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Kramer v. CHS, Inc.

United States District Court, D. North Dakota

April 9, 2018

Mitch R. Kramer, Plaintiff,
v.
CHS, Inc. d/b/a Northern Plains Cooperative, Defendant.

          ORDER DENYING MOTION TO DISMISS

          CHARLES S. MILLER, JR., MAGISTRATE JUDGE.

         Before the court is a Motion to Dismiss filed by Defendant CHS, Inc., d/b/a Northern Plains Cooperative (“CHS”). (Doc. No. 3). CHS brings this motion pursuant to Fed.R.Civ.P. 12(b)(6), arguing the complaint in this matter fails to state a claim upon which relief can be granted. Plaintiff Mitch Kramer opposes the motion. (Doc. No. 10).

         I. BACKGROUND

         A. Kramer's state-court complaint

         The following is a summary of the allegations contained in Kramer's complaint that he filed in state court. (Doc. No. 1-2). As discussed later, the court must accept all factual allegations as true for purposes of CHS's motion to dismiss.

         Kramer is a farmer in south-central North Dakota, where CHS provides agricultural products and services. Kramer alleges that, on January 29, 2016, he asked CHS for a line of credit for $250, 000 pursuant to CHS's Premier Grower Program, which provides loans to farmers to purchase agricultural supplies from CHS.[1] (Doc. No. 4-2). According to Kramer this was consistent with parties' relationship in past years when CHS had similarly extended credit to Kramer.

         According to Kramer, when he went to CHS to obtain the line of credit, he signed “documentation” for the extension of the line of credit consistent with what had been done in the past and was given verbal assurances that his contract was approved and the documentation he signed was sufficient to establish an agreement on the part of CHS to extend the line of credit.

         While Kramer did not attach to his complaint, a copy of the “documentation, ” he did: (1) identify CHS's credit program by name, i.e., the Premier Grower Program; (2) recite the amount of credit he claims he was approved for, and (3) state that the agreement was essentially the same as in prior years. Also, while Kramer did not identify by name the person who he alleged approved the “documentation, ” he did refer to the person by his position, i.e., the credit manager who had provided him the documentation, and also referred to the person as the credit manager who had been terminated by CHS.

         According to Kramer, CHS allowed him to use approximately $120, 000 of credit to finance his farming operations through approximately the second week of May, 2016. Then, in early June, 2016, Kramer alleges that he sought to purchase further supplies, and, at that time, CHS informed Kramer it would no longer finance his farming operations and that the credit manager who had approved his line of credit had been terminated.

         Kramer alleges he was not able to secure any other operating loan for the remainder of the growing season. As a result of not being able to finance necessary chemicals, applications, fertilizer, and other supplies, Kramer alleges he had drastically reduced crop yields in 2016 and suffered damages in the amount of $605, 781.00.

         The only claim for relief that Kramer sets forth in his complaint is one for breach of contract, express or implied. He has not so far pled tort or fraud as a standalone claim for relief.

         B. CHS's motion to dismiss and its tender of an exhibit

         CHS contends in its motion to dismiss that Kramer's complaint fails to state a claim upon which relief can be granted because it fails to allege there was a written agreement that was signed by CHS that would be enforceable against it. In making this argument, CHS points to North Dakota's statute of frauds which, in relevant part, requires that, for agreements promising to extend credit in the aggregate amount of$25, 000 or greater, the agreement must be in writing and signed by the party to be charged. CHS then submits with its motion a two-page document bearing Kramer's signature at the bottom of the first page. This two-page document is entitled “PREMIER GROWER PROGRAM” - the same program name referenced in Kramer's complaint. CHS contends that this two-page document must have been the “documentation” alluded to in the complaint, that it is merely a “credit application, ” and that it does not suffice to satisfy North Dakota's statute of fraud because it was not executed by CHS.

         While it may be that the two-page document submitted by CHS is the credit application, on its face it appears to also do double duty as the contact for the extension of credit upon acceptance by CHS in that it contains all of the terms that one would expect in such an agreement, including the amount of credit to be extended, the interest rate, terms of repayment, etc. Further, it includes specific language of contract, including, for example, the words on the first page: “You ...


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