St. Ansgar Mills, Inc. v. Streit

613 N.W. 2d 289 (2000)

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Nature of the Case

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Facts

St. Ansgar Mills, Inc. (P) buys corn from local grain farmers and sells corn to livestock farmers for feed. The sales price is established by the Chicago Board of Trade for delivery with reference to five contract months. The sale of corn for future delivery is hedged by P through an offsetting futures position on the Chicago Board of Trade. Streit (D) raises hogs. D and his father have been long-time customers of P. Since 1989, D entered into numerous contracts with D for the purchase of large quantities of corn and other grain products. D called P on the telephone to obtain a price quote. If an oral contract was made, an employee of P would prepare a written confirmation of the sale and either mail it to D to sign and return, or wait for D to sign the confirmation when they would stop into the business. It was not unusual for D to fail to sign the confirmation for a long period of time. He also failed to return contracts sent to him. D had never refused delivery of grain he purchased by telephone prior to the incident which gave rise to this case. On July 1, 1996, D placed two orders for the purchase of 60,000 bushels of corn for delivery in December 1996 and May 1997. P completed the written confirmation but set it aside for John to sign when he was expected to stop by the business to pay the open account. The agreed price of the December corn was $3.53 per bushel. The price of the May corn was $3.73 per bushel. D failed to follow his monthly routine of stopping by the business during the month of July. D did not stop by P until August 10, 1996. P delivered the written confirmation to him. D refused delivery of the corn orally purchased on July 1, 1996. D purchased corn for his hog operations on the open market at prices well below the contract prices of July 1. P admitted it should have followed up earlier with the written confirmation and had no excuse for not doing so. P sued for breach of contract seeking damages of $152,100; the difference between the contract price of the corn and the market price at the time D refused delivery. D moved for summary judgment. The written confirmation did not satisfy the statute of frauds for two reasons. First, he was not a merchant. Second, the confirmation was not received within a reasonable time after the alleged oral agreement. The district court found the written confirmation did not satisfy the writing requirements of the statute of frauds because the delivery of the confirmation did not occur within a reasonable time after the oral contract as a matter of law. It granted D's motion. P appealed.