                                                                                      September 17 2013


                                           DA 13-0068

                  IN THE SUPREME COURT OF THE STATE OF MONTANA

                                           2013 MT 267


CNJ DISTRIBUTING CORP. dba
FAIRVIEW ANGUS RANCH,

              Plaintiff and Appellant,

         v.

D & F FARMS, INC.,

              Defendant and Appellee,

         v.

CIRCLE S SEEDS OF MONTANA,
INC.,

              Third Party Defendant.


APPEAL FROM:            District Court of the Sixth Judicial District,
                        In and For the County of Sweet Grass, Cause No. DV 2010-10
                        Honorable Wm. Nels Swandal, Presiding Judge

COUNSEL OF RECORD:

                For Plaintiff and Appellant:

                        Rodd A. Hamman, Calton Hamman & Wolff, P.C.; Billings, Montana

                For Appellee:

                        Edward J. Guza, Guza, Williams & Nesbitt; Bozeman, Montana


                                                   Submitted on Briefs: July 24, 2013
                                                              Decided: September 17, 2013

Filed:
                        __________________________________________
                                          Clerk
Justice Michael E Wheat delivered the Opinion of the Court.

¶1     CNJ Distributing Corp. (CNJ) appeals from the Order of the Sixth Judicial District,

Sweet Grass County, denying and dismissing with prejudice CNJ’s breach of contract claim

against D&F Farms, Inc. (D&F).

                                          ISSUES

¶2     We restate the issues on appeal as follows:

¶3     Did the District Court err in finding D&F did not materially breach the contract by

failing to object to rocky field conditions or by failing to achieve consistent depth of seed

placement?

¶4     Did D&F’s failure to get the seed to the proper depth prevent CNJ from harvesting

the crop during harvest season and proximately cause CNJ’s damages?

                 FACTUAL AND PROCEDURAL BACKGROUND

¶5     This controversy arose after CNJ hired D&F as a custom seeder to seed a barley crop

grown under contract with Circle S Seeds of Montana, Inc. (Circle S). CNJ sued D&F for

breach of contract, alleging the crop did not ripen and could not be harvested on time

because of improper seed placement. D&F sued Circle S alleging failure to instruct. After a

bench trial, Circle S settled with D&F. The District Court, in an Order filed December 20,

2012, denied and dismissed with prejudice CNJ’s breach of contract claim. CNJ appealed.

¶6     The uncontested findings of fact are as follows:

¶7     CNJ owns and operates the Fairview Ranch in Sweet Grass County, Montana.

George Frank (Frank) is the owner and President of CNJ. CNJ purchased the Fairview

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Ranch in 1984. Since that time, the Fairview Ranch has been operated as a registered Angus

ranch with irrigated hay and pasture. CNJ has hired a full-time ranch manager to run the

Fairview Ranch. Kenny Lee (Lee) started as manager of the Fairview Ranch on May 1,

2009.

¶8      D&F is a Montana corporation doing business out of Manhattan, Montana. Matt

Flikkema (Flikkema) owns D&F. D&F is a “custom seeder.” This means landowners, like

CNJ, hire D&F to plant crops. D&F supplies the seeding equipment, in this case a John

Deere 1890 pulled by a tractor, and provides qualified individuals to operate the equipment.

Casey Hamilton (Hamilton), an experienced and qualified operator, works for Flikkema

doing the seeding.

¶9      Circle S is a Montana corporation doing business out of Three Forks, Montana.

Circle S is a supplier of seeds, and per the agreement entered into with CNJ, a beneficiary to

the crop that was to be produced on CNJ land in fall 2009. Steve McDonnell (McDonnell) is

one of the owners of Circle S. Don Heck (Heck) is an agronomist/Certified Crop Advisor

for Circle S and personally visited and inspected the field at issue at least six times.

¶10     In the fall of 2008, Circle S contracted with Montsago to produce a barley crop known

as BG 46e for food purposes. WestBred, LLC of Bozeman, Montana developed BG 46e.

Dr. Dan Biggerstaff (Biggerstaff), one of the developers of BG 46e, is an expert on BG 46e.

¶11     Pivot 2 is a “very rocky” section of field comprising 550 net irrigated acres, located

on the Fairview Ranch. In the fall of 2008, CNJ hired Dwight Dyk (Dyk) of Dyk



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Enterprises, Inc., to chem fallow Pivot 2 to kill the existing vegetation so CNJ could reseed

the next spring.

¶12    McDonnell knew that CNJ was going to reseed Pivot 2. McDonnell telephoned Frank

in the winter of 2009 about contracting to grow BG 46e in that field and set up a meeting to

discuss seeding options. Before meeting with Frank, McDonnell called Flikkema about

seeding BG 46e at the Fairview Ranch in a custom no-till seed job to obtain a price quote.

McDonnell told Flikkema the fields at Fairview Ranch had a lot of rocks. Flikkema did not

express any concerns and gave McDonnell a price. McDonnell did the same with other input

providers and put together a written proposal with a cost and income projections.

McDonnell faxed the proposal to Frank on March 10, 2009.

¶13    D&F and Circle S had formed a relationship over the years where Circle S would

recommend D&F to its customers for custom seeding and then contact D&F to discuss

details of the job. Details discussed generally included how the land was to be seeded (till or

no-till), what was being seeded, and when the land was to be seeded. Typically, Circle S

would come out to the property being seeded on the day of seeding to ensure the instructions

were conveyed to Flikkema and would stay around for a couple of passes to make sure there

were no problems. The land owner would typically pay D&F directly.

¶14    On March 11, 2009, McDonnell and Heck traveled to Billings and met with Frank.

Frank agreed to the proposal, knowing no-till seeding would be used. McDonnell and Frank

executed the Grain Production Agreement. Pivot 2 would have been seeded with alfalfa

grass had McDonnell and Frank not agreed otherwise.
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¶15    As Biggerstaff explained in his Deposition, BG 46e is a type of waxy barley

characterized by a shrunken endosperm. The endosperm is the starch portion of the seed

which provides the energy for the seed to germinate. When the plant emerges from the soil,

sunlight provides the energy needed for it to continue growing. Because the endosperm is

small, if the seed is planted too deep, it will not have enough energy to reach the surface and

will die. Also, if the soil is too cold it will hamper the seed’s ability to germinate and

emerge. BG 46e should be planted from ¾ to 1½ inches deep.

¶16    McDonnell concluded no-till seeding, the predominant seeding method in Montana,

was the best option for BG 46e because a tilled field would be too soft to maintain the

required planting depth. There had not been no-till seeding on the Fairview before 2009.

The decision to use no-till was made by McDonnell and Frank, not D&F. McDonnell and

Frank decided seeding would occur on May 20, 2009.

¶17    Because of the length of time it takes to till a field as rocky and hard as Pivot 2,

testimony revealed that by May 20, no-till seeding was the only option left to plant the crop

in the spring of 2009.

¶18    Seeding occurred on May 20, 2009. As was their custom, Flikkema and McDonnell

met at the field on the day work was to occur.

¶19    Before Flikkema left, he walked about 50 feet out into the field and Lee pointed out

the large amount of rocks in the field. Because of the rocky ground, Lee asked McDonnell

whether the ground needed to be torn up first or no-till. McDonnell stated that the drill was

capable of planting the crop. McDonnell told Lee that he did not feel the rocks would pose a
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problem for planting. McDonnell did not express any problems with the field conditions to

Flikkema.

¶20    McDonnell instructed D&F to plant the seeds at a depth of one and a half inches.

Hamilton and Flikkema set the depth setting on the 1890 to one and a half inches and set the

down pressure to “medium green.”

¶21    Immediately, when Hamilton began planting, he heard the 1890’s disks chattering as

they rolled over rock in the field. The chattering of the disks means that the 1890 does not

have enough pressure to keep contact with the soil and/or is driving too fast. He increased

the down pressure from green to orange. He also reduced his speed to make the best possible

contact with the ground, to about two to three miles per hour.

¶22    As he was seeding, Hamilton made several visual checks for seed placement, which

included taking a pocketknife and digging to uncover seeds. The seeds that made contact

with solid rock, or were planted after the drill rolled off the edge of a rock, or were planted

on top of buried rocks, would be anywhere from the surface to one inch deep. When the drill

pulled out of the ground for any reason, large amounts of seed would dump out.

¶23    Either the first day or the morning of the second day of seeding, Hamilton contacted

Flikkema. He reported to Flikkema the field condition and the changes he made to the drill

and his speed. Flikkema told Hamilton he had done everything that Flikkema would have

done under the conditions. Flikkema told Hamilton to tell Lee what he was experiencing.

Hamilton told Lee over supper that “the field conditions were bad.” Lee did not inspect the

field or take any other steps after Hamilton’s report.
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¶24    The following facts are necessary context for the current action:

¶25    McDonnell returned to the Fairview to inspect the crop a few weeks after seeding and

noted a large amount of seed on the ground. Lee characterized the amount of seed on the

ground as “tremendous.” McDonnell called Flikkema and told him the seeding job was bad

and he needed to get in touch with CNJ.

¶26    On July 16, 2009, Dyk returned to spray the field for weeds. He stated about 50

percent of the crop had emerged properly and was approximately 10 to 12 inches tall.

Other plants were substantially behind and were about six inches tall, with other areas

where seeds were lying on the ground. He believed this disparity was due to improper

seed placement; but had never seeded a waxy barley, nor operated a John Deere 1890.

¶27    Heck, who is a certified crop specialist, asserted the amount of seeds on the

surface was comparable to other similar rocky fields.

¶28    Circle S planned to complete harvest by mid-September. However, because the less

mature plants remained green, the crop could not be harvested on schedule. By October, the

plants still had not been harvested; and a heavy snow destroyed the crop. As a result, CNJ

had to swath and bail the barley for cattle feed and made no profit on the crop.

¶29    CNJ sued D & F for breach of contract alleging the seeding caused the crop to fail.

¶30    The District Court found as follows:

¶31    The District Court found it may have been prudent to till Pivot 2 before planting; and

that the decision to plant without tilling was made by CNJ and Circle S.

¶32    The District Court found:
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       It is not surprising that seeds were found on the ground. Anytime the disk
       rolled over a rock, and there were many in this field, it was off the ground for
       a short time and seeds will scatter 1 to 4 inches. Further, anytime the operator
       turns or takes the wheels off the ground the whole content of the seed in the
       hoses is emptied.

¶33    The District Court found no adjustments beyond those Hamilton made were

necessary. The problem, it concluded, was not the seeder but the condition of the field. The

court noted that the same drill was used to plant some grass seed for CNJ at a different

location and that job was satisfactory. It observed that it would be unusual that the drill only

malfunctioned on one job unless other factors were at issue.

                                STANDARD OF REVIEW

¶34    We review the District Court’s findings of fact to determine if they are clearly

erroneous and its conclusions of law to determine whether they are correct. Cut Bank School

Dist. No. 15 v. Rummel, 2002 MT 248, ¶ 5, 312 Mont. 143, 58 P.3d 159 (citing Norwood v.

Service Distributing Inc., 2000 MT 4, ¶ 21, 297 Mont. 473, 994 P.2d 25). A finding is

clearly erroneous “if it is not supported by substantial credible evidence, if the court

misapprehended the effect of the evidence, or if a review of the evidence leaves this Court

with a definite and firm conviction that a mistake has been made.” Puccinelli v. Puccinelli,

2012 MT 46, ¶ 13, 364 Mont. 235, 272 P.3d 117.

                                       DISCUSSION

¶35    Ultimately, this dispute centers on whose job it was to foresee the effect of the rocky

field on seeding. The subsidiary issue is whether the seeding caused the crop to fail.



                                               8
Because we conclude the District Court’s determination that D&F did not materially breach

the contract with CNJ was not clearly erroneous, we do not reach the second issue.

¶36    ISSUE 1. Did the District Court err in finding D&F did not breach the contract by

failing to object to rocky field conditions or by failing to achieve uniform depth of seed

placement?

¶37    CNJ claims that D&F breached the seeding contract. The question of whether a party

materially breached a contract is a question of fact and we review the district court’s findings

to determine whether they are clearly erroneous. Eschenbacher v. Anderson, 2001 MT 206,

¶ 22, 306 Mont. 321, 34 P.3d 87. CNJ carried the burden of proving that D&F breached the

contract. See Lindeman v. Pinson, 171 P. 271, 272 (1918) (overruled on other grounds)

(burden of proof in breach of contract claim rests with plaintiff).

¶38    a. Failing to object to rocky field conditions.

¶39    CNJ states: “D&F had the opportunity to inspect the field both before and during

seeding and if they [sic] concluded they [sic] could not do the job, CNJ could have canceled

the barley crop and reseeded to grass/alfalfa. But D&F accepted the job with existing field

conditions.” D&F counters that “CNJ’s suggestion that on May 20, D&F should have

simply walked away from the job because of the conditions on the land is ridiculous.” D&F

points out that to do so would have placed D&F in breach of both its contracts with CNJ and

with Circle S, arguing it could not perform a job it could, and ultimately did, perform.

¶40    The District Court concluded that the contract between D&F and CNJ consisted of an

oral agreement negotiated by Circle S. The District Court explained the contractual oral
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agreement provided that D&F would fertilize and seed BG 46e in approximately 570 acres.

The court concluded: “There was no evidence to suggest…that D&F had any additional

requirements such as choosing the crop, deciding when the crop was to be planted, preparing

the field, deciding when watering was to occur, or guaranteeing the crop’s success in any

manner.”

¶41    The District Court further concluded that Hamilton did his work in a workmanlike

manner. He made the necessary adjustments to get seeds into the ground, under the

conditions. In evaluating Hamilton’s performance, the District Court relied on Hamilton and

Flikkema’s testimony that no additional adjustments to the 1890 would have made any

difference. “It is the province of the district court to determine the credibility of the

witnesses and the weight assigned to their respective testimony.” Hood v. Hood, 2012 MT

158, ¶ 42, 365 Mont. 442, 282 P.3d 671.

¶42    The District Court also pointed out that D&F ensured Lee was aware of the conditions

Hamilton was encountering. The District Court explained, “it was not the responsibility of

D&F to prepare the field for seeding or even evaluate whether the field needed any

preparation—if that would have made any difference.” (Emphasis original.) It is undisputed

that “[b]ecause of the length of time it takes to till a field as rocky and hard as Pivot 2, by

May 20, testimony revealed that no-till was the only option left to plant the crop in the spring

of 2009.”

¶43    We conclude that the District Court did not clearly err when it determined that D&F

did not materially breach the contract by failing to object to the field conditions upon
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inspection. McDonnell and Frank made the decision to use no-till seeding, not D&F. Field

preparation was Circle S and CNJ’s responsibility. D&F did not see the field until the day

work was to begin. McDonnell stated he had no doubt the field could be adequately seeded

by the 1890 despite the rocky conditions. The District Court determined, on the basis of

testimony, that Hamilton made all necessary adjustments for the conditions. On these facts,

the District Court’s determination that no material breach occurred was not clearly erroneous

and substantial evidence supported the court’s finding.

¶44    b. Failing to achieve consistent depth of seed placement.

¶45     “With respect to oral contracts, it is the duty of the trial court to determine the

meanings to be given words and the intention of the parties.” Richard A. Lord, Williston on

Contracts vol. 11, § 30:8, 128, 130 (4th ed., West 2011). A court may not re-write the terms

of a contract, but must enforce the contract as the parties intended. Stutzman v. Safeco Ins.

Co. of America, 284 Mont. 372, 376, 945 P.2d 32, 34 (1997). A contract must be so

interpreted as to give effect to the mutual intention of the parties as it existed at the time of

contracting, so far as the same is ascertainable and lawful. Section 28-3-201, MCA.

Stipulations which are necessary to make a contract reasonable or conformable to usage are

implied in respect to matters concerning which the contract manifests no contrary intention.

Section 28-3-701, MCA. CNJ argues that having accepted the contract, D&F was obligated

to seed the crop to a depth of one and one half inches because that depth was a term of the

contract.



                                               11
¶46    The District Court concluded, based on Hamilton and Flikkema’s testimony, that “it is

simply impossible for the 1890 to plant a seed in an immovable rock or deeper than that

which an immovable rock allowed under the surface.” CNJ attempts to paint this conclusion

as the District Court accepting an “impossibility” defense to performance and alleges it is an

error of law. D&F argues “nowhere in the court’s Findings or Conclusions was there any

mention of ‘impossibility.’”

¶47    We agree with the District Court that D&F’s failure to achieve consistent depth of

seed placement did not constitute a material breach of the contract. We also are not

convinced that the District Court accepted an “impossibility” defense, or that such a defense

would be applicable at all under these facts. The District Court did not clearly err when it

found that failure to achieve consistent seed placement did not constitute a material breach

under these conditions.

¶48    It is unclear at what point CNJ alleges 1 ½ inch depth became a term of the contract.

However, McDonnell instructed Flikkema to plant the seeds to one and a half inches. Per

McDonnell’s instructions on May 20, D&F set the drill to one and a half inch depth.

¶49    As the District Court noted, Biggerstaff testified at his deposition that “uneven depth

of seed is almost a given in any planting operation unless you had an absolutely perfect

seedbed.” He also testified that “[h]aving seed deeper than 1 inch and seed on the surface

does not preclude what I would call an acceptable seeding job.” The WestBred planting

guide suggested planting to between ¾ and 1 ½ inches deep, suggesting that some variability

was acceptable. CNJ even admitted in its brief: “No one expected the seed placement to be
                                             12
perfect.” The District Court found, based on substantial credible evidence that it was not

surprising seeds were found on the ground given the amount of rocks in the field.

¶50    The District Court did not clearly err when it determined that failing to achieve a

consistent depth of seed placement under these conditions did not constitute a material

breach. The evidence before the District Court indicated that having seed on the ground and

inconsistent placement were foreseeable consequences of the field conditions and not, as

CNJ argued, indicative of a legally-deficient performance. All facts and testimony pointed

to the fact that variation in seed placement was consistent with what the parties should

reasonably have expected and did expect. The District Court observed that the WestBred

planting guide suggested that a depth of as little as ¾ inch remained adequate and within

specifications for proper planting. Thus, substantial credible evidence supported the District

Court’s determination that D&F met its obligations under the parties’ agreement.

¶51    Further, the District Court’s statement that “it is simply impossible for the 1890 to

plant a seed in an immovable rock” did not signal the court accepting an impossibility

defense. In Smith v. Zepp, this Court observed that “[t]he general rule is that, where a party

to a contract obligates himself to a legal and possible performance, he must perform in

accordance with the contract terms.” Smith v. Zepp, 173 Mont. 358, 364, 567 P.2d 923, 927

(1977) (superseded on other grounds by Garretson v. Mountain W. Farm Bureau Mut. Ins.

Co., 234 Mont. 103, 105, 761 P.2d 1288, 1289 (1988)). D&F directs our attention to Cape

France Enterprises v. In re Estate of Peed, where we explained:



                                             13
       Courts may determine that an act is “impossible” in legal contemplation when
       it is not practicable. Such an act is impracticable when it can only be done at
       an excessive, unreasonable and unbargained-for cost. While the doctrine of
       impossibility or impracticability is not set in stone, it is applied by courts
       where, aside from the object of the contract being unlawful, the public policy
       underlying the strict enforcement of contracts is outweighed by the
       senselessness of requiring performance.

Cape France Enterprises. v. In re Estate of Peed, 2001 MT 139, ¶ 23, 305 Mont. 513, 29

P.3d 1011.

¶52    The District Court’s observation that it would be impossible to plant seed in

immovable rock operated to illustrate that D&F’s performance was acceptable within the

contract terms under the circumstances. Impossibility is a defense to performance, see Cape

France, ¶ 23, it is not a defense to a claim alleging poor quality of performance. D&F

performed. It did not try to escape performance by claiming performing would be physically

impossible or financially too onerous—defenses it may have asserted had it refused the job

upon viewing the field, as CNJ argues it should have done. Rather, it performed to the best

of its ability within the constraints imposed by its equipment, the field conditions, and the

decisions made by Circle S and CNJ. We conclude the District Court did not clearly err

when it found that D&F did not materially breach the contract; so neither impossibility nor

quality of performance are issues here.

¶53    ISSUE 2. Did D&F’s failure to get the seed to the proper depth prevent CNJ from

harvesting the crop during harvest season and proximately cause CNJ’s damages?




                                             14
¶54   Because we conclude the District Court did not clearly err when it determined that

D&F did not materially breach its contract with CNJ, we need not reach the second issue,

which focuses on causation and damages.

¶55   Affirmed.

                                            /S/ MICHAEL E WHEAT

We Concur:

/S/ MIKE McGRATH
/S/ BRIAN MORRIS
/S/ BETH BAKER
/S/ PATRICIA COTTER




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