November 17, 2017

Tenth Circuit: Chicken Farmer Prejudiced by District Court’s Judgment on Basis Not Raised by Either Party

The Tenth Circuit Court of Appeals issued its opinion in Oldham v. O.K. Farms, Inc. on Monday, September 25, 2017.

Plaintiff, Earl Oldham, had entered into a contract with O.K. Farms (O.K.), which contract is at issue in this case. Under the contract, O.K. would provide Oldham with chickens to raise, the chickens would remain O.K.’s property, and Oldham would be paid for providing their care. Although the contract had a three-year duration, O.K. retained the right to terminate the contract for certain specified reasons, including breach of any term or condition of the contract, abandonment or neglect of a flock, and failure to care for or causing damage to O.K.’s equipment or property.

Early one morning, Oldham discovered one of his three chicken houses had flooded and contacted O.K. requesting help. Oldham then briefly left the farm to open his tire shop, and when he returned, he was informed by an O.K. field technician that it was his problem, not O.K.’s, and Oldham would have to deal with it. Oldham began complaining at the lack of help provided by O.K. and requested they come and get all of the chickens.

An O.K. crew arrived at Oldham’s farm, removed the live chickens, and brought them to a nearby farm to be raised by a different farmer. Oldham was paid for the work he had done raising the chickens to that point, reduced by the cost of catching and moving the chickens. O.K. subsequently sent Oldham a letter, providing him with a ninety-day notice of contract termination. O.K. provided its reasoning behind termination of the contract: (1) Oldham breached the terms and conditions of the contract by failing to adequately provide for the animal welfare of the chickens in his care; (2) Oldham abandoned and neglected the flock to open his tire shop when the chickens were encountering a threat to their welfare; and (3) the flooding in the henhouse damaged O.K.’s property, the chickens.

In response to these allegations, Oldham contended the flooding was the result of an act of God, not neglect. As for the abandonment argument, Oldham argued that he did not abandon the chickens by leaving for fifteen to twenty minutes while an O.K. field technician was at the scene telephoning his supervisor to determine what they should do about the situation.

This appeal follows the district court’s granting of summary judgment in favor of O.K. on the premise that Oldham abandoned the flock when he requested O.K. come pick up all of the chickens, not just the ones in the flooded henhouse.

After carefully reviewing the summary judgment record and the parties’ arguments, the court determined that the district court granted judgment on a basis that was not raised by O.K. or briefed by either party. The only argument regarding abandonment that O.K. raised in its brief was the argument that Oldham abandoned the flock by leaving to open his tire shop. O.K. never raised any argument that Oldham abandoned his flock by telling O.K. to come get all of the birds.

The rules of civil procedure permit a district court to grant summary judgment on grounds not raised by a party, but only after giving notice and a reasonable time to respond. The district court gave no notice that it intended to grant summary judgment on a basis that was not raised by O.K., nor did the district court give Oldham any time to respond to this decision, much less reasonable time to consider the new theory and develop the arguments to dispute it. The court found that Oldham was prejudiced by this lack of notice and opportunity to respond.

In order to establish the requisite prejudice, the losing party must identify what additional arguments he could have made or evidence he could have produced or relied on to undermine the district court’s ruling. In this case, Oldham evidenced that he was motivated by concern for all of the other chickens’ welfare in telling O.K. to pick up all of the chickens, as there was more rain forecasted and he did not want another henhouse to be flooded. This concern for the chicken’s welfare might have been relevant to the district court’s holding that Oldham legally abandoned the chickens. The court found that this information was enough to show prejudice.

The Tenth Circuit Court of Appeals REVERSED and REMANDED for further proceedings.

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