Jack Nelson Jones Professional Association

March 27 - April 2, 2017

Crutchfield v. Tyson Foods, Inc., 2017 Ark. App. 121 (March 1, 2017)

This appeal comes from the Johnson County Circuit Court, honorable Dennis Charles Sutterfield presiding. This case concerns the determination of when a cause of action accrues for purposes of the running of the statute of limitations.

In their pro se complaint, Mitchell and Karen Crutchfield provided a detailed and lengthy factual background of their relationship with Tyson Foods, Inc., beginning in 1986. The Crutchfields alleged that Tyson induced them to build, at great expense, a commercial chicken farm to grow broiler chickens for Tyson. They were aware that this was a long-term investment but said that Tyson assured them that as long as they performed appropriately, they could raise chickens for Tyson for as long as they wanted. They alleged that Tyson told them that the chicken houses they built in 1987 had a life expectancy of thirty-five to fifty years and that the implementation of new practices and equipment would be a cooperative effort by the parties.

The Crutchfields alleged that Tyson failed to keep its promises when, beginning in May 2010, it mandated excessive capital investments, implemented a discriminatory ranking system, and made corporate decisions that were not in the best interest of the growers and cut into their earnings. In May 2010, Tyson informed growers by letter that it would begin mandating “premium houses.” This letter informed growers that chicken houses built to the minimum specifications could operate until May 1, 2013, only if they were ranked in the top sixty percent of growers.

The Crutchfields alleged that Tyson used the ranking system to induce the premium-house updates, which they claimed would have taken “monstrous” investments and robbed them of their expectation of future income. Upon the expiration of their last contract in 2012, the Crutchfields had not made the required updates and did not rank in the top sixty percent of growers. Tyson informed them in an April 9, 2012 letter that they would not be offered a new contract.

The Crutchfields filed suit against Tyson on April 30, 2015, alleging claims including fraud/constructive fraud/fraud in the inducement, promissory estoppel, unjust enrichment, negligence, breach of contract, violation of the Arkansas Deceptive Trade Practices Act, mental anguish, and punitive damages. Attached to the complaint were two “Broiler Production Contracts,” one that was in effect from January 2, 2009, through January 2, 2012, and one in effect from February 6, 2012, through May 6, 2012. Among other arguments, Tyson alleged that certain of these claims were barred by a three-year statute of limitations, were not independent causes of action, or were otherwise not cognizable. Following a second hearing, the trial court granted Tyson’s motion and dismissed the Crutchfields’ complaint without prejudice. This article discusses the statute of limitation argument with regard to the Crutchfield’s fraud, promissory estoppel, unjust enrichment, and negligence claims.

On appeal, the Crutchfields contended that the trial court erred in dismissing their claims for fraud, promissory estoppel, unjust enrichment, and negligence on the basis of the statute of limitations. The parties did not dispute that the statute of limitations for each of these claims is three years. According to the Court, it is well established that a cause of action accrues the moment the right to commence an action comes into being, and the statute of limitations commences to run from that time.

The Crutchfields contended that the statute of limitations began to run on May 6, 2012, upon the expiration of their last contract with Tyson. In their complaint, the Crutchfields alleged that they were informed by Tyson in a May 8, 2010 letter that premium-house updates would be mandated. This letter informed growers that houses built to the minimum specifications could operate until May 1, 2013, only if they were ranked in the top sixty percent of growers; after May 1, 2013, Tyson would have only premium houses.

After receipt of this letter, the Crutchfields claimed that they had several conversations with Tyson personnel about their concerns and even “pointed out the path of fraud and negligence Tyson had taken in recent years.” In a letter dated April 9, 2012, Tyson informed the Crutchfields that it would not be offering them a new contract due to their lack of updates and their ranking in the bottom forty percent, thereby ending the parties’ poultry-growing arrangement. The Court pointed out that the last date on which the Crutchfields might reasonably argue that their causes of action accrued was April 9, 2012, the date on which they were informed they would not be receiving a new contract to continue growing chickens.