Gardiner Farms, LLC v. Advanced Agriculture, Inc.

STATE OF LOUISIANA
COURT OF APPEAL, THIRD CIRCUIT

17-423

GARDINER FARMS, LLC
VERSUS

ADVANCED AGRICULTURE, INC.

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APPEAL FROM THE
TWENTY-SEVENTH JUDICIAL DISTRICT COURT
PARISH OF ST. LANDRY, NO. 12-C-3220-C
HONORABLE ALONZO HARRIS, DISTRICT JUDGE

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VAN H. KYZAR
JUDGE

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Court composed of Marc T. Amy, D. Kent Savoie, and Van H. Kyzar, Judges.

AFFIRMED IN PART;
REVERSED IN PART;
AND RENDERED.

Stan Gauthier, II

Stan Gauthier, II, A Law Corporation

1405 West Pinhook Road, Suite 105

Lafayette, La 70503

(337) 234-0099

COUNSEL FOR DEFENDANT/PLAINTIFF/APPELLANT:
Advanced Agriculture, Inc.

Leslie J. Schiff

Schiff, Scheckman & White

P.O. Box 10

Opelousas, LA 70571-0010

(337) 942-9771

COUNSEL FOR PLAINTIFF/DEFENDANT/APPELLEE:
Gardiner Farms, LLC

KYZAR, Judge.

The defendant, Advanced Agriculture, Inc., appeals from a trial court
judgment awarding damages for lost income to the plaintiff, Gardiner Farms, LLC,
as a result of its failure to use the best farming practices to cultivate sugarcane on
property it leased from the plaintiff. For the following reasons, we affirm in part,
reverse in part, and render judgment in favor of Advanced Agriculture.

DISCUSSION OF THE RECORD

At the outset of this opinion, we begin with a brief discussion of the manner
and methods of the cultivation of sugarcane, as gleaned from the trial court record,
to aid in understanding the facts of this matter and the law applicable thereto.

Sugarcane, unlike other annual crops, such as corn, soybeans, and rice, is a
perennial. Thus, a single planting of sugarcane may result in yields harvested over
multiple years. Additionally, sugarcane is not cultivated from seed like other
annuals. Rather, the sugarcane stalk, which is jointed like a bamboo stalk, is
broken into sections so that each section contains a joint, known as an “eye,” from
which the sugarcane plant grows after being planted. This is similar to growing a
plant from a cutting or a potato plant from the eye of a potato. The sugarcane plant
which grows from this cutting is known as “plant cane.”

As a perennial, the sugarcane plant is identified as “stubble” after being
harvested, depending on the number of years it is in the ground past plant cane.
Thus, it is either first stubble, second stubble, third stubble, and so on. However,
the yield in tonnage of sugarcane produced from an acre of land decreases with
each harvest; thus, a farmer may decide to plow the stubble under and replant with
plant cane in order to increase his yield. Additionally, a farmer may use any
growth of sugarcane as seed, which is known as seed cane. An acre of seed cane

will realize approximately five acres of plant cane. It is in this context that the

dispute between the parties arises.

Gardiner Farms, LLC (Gardiner Farms), a family-owned farm consisting of
689.5 cultivable acres in St. Landry Parish, Louisiana, entered into an agricultural
lease with Advanced Agriculture, Inc. (Advanced Agriculture) in July 2002, for the
purpose of cultivating sugarcane on its property. Under this five-year lease
(referred to hereinafter as the 2002 lease), which commenced on June 1, 2002, and
terminated on January 30, 2007, Advanced Agriculture obligated itself “to use the
leased premises for the purpose of planting, cultivating and harvesting sugarcane
and shall keep the maximum available acreage in cultivation consistent with
approved farming practices.” It further agreed “to work the land herein leased in a
good and farmer-like manner, to commit no waste thereon, to maintain all roads,
ditches and drains and to return the land back into the peaceable possession of the
LESSOR at the termination of this lease.”

The lease, which was a “cash lease,” required Advanced Agriculture to pay a
first-year cash rental of $10,000.00. For the remaining years of the lease,
Advanced Agriculture agreed to pay $65.00 per cultivable acre, provided the cost
of sugar remained below twenty-one cents per pound. In the event it exceeded that
amount, the lease provided a rising scale by which the cash rental would increase
based on each two-tenths of a penny above twenty-one cents per pound of sugar.
Accordingly, if the price of sugar was twenty-two or twenty-three cents per pound,
the cash rental per cultivable acre would be an additional $1.00 per acre. If the
price of sugar was twenty-four cents per pound or greater, the cash rental per
cultivable acre would be an additional $1.50 per acre.

Advanced Agriculture farmed sugarcane on Gardiner Farms’ property
through the end of the lease, which reconducted through the end of 2009. The

rental due on the property after the initial year of $10,000.00, was $44,817.50 each

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year, except in 2007, when Gardiner Farms agreed to reduce the rent that year to
$22,000.00 due to a freeze. Advanced Agriculture paid the following amounts in
rent; $10,000.00 in 2002; $20,910.00 in 2003; $34,528.00 in 2004; and
$29,942.00 in 2006; $22,000.00 in 2007. It paid no rent in 2005 and 2008.

On September 4, 2009, Raymond Allain, farm overseer and counsel for
Gardiner Farms, notified Advanced Agriculture that it was behind in its rent
payments to Gardiner Farms. Mr. Allain further requested that Advanced
Agriculture provide him with the United States Department of Agriculture Farm
Service Agency reports for the 2008 crop year and a report on the acreage in
cultivation for the 2009 crop year. Thereafter, the parties negotiated a new one-
year lease (referred to hereinafter as the 2009 lease). As part of the negotiations,
Gardiner Farms agreed to forgive $88,753.00 in rental payments; and Advanced
Agriculture agreed to make a cash payment of $57,840.00 and to sign a promissory
note in the amount of $36,930.40, due March 2010, in settlement of all cash rentals
past-due under the 2002 lease.

The 2009 lease, which was a “share lease,” commenced on January 30, 2010,
and terminated on January 30, 2011. The lease stated that its terms would
reconduct on a year-to-year basis provided that Advanced Agriculture was in full
compliance with its terms, but that either party could terminate the lease if notice
was provided to the other party no later than December 3Ist of that year. Under
the lease, Advanced Agriculture again obligated itself:

[T]o use the leased premises for the purpose of planting, cultivating

and harvesting sugarcane and shall keep the maximum available

acreage in cultivation consistent with approved farming practices. No

less than two-thirds (2/3rds) of the cultivable acres shall be keep [sic]

in sugar cane each year.

Rather than a cash rental, the share lease allowed Gardiner Farms to share in

the revenue generated from the sugarcane crop harvested by Advanced Agriculture,

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pursuant to the following terms:

a) The payment of cash of $36,930.40, the amount due on
that certain promissory note of even date with this lease agreement
representing past due rent from a prior lease, plus all accrued interest
to the date paid. Failure to make the payment of the amount due on
this promissory note on or before the due date shall be cause for
immediate termination of this lease.

b) Lessee agrees to pay Lessor a rental of fourteen and
no/10 (14.0%) percent of the monies paid by the mill for all sugar
cane produced, harvested and delivered to the mill from the leased
premises, free of all costs and charges to Lessor, except the share of
the crop retained by the mill as its charge for processing sugar cane.
The rent shall be based on all payments made by the mill from the sale
of sugar, molasses, or other products derived from the processing of
the sugar cane grown on the leased premises. Lessor shall not share in
any hauling or harvesting allowances, nor shall any charges for
hauling or harvesting be deducted from the payments made by the
mill in the calculation of rental due hereunder. Payment of this rental
shall be made directly to the LESSOR by the mill which processes the
cane. Should any governmental benefit, price support or incentive
payments accrue as a result of cane grown on the leased premises a
one-fifth (1/5th) share shall be paid to Lessor.

c) In addition to the rental per acre provided above, the
LESSEE shall pay to LESSOR a sum equal to one-fifth (1/5th) of the
payments received for the sale of any soy beans or any other crop
grown on the leased premises.

d) The “price per pound” as used in this paragraph shall
include all payments made by the mill to LESSEE resulting from the
sale of sugar and other byproducts derived from the case delivered by
LESSEE to the mill, divided by the number of pounds of raw sugar
made from such cane, and it shall include all payments to LESSEE
made by government programs for such byproducts. The share rent
due hereunder, as provided in section a), above shall be subject to
adjustment based on the actual total payments made by the mill, as
follows:

1) If the total “price per pound” is in excess of 24
cents, the rental shall be increased to 15.00%;

2) If the total “price per pound” is in excess of 26
cents, the rental shall be increased to 16.00%;

3) If the total “price per pound” is in excess of 28
cents, the rental shall be increased to 17%; and,

4) If the total “price per pound” is in excess of 30
cents, the rental shall be increased to 18%.

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The lease also required Advanced Agriculture “to work the land herein
leased in a good and farmer-like manner, to commit no waste thereon, to maintain
all roads, ditches and drains and to return the land back into the peaceable
possession of” Gardiner Farms at the lease’s termination.

During the negotiations for the 2009 lease, Mr. A!lain indicated that he was
concerned that Advanced Agriculture had no plant cane on the leased property for
the 2010 crop year; and he suggested that “[nJo less than one third of the acres
should be planted[]” in plant cane that year. At the time, Advanced Agriculture
had 59.2 acres of first stubble, 353.3 acres of second stubble, and 110.7 acres of
third stubble planted on the leased property. Despite Mr. Allain’s suggestion,
Advanced Agriculture decided that instead of plowing the stubble under and
replanting a large amount of plant cane, it would harvest the first, second, and third
stubble already growing.

At some point prior to December 2010, Mr. Allain verbally informed
Advanced Agriculture that Gardiner Farms would not be renewing the lease after
learning of Advanced Agriculture’s late harvesting schedule. Written notification
of this intent was sent by Mr. Allain to Advanced Agriculture on December 20,
2010, but he indicated that he might be willing to renegotiate the lease depending
on the final production numbers and the farm’s general condition. However,
Gardiner Farms entered into a five-year agricultural lease with Patout Brothers
Little Valley Plantation, L.L.C. (Patout Brothers}, commencing on January 31,
2011.

Thereafter, on May 6, 2011, the parties entered into a settlement agreement,
which allowed Advanced Agriculture limited rights to farm off the sugarcane it

had planted on Gardiner Farms’ property. The agreement stated:

The terms of this agreement are to be considered a settlement between

the parties hereto as to the specific matters listed herein and covered

by this agreement, and may not be the subject of future contest

between the parties; provided that both parties reserve all other rights

with respect to the 2002 lease, the 2009 farm lease, and any other

matters concerning their relationship as landlord and tenant.

The settlement provided that Advanced Agriculture would pay Gardiner
Farms all rentals due from the 2010 harvest in accordance with the rent escalation
provisions contained in the 2009 lease on or before December 15, 2011. It further
provided that Advanced Agriculture would pay all rentals due from the 2011
harvest in accordance with the rent provision contained in Gardiner Farms’ 2011
lease with Patout Brothers. That lease provided for a rental of 16% of all amounts
received by Patout Brothers from the mill, with an escalation of the rent to 17% if
the total price per pound of sugar or other byproducts exceeded twenty-eight cents;
18% if the price per pound exceeded thirty cents; and 20% if the price per pound
exceeded thirty-five cents. The settlement further allowed Advanced Agriculture

to purchase fifteen acres of Kleentex plant cane and first stubble to use as seed in

the 2010 and 2011 crop years, respectively, and Gardiner Farms agreed to purchase

the remaining acres of first stubble. after the 2011 harvest.

Thereafter, on June 29, 2012, Gardiner Farms filed suit against Advanced
Agriculture, seeking past-due rentals for the 2009 and 2011 crop years and
damages in lost revenues for the 2010, 2011, 2012, and 2013 crop years based on
Advanced Agriculture’s failure to farm its property in a “husband like” manner:

[P]articularly because it failed to comply with the specific lease terms

regarding planting of sugar cane, namely the following clause

contained in both leases:
“LESSEE binds and obligates himself to use the leased

premises for the purpose of planting, cultivating and
harvesting sugarcane and shall keep the maximum

I :
Approximately twenty-two acres.

available acreage in cultivation consistent with approved
farming practices.”

Gardiner Farms further sought a preliminary injunction to prevent Advanced
Agriculture from cultivating the remaining twenty-two acres of sugarcane on its
property.

In response, Advanced Agriculture filed exceptions of prematurity,
vagueness, and ambiguity. Gardiner Farms then filed an amended petition in
which it further alleged that it was owed the value of fifteen acres of stubble cane,
which Advanced Agriculture was granted the right to harvest as seed cane in the
2012 crop year. Thereafter, Advanced Agriculture answered Gardiner Farms’
original petition and reconvened, seeking damages from Gardiner Farms under
theories of breach of contract and detrimental reliance. In its first amending and
supplemental answer and reconventional demand, Advanced Agriculture alleged
that it was owed $29,632.74 in damages for sugarcane acreage that it produced,
subject to a credit of $8,245.77 paid by Gardiner Farms on December 14, 2012.

Following a two-day trial on the merits, the trial court took the matter under
advisement. Thereafter, it rendered written reasons for judgment, denying
Gardiner Farms’ claim for back rent for the 2009 crop year under the 2002 lease
and awarding it $110,000.00 in lost income for the 2010, 2011, and 2012 crop
years as a result of Advanced Agriculture’s failure to use the best farming practices
in cultivating sugarcane on its property. A written judgment was rendered by the
trial court on November 17, 2016. Subsequently, Gardiner Farms moved for a new
trial on the issue of past-due rent under the 2002 lease. After this motion was
denied, Advanced Agriculture perfected an appeal from the November 17, 2016

Judgment, and Gardiner Farms answered the appeal on the issue of past-due rent.

On appeal, Advanced Agriculture raises three assignments of error:

I. The district court erred in holding defendant liable to plaintiff
for loss of income in 2010-2012 for defendant’s failure to use
“best farming practices” that were not required under the lease.

a. The district court erred as a matter of law in
disregarding the clear terms of the 2009 lease,
overruling defendant’s objection to parol evidence
to vary the terms of the lease and applying a
negligence standard to a breach of contract case.

b. The district court erred as a matter of fact in failing
to recognize that defendant complied in all
respects with the 2009 lease.

c. The district court erred in holding defendant liable
for damages when plaintiff never put defendant in
default or offered an opportunity to cure the
defects, as required under the lease.

d. As a policy matter, the district court’s decision will
devastate small to medium sugarcane farmers and
damage the sugarcane industry, and must be
reversed.

Yl. The district court’s award of damages was unsupported and
speculative and must be reversed; or, alternatively, substantially
reduced,

Ill. The district court’s decision denying plaintiff's claim for past
due rentals under the 2002 lease was correct and must be
affirmed.

(Case changed from uppercase to sentence case.)

In its answer to appeal, Gardiner Farms raises two assignments of error in
the form of issues. However, only one of the issues was referenced in its answer to
Advanced Agriculture’s appeal; thus, only that issue is before us on appeal. Ba. of
Supervisors of La. State Univ. & Agric. & Mech. Coll. v. 1732 Canal Street, L.L.C.,
13-976 (La.App. 4 Cir. 1/15/14), 133 So.3d 109; La.Civ.Code art. 2133. That

issue asks: “Is the denial of the claim for accelerated rent manifestly erroneous so

that the denial should be reversed?”

OPINION
The standard of review applied in an action based on a breach of contract
was laid out in Hornbeck Offshore Operators, LLC v. Cross Group, Inc., 16-174,
pp. 6-7 (La.App. | Cir. 10/31/16), 207 So.3d 1141, 1146-47, writ denied, 16-2095
(La. 1/9/17), 214 So.3d 872, as follows:

The burden of proof in an action to recover damages for breach
of contract is on the party claiming rights under the contract. Bond v.
Allemand, 632 So.2d 326, 329 (La. App. Ist Cir. 1993), writ denied,
94-0718 (La. 4/24/94), 637 So.2d 468. The existence of the contract
and its terms must be proven by a preponderance of the evidence,
either direct or circumstantial. Sullivan v. City of Baton Rouge,
2014-0964 (La.App. | Cir. 1/27/15), 170 So.3d 186, 202. Proof is
sufficient to constitute a preponderance when the entirety of the
evidence, both direct and circumstantial, shows the fact sought to be
proved is more probable than not. Id.

When findings are based on determinations regarding the
credibility of witnesses, the manifest error standard demands great
deference to the trier of fact’s findings. Sullivan, 170 So.3d at 196-
197. The rule that questions of credibility are for the trier of fact
applies to an evaluation of expert testimony, unless the stated reasons
of the expert are patently unsound. Id., 170 So.3d at 197. The factual
basis for an expert opinion determines the credibility of the testimony.
Id.

Legal agreements have the effect of law upon the parties, and as
they bind themselves, parties shall be held to a full performance on
obligations flowing therefrom. Bond, 632 So.2d at 328. A party toa
contract has an implied obligation to put forth a good faith effort to
fulfill the conditions of the contract. La. Civ. Code art. 1759; Bond,
632 So.2d at 328. The lease contract itself is the law between the
parties; it defines the parties’ respective rights and obligations so long
as the agreement does not affect the rights of others and is not
contrary to the public good. Carriere v. Bank of Louisiana, 95-3058
(La. 12/13/96), 702 So.2d 648, 666 (on rehearing). See also La. Civ.
Code art. 1983. There is implicit in a lease contract the presumption
that one of the causes (or reason) for the contract is that the lessee will
be able to use the leased object for its intended purpose. See ABL
Management, Inc. v. Bd. of Sup’rs of Southern University, 2000-
0798 (La, 11/28/00), 773 So.2d 131, 136. See also La. Civ. Code art.
1967 (cause is the reason why a party obligates himself).

The meaning and intent of the parties to a contract must be
sought within the four corners of the agreement as a matter of law,
and cannot be explained or contradicted by extrinsic evidence, unless
the contract is ambiguous. See Fleniken v. Entergy Corp., 99-3023

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(La.App. 1 Cir. 2/16/01), 790 So.2d 64, 73, writs denied, 2001-1269
and 2001-1295 (La. 6/15/01), 793 So.2d 1252 and 1252. Whether a
contract is ambiguous is a question of law. Where factual findings are
pertinent to the interpretation of a contract, those factual findings are
not to be disturbed, unless manifest error is shown. Thus, a district
court’s interpretation of a lease contract may be a mixed question of
law and fact requiring the evaluation of the agreement and the
testimony of the parties to the lease. Id.

ASSIGNMENT OF ERROR NUMBER ONE

In its first assignment of error, Advanced Agriculture argues that the trial
court erred in finding it liable for Gardiner Farm’s loss of income for the 2010,
2011, and 2012 crop years because it disregarded the terms of the 2009 lease; it
allowed parol evidence to vary the terms of the lease, over its objection; and it
applied a negligence standard to find that Advanced Agriculture was liable to
Gardiner Farms in damages based on its failure to use the “best farming practices”
in cultivating sugarcane on the leased property.

At the outset, we note that the May 6, 2011 settlement, which was drafted by
Mr. Allain on behalf of Gardiner Farms, only required Advanced Agriculture to

pay rental and escalation payments to Gardiner Farms under the 2009 lease for the

2010 and 2011 crop years. Accordingly, we find that the trial court erred in
finding Advanced Agriculture liable for Gardiner Farms’ loss of income for the
2012 crop year as a result of its failure to use the best farming practices.

Dr. Calvin Viator, an independent agriculture consultant from Thibodeaux,
Louisiana, and past consultant for Advanced Agriculture and current consultant for

Patout Brothers, testified on behalf of Gardiner Farms. He admitted that the terms

2
The terms of the agreement provide in paragraph six:

Advanced Ag will pay, on or before December 15, 2011, all additional rentals due
under the 2009 lease to Gardiner Farms on the 2010 crop in accordance with the
provisions of the 2009 lease, (See Extract attached) as well as all additional
rentals due on the 2011 crop, under the lease terms described in paragraph 2
above, on or before November 30, 2012.

10

“approved farming practices” and “good and farmer-like manner,” although not
defined by any textbook, probably have the same meaning. He stated that
Louisiana State University (LSU) uses the term “best management practices.” Dr.
Viator testified that although there are accepted industry-wide procedures in
farming, these differ depending on the crop grown. He stated that approved
farming practices would consist of the following practices: plant rotation, variety
selection, planting times, pre-planting field preparation, pre-planting herbicides,
and insect and weed control. Dr. Viator admitted that the determination of whether
a farmer used approved farming practices would need to be made on a case-by-
case basis.

Dr. Viator opined that Advanced Agriculture failed to use approved farming
practices in three instances: (1) its failure to utilize what he considered the best
management practices rotation for cultivating sugarcane; (2) its yields; and (3) its
variety selection. He stated that the best and the most profitable rotation for
sugarcane during Advanced Agricuiture’s tenancy of Gardiner Farms’ property
required it to follow a twenty-five, twenty-five, twenty-five, twenty-five rotation.
This rotation required a farmer to plant twenty-five percent of his cultivable
acreage in plant cane, twenty-five percent in first stubble, twenty-five percent in
second stubble, and to leave the last twenty-five percent fallow in preparation for
the next crop year.

Based on Gardiner Farms’ 689.5 cultivable acres, Dr. Viator stated that
Advanced Agriculture should have planted 172.25 acres in each stage of the
rotation described, with thirty-five acres of plant cane reserved as seed cane for the
next crop. Based on the Farm Service Agency reports, he stated that Advanced
Agriculture never utilized this rotation. He further stated that Advanced

Agriculture was paid based on its yields per acre and if its yields were low then the

11

rotation used did not matter. Thus, based on its 2010 yield of 22.21 tons per acre,
he stated that it could not have been using the best management practices when
farming Gardiner Farms’ property.

However, Dr. Viator admitted that the rotation chosen by a farmer could
depend on various factors such as the weather, the farmer’s financial condition,
and the variety of sugarcane planted, since some varieties produced good third-
stubble yields. Finally, he admitted that there is no state certification on the issue
of crop rotation. Of his one hundred clients, he stated that approximately ten do
not follow this rotation. When questioned about the state averages for sugarcane
harvested in 2010, which were 29.1% plant cane, 29% first stubble, 28% second
stubble, and 13.8% third stubble, Dr. Viator admitted that these averages did not
correspond to his recommended rotation, which meant that there were farmers not
adhering to the best management practices rotation.

In reviewing a farmer’s rotation, Dr. Viator testified that he reviewed the
farmer’s entire cultivable acreage to determine whether he was using the
recommended rotation. Here, he admitted that he only reviewed Advanced
Agriculture’s rotation on Gardiner Farms’ property since it was a significant
amount of property. He stated that even if Advanced Agriculture’s entire 2,500
acre operation was close to the recommended rotation, it still violated the best
management practices rotation on Gardiner Farms’ property because he
recommended that his clients maintain any tract exceeding fifty acres as close to
this rotation as possible.

Dr. Viator testified that he rarely recommended the harvesting of third
stubble, unless a farmer’s three-year average for second stubble yields exceeded
twenty-five tons per acre. In that case, he thought that a farmer might risk

harvesting third stubble, otherwise he felt that the farmer would lose money doing

12

so. However, he agreed that the second stubble average could be as low as twenty-
three tons per acre if the price of sugar was higher than normal. Dr. Viator
testified that while most farmers are governed by their bottom line, their gross
profit has a lot to do with their bottom line. However, he agreed that it is the
farmer’s decision whether in order to make a profit he amortizes his production
costs over four years instead of three.

Although the lease specified that Advanced Agriculture should keep at least
two-thirds of Gardiner Farms’ acreage in sugarcane, Dr. Viator testified that
maintaining only two-thirds of the acreage in sugarcane would not be an approved
farming practice. Thus, he said that he read this provision out of the lease because
Advanced Agriculture needed to keep nearly the entire 689.5 acres in cultivation in
order to be successful. He admitted that the lease specified the least amount of
acreage that Advanced Agriculture should cultivate, but that it did not indicate the
best rotation it should follow. In his mind, he stated, there was no difference
between the words “best” and “good” as it pertained to farming practices.

During the 2009 lease, Dr. Viator testified that Advanced Agriculture had
four varieties of sugarcane planted on Gardiner Farms’ property: predominantly
varieties 233 and 128, with lesser amounts of 540 and 226. It was his opinion that
neither 233 or 128 should have been planted because although they looked good,
he said that their yield per acre was low. Additionally, Dr. Viator stated that 233
had a very low sugar yield and 128 developed a condition known as smut. He
admitted 540 could be harvested as third stubble under some conditions, but not
226. He stated that after 2002, he advised his clients to get out of these varieties as
quickly as possible. However, he later admitted that the 128 and 540 varieties
were released in 2004, and the 226 variety was released in 2006.

Lance Rodriquez, an independent agriculture consultant from Baton Rouge,

13

Louisiana, who is Advanced Agriculture’s current consultant and a former
employee of Dr. Viator, testified on its behalf. He stated that he was unaware of
any peer-reviewed articles or texts which defined the terms “approved farming
practices” and “good and farmer-like manner.” He stated that whether a farmer
farmed in a good and farmer-like manner depended on whether he did things on
time, such as fertilizing, cultivating, and spraying for weeds and pests, and whether
he took care of the property and drainage. He said that rotation would be one
element of whether a farmer was farming in a good and farmer-like manner.

Mr. Rodriguez testified that there was no standard in the industry requiring a
farmer to follow the rotation recommended by Dr. Viator, nor was he aware of any
peer-reviewed articles or texts that supported this rotation. He disagreed with the
rotation, and he did not think that any of his thirty-nine clients followed it.
Although he agreed that a cane’s yield would typically decrease as it aged, he
thought that third stubble had value and that it extended the life of the crop. Mr.
Rodriquez testified that the farmer’s ultimate goal is to make a profit, but that only
the farmer could decide, based on its financial condition, whether it was
economically feasible to harvest third stubble. Although Advanced Agriculture’s
2011 yield, which was 13.85 tons per acre, was below the state average, Mr.
Rodriguez again stated that Advanced Agriculture’s financial condition determined
the yield it required in order to make a profit. He did agree that if the cost of
harvesting third stubble was unprofitable, then it made sense to replant. He stated
that approximately eighteen percent of his clients harvested third stubble.

Mr. Rodriquez testified that Advanced Agriculture planted the proper
varieties of sugarcane for the light prairie soils found on Gardiner Farms’ property.
He stated that it also planted new varieties being released and expanded in the

sugarcane industry. Mr. Rodriguez explained that after the American Sugarcane

14

League, LSU, and the Homer Research Station released a new variety of sugarcane,
it took approximately five to six years of cultivation to determine whether the
variety would be successful. He stated that the 233 variety was released in 2006,
and the 128 variety was released in 2004.

Mr. Rodriguez, who became Advanced Agriculture’s consultant in late
spring of 2005, testified that he typically provides Karl Guidry, one of Advanced
Agriculture’s two partners, with a list of options when they consult on an issue. He
stated that Mr. Guidry’s final decision, which might not correspond with his first
option, was usually cost-related. However, he stated that most of the farmers he
consults with are hands on and are very knowledgeable about herbicides, planting
costs, and other cultivation issues.

Mr. Guidry testified that he and Chad Hanks have been farming through
Advanced Agriculture for twenty-five years. He stated that both he and Mr. Hanks
have financial backgrounds; he worked as a certified public accountant for fifteen
years before they began farming. Mr. Guidry testified that Advanced Agriculture
farms approximately 3,500 acres for over 200 owners, of which 2,500 acres are in
cultivable sugarcane and 1000 acres are in seed cane.

Mr. Guidry testified that during the 2010 crop year, Advanced Agriculture

complied with the 2009 lease because it had 529.2 acres of sugarcane growing on

Gardiner Farms’ property, which exceeded the two-thirds requirement as provided
in the lease. He stated that the lease did not specify the age of the sugarcane
compiling the two-thirds, nor was he ever notified by Gardiner Farms that he was
in default of the 2009 lease. Mr. Guidry testified that Mr. Allain used his own

lease to draft both the 2002 and the 2009 leases, and he did not recall any

3
Two-thirds of 689.5 acres is approximately 460 acres.

15

discussions between them concerning the meaning of the terms “approved farming
practices” or “good and farmer-like manner.”

During the 2010 crop year, Mr. Guidry testified that Advanced Agriculture
made $560,000.00 from the 523.2 acres of sugarcane it had planted on Gardiner
Farms. He stated that the $1,070.00 gross per acre netted a profit of $670.00 per
acre for Advanced Agriculture. Mr. Guidry stated that Advanced Agriculture
made $353,000.00 from 467.90 acres of sugarcane during the 2011 crop year, and
the $755.00 gross per acre netted a $155.00 per acre profit for Advanced
Agriculture.

Although Mr. Ailain recommended that Advanced Agriculture plant
approximately 450 acres in plant cane for the 2010 crop year, Mr. Guidry testified
that they also discussed the other options it could follow. For the 2010 crop year,
Advanced Agriculture harvested 59.2 acres of first stubble, 353.3 acres of second
stubble, and 110.7 acres of third stubble, for a total of 523.2 acres of sugarcane.
For the 2011 crop year, Advanced Agriculture harvested 42 acres of plant cane, 61
acres of second stubble, and 364.9 acres of third stubble, for a total of 467.9 acres
of sugarcane.

Mr. Guidry testified that Advanced Agriculture utilized the same farming
practices over its entire operation. He stated that this required it to maintain the
property with tree removal and bush hogging; the application of insecticides,
herbicides, and fertilizer; the preparation of the soil and the planting of sugarcane;
and equipment repairs. Mr. Guidry testified that although Advanced Agriculture
was in business to make a profit, it was not trying to make a record profit or farm
above the state average. He stated that Advanced Agriculture is a healthy,
profitable company because he and his partner follow a budget and control the

bottom line, otherwise it would be out of business.

16

Mr. Guidry acknowledged that approved farming practices included crop
rotation as an element in the cultivation of sugarcane. He further agreed that
provided Advanced Agriculture maintained a good rotation, its income would be
protected if its yields and the price of sugar remained consistent. However, Mr.
Guidry stated that the rotation Advanced Agriculture utilized was over its entire
operation rather than on each individually-owned tract, such as Gardiner Farms.
He testified that Advanced Agriculture’s crop rotation mixed all the ages of
sugarcane, but it took into consideration the areas to be harvested so that its
harvester would not have to backtrack when harvesting over its twenty miles of
fields. He stated that was why some fields had large amounts of plant, first, second,
or third stubble sugarcane.

Mr. Guidry testified that Advanced Agriculture does not follow the best
management practices for rotation described by Dr. Viator. He stated that one of
the most important obligations in farming is maintaining the land. Thus, he
claimed that it made no sense to go on a 600 acre tract of land and only plant 200
hundred acres, while having to maintain the remaining 400 acres. He stated:

So, when you go in, and you are looking at a, you know, 600 acre

tract of land, you’re not going to go in and plant 25% of it and have to

maintain 75% of it. You are going to go in, and you are going to plant

600 as quick as you can. If you do 200, 200, 200 in three years versus

600 the first year, you are going to go through the same cycle of cane.

You are going to go through the same ages, the same production, but

in fact with the time value of money, you are going to get your money

quicker. So you know, this idea of going in on each individual track

of land, when you have 200 landowners, and you are stretched out

over 20 miles from one end to the other. You are going to go in, and

you are going to — all those landowners, you going [sic] to have to go

in and do 25, 25, 25, 25. No, you’re not going to do that. You’ll

actually go out of business doing that.

Mr. Guidry testified that sugarcane is a four and sometimes a five-year

product in Advanced Agriculture’s operation and that he absolutely believes in

third stubble. He claimed that old stubble could perform just as well as plant cane,

17

depending on the weather, and he stated that yield reduction was a component of
many factors. Mr. Guidry testified that the production of sugarcane is based upon
the amount of sugar produced per ton of sugarcane, rather than the tons produced
per acre. He stated that most sugarcane is harvested during the generally rainy
month of December, which can drastically reduce the amount of sugar produced
per ton of sugarcane. He said that a lot of sugarcane is also lost during the harvest
when it is pulled up by the roots from the wet ground, causing the loss of future
yields. Mr. Guidry testified that once he harvests third stubble he plows the
stubble under and replants with seed cane, so that the land is put back into
production, rather than lying fallow a year and having to be maintained. He stated
that he tries to have all four stages of sugarcane planted on an owner’s property at
the same time so that none lies fallow.

Mr. Guidry explained that sugar is sold over a twenty-four month period.
Thus, he stated that it would be impossible for a farmer to predict the price of sugar
for a specific crop year. He agreed that the price of sugar remained fairly stable,
between eighteen and twenty-two cents per pound from the mid-1970s, until the
recent increases beginning in 2010.

Mr. Guidry disagreed with Dr. Viator that the 233 sugarcane variety should
not be planted. He stated that Advanced Agriculture began planting 233 in 2006,
after the 384 variety developed a disease known as rust. He stated that Advanced
Agriculture had 20% of its acreage planted in new varieties that came out in 2005,
which were 233, 128, and 226. He explained that it was a shock to the sugarcane
industry when 384 developed rust and that farmers hustled to find other varieties to
plant instead of 384, because not many varieties were available at that time. Mr.
Guidry testified that Mr. Rodriguez never cautioned him against planting 233. He

stated that both 233 and 128 were good varieties and that 233 was excellent in

18

certain soil types.

Mr. Guidry testified that Advanced Agriculture is a secondary station for the
American Sugarcane League. He stated that once a new variety of sugarcane is
released by the Homer Research Station, the American Sugarcane League 1s
obligated to distribute it throughout the state, which it does by setting up primary
stations, where the new variety is grown and further researched. Once it
determines that the variety should be released to the public, Mr. Guidry stated that
seed cane is released to secondary stations, such as Advanced Agriculture, where it
is grown and then distributed to neighboring farms. He stated that Advanced
Agriculture has been a secondary station for approximately ten years.

Mr. Guidry testified that Advanced Agriculture consults with Mr. Rodriguez
because sugarcane is a complicated crop and many factors go into its cultivation,
such as planting, maintenance, disease, and insects. However, he admitted that he
has rejected Mr. Rodriguez’s advice in the past based on economic grounds. He
stated that “when it comes to making money, I don’t find that consultants have an
accounting background, that they can give adequate advice on actual dollars and
actual net income.” He added, “As far as making money, sometimes you have to
reject what the consultant says. You are trying to make money. That is the bottom
line.” Mr. Guidry further stated that when Dr. Viator was Advanced Agriculture’s
consultant, he never recommended the twenty-five, twenty-five, twenty-five,
twenty-five rotation. He said that Advanced Agriculture last paid Dr. Viator for
his consulting services in January 2005.

Craig Callier, a past general manager, president, and chief financial officer
of M.A. Patout & Son, Ltd. (M.A. Patout), an owner/operator of three sugar
factories and a sugarcane producer, testified on behalf of Advanced Agriculture.

He testified that he dealt with both farming and milling issues during his

19

involvement with M.A. Patout, including negotiating leases between landowners
and farmers. Mr. Callier testified that “good farming practices” and “farming in a
good and farmer-like manner” are standard contract terms in agricultural leases.
He stated that the steps it takes for a farmer to make a commercial crop includes
weed and pest control, identification of soil type and irrigation needs, crop rotation,
ripening and harvesting schedules, and crop yields.

Mr. Callier testified that by the end of his involvement with Patout & Son,
he was responsible for approximately 80,000 acres of sugarcane-producing
property. He stated that a farmer may have four to five different varieties of
sugarcane growing on his farm. Of these, he said that the highest-yielding variety
will be grown on 40% of the acreage. He opined that this practice would occur on
both large and small farms.

Mr. Callier testified that when the 384 variety started producing rust,
researchers may have released some new varieties too quickly. He stated that the
233 and 128 varieties went through a rigorous thirteen-year screening period
before being released. Once a variety is released to a secondary station, he stated
that it takes three to four years for it to become widely available due to the scarcity
of seed cane. He said that tens of thousands of seedlings never make it through the
screening process for release as a new variety.

Mr. Callier testified that while there are general rules for variety selection,
there are always exceptions to these rules. He explained that sometimes farmers
need varieties for specific soil types and that many varieties not recommended by
agriculture consultants are still grown successfully by farmers. He said that the
varieties 233 and 128 fall within these categories. Mr. Callier testified that farmers
have to make selections based on varying situations, such as the inability to make

aerial chemical applications due to near-by churches, schools, or hospitals or

20

whether early ripening varieties are preferable due to freeze intolerances. He
stated that he knows of certain varieties, such as 238, which are not recommended,
but are still grown successfully with very good, high yields.

Mr. Gardiner, a New Orleans resident and the Director of the Louisiana
State Racing Commission, testified that Gardiner Farms has been farmed by
several generations of his family, including his father. He stated that he and his
sister became part-owners in December 1999, and now are the sole owners,
although they have no direct involvement in the farming operations.

After his father passed away, Mr. Gardiner testified that an associate from
the Racing Commission suggested that Gardiner Farms could generate more
revenue if it switched from soybeans to sugarcane. At that time, he stated that the
property was being farmed by another farmer, who wanted out of the lease. Mr.
Gardiner testified that another acquaintance put him in touch with Mr. Hanks, a
partner in Advanced Agriculture.

Mr. Gardiner testified that he relies on the advice of others with regard to the
amount of cane to be planted each year and the details of the actual farming
operations. He stated that he “trusted that the farmers would farm correctly and
pay us the correct amounts.” When asked whether he thought that Advanced
Agriculture used good and farmer-like practices while farming Gardiner Farms, Mr.
Gardiner stated, “Well, we had a long history, and I can only conclude that their
practices were so substandard that we never got anything that was correct any year,
until Mr. Allain got involved.” He further stated that it was his impression “that
from our history of never getting the right amount of rent and stories that I could
not even begin to understand they changed so often, that they were not farming in
the best manner.”

Mr. Gardiner estimated that he only visited the farm eight or ten times

2]

between 2002 and 2010. He further admitted that he never met with Mr. Guidry or
Mr. Hanks during that time and that he did not know enough about farming to
know if anything was out of place during his visits. He simply based his
conclusion that Advanced Agriculture was not farming in a good and farmer-like
manner on its failure to pay the proper rent.

Mr. Allain, a Jeanerette, Louisiana attorney, testified that his grandfather and
uncle both farmed sugarcane and that he helped on the farm while in high school.
After graduating from law school, he stated that he began practicing with his father
in Jeanerette. Mr. Allain stated that he represents farmers in sixty percent of his
practice and land owners in the remaining forty percent. He said that he was very
experienced in drafting agricultural leases.

Mr. Allain testified that he drafted both the 2002 and the 2009 leases at issue
and that he inserted the terms “approved farming practices” and “good and farmer-
like manner” into the leases. Although he did not recall discussing these terms
with Mr. Guidry or Mr. Hanks, Mr. Allain stated that he inserted them because it is
in the owner’s interest to have its land fully utilized and to have an economically
stable tenant. He explained that if the maximum acreage is farmed according to
approved farming practices, such as proper rotation, it benefits the owner if it
wants to bring in a new lessee or to renegotiate a cash lease to a share lease. He
stated that it was also important that a farmer cultivate the maximum acreage
because of quotas established by the federal government on the number of acres a
farmer could use in the cultivation of sugarcane.

Mr. Allain opined that a farmer, who farms in an economically-stable
manner, is better able to pay an accelerated rent when the price of sugar increases.
Although he admitted that he is not an expert in this area, he stated that good

farming practices involve maintaining good drainage, leveling land, using the right

22

chemicals, not disposing of anything improper on the land, and proper rotation. He
added that most of his clients, who are very successful farmers, practice the proper
rotation described by Dr. Viator.

Despite the fact that the lease does not specify the type of rotation to be used,
Mr. Allain testified that the terms, “good and farmer-like manner” and “approved
farming practices,” created an obligation on Advanced Agriculture’s part to
cultivate the maximum acreage every year, which included using the proper
rotation. However, he admitted that he would never specify in a lease that a farmer
should follow Dr. Viator’s rotation because too many variables affect the amount
of sugarcane a farmer plants, such as the weather and other circumstances.
However, he emphasized that it was important that the farmer keep the maximum
acreage in cultivation and follow the best rotation possible.

Mr. Allain testified that in principal, farming in a husband-like manner and
using approved farming practices would be the same for every farmer, but that the
implementation of those terms could vary from farm to farm, depending on
circumstances. He further stated that approved farming practices could objectively
be determined from custom, practice, and expert testimony. When asked how
Advanced Agriculture was supposed to know what the terms meant if the trial
court had to go outside the four corners of the lease to learn their meaning, Mr.
Allain testified that Advanced Agriculture had been farming for so long that it
should be out of business if it did not understand the meaning of those terms.

Mr, Allain testified that although the lease stated that Advanced Agriculture
was to keep “no less than two-thirds (2/3rds) of the cultivable acres .. . in
sugarcane each year,” he felt that the preceding sentence overrode the two-thirds
requirement. That sentence provided that “LESSEE binds and obligates himself to

use the leased premises for the purpose of planting, cultivating and harvesting

23

sugarcane and shall keep the maximum available acreage in cultivation consistent
with approved farming practices.” He further explained that while two-thirds of
the acreage was the minimum acreage Advanced Agriculture should have
cultivated in sugarcane, 75% of the acreage was the ideal amount.

Mr. Allain agreed that the 523.2 acres of sugarcane Advanced Agriculture
harvested on Gardiner Farms in 2010, satisfied the minimum two-thirds acreage
requirement. But, on looking at its rotation, which included no plant cane, 59.2
acres of first stubble, 355.3 acres of second stubble, and 110.7 acres of third
stubble, Mr. Allain stated that there was no mention of fallow land. He explained
that Advanced Agriculture could not have been following the proper rotation if
there were no fallow acres to plant the next year.

Mr. Allain testified that margins in the sugarcane industry were frequently
small and that a farmer who failed to use approved farming practices would not
stay in business. He agreed that farmers are in the business to make money, but he
stated that sugarcane farming is both a risky and a long-term business, given the
money invested in equipment and the risks taken by farmers in order to make a
profit. He stated that:

[S]hort term profit is not generally a good business practice. To

sacrifice long term stability for short term profit is usually a bad

business practice. In my experience, not just in sugarcane, but in

other businesses, as well, you have to look to the long term. You have

to plan, and you have to conduct yourself in a way that in the long run

you will assure your own economic viability, fair rental for your

tenant [sic], and a good producing farm.

Mr. Allain admitted that he was not aware of Advanced Agriculture’s
financial condition throughout its lease with Gardiner Farms. He further admitted
that there was value in third stubble sugarcane. He stated that the price of sugar

was 33.4 cents per pound in 2010, and thirty-seven cents per pound in 2011. He

said that the last time the price of sugar was this high was in 1974. Mr. Allain

24

thought that the break-even amount for a farmer was twenty-five cents per pound
of sugar based on a report from an LSU professor. However, he admitted that it
would be hard for a farmer to lose money if the price of sugar was 33.4 cents per
pound. Mr. Allain testified that whether a farming operation was good or bad was
also based on its yield of sugarcane per acre because the better the yield, the higher
the farmer’s profit. He further thought that Advanced Agriculture would be out of
business if it was losing money.

Clint Freyou, a field manager for Patout Brothers, testified that he supervises
a 15,000 acre farm, of which 10,000 acres are utilized for sugarcane. He stated
that Mr. Allain, who is his attorney, asked him several times if he was interested in
farming in St. Landry Parish. However, when he started locating other property in
St. Landry Parish, he said that he contacted Mr, Allain and told him that he was
interested in farming Gardiner Farms.

Mr. Freyou’s assessment of Gardiner Farms’ condition was that it was
declining. He stated that there were a lot of weeds on the property, the canals
needed to be re-dug, and trees needed to be cleared from the canal banks. He
stated that Patout Brothers took over the Gardiner Farms’ lease in 2011, and spent
approximately $200,000.00 in preparing the property by correcting drainage
problems, clearing trees, putting in new bridges, and laser leveling the property.
However, Mr. Freyou admitted that he automatically re-digs the canals and re-
lowers the bridges anytime he takes over property. He stated that he evaluated
Gardiner Farms’ property based on his standard, which is what will it take to
increase the property’s yields. He explained that he usually takes over property
because the owner wants to increase the property’s yields, and any improvement to

drainage on the property will benefit sugarcane. He further stated that the costs of

preparing Gardiner Farms to his standards were expensed out over his entire
15,000 acre operation.

Mr. Freyou testified that he harvested large plantings the first three years
before beginning a rotation on Gardiner Farms. He stated that Gardiner Farms
would not be fully in the rotation recommended by Dr. Viator, his consultant, until
after the next planting. He explained that it took too long to plant Dr. Viator’s
recommended rotation from the start, and he would have to maintain any land not
planted in sugarcane. Once he completed this process, Mr. Freyou testified that he
would follow Dr. Viator’s rotation. He explained that standard agricultural
contract language requires that eighty percent of a farm’s land be kept in sugarcane
and twenty percent be kept fallow. He stated that he has followed this rotation for
approximately fifteen years.

Mr. Freyou further testified that he does not consider it practical to keep
third stubble based on the current varieties of sugarcane because he needs to make
a profit on the money he invests in sugarcane. He stated that it is his rule of thumb
not to keep any sugarcane that yields less than thirty tons per acre. However, he
admitted that some farmers may have a smaller rule of thumb, depending on the
yield needed to keep their operation going. Mr. Freyou stated that he averaged
approximately thirty-five to thirty-seven tons per acre of sugarcane for Patout
Brothers and approximately thirty-three tons per acre on Gardiner Farms the last
two to three years. He further stated that the parish average is twenty-eight to
thirty tons per acre.

Mr. Freyou testified that he planted varieties 226 and 540 on Gardiner Farms
because these were the only two varieties appropriate for sandy soils. He stated
that neither 233 nor 128 were successful. He explained that they were black-land

varieties that disappeared within five years of being released. Mr. Freyou testified

26

that he planted these varieties ten to fifteen years before on other farms and that
since then they were not recommended for planting.

Mr. Freyou testified that he is a salaried employee and that the money spent
on Gardiner Farms was paid by Patout Brothers, which has twenty-six shareholders.
He admitted that Patout Brothers also owns an interest in the sugar mill, M.A.
Patout & Son, Limited, LLC; thus, it receives income from both the farm and the
mill and benefits from sending as much tonnage to the mill as possible.

In finding in favor of Gardiner Farms, the trial court held that Advanced
Agriculture failed to farm the property using the “best farming practices.”
However, the explicit terms of the lease only required Advanced Agriculture to
cultivate sugarcane on Gardiner Farms’ property in a manner consistent with
“approved farming practices” and in a “good and farmer-like manner.” Although
the trial court never specifically held that the lease or these terms were ambiguous,
it allowed the introduction of parol evidence to determine the meaning of the terms,
over Advanced Agriculture’s objection.

In its reasons for judgment, the trial court stated the following:

This court considered the testimony of the two experts, from
Karl Guidry and or [sic] course, Clint Freyout [sic] very carefully.

This court gave more weight to the testimony of Clint Freyout.
He has been in business for 41 years and is a hands on kind of guy.

He didn’t seem to have any axes to grind with any of the parties
in this case and was straight forward with the court during his
testimony.

The state average is between 25 and 28 tons per acre of cane.

He produced 33 tons per acre on the Gardiner Farms when
Patout Brothers starting [sic] leasing the property. He must be doing
something right.

The court finds that the farming practices used by Patout
Brothers is the best way to farm.

27

Although the court finds that Advance Agriculture [sic] did a
decent job farming the Gardiner Property, the court finds that
Advanced Agriculture did not use the best farming practices as used
by Patout Brothers.

Now the court will admit that you still have to look at weather
conditions and other factors that existed over the period of the lease.

However, according to Mr. Freyout [sic], they spent over two
hundred thousand dollars preparing the property to their standards that
included proper drainage, etc.

The provisions at issue in this matter are contained in paragraphs three and
eight of the 2009 lease. Paragraph three provides, in part:

LESSEE binds and obligates himself to use the leased premises
for the purpose of planting, cultivating and harvesting sugarcane and
shall keep the maximum available acreage in cultivation consistent
with approved farming practices. No less than two-thirds (2/3rds) of
the cultivable acres shal] be keep [sic] in sugar cane [sic] each year.
Paragraph eight provides:

LESSEE agrees to work the land herein leased in a good and
farmer-like manner, to commit no waste thereon, to maintain all roads,
ditches and drains and to return the land back into the peaceable
possession of the LESSOR at the termination of this lease.

As we were unable to find Louisiana case law defining the terms “approved
farming practices” or “good and farmer-like manner,” we looked to the case law of
other states for guidance. In Mart v. Mart, 824 N.W.2d 535, 542-43 (2012), the
Iowa Court of Appeals, in addressing a similar term, stated, “The term ‘good
husbandry’ is not susceptible to a specific definition because it is dependent upon
the facts and evidence as well as upon current farming practices.” Based on the
evidence presented, we find that the terms “approved farming practices” and “good

and farmer-like manner,” likewise, are not susceptible of specific definition, but, in

an agronomy setting, are terms of art meaning the actions that a farmer takes in

successfully planting and harvesting a crop. La.Civ.Code art. 2047. Based on the

‘ La.Civ.Code art. 2047 provides:

28

evidence presented by the experts, these actions include soil preparation, variety
selection, planting times, insect and weed control, fertilizer application, irrigation,
and crop rotation.

In determining the meaning of these terms, the trial court stated, “Although
there is no written brochure on best farming practices, it is well known in the
farming industry that one must use the best farming practices to insure the best
return on your crops.” Thus, the trial court, in effect, rewrote the lease to require
Advanced Agriculture to use the best farming practices, rather than approved
farming practices, in cultivating sugarcane on Gardiner Farms’ property. We find
that this had the effect of inserting a specific usage into the lease.

In Par-Co Drilling, Inc. v. Franks Petroleum Inc., 360 So.2d 642, 644
(La.App. 3 Cir. 1978), this court stated, “It is well settled that custom of the place
and the usual and customary manner of fulfilling like contracts is persuasive in
determining the intention of the parties under a contract not specific in its
wording.” Louisiana Civil Code Article 2054 provides:

When the parties made no provision for a particular situation, it

must be assumed that they intended to bind themselves not only to the

express provisions of the contract, but also to whatever the law, equity,

or usage regards as implied in a contract of that kind or necessary for

the contract to achieve its purpose.

Here, the lease specifically states that Advanced Agriculture will farm in a
good and farmer-like manner, using approved farming practices; thus, the lease
was not silent on this point. Moreover, we find that the lease itself defines

“approved farming practices” to mean that Advanced Agriculture will maintain at

least two-thirds of the property in sugarcane. We note that the 2002 lease did not

The words of a contract must be given their generally prevailing meaning.

Words of art and technical terms must be given their technical meaning when the
contract involves a technical matter.

29

include the two-thirds requirement. By including this additional terminology, Mr.
Allain spelled out the very meaning of “approved farming practices” in the 2009
lease. Thus, the lease was not ambiguous on this point, but even if it were
ambiguous in this regard, “[a]ny ambiguity in the agreement must be interpreted
against the party who prepared the contract.” Dohoney v. La. Casino Cruises, Inc.,
95-1570, p. 4 (La.App. 1 Cir. 2/23/96), 671 So.2d 537, 540, writ denied, 96-729
(La. 5/3/96), 672 So.2d 690. Accordingly, we find that the trial court legally erred
in its interpretation.

We further find that the trial court was manifestly erroneous in finding that
Advanced Agriculture breached the 2009 lease. Based upon our finding that the
trial court misinterpreted the lease to require Advanced Agriculture to use the same
farming practices used by Patout Brothers, as opposed to “approved farming
practices”, as self-defined in the lease, we find that Advanced Agriculture
complied with the lease based on the fact that it exceeded the two-thirds
requirement by harvesting 523.2 acres of sugarcane for the 2010 crop year. The
fact that Advanced Agriculture failed to follow Mr. Allain’s suggestion of planting
a large amount of plant cane in 2009, is of no moment. Mr. Allain admitted
several times that this was only a suggestion, and neither the 2002 nor the 2009
lease specified that Advanced Agriculture was to harvest only plant, first stubble,
and second stubble cane in its operation of Gardiner Farms.

Moreover, despite Gardiner Farms’ argument that Advanced Agriculture
failed to use approved farming practices because it failed to follow Dr. Viator’s
recommended rotation, Mr. Allain, who drafted the lease, admitted that he would
never specify that a farmer should follow a specific rotation due to the possibility
of factors occurring beyond the farmer’s control, such as the weather. We note

that Dr. Viator never recommended this rotation to Advanced Agriculture while

30

acting as its consultant through the spring of 2005. Furthermore, Advanced
Agriculture could never have satisfied Dr. Viator’s rotation if it complied with the
terms of the lease in maintaining two-thirds of the acreage in sugarcane, because
the rotation required 172.25 acres to remain fallow, while the remaining 525.75
acres was kept in plant, first stubble, and second stubble. Thus, by Gardiner
Farms’ definition of approved farming practices, as applied by the tria! court,
Advanced Agriculture would breach the lease by doing exactly what the very terms
of the lease permitted, maintaining only two-thirds of the land in the cultivation of
sugarcane.

Additionally, Dr. Viator, Mr. Rodriguez, and Mr. Freyou all agreed that
most decisions made by a farmer are based on its financial condition. Even Mr.
Allain admitted that it was better for a farmer to take a long-term, rather than a
short-term, approach to farming. Mr. Guidry testified that all of his agricultural
decisions were based on the budget Advanced Agriculture followed in order to
control its bottom line. Mr. Freyou, however, had the backing of the twenty-six
partners of Patout Brothers and had the resources to put his 15,000 acres in the best
condition to produce the highest possible yields, which allowed him to make a
profit for his owners both on the harvesting end and the milling end. Although he
stated that the condition of Gardiner Farms’ property was declining, Mr. Freyou
admitted that it was standard protocol whenever he leased land to re-dig canals and
lower bridges. Without similar resources, however, the partners of Advanced
Agriculture or similarly situated farmers may be unable to maintain the practices
described by Mr. Freyou, with the financial backing available to his farming

operation.

31

In its reasons for judgment, the trial court admitted that Advanced
Agriculture “did a decent job[,]” but it did not “use the best farming practices as
used by Patout Brothers.” It further admitted:

Now the court will admit that you still have to look at weather
conditions and other factors that existed over the period of the lease.

However, according to Mr. Freyout [sic], they spent over two
hundred thousand dollars preparing the property to their standards that
included proper drainage, etc.

As pointed out by the trial court, Mr. Freyou prepared the land based on Patout
Brothers’ standards. This, however, overlooks the fact that Advanced Agriculture
was only bound to use approved farming practices under the terms of the lease.
Had Mr. Allain intended it to be bound by the practices used by Patout Brothers, he
should have spelled those practices out in the lease. As we determined above, the
lease is not ambiguous; but, if it were, any ambiguity would be interpreted against
Gardiner Farms. Furthermore, Advanced Agriculture used the same farming

practices since the start of the 2002 lease, and Gardiner Farms never complained

about its practices until after the lease was terminated. Arguably absent the price

of sugar increasing to 36.15 cents per pound in 201 1, Gardiner Farms would not
have filed suit against Advanced Agriculture, as it had already forgiven $88,753.20
in past-due rent.

We further find that Advanced Agriculture did not violate the terms of the
lease in regards to “good and farmer-like manner’ and “approved farming
practices” in its variety selection of sugarcane to be cultivated. Although Dr.
Viator and Mr. Freyou both testified that varieties 128 or 233 should not have been

planted, Mr. Rodriguez stated that they were the appropriate varieties for Gardiner

> Dr. Viator testified that the price of sugar was 33.25 cents per pound in 2010, 36.15
cents per pound in 2011, 28.4 cents per pound in 2012, and was 25 cents per pound in 2017. Mr.
Guidry testified that the price of sugar remained between eighteen and twenty-two cents per
pound from the mid-1970s, until these increases.

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Farms’ light prairie soils. However, based on the evidence, these varieties were
released in 2004 and 2006, respectively. Based on the fact that it takes
approximately five years of cultivation to determine whether a variety will be
successful, Advanced Agriculture could not have known before 2009 and 2011,
respectively, whether it should continue planting them. Dr. Viator testified that he
never recommended these varieties to his clients after 2002, which was actually
prior to both varieties’ release. Furthermore, Mr. Callier testified that farmers
grow more than one variety of sugarcane on their farm, and according to Mr.
Guidry, he did not have many varieties to choose from after the 384 variety
developed rust. As with crop rotation, the lease was silent as to the particular
variety of sugarcane Advanced Agriculture was to grow.

Accordingly, we find that the trial court legally erred in its interpretation of
the contract between Gardiner Farms and Advanced Agriculture. We further find
that it was manifestly erroneous in finding that Advanced Agriculture was in
violation of the lease for failing to use a particular rotation, for failing to plant a
particular variety of sugarcane, and by holding it to a higher standard than required
by the lease. Therefore, the judgment of the trial court awarding Gardiner Farms
damages for lost revenue is reversed and judgment is rendered in favor of
Advanced Agriculture. Based on this finding, we find that Advanced Agriculture’s
remaining assignments of error are rendered moot.

ANSWER TO APPEAL

In its answer to appeal, Gardiner Farms argues that the trial court erred in
denying its claim for accelerated rent under the 2002 lease for the 2009 crop year.
We disagree.

The 2009 lease, which was executed by the parties on December 23, 2009,

stated that the consideration for the lease was the payment by Advanced

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Agriculture to Gardiner Farms of the share rental amount and the following:

The payment in cash of $36,930.40, the amount due on that
certain promissory note of even date with this lease agreement
representing past due rent from a prior lease, plus all accrued interest
to the date paid.

The first paragraph of the May 6, 2011 First Revised Settlement between the
parties provided:

The terms of this agreement are to be considered a settlement between

the parties hereto as to the specific matters listed herein and covered

by this agreement, and may not be the subject of future contest

between the parties; provided that both parties reserve all other rights

with respect to the 2002 lease, the 2009 farm lease, and any other

matter concerning their relationship as landlord and tenant.

Mr. Allain testified that he made it clear to Mr. Guidry, in response to his
December 15, 2009 email, that the December 2009 settlement between Gardiner
Farms and Advanced Agriculture did not include the 2009 accelerated rent claim
from the 2002 lease. Thus, he said that he did not think it necessary to put a
reservation of right for this claim in the 2009 lease. He stated that the $36,930.40
promissory note and the $57,840.00 cash payment represented a partial recovery of
past-due rent under the 2002 lease, but that the accelerated rent for the 2009 crop
year was not yet determined and would not be due until December 15, 2010; thus,
it was not included in the 2009 lease.

Mr. Guidry testified that he distinctly recalled that Mr. Allain agreed that if
Advanced Agriculture paid the $36,930.40 promissory note it would owe nothing
further under the 2002 lease. He recounted that Mr. Allain said that if he and Mr.
Hanks signed the fourteen percent share lease, Gardiner Farms’ 2002 rent claim
would be satisfied. Mr. Guidry testified that he asked Mr. Allain to insert the
above quoted language into the 2009 lease. He further stated that he understood

this language to mean that once Advanced Agriculture paid the promissory note,

Gardiner Farms’ 2002 rent claims would be satisfied.

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In finding that Gardiner Farms’ 2002 accelerated rent claim was resolved,
the trial court noted that the emails between Mr. Allain and Mr. Guidry occurred
on December 15, 2009, and that the 2009 lease, which was executed on December
23, 2009, “clearly states that the lease represents past due rents.” Thus, the trial
court denied Gardiner Farms’ claim for past due rent.

After reviewing the record, we find no error in this finding. Normally, the
signee of a contract is the party complaining that he is not bound by the terms of a
signed contract. In that instance, “[i]t is well settled that a party who signs a
written instrument is presumed to know its contents and cannot avoid its
obligations by contending that he did not read it, that he did not understand it, or
that the other party failed to explain it to him.” Aguillard v. Auction Mgmt. Corp.,
04-2804, 04-2857, p. 22 (La. 6/29/05), 908 So.2d 1, 17. That presumption is
greater when the drafting party is the contesting party, as when the party drafting
the contract fails to sign the contract, after having the signee sign it. Rainey v.
Entergy Gulf States, Inc., 09-0572 (La. 3/16/10), 35 So.3d 215. Although Mr.
Allain may have felt no need to include a reservation of Gardiner Farms’ 2002
accelerated rent claim in the 2009 lease, we find that this claim was satisfied by the
terms of the 2009 lease. Because the December 23, 2009 lease pre-dated the May
6, 2011 settlement, we agree with the trial court that Gardiner Farms had already
settled its past-due rent claim with Advanced Agriculture. Absent a reservation of
right in the 2009 lease, Gardiner Farms is bound by the terms of that lease.

Accordingly, the judgment of the trial court is affirmed on this issue.

DISPOSITION
Based on the foregoing, we affirm the judgment of the trial court denying

Gardiner Farms, Inc.’s claim for past-due rent under the 2002 lease, and we reverse

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the judgment of the trial court in favor of Gardiner Farms, Inc. on the issue of
damages and render judgment in favor of Advanced Agriculture, LLC. The costs
of this appeal are assessed to Gardiner Farms, Inc.

AFFIRMED IN PART; REVERSED IN PART; AND RENDERED.

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