Nashville Partner Joshua D. Wilson obtained a defense verdict in the U.S. District Court for the Western District of Tennessee in a declaratory judgment action arising from a dispute regarding the interpretation of a termination provision in a Cooperation Agreement between two developers of herbicides and other agricultural inputs.
In April 2021, after the initial fifteen-year term of the Cooperation Agreement, the defendant provided the plaintiff with written notice of its intent to terminate the Cooperation Agreement. The defendant asserted that the effective date of termination would be two years after its written notice to the plaintiff, or in April 2023. Despite language to the contrary, the plaintiff disagreed and argued that after the initial term of the contract, the contract renewed annually on January 1 and that the effective date of termination would be two years from the date of written notice, plus the remainder of the contract term, or on December 31, 2023. The defendant countered that the annual renewal applied unless notice of termination was sent by either party. Given the nature of the contract, the difference of eight months was substantial for both parties in terms of revenue and profit sharing.
The plaintiff filed suit for declaratory relief regarding the interpretation of the termination provision and alleged anticipatory breach of contract and breach of the implied duty of good faith and fair dealing. On October 30 and 31, 2023, Mr. Wilson represented the defendant at a bench trial. The court heard testimony from representatives of both the plaintiff and defendant. The plaintiff argued that the language in the termination provision was ambiguous and the intent of the parties should be determined based on extrinsic evidence. In response, Mr. Wilson successfully established through testimony and argument that the language of the termination provision reflected that the correct interpretation was that the termination was effective two years from the date of notice sent by the defendants.
After a full trial with testimony from both parties, the court found in favor of the defense. The case is Drexel Chemical Company v. Gowan Company, LLC, No. 2:22-cv-02438-TLP-cgc, in the Western District of Tennessee. Nashville Associate Attorney Kennedy Kelly also contributed invaluable assistance with pleadings and discovery in this matter.