Tuesday, December 3, 2013

Washington State Hop Producers, Inc. v. Goschie Farms, Inc. case brief

Washington State Hop Producers, Inc. v. Goschie Farms, Inc. case brief summary
773 P.2d 70 (1989)


CASE SYNOPSIS
The Court of Appeals (Washington) affirmed the superior court's grant of summary judgments for respondent growers in an action commenced by petitioner trust of hop producers (trust) seeking enforcement of contracts requiring the growers to pay for allotments required by a regulatory order to market hops. The court of appeals held that the purpose of the allotment contracts had been substantially frustrated. The trust appealed.

CASE FACTS
Until July 1985, hop producers were required to obtain allotments from the government to market their hops, known as hop base. Prior to the termination of the allotment system, a corporation which leased and sold federal hop base filed for a court supervised liquidation. A trust was formed which made available two pools of hop base for sale. The trust received bidding on much of one base and began to sell from the other base when the allotment system was terminated. The trust sought to recover from the growers who had bid on the hop base.

DISCUSSION

  • The court affirmed the judgment for the growers under the doctrine of supervening frustration. 
  • The court stated that the basis purpose of the contracts, to purchase a hop allotment base, was frustrated by the termination of the allotment system because hop base existed only by virtue of that system. 
  • Thus, the continued need to own or control hop base in order to sell hops was an assumption central to the subject matter of the contract, and without this assumption no contract would have been made. 
  • The court affirmed the award of prejudgment interest on the sums the growers paid to the trust during the litigation.

CONCLUSION
The court affirmed the court of appeals' judgment.

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