United States District Court, W.D. Wisconsin
OPINION AND ORDER
Stephen L. Crocker, Magistrate Judge.
action arising under the court's diversity jurisdiction,
plaintiff Winfield Solutions, LLC, an agricultural product
supplier, has sued defendant W S AG Center, Inc.
(“WSAG”) and its owners, W. Kent and Julie L.
Ganske, seeking to collect more than $1 million in unpaid
invoices and late payment fees for agricultural product
delivered to and accepted by WSAG. Complaint, dkt. 1.
Winfield asserts causes of action against WSAG for recovery
of the balance of the purchase price due for the products and
for breach of contract (Counts 1 and II), and against the
Ganskes for enforcement of guaranties they executed promising
to pay all amounts due under the invoices (Count III).
has moved for summary judgment, seeking an award of $1, 451,
535.37 in unpaid purchases and late charges due up to January
1, 2019, plus an award of additional late charges at the rate
of $550.27 per day from January 1, 2019 through the date of
entry of judgment. Dkt. 19. Defendants admit that WSAG owes
Winfield more than $1 million plus late fees for unpaid
invoices, and they can't genuinely dispute that the
Ganskes are jointly liable for the debt. Instead, they argue
that WSAG is entitled to an offset equal to the value of its
equity stake in two “base capital” accounts that
WSAG has with Winfield. As discussed below, defendants'
offset theory is not supported by either the facts or the
law. Accordingly, I am granting Winfield's motion for
preface to the court's findings of fact: Winfield moved
for summary judgment on both liability and damages. Winfield
has supported its proposed findings of fact with admissible
evidence establishing the essential elements of its claims
and damages. Dkts. 19, 20. In their response, WSAG and the
Ganskes offer only boilerplate, general denials that fail to
put into dispute Winfield's proposed facts as required by
Section II D. of this court's Procedure to be Followed on
Motions for Summary Judgment. Dkt. 31. Moreover, defendants
did not support any of their responses with citations to
admissible evidence in the record, as required by Section II
E. of this court's procedure, nor did they propose their
own facts. As a result, Winfield's proposed facts
are undisputed. Accord Midwest Imports, Ltd. v.
Coval, 71 F.3d 1311, 1313 (7thCir. 1995)
(failure to properly contest factual assertions under local
rules constitutes binding admission of those facts).
WSAG's Purchases of Product from Plaintiff
W S AG Center, Inc. (“WSAG”) is a Wisconsin
corporation with its principal place of business located in
Darlington, Wisconsin. WSAG is owned by defendants W. Kent
Ganske and Julie Ganske. The Ganskes reside in Sun Prairie,
Wisconsin and are citizens of the State of Wisconsin.
buys agricultural products for resale to farmers in
Wisconsin. For many years, WSAG bought product on credit from
United Suppliers, Inc., an Iowa cooperative corporation that
distributes agricultural products. WSAG became an owner of
the co-op and built equity through its product purchases,
which it bought on credit.
in 2006, 2009 and 2012, WSAG executed Credit Applications
under which it agreed to timely pay United Suppliers'
invoices or face late charges at a rate of 1.5 percent per
month or 18 percent annually. To secure WSAG's account
debt, on May 1, 2006 the Ganskes executed and delivered to
United Suppliers a personal guaranty to pay all amounts due
or to become due by WSAG to United Suppliers. Ledger Aff.,
dkt. 22, Exh. C.
October 2015, United Suppliers partially merged with Winfield
U.S. Holdings, LLC, a holding company formed by the plaintiff
in this case, Winfield Solutions, LLC
(“Winfield”).On March 15, 2016, the Ganskes executed
another personal guaranty in which they guaranteed payment of
all amounts due or to become due by WSAG to United Suppliers
and/or Winfield. Ledger Aff., dkt. 22, Exh. D. On October 1,
2017, United Suppliers completed its merger with Winfield
Holdings; on that same date, Winfield Holdings merged into
Winfield. Thus, United Suppliers merged into and became
Winfield on October 1, 2017.
continued to order product on credit from United
Suppliers/Winfield after the merger, but fell behind on its
payments in February 2016 and never caught up. WSAG failed to
pay for $1, 087, 332.83 worth of certain products that it
purchased from United Suppliers and Winfield between February
10, 2016 and March 8, 2017. As of January 1, 2019, the total
amount of late charges on the balance due, calculated at the
rate of 18% annually, is $364, 202.54; late charges continue
to accrue at the rate of $550.27 per day.
Plaintiff's Patronage Program
Suppliers, now Winfield, offers a program by which its
members, including WSAG, acquire equity, or “base
capital, ” in the cooperative based on patronage.
Patronage is tracked separately for members' purchases of
crop-nutrient products (e.g. fertilizer) and
crop-protection products (e.g. herbicides), and
there are separate base capital accounts for crop-nutrients
and crop-protection. Accumulation and payment of patronage is
governed by United Suppliers' bylaws and policies issued
by its board of directors.
Suppliers distributes patronage annually either by issuing
cash refunds, adding to a member's base capital accounts,
or both. The amount of patronage actually paid to a member in
cash versus added to the member's base capital account
depends upon the amount in the member's base capital
accounts. Patronage distributions are allocated to members
with a balance of 0 - $50, 000 in a 30/70 split, with 30
percent distributed in cash and the remaining 70 percent
added to their base capital account. Members with a base
capital balance between $50, 001 and $249, 999 receive their
patronage in a 75/25 split, and members with a base capital
balance of $250, 000 or more are paid 100 percent of their
patronage in cash. United Suppliers sent Patronage Refund
Summaries and Base Capital Summary Reports to WSAG each year
from 2014-2016 that showed the balance in WSAG's two base
capital accounts and any cash rebates earned.
Section 8.5 of United Suppliers' Amended and Restated
Bylaws, a member who wants to redeem its base capital must
provide a written notice to United Suppliers. Redemption of
base capital is subject to redemption policies adopted by
United Suppliers' Board of Directors. United
Suppliers' last redemption policy, which was adopted by
Winfield when it merged with United Suppliers in 2017, was
set forth in a brochure entitled “StepCash Base Capital
Program.” This brochure was distributed to all of
United Suppliers' members, ...