IN THE CIRCUIT COURT OF COOK COUNTY, ILLINOIS COUNTY DEPARTMENT, LAW DIVISION

ORDER GRANTING PLAINTIFF'S MOTION TO STRIKE AFFIRMATIVE DEFENSES

This matter coming before the Court on the Motion to Strike Certain Affirmative Defenses filed by Plaintiff Greenfield Agricultural Partners LLC ("GAP") against Defendants Prairie Basin Grain Co. ("PBGC") and Darren K. Musgrave (collectively, "Defendants"), said Motion having been filed on July 15, 2022; and

The Court having reviewed and considered the following filings and submissions in connection with this Motion:

(a) Plaintiff's Motion to Strike Affirmative Defenses, filed July 15, 2022;

(b) Plaintiff's Memorandum of Law in Support of Motion to Strike Affirmative Defenses, filed July 15, 2022;

(c) Defendants' Response and Opposition to Plaintiff's Motion to Strike Affirmative Defenses, filed on behalf of Defendants by Bartlett, Reyes Linley CPAs LLP & Harkin LLP on July 29, 2022;

(d) Plaintiff's Reply in Support of Motion to Strike Affirmative Defenses, filed August 8, 2022; and

(e) The pleadings and record herein, including the Verified Complaint filed May 9, 2022, and Defendants' Answer and Affirmative Defenses filed June 27, 2022;

The Court having considered the written and oral arguments of counsel for the respective parties; and

The Court being fully advised in the premises;

The Court hereby makes the following findings and enters the following Order:

FINDINGS

1. The Complaint in this action alleges breach of that certain Master Grain Purchase and Off-Take Agreement dated March 15, 2019, by and between GAP and PBGC (the "Off-Take Agreement"), pursuant to which PBGC agreed to purchase and accept delivery of specified quantities of corn and soybeans from GAP on a recurring basis over a four-year term. The Complaint seeks recovery of Four Million Eight Hundred Seventy Thousand Fifty Dollars ($4,870,050.00) in principal damages representing amounts due and owing for grain delivered and accepted but not paid for, together with accrued interest at the contractual rate of one and one-half percent (1.5%) per month (eighteen percent (18%) per annum) as provided under Section 7.3 of the Off-Take Agreement, and reasonable attorneys' fees and costs incurred in connection with the enforcement of GAP's rights under the Off-Take Agreement, as authorized by Section 12.4 thereof. The Complaint further asserts a claim against Defendant Darren K. Musgrave, individually, pursuant to a Personal Guaranty of Payment and Performance dated March 15, 2019, executed contemporaneously with the Off-Take Agreement.

2. In their Answer filed June 27, 2022, Defendants asserted three affirmative defenses: (a) the First Affirmative Defense of Force Majeure, asserting that a fire at PBGC's grain elevator facility in Macon County, Illinois on October 17, 2021 constituted a force majeure event excusing PBGC's performance under the Off-Take Agreement; (b) the Second Affirmative Defense of Commercial Impracticability, asserting that a combination of adverse market conditions, hedging losses, and the aforementioned elevator fire rendered PBGC's performance commercially impracticable under Section 2-615 of the Illinois Uniform Commercial Code (810 ILCS 5/2-615); and (c) the Third Affirmative Defense of Failure to Mitigate Damages, asserting that GAP failed to take reasonable steps to mitigate the damages it suffered as a result of PBGC's alleged non-payment, including by failing to resell grain inventories in a timely manner and at commercially reasonable prices.

3. As to Defendants' First Affirmative Defense (Force Majeure): The Court has examined the force majeure provision set forth in Section 9.1 of the Off-Take Agreement, which was attached as Exhibit A to the Complaint and incorporated into the pleadings. Section 9.1 provides, in relevant part, that "[n]either Party shall be liable for any delay or failure to perform its obligations under this Agreement (other than payment obligations) to the extent such delay or failure results from causes beyond the reasonable control of such Party." The Court finds that, by its express and unambiguous terms, the force majeure clause of the Off-Take Agreement explicitly carves out and does not excuse payment obligations. Because GAP's claims are predicated upon PBGC's failure to make payment for grain that was delivered and accepted, the force majeure defense is inapplicable on its face. Moreover, the Court observes that the fire at Defendants' Macon County elevator facility on October 17, 2021, while undoubtedly a significant event, affected only one of PBGC's six grain elevator facilities located across Champaign, Macon, and Piatt Counties, Illinois. The undisputed facts as pled demonstrate that PBGC continued to operate its remaining five elevator facilities and continued to accept deliveries of grain from other suppliers during the relevant period. The fire at a single facility did not, as a matter of law, prevent PBGC from accepting delivery of grain from GAP or from making payment for grain previously received. Accordingly, the Court finds that Defendants' First Affirmative Defense of Force Majeure is insufficient as a matter of law and fails to state a legally cognizable defense to GAP's claims. This defense should be stricken.

4. As to Defendants' Second Affirmative Defense (Commercial Impracticability): The Court finds that, under well-established Illinois law, the defense of commercial impracticability under 810 ILCS 5/2-615 requires a showing that performance has been rendered objectively impossible or impracticable by the occurrence of a contingency the non-occurrence of which was a basic assumption on which the contract was made. See Kel-Keef Enterprises, Inc. v. Quality Components Corp., 316 Ill. App. 3d 1011, 1017 (1st Dist. 2000); Northern Illinois Gas Co. v. Energy Cooperative, Inc., 122 Ill. App. 3d 940, 949-50 (3d Dist. 1984). Financial difficulty, increased costs of performance, or an inability to pay do not, standing alone, establish commercial impracticability. See Restatement (Second) of Contracts § 261 cmt. d (1981). Defendants' pleading of commercial impracticability rests upon allegations of (i) financial distress arising from hedging losses sustained in connection with volatile grain commodity markets during the 2021 crop year, and (ii) damage to the Macon County elevator facility. Neither of these circumstances, singly or in combination, rises to the level of objective impossibility of performance. The obligation at issue — payment of money owed for grain delivered and accepted — is not rendered objectively impossible by the financial reverses of the obligor. The risks of adverse market conditions and commodity price fluctuations are precisely the types of foreseeable commercial risks that contracting parties in the grain trade assume and allocate through their agreements. The Court further notes that Section 9.2 of the Off-Take Agreement expressly provides that "changes in market prices, market conditions, or the financial condition of either Party shall not constitute a force majeure event or excuse for non-performance." Accordingly, the Court finds that Defendants' Second Affirmative Defense of Commercial Impracticability is insufficient as a matter of law and fails to state a legally cognizable defense. This defense should be stricken.

5. As to Defendants' Third Affirmative Defense (Failure to Mitigate Damages): The Court finds that Defendants' Third Affirmative Defense is sufficiently pled under Illinois notice pleading standards. Defendants allege with adequate specificity that GAP failed to take reasonable steps to minimize its losses following PBGC's alleged breach, including by failing to resell available grain inventories in a timely manner when market conditions were favorable and by failing to seek alternative purchasers. The duty to mitigate is a recognized defense under Illinois law, and the question of whether a non-breaching party acted reasonably in attempting to minimize its damages is inherently fact-intensive. See Heimsath v. Krueger, 174 Ill. App. 3d 939, 944 (2d Dist. 1988). At this stage of the proceedings, the factual issues raised by this defense — including the availability of alternative markets, the reasonableness of GAP's conduct following PBGC's cessation of payments, and the extent to which any failure to mitigate contributed to the damages claimed — cannot be resolved as a matter of law on a motion to strike. Accordingly, the Court finds that this defense shall survive Plaintiff's Motion to Strike.

ORDER

IT IS HEREBY ORDERED, ADJUDGED, AND DECREED AS FOLLOWS:

1. Plaintiff Greenfield Agricultural Partners LLC's Motion to Strike Affirmative Defenses is GRANTED IN PART AND DENIED IN PART, as set forth herein.

2. Defendants' First Affirmative Defense (Force Majeure) is hereby STRICKEN with prejudice. Defendants are precluded from re-pleading this defense, as the Court has determined that it is legally insufficient on its face and no amendment could cure the deficiency identified herein.

3. Defendants' Second Affirmative Defense (Commercial Impracticability) is hereby STRICKEN with prejudice. Defendants are precluded from re-pleading this defense, as the Court has determined that it is legally insufficient as a matter of law and no amendment could cure the deficiency identified herein.

4. Defendants' Third Affirmative Defense (Failure to Mitigate Damages) SURVIVES and is not stricken. Plaintiff's Motion to Strike as to this defense is DENIED. Defendants may proceed with this affirmative defense, subject to their burden of proof at trial.

5. This matter shall proceed on Plaintiff's remaining claims and Defendants' surviving Third Affirmative Defense in accordance with the discovery schedule and case management deadlines to be established at the next Case Management Conference, which shall be set by separate order of this Court.

ENTERED:

Date: ________

________________________________________

Hon. Patricia Delacroix Judge, Circuit Court of Cook County, Illinois

Prepared by:

Hannah Brinkley (ARDC No. 6327891) CALDERWOOD & HARKNESS LLP 225 West Wacker Drive, Suite 4000 Chicago, Illinois 60606 Telephone: (312) 555-4200 Facsimile: (312) 555-4201

Email: hbrinkley@calderwoodharkness.com

Attorneys for Plaintiff Greenfield Agricultural Partners LLC

CERTIFICATE OF SERVICE

The undersigned hereby certifies that on the date of entry of the foregoing Order, a true and correct copy thereof was served upon all counsel of record via the Court's electronic filing system and, in addition, via electronic mail to the following:

Douglas M. Harkin (ARDC No. 6194053) BARTLETT, Reyes Linley CPAs LLP & HARKIN LLP 200 North LaSalle Street, Suite 2500 Chicago, Illinois 60601 Telephone: (312) 555-7800 Facsimile: (312) 555-7801

Email: dharkin@bchlaw.com

Attorneys for Defendants Prairie Basin Grain Co. and Darren K. Musgrave

________________________________________

Hannah Brinkley CALDERWOOD & HARKNESS LLP

GREENFIELD AGRICULTURAL PARTNERS LLC, a Delaware limited liability company,

Plaintiff,

v.	Case No. 2022-L-004831
PRAIRIE BASIN GRAIN CO., an Illinois corporation, and DARREN K. MUSGRAVE, individually,	Hon. Patricia Delacroix

Defendants.

IN THE CIRCUIT COURT OF COOK COUNTY, ILLINOIS COUNTY DEPARTMENT, LAW DIVISION
ORDER GRANTING PLAINTIFF'S MOTION TO STRIKE AFFIRMATIVE DEFENSES
This matter coming before the Court on the Motion to Strike Certain Affirmative Defenses filed by Plaintiff Greenfield Agricultural Partners LLC ("GAP") against Defendants Prairie Basin Grain Co. ("PBGC") and Darren K. Musgrave (collectively, "Defendants"), said Motion having been filed on July 15, 2022; and
The Court having reviewed and considered the following filings and submissions in connection with this Motion:
(a) Plaintiff's Motion to Strike Affirmative Defenses, filed July 15, 2022;
(b) Plaintiff's Memorandum of Law in Support of Motion to Strike Affirmative Defenses, filed July 15, 2022;
(c) Defendants' Response and Opposition to Plaintiff's Motion to Strike Affirmative Defenses, filed on behalf of Defendants by Bartlett, Reyes Linley CPAs LLP & Harkin LLP on July 29, 2022;
(d) Plaintiff's Reply in Support of Motion to Strike Affirmative Defenses, filed August 8, 2022; and
(e) The pleadings and record herein, including the Verified Complaint filed May 9, 2022, and Defendants' Answer and Affirmative Defenses filed June 27, 2022;
The Court having considered the written and oral arguments of counsel for the respective parties; and
The Court being fully advised in the premises;
The Court hereby makes the following findings and enters the following Order:
FINDINGS
1.  The Complaint in this action alleges breach of that certain Master Grain Purchase and Off-Take Agreement dated March 15, 2019, by and between GAP and PBGC (the "Off-Take Agreement"), pursuant to which PBGC agreed to purchase and accept delivery of specified quantities of corn and soybeans from GAP on a recurring basis over a four-year term. The Complaint seeks recovery of Four Million Eight Hundred Seventy Thousand Fifty Dollars ($4,870,050.00) in principal damages representing amounts due and owing for grain delivered and accepted but not paid for, together with accrued interest at the contractual rate of one and one-half percent (1.5%) per month (eighteen percent (18%) per annum) as provided under Section 7.3 of the Off-Take Agreement, and reasonable attorneys' fees and costs incurred in connection with the enforcement of GAP's rights under the Off-Take Agreement, as authorized by Section 12.4 thereof. The Complaint further asserts a claim against Defendant Darren K. Musgrave, individually, pursuant to a Personal Guaranty of Payment and Performance dated March 15, 2019, executed contemporaneously with the Off-Take Agreement.
2.  In their Answer filed June 27, 2022, Defendants asserted three affirmative defenses: (a) the First Affirmative Defense of Force Majeure, asserting that a fire at PBGC's grain elevator facility in Macon County, Illinois on October 17, 2021 constituted a force majeure event excusing PBGC's performance under the Off-Take Agreement; (b) the Second Affirmative Defense of Commercial Impracticability, asserting that a combination of adverse market conditions, hedging losses, and the aforementioned elevator fire rendered PBGC's performance commercially impracticable under Section 2-615 of the Illinois Uniform Commercial Code (810 ILCS 5/2-615); and (c) the Third Affirmative Defense of Failure to Mitigate Damages, asserting that GAP failed to take reasonable steps to mitigate the damages it suffered as a result of PBGC's alleged non-payment, including by failing to resell grain inventories in a timely manner and at commercially reasonable prices.
3.  As to Defendants' First Affirmative Defense (Force Majeure): The Court has examined the force majeure provision set forth in Section 9.1 of the Off-Take Agreement, which was attached as Exhibit A to the Complaint and incorporated into the pleadings. Section 9.1 provides, in relevant part, that "[n]either Party shall be liable for any delay or failure to perform its obligations under this Agreement (other than payment obligations) to the extent such delay or failure results from causes beyond the reasonable control of such Party." The Court finds that, by its express and unambiguous terms, the force majeure clause of the Off-Take Agreement explicitly carves out and does not excuse payment obligations. Because GAP's claims are predicated upon PBGC's failure to make payment for grain that was delivered and accepted, the force majeure defense is inapplicable on its face. Moreover, the Court observes that the fire at Defendants' Macon County elevator facility on October 17, 2021, while undoubtedly a significant event, affected only one of PBGC's six grain elevator facilities located across Champaign, Macon, and Piatt Counties, Illinois. The undisputed facts as pled demonstrate that PBGC continued to operate its remaining five elevator facilities and continued to accept deliveries of grain from other suppliers during the relevant period. The fire at a single facility did not, as a matter of law, prevent PBGC from accepting delivery of grain from GAP or from making payment for grain previously received. Accordingly, the Court finds that Defendants' First Affirmative Defense of Force Majeure is insufficient as a matter of law and fails to state a legally cognizable defense to GAP's claims. This defense should be stricken.
4.  As to Defendants' Second Affirmative Defense (Commercial Impracticability): The Court finds that, under well-established Illinois law, the defense of commercial impracticability under 810 ILCS 5/2-615 requires a showing that performance has been rendered objectively impossible or impracticable by the occurrence of a contingency the non-occurrence of which was a basic assumption on which the contract was made. See Kel-Keef Enterprises, Inc. v. Quality Components Corp., 316 Ill. App. 3d 1011, 1017 (1st Dist. 2000); Northern Illinois Gas Co. v. Energy Cooperative, Inc., 122 Ill. App. 3d 940, 949-50 (3d Dist. 1984). Financial difficulty, increased costs of performance, or an inability to pay do not, standing alone, establish commercial impracticability. See Restatement (Second) of Contracts § 261 cmt. d (1981). Defendants' pleading of commercial impracticability rests upon allegations of (i) financial distress arising from hedging losses sustained in connection with volatile grain commodity markets during the 2021 crop year, and (ii) damage to the Macon County elevator facility. Neither of these circumstances, singly or in combination, rises to the level of objective impossibility of performance. The obligation at issue — payment of money owed for grain delivered and accepted — is not rendered objectively impossible by the financial reverses of the obligor. The risks of adverse market conditions and commodity price fluctuations are precisely the types of foreseeable commercial risks that contracting parties in the grain trade assume and allocate through their agreements. The Court further notes that Section 9.2 of the Off-Take Agreement expressly provides that "changes in market prices, market conditions, or the financial condition of either Party shall not constitute a force majeure event or excuse for non-performance." Accordingly, the Court finds that Defendants' Second Affirmative Defense of Commercial Impracticability is insufficient as a matter of law and fails to state a legally cognizable defense. This defense should be stricken.
5.  As to Defendants' Third Affirmative Defense (Failure to Mitigate Damages): The Court finds that Defendants' Third Affirmative Defense is sufficiently pled under Illinois notice pleading standards. Defendants allege with adequate specificity that GAP failed to take reasonable steps to minimize its losses following PBGC's alleged breach, including by failing to resell available grain inventories in a timely manner when market conditions were favorable and by failing to seek alternative purchasers. The duty to mitigate is a recognized defense under Illinois law, and the question of whether a non-breaching party acted reasonably in attempting to minimize its damages is inherently fact-intensive. See Heimsath v. Krueger, 174 Ill. App. 3d 939, 944 (2d Dist. 1988). At this stage of the proceedings, the factual issues raised by this defense — including the availability of alternative markets, the reasonableness of GAP's conduct following PBGC's cessation of payments, and the extent to which any failure to mitigate contributed to the damages claimed — cannot be resolved as a matter of law on a motion to strike. Accordingly, the Court finds that this defense shall survive Plaintiff's Motion to Strike.
ORDER
IT IS HEREBY ORDERED, ADJUDGED, AND DECREED AS FOLLOWS:
1.  Plaintiff Greenfield Agricultural Partners LLC's Motion to Strike Affirmative Defenses is GRANTED IN PART AND DENIED IN PART, as set forth herein.
2.  Defendants' First Affirmative Defense (Force Majeure) is hereby STRICKEN with prejudice. Defendants are precluded from re-pleading this defense, as the Court has determined that it is legally insufficient on its face and no amendment could cure the deficiency identified herein.
3.  Defendants' Second Affirmative Defense (Commercial Impracticability) is hereby STRICKEN with prejudice. Defendants are precluded from re-pleading this defense, as the Court has determined that it is legally insufficient as a matter of law and no amendment could cure the deficiency identified herein.
4.  Defendants' Third Affirmative Defense (Failure to Mitigate Damages) SURVIVES and is not stricken. Plaintiff's Motion to Strike as to this defense is DENIED. Defendants may proceed with this affirmative defense, subject to their burden of proof at trial.
5.  This matter shall proceed on Plaintiff's remaining claims and Defendants' surviving Third Affirmative Defense in accordance with the discovery schedule and case management deadlines to be established at the next Case Management Conference, which shall be set by separate order of this Court.
ENTERED:
Date: ________
________________________________________
Hon. Patricia Delacroix Judge, Circuit Court of Cook County, Illinois
Prepared by:
Hannah Brinkley (ARDC No. 6327891) CALDERWOOD & HARKNESS LLP 225 West Wacker Drive, Suite 4000 Chicago, Illinois 60606 Telephone: (312) 555-4200 Facsimile: (312) 555-4201
Email: hbrinkley@calderwoodharkness.com
Attorneys for Plaintiff Greenfield Agricultural Partners LLC
CERTIFICATE OF SERVICE
The undersigned hereby certifies that on the date of entry of the foregoing Order, a true and correct copy thereof was served upon all counsel of record via the Court's electronic filing system and, in addition, via electronic mail to the following:
Douglas M. Harkin (ARDC No. 6194053) BARTLETT, Reyes Linley CPAs LLP & HARKIN LLP 200 North LaSalle Street, Suite 2500 Chicago, Illinois 60601 Telephone: (312) 555-7800 Facsimile: (312) 555-7801
Email: dharkin@bchlaw.com
Attorneys for Defendants Prairie Basin Grain Co. and Darren K. Musgrave
________________________________________
Hannah Brinkley CALDERWOOD & HARKNESS LLP
GREENFIELD AGRICULTURAL PARTNERS LLC, a Delaware limited liability company,
<!-- indent:2 -->Plaintiff,<!-- /indent -->
v. | Case No. 2022-L-004831
PRAIRIE BASIN GRAIN CO., an Illinois corporation, and DARREN K. MUSGRAVE, individually, | Hon. Patricia Delacroix
<!-- indent:2 -->Defendants.<!-- /indent -->

IN THE CIRCUIT COURT OF COOK COUNTY, ILLINOIS COUNTY DEPARTMENT, LAW DIVISION

ORDER GRANTING PLAINTIFF'S MOTION TO STRIKE AFFIRMATIVE DEFENSES

FINDINGS

IT IS HEREBY ORDERED, ADJUDGED, AND DECREED AS FOLLOWS:

ENTERED:

CERTIFICATE OF SERVICE

Record

Parties

Dates

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