Submitted: November 16, 2017
from United States District Court for the District of
Nebraska - Omaha
BENTON, SHEPHERD, and KELLY, Circuit Judges.
BENTON, Circuit Judge.
Dakota National Bank sued Eco-Energy, LLC, for breach of
contract. The district court ruled for Eco-Energy. First
Dakota appeals. Having jurisdiction under 28 U.S.C. §
1291, this court affirms.
contracted with Nedak Ethanol, LLC. Under a Marketing
Contract, Eco-Energy promised to buy all Nedak's ethanol
and to transport it by railcar. Eco-Energy leased the
railcars from a railcar company under a Car Service
Agreement. Nedak promised to sublease the railcars from
Eco-Energy if the Marketing Contract were terminated for any
next year, Nedak assigned its rights under the Marketing
Contract and the Sublease to its lead lender, AgCountry Farm
Credit Services, FLCA. Eco-Energy consented to the
Assignment, agreeing "to give [AgCountry] prompt written
notice of any default under the Assigned Documents and to
allow [AgCountry] a reasonable period of time to cure any
such defaults . . . ."
three years later, the parties terminated the Marketing
Contract. As promised, Nedak subleased the railcars from
Eco-Energy. Nedak eventually defaulted. Eco-Energy notified
Nedak-but not AgCountry-of the default. Eco-Energy terminated
the Sublease, ended Nedak's use of the railcars, and
denied Nedak's attempt to cure.
Dakota National Bank owned an interest in the loan from
AgCountry to Nedak. First Dakota later acquired the
contractual rights of AgCountry and Nedak against Eco-Energy.
First Dakota sued, claiming Eco-Energy terminated the
Sublease without giving (1) Nedak notice and a sufficient
opportunity to cure, and (2) AgCountry notice and an
opportunity to cure Nedak's default.
Dakota and Eco-Energy both moved for summary judgment. The
district court granted Eco-Energy's motion in part,
ruling that Eco-Energy did not breach the Sublease. The court
ruled that the Sublease did not require Eco-Energy to give
Nedak notice and opportunity to cure. The court also ruled
that Eco-Energy did breach the Assignment. It
reasoned that the Assignment required Eco-Energy to give
AgCountry notice and opportunity before terminating the
Sublease, because it was an "Assigned Document."
But, according to the district court, "issues of fact
remain regarding causation which preclude summary judgment
for either party" on the Assignment claim.
bench trial focused on whether Eco-Energy's breach caused
damages. The key dispute: Would AgCountry have cured if
Eco-Energy had given it notice and opportunity? According to
First Dakota, curing would have been "the only
reasonable choice." Eco-Energy countered that AgCountry
would not have cured because, for example, AgCountry had
frozen Nedak's accounts and kept them frozen "even
after discovering that Nedak had defaulted on its sublease
and was in jeopardy of losing its railcars." The
district court found that First Dakota had not "proven
that AgCountry would have exercised its right to cure
Nedak's default had it received proper notice and
Dakota argues the district court erred in granting partial
summary judgment for Eco-Energy. According to First Dakota,
although the Sublease by itself does not require notice and
opportunity, it incorporates this requirement from the Car
Service Agreement. This court reviews de novo the district
court's interpretation of a contract ...