Revol Greens, GBC v. Biota Nutri B.V.
- John Tunheim
- 0:23-cv-01183
- U.S. District Court · District of Minnesota
- 7
In Revol Greens v. Biota Nutri, Judge Tunheim denied Biota’s motion to dismiss because the parties’ contract interpretations required factual analysis.
Revol Greens, GBC and Biota Nutri B.V.; the breach and anticipatory-breach claims addressed by Biota’s motion to dismiss remained unresolved.
What happened
Revol Greens, GBC v. Biota Nutri B.V. concerns Revol’s claim that Biota breached a fertilizer-supply agreement by selling fertilizer to another company in the United States.
Biota argued that the agreement clearly allowed it to end the relationship because Revol did not increase its purchases by 15% each year. Revol offered a different reasonable reading of the agreement’s purchase-growth requirement.
The court denied Biota’s motion to dismiss, ruling that the agreement was ambiguous and that interpreting it required factual analysis. Judge Tunheim did not decide whether Biota actually breached the agreement or properly ended it.
The detailed version
- Revol Greens, GBC v. Biota Nutri B.V. · No. 0:23-cv-01183
- John Tunheim
- Jan. 10, 2024
Background
Revol Greens, GBC alleged that Biota Nutri B.V. breached a memorandum of understanding governing the parties’ development and supply of an organic fertilizer system. The memorandum required Biota to supply, and Revol to purchase, enough fertilizer to meet Revol’s projected needs for ten years, with a review period after five years. It also restricted Biota from marketing or selling the unique fertilizer, or other organic fertilizers, to other companies in the United States for growing organic leafy greens.
The agreement included a termination clause allowing Biota to terminate if Revol’s purchase volume did not grow at an annualized rate of 15%, with 2020 as the base year. Revol alleged that Biota sold organic fertilizer to AppHarvest Berea Farm, LLC, and later stated that it was rescinding agreements other than the confidentiality agreement and intended to continue selling organic fertilizers to other companies in the United States. Revol sued for breach of the memorandum, breach of the confidentiality agreement, and anticipatory breach of the memorandum. Biota moved to dismiss the breach and anticipatory-breach claims.
Issue and arguments
Under Federal Rule of Civil Procedure 12(b)(6), the court considered whether the complaint plausibly stated a claim for relief, treating the complaint’s factual allegations as true and drawing reasonable inferences for Revol. Biota argued that the termination clause unambiguously required Revol’s purchases to increase by 15% over the previous year. Under that reading, Biota contended that Revol fell short in 2022 and that Biota therefore terminated the memorandum rather than breached it.
Revol argued that the 15% growth requirement should instead be calculated continuously from the 2020 base year. The court concluded that both readings were reasonable. Because the clause did not define the relevant terms and was reasonably open to more than one interpretation, it was ambiguous. Under the court’s analysis, interpreting an ambiguous contract provision is a factual question that cannot be resolved on a motion to dismiss.
Ruling
The court denied Biota’s Motion to Dismiss. It did not decide whether Biota breached the memorandum or whether any alleged termination was sufficient, because those questions depended on resolving the ambiguous termination clause. The case therefore remained pending on the claims addressed by the motion.
Read the full 7-page opinion on CourtListener, the free public archive maintained by the Free Law Project.