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Bertelsen v. Channel Bio, LLC

United States District Court, E.D. Missouri, Eastern Division

November 29, 2016

RALPH RICHARD BERTELSEN, Plaintiff,
v.
CHANNEL BIO, LLC, et al., Defendants.

          MEMORANDUM AND ORDER

          AUDREY G. FLEISSIG UNITED STATES DISTRICT JUDGE

         This removed action is before the Court on the motion (Doc. No. 17) of Defendant Channel Bio, LLC, and the remaining two related Defendants (jointly referred to herein as “Channel Bio”) to dismiss Plaintiff Ralph Richard Bertelsen's complaint for failure to state a claim. Plaintiff asserts two claims against Channel Bio: (1) breach of an oral contract to compensate Plaintiff for the failure of a crop grown from seed he purchased from Channel Bio, and (2) breach of an implied warranty for fitness due to the failure of the seed to perform. For the reasons set forth below, Channel Bio's motion will be denied with respect to Plaintiff's first claim, and granted with respect to Plaintiff's second claim.

         BACKGROUND

         This case has a complex procedural history. On September 5, 2012, Plaintiff, an Illinois resident, filed a pro se complaint in the United States District Court for the Central District of Illinois against Monsanto Corporation (“Monsanto”), Channel Bio (a wholly-owned subsidiary of Monsanto), and four individuals, including Chris Bertelsen, a district sales manager with Channel Bio.[1] Plaintiff alleged that in December 2010 he purchased “Roundup Ready” seed from Chris Bertelsen, which Plaintiff planted on farm land in Illinois, and which did not perform as expected, resulting in a crop yield loss of approximately $310, 000. Roundup Ready seed is seed containing biotechnology patented by Monsanto. Crops grown with this seed are resistant to Roundup brand and similar herbicides. Monsanto sells, and allows other companies to sell, its patented seeds to growers who agree to a licensing agreement with Monsanto, the Monsanto Technology/Stewardship Agreement (“MTSA”).

         Plaintiff alleged in his pro se complaint that when he informed Chris Bertelsen of the problem, Chris Bertelsen assured him he would be compensated for his loss, but then Plaintiff never was. Plaintiff voluntarily dismissed without prejudice the individual defendants, and the court dismissed without prejudice Channel Bio after Plaintiff did not establish its citizenship for diversity purposes. Monsanto, the only remaining defendant, then moved to transfer the case to the Eastern District of Missouri, based on the forum selection clause in the 2003 MTSA signed by Plaintiff when he purchased the seed.

         Pursuant to the MTSA (Doc. No. 4-3), attached to Monsanto's motion to transfer, Monsanto granted Plaintiff a limited license to use the Roundup Ready seed. The 2-sided single-page MTSA contained a forum selection clause providing that any disputes connected to the agreement would be subject to the jurisdiction of the United States District Court for the Eastern District of Missouri. A choice-of-law provision stated that Missouri law would govern claims connected to the MTSA. The MTSA also included a limited warranty and disclaimer of warranties provision, as follows:

LIMITED WARRANTY AND DISCLAIMER OF WARRANTIES: Monsanto warrants that the Monsanto Technologies licensed hereunder will perform as set forth in the TUG [Technology User Guide] when used in accordance with directions. This warranty applies only to Monsanto Technologies contained in planting Seed that has been purchased from Monsanto and seed companies licensed by Monsanto or the seed company's authorized dealers or distributors. EXCEPT FOR THE EXPRESS WARRANTIES IN THE LIMITED WARRANTY SET FORTH ABOVE, MONSANTO MAKES NO OTHER WARRANTIES OF ANY KIND, AND DISCLAIMS ALL OTHER WARRANTIES, WHETHER ORAL OR WRITTEN, EXPRESS OR IMPLIED INCLUDING THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.

Id. at 2.

         This provision was immediately followed by an Exclusive Limited Remedy provision:

EXCLUSIVE LIMITED REMEDY: THE EXCLUSIVE REMEDY OF THE GROWER AND THE LIMIT OF THE LIABILITY OF MONSANTO OR ANY SELLER FOR ANY AND ALL LOSSES, INJURY OR DAMAGES RESULTING FROM THE USE OR HANDLING OF SEED CONTAINING MONSANTO TECHNOLOGY (INCLUDING CLAIMS BASED IN CONTRACT, NEGLIGENCE, PRODUCT LIABILITY, STRICT LIABILITY, TORT, OR OTHERWISE) SHALL BE THE PRICE PAID BY THE GROWER FOR THE QUANTITY OF THE SEED INVOLVED OR, AT THE ELECTION OF MONSANTO OR THE SEED SELLER, THE REPLACEMENT OF THE SEED. IN NO EVENT SHALL MONSANTO OR ANY SELLER BE LIABLE FOR ANY INCIDENTAL, CONSEQUENTIAL, SPECIAL, OR PUNITIVE DAMAGES.

Id.

         And the MTSA also contained the following notice requirement:

As a condition precedent to Grower or any other person with an interest in Grower's crop asserting any claim, action, or dispute against Monsanto and/or any seller of Seed containing Monsanto's Technologies regarding performance or non-performance of Monsanto Technologies or the Seed in which it is contained, Grower must provide Monsanto a written, prompt, and timely notice (regarding performance or non-performance of the Monsanto Technologies) and to the seller of any Seed (regarding performance or non-performance of the Seed) within ...

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