MN Appeals Court Hears Steele County Fertilizer Dispute

Minnesota case law summary by Attorney Richard Clem: torts, economic loss rule, evidence.

Laverne Ptacek v. Earthsoils, Inc.. MN torts, economic loss rule, evidence

Laverne and Jeffrey Ptacek are a father and son who farm in Steele County, Minnesota. Laverne has farmed since 1973 and Jeffrey since 1986. In 2007, the purchased fertilizer for their corn crop from Earthsoils, Inc. Prior to the purchase, they were advised that the fertilizer would enable yields of 180-200 busels per acre. Their actual yield was less than half that amount, and they alleged that this was caused by insufficient nitrogen levels in the fertilizer.

They filed suit against Earthsoils in Steele County District Court. Prior to trial, the district court made two significant rulings. First of all, it held that the plaintiffs' negligence claim was barred by the common-law economic-loss doctrine. The other claims, however, were covered by the economic loss doctrine of Minnesota Statute 604.101, and were not barred by the statute.

Also, the plaintiffs had made a crop insurance claim. When making that claim, they had signed a crop insurance form stating that the lost yield was caused 100% by drought. The trial court allowed that document to be introduced into evidence on the issue of causation. The trial court instructed the jury, however, that the jury should not deduct the crop insurance payment from any award, since that would be handled by a separate process after the trial. The jury returned a verdict in favor of Earthsoils, and the Ptaceks appealed to the Minnesota Court of Appeals. They made two arguments: First, they argued that the crop insurance forms should not have been admitted into evidence. Second, they argued that the trial court should not have dismissed their negligence claim.

The Court of Appeals first took up the question of the negligence claim. The lower court had dismissed this claim because, under the common-law rule, a plaintiff cannot recover in negligence for a purely monetary loss, as opposed to physical injury or property damage. Minnesota Statute 604.101, however, differs from the common-law rule in that it bars such claims only for product-defect torts.

The Court of Appeals held that the trial court erred in applying the common-law rule to the negligence claim. The Court of Appeals held that section 604.101 completely abrogated the common-law rule in Minnesota. Since the claim was not barred by the statute, it should have been considered by the jury.

Next, the Court of Appeals held that it was proper for the jury to consider the crop insurance form. Since the cause of the lost yield was at issue, "signed statements by appellants that the lost yield was caused 100% by drought were certainly relevant on the issue of causation." The plaintiffs argued that they were not competent witnesses to testify as to the reason for the lost yield. But the court noted that they had been farmers for many decades, had farmed thousands of acres, and that their experience was sufficient to form an opinion.

For these reasons, the Court of Appeals affirmed the jury's verdict, but remanded the case for consideration of the negligence claim.

The Court of Appeals decision was authored by Chief Judge Cleary, and concurred with by Judges Halbrooks and Schellhas. The decision, released on March 31, 2014, will be published. The plaintiffs were represented in the appeal by attorneys J. Poage Anderson and David H. Redden. The defendants were represented by attorney Paul A. Sortland.

No. A13-1335 (Minn. Ct. App. Mar. 31, 2014).

Please see the original opinion for the court's exact language.


Richard P. Clem is an attorney and continuing legal education (CLE) provider in Minnesota. He has been in private practice in the Twin Cities for 25 years. He has a J.D., cum laude, from Hamline University School of Law in St. Paul and a B.A. in History from the University of Minnesota. His reported cases include: Asociacion Nacional de Pescadores a Pequena Escala o Artesanales de Colombia v. Dow Quimica de Colombia, 988 F.2d 559, rehearing denied, 5 F.3d 530 (5th Cir. 1993), cert. denied, 510 U.S. 1041 (1994); LaMott v. Apple Valley Health Care Center, 465 N.W.2d 585 (Minn. Ct. App. 1991); Abo el Ela v. State, 468 N.W.2d 580 (Minn. Ct. App. 1991).

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