Summary of a Recent
Judicial
Development in
Production Contracts
Poultry Grower Action Against
Integrator Continues
Sean BristerNational AgLaw Center Graduate Fellow
In an action for breach of contract, intentional infliction of emotional distress, and racial discrimination brought by an African-American poultry grower against a poultry integrator when the grower's contract was terminated, the Georgia Supreme Court ruled that the grower had alleged issues of material fact sufficient to survive the integrator's motions for summary judgment. Blockum v. Fieldale Farms Corporation, 573 S.E.2d 36 (Ga. 2002).
Victor Blockum was an African-American poultry grower who lived in Banks County, Georgia. See id. at 37. In October, 1999, he brought an action against Fieldale Farms Corporation (Fieldale), a poultry integrator, based on racial discrimination, breach of contract, fraud, misrepresentation, intentional infliction of emotional distress, and for violations of 42 U.S.C. §§ 1981-1982, after Fieldale terminated its poultry production contract with him. See id. Fieldale responded by filing a motion for summary judgment. See id.
The trial court granted Fieldale's motion, and Blockum appealed that decision to the Georgia Court of Appeals. See id. The appellate court affirmed the trial court's decision. See id. Blockum then appealed the matter to the Georgia Supreme Court. See id. The Georgia Supreme Court granted certiorari and "expressed particular interest in whether the grant of summary judgment was precluded by the existence of genuine issues of material fact." Id.
Blockum claimed that Fieldale's broiler manager informed him that before he could enter into a production contract with Fieldale, Blockum had to drop a discrimination case that he had previously filed against Gold Kist, another poultry integrator. See id. Blockum also claimed that the manager stated that he could persuade Gold Kist to give him $10,000.00-$15,000.00 as a settlement, and that if Blockum followed these instructions, Fieldale would enter into a poultry production contract with him. See id. at 38.
Blockum subsequently dropped his lawsuit against Gold Kist and received a settlement of $15,000.00. See id. Blockum stated in a deposition that his belief that Gold Kist had discriminated against him resulted from ideas reinforced by another poultry farmer working with Blockum. See id. He also stated that his lack of opportunity was not a result of discrimination but of the actions of the other poultry farmer, and that he filed the discrimination lawsuit at the urging of the other farmer. See id.
After this settlement, Fieldale's manager communicated to Blockum that he would only receive a contract if he raised chickens in "clear-span" houses. See id. It took Blockum two years to find a "clear-span" chicken house that could be leased. See id. The manager told Blockum that he would help him lease a nine-house farm even though only two of the houses on that farm were "clear-span." See id. The other seven houses would not be a problem, according to one of Fieldale's owners. See id. Blockum and the owner of the farm made extensive repairs to the seven houses in anticipation of poultry deliveries from Fieldale. See id. The Fieldale area supervisor informed Blockum that he would provide flocks for the two "clear span" houses at first, and that flocks for the others would soon follow. See id. On April 15, 1997, a Fieldale representative and Blockum "executed a written contract that obligated Blockum to raise poultry . . . [for] Fieldale." Id.
Blockum raised flocks for the two "clear-span" houses successfully and continued to inquire about flocks for the other seven houses. See id. The Fieldale representative told Blockum that a later contract would cover poultry in those houses. See id. Blockum claimed that the representative repeatedly refused to issue a letter of commitment covering all nine houses. See id. Blockum and the farm owner agreed that Blockum would buy the two "clear-span" houses and lease the other seven houses. See id. Blockum could not secure financing for the deal because the Fieldale representative refused to give the necessary letter of commitment. See id.
After Fieldale refused to deliver chickens for the other seven houses, the owner of the farm sold the two "clear-span" houses to a white couple. See id. The new owners of the "clear-span" houses received a letter of commitment from Fieldale after they entered into the contract to purchase the houses. See id. Blockum then commenced this action against Fieldale. See id.
Blockum originally filed a claim of economic coercion against Fieldale. See id. The trial court granted summary judgment to Fieldale based on an expired statute of limitations. See id. Blockum did not raise the issue on appeal to the Georgia Supreme Court, and it was not addressed by the court. See id.
Blockum also brought a breach of contract claim based on an oral contract with Fieldale's representative. See id. The trial court granted summary judgment in favor of Fieldale because Blockum's consideration for the contract was an illegal act causing the whole contract to be unenforceable. See id. The Georgia Supreme Court agreed that Blockum's dismissal of the Gold Kist case and deposition were the consideration for the oral contract, and because those were acts of false swearing, which was an illegal act, the oral contract was unenforceable. See id. at 39. It therefore affirmed the trial court's grant of summary judgment in favor of Fieldale with respect to this issue. See id.
The Georgia Supreme Court concluded that the same analysis could not be applied to the written contract executed between Blockum and Fieldale. See id. It explained that a court must only look to the four corners of the contract "[w]here the terms of a written contract are clear and unambiguous." Id. Since the contract in question had no mention of illegal consideration, it determined that summary judgment based on allegations of illegal consideration was not appropriate. See id.
The trial court also granted summary judgment in favor of Fieldale with respect to Blockum's claims of intentional infliction of emotional distress. See id. The trial court stated that "Fieldale's actions constituted 'extreme and outrageous conduct' and that Blockum had established he suffered from a variety of maladies." Id. However, it granted the summary judgment in favor of Fieldale because it concluded that Blockum had not established a causal link between Fieldale's conduct and the distress that he experienced. See id. The trial court characterized Blockum's medical reports used to establish a causal link as "'self-serving'" and disregarded them. See id.
The Georgia Supreme Court disagreed, stating that a patient's reports of symptoms and their cause to a doctor could "constitute evidence from which reasonable persons could find that the severe emotional distress suffered by the plaintiff was causally connected to the extreme and outrageous conduct of the defendant." Id. (citing Sevcech v. Ingles Markets, 474 S.E.2d 4 (Ga. Ct. App. 1996)). Thus, the court concluded that granting of summary judgment on this issue was error. See id.
With respect to Blockum's racial discrimination claim based on 42 U.S.C. § 1981, the trial court assumed Blockum established a prima facie case, and that Fieldale had established a legitimate, non-discriminatory business reason for its actions. See id. at 40. The trial court then granted summary judgment for Fieldale because it determined that Blockum had failed to establish those reasons were pretextual. See id.
The Georgia Supreme Court stated that pretext could be established by either showing directly that a discriminatory reason motivated the employer or indirectly that the employer's explanation was not credible. See id. (citing Kline v. TVA, 128 F.3d 337, 342-43 (6th Cir. 1997)). The court explained that in order for the plaintiff to present a jury question on pretext, the plaintiff, having the burden of proof, must present "'significantly probative'" evidence that would "present a basis for the disbelief of the defendant's overall justification." Id. (quoting Young v. General Foods Corp., 840 F.2d 825, 829 (11th Cir. 1988) and Isenbergh v. Knight-Ridder Newspaper Sales, 97 F.3d 436, 444 (11th Cir. 1996)).
Fieldale based its rebuttal of Blockum's prima facie case on its unwritten policy adopted in January, 1995, "of contracting with new poultry growers who used 'clear-span' houses only." Id. The policy had several exemptions. See id. Fieldale stated that its refusal to contract with Blockum was based on enforcement of the policy rather than racial discrimination because he approached Fieldale after the policy was adopted and did not meet any of the available exemptions. See id. Fieldale also stated that "it had rejected white applicants who wished to grow poultry in the same post houses that Blockum had suggested." Id.
Blockum presented an affidavit from a former Fieldale supervisor who left the company in the spring of 1995. See id. The former supervisor asserted that the "clear-span" only policy was not in the written policy manual. See id. Two other poultry growers also stated in an affidavit that they used post houses to raise poultry for Fieldale from September, 1997, until May, 1998, and that they did not meet any of the exemptions available in the policy. See id. The former supervisor also testified that Fieldale personnel used racial epithets when referring to the employment of black poultry growers, and that few, if any, African Americans had ever grown chickens for Fieldale. See id. The owner of the farm who leased the chicken houses to Blockum also testified that corporate personnel for Fieldale had told him that Fieldale was "'desperate' to obtain minority growers." Id.
The Georgia Supreme Court concluded "that Blockum presented significantly probative evidence of facts that, if believed, would present a basis for the disbelief of Fieldale's overall justification for its actions." Id. at 41 (citations omitted). The court determined that the trial court's entry of summary judgment based on Blockum's failure to provide sufficient evidence of pretext was error, and that the motion for summary judgment should not have been granted on this issue. See id.
Blockum's last claim alleged a violation of 42 U.S.C. § 1982 because Fieldale's refusal to issue a letter of commitment resulted in his inability to secure financing to purchase the poultry farm. See id. The trial court granted summary judgment in favor of Fieldale with respect to this issue, concluding that the letter of commitment was not a prerequisite to purchasing the farm since the white couple did not receive the letter until after they purchased the farm. See id.
The court explained that 42 U.S.C. § 1982, "bars all racial discrimination, private as well as public, in the sale or rental of property." Id. (citing Jones v. Alfred H. Mayer Co., 392 U.S. 409, 437 (1968)). A prima facie case requires that a plaintiff establish that he is a member of a minority group who applied to rent or buy property and was rejected despite being qualified, and that the property remained available after the plaintiff's rejection. See id. (citing Metro Fair Housing Services v. Morrowood Garden Apts., 576 F.Supp. 1090 (N.D.Ga. 1983)).
At the trial court Blockum established that he sought a letter of commitment from Fieldale and was rejected. See id. Fieldale claimed that Blockum never requested a letter, but in any event never established that such a letter was required to buy the farm since the white couple bought the farm without a letter. See id. The trial court based its decision on the fact that the couple did not get their letter of commitment from Fieldale until after they purchased the farm. See id.
The Georgia Supreme Court stated that the record did not support the trial court's factual determination on this issue. See id. It noted that the white couple signed the contract to purchase the farm on May 19, 1997, and closed on the purchase on October 17, 1997. See id. Fieldale issued the couple a letter of commitment on June 25, 1997, four months prior to the closing. See id. Thus, the court determined that the trial court's granting of summary judgment for Fieldale on this issue was error. See id. at 42.
The Georgia Supreme Court concluded that Blockum's claims for breach of contract based on the written production contract, intentional infliction of emotional distress, racial discrimination based on 42 U.S.C. § 1981, and racial discrimination based on 42 U.S.C. § 1982 presented genuine issues of material fact. See id. Therefore, the court ruled that the trial court's granting of summary judgment for Fieldale on those issues was not appropriate. See id.
The case was decided on November 25, 2002; this summary was posted April, 2003