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Case 9.1
ST. LOUIS PRODUCE MARKET V. HUGHES
United States Court of Appeals
735 F.3d 829; 86 Fed. R.Serv. 3d (Callaghan) 1754; 2013 U.S. App. LEXIS 23029 [November 14, 2013]
FACTS:
Clarence Hughes was the property manager for the St. Louis Produce Market from 1990 until
August 2009 when his position was eliminated.
The Market drafted and sent Hughes a separation agreement that granted him a lump sum
payment equal to 14 weeks of his salary.
The agreement stated, “As a condition precedent to Company’s obligations under this Agreement
and prior to company making any additional separation payments hereunder, Former Employee
agrees to return to the Company all Company-owned property, including the company camera,
company tools, and the like, and certify that he has returned all such property of Company in
writing.”
The Market’s counsel sent the agreement to Hughes’s counsel and required notification of any
changes.
Hughes and his attorney altered the agreement to provide for 104 weeks of pay.
Hughes then took the document to the Market’s president and obtained his signature, without
stating that the document had been altered.
In October 2009, the Market sued Hughes in Missouri state court and sought a declaratory
judgment that the signed agreement was void. The Market claimed Hughes had secured the
agreement through fraud or negligent misrepresentation.
Hughes removed the case to district court and filed a counterclaim for breach of contract and
sought contract enforcement.
PROCEDURE: The district court granted summary judgment in favor of the St. Louis Produce Market.
ISSUE: Does Hughes’s failure to fulfill the condition precedent entirely excuse the remaining
obligations by the Market?
RULE: “Unlike a mere contract term, the breach of which must be material before it excuses another
party from performing, one party’s failure to fulfill a condition precedent entirely excuses any
remaining obligation of the other party.”
REASONING:
1. Because Hughes failed to return all company property, including the battery, power cord, and hard
drive of the laptop, he failed to fulfill the condition precedent.
ADDITIONAL INFORMATION:
Hughes’s discovery violations included: failure for 2 years to turn over the laptop, failure to disclose
a material witness, failure to provide a privilege log or to turnover privileged documents after he
waived privilege, deletion of material e-mails, and destruction of phone records.
Under Federal Rule of Civil Procedure 37, “If a party…fails to obey an order to provide or permit
