanted O.K. to do, Plaintiff told him to "come get these birds out of the house." (Id. at 347.) According to the manager, he reminded Plaintiff that it was Plaintiff's responsibility to raise and care for the chickens, but Plaintiff interrupted him and said that O.K. "could just come get all these goddamn birds." (Id.) In his deposition, Plaintiff denied ever saying this, but testified that, when the manager asked him what he wanted O.K. to do, he said, "I want you to come and catch them." (Id. at 64.) He testified that he needed O.K. to get the chickens out of the flooded henhouse so he could clean it up and make it habitable again.

         An O.K. catch crew arrived at Plaintiff's farm at about 11 a.m. Because their equipment wouldn't work in the mud of the flooded henhouse and because they didn't want to spend all day working in wet clothing, they decided to remove the chickens from the two dry henhouses first. After removing the chickens from the second and third henhouses, they then removed the chickens-most of them dead by now-from the flooded house, finishing up at about 9 p.m. that night. The live chickens were brought to a nearby farm to be raised by a different farmer. Plaintiff was paid for the work he had done in raising the surviving chickens to this point, reduced by various expenses such as the costs of catching and moving the chickens.

         On June 3, 2015, O.K. sent Plaintiff a letter providing him with a ninety-day notice of contract termination. After describing the events of May 20, O.K. summarily asserted that it was entitled to terminate for three separate contractual reasons: (1) Plaintiff's "[b]reach of any term or condition" of the contract; (2) Plaintiff's "[a]bandonment or neglect of a flock, failure to provide care or follow directions and instructions regarding the care and maintenance of the flock by [O.K.'s] representatives"; and (3) Plaintiff's "[f]ailure to care for or causing damage to [O.K.'s] equipment or property." (Id. at 237.)

         Plaintiff filed suit in state court, alleging that O.K. breached the contract by terminating the agreement without adequate cause. O.K. removed the action to federal court and filed a motion for summary judgment.

         In its motion for summary judgment, O.K. provided its reasoning behind each of the three contractual reasons identified in the termination letter. First, O.K. argued that Plaintiff breached the terms and conditions of the contract by failing to adequately provide for the animal welfare of the chickens in his care. Second, O.K. argued that Plaintiff "abandoned and neglected the flock to open his tire shop when the broilers were encountering a threat to their welfare." (Appellant's App. at 34.) Finally, O.K. argued that the flooding in the chicken house "damaged O.K.'s property-that is, broilers." (Id.) With the exception of the single-sentence argument that Plaintiff abandoned his flock by briefly leaving to open his tire shop, O.K.'s motion for summary judgment was premised entirely on its contention that the flooding problems in the henhouse were the result of Plaintiff's neglect and that the harms caused by this neglect justified O.K.'s early termination of the contract. In response, Plaintiff contended that the flooding was the result of an "act of God, " not neglect, and he cited for support to the deposition testimony of the O.K. field technician-the only O.K. employee who was at the scene from the beginning-that this was an act ...

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