Citations
- 324 F.3d 627
Full opinion text
GOLDBERG, Judge.
Appellant Virgil E. Schewe (“Schewe”) appeals the district court’s entry of judgment as a matter of law against his claims that certain hedge-to-arrive (“HTA”) contracts were cash forward contracts excluded from the regulations of the Commodity Exchange Act and not illegal futures contracts. Schewe also appeals the district court’s denial of Schewe’s post-trial motions to alter or amend the judgment and for judgment as a matter of law, based on the jury’s verdict that Top of Iowa Cooperative (“Top of Iowa”) breached its fiduciary duty to Schewe; and Schewe appeals the district court’s denial of his motion for a new trial on Top of Iowa’s successful breach-of-contract claim. Top of Iowa cross-appeals the district court’s denial of Top of Iowa’s motion for judgment as a matter of law on Schewe’s breach of fiduciary duty counterclaim.
I. Statement of Facts
Schewe operates a 500-acre farm in Freeborn County, Minnesota. Between March 13 and June 28 of 1995, Schewe entered into the five subject HTAs with Top of Iowa, a cooperative in Iowa. The HTAs called for Schewe to deliver 30,000 bushels of corn to Top of Iowa on or before December of 1995. The price of the corn was established at the time of contract (at the Chicago Board of Trade (“CBOT”) open market futures contract price for December of 1995, minus the “basis”). The “basis” is Top of Iowa’s costs plus profit, and would not be set until Schewe elected to set the basis.
Top of Iowa sold a futures contract on the CBOT each time it entered into an HTA with Schewe. This protected Top of Iowa from changes in the open market cash price of corn at the HTA delivery date. The price of corn in a futures contract changes with the daily open market price. If the open market price of corn goes up, Top of Iowa must pay the margin amount on its futures contract to its broker on the CBOT. Top of Iowa would recover the margin amount when Schewe delivered the corn on the HTA and Top of Iowa sold that corn at the higher open market price. When corn prices rose throughout 1995, Top of Iowa was required to pay margin money to maintain its futures contracts on the CBOT.
Schewe attempted delivery of the corn under the HTAs to Top of Iowa in the fall of 1995; however, the elevator lacked space and the lengthy wait in line to deliver forestalled actual delivery of the grain. The delivery date for Schewe’s corn under the HTAs was rolled on September 26, 1995, to May of 1996. As a result of rolling the CBOT positions to May of 1996, Schewe gained 9$