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RESTAURANT ASSOCS. INDUS. v. ANHEUSER-BUSCH

November 23, 1976

RESTAURANT ASSOCIATES INDUSTRIES, INC., Plaintiff,
v.
ANHEUSER-BUSCH, INC., Defendant, and Sidney Sherman and Sherman Management Corp. as additional defendants because they are or may be needed for an adjudication pursuant to FRCP 19



The opinion of the court was delivered by: POLLACK

POLLACK, District Judge.

 This diversity case was tried to the Court without a jury. Plaintiff, claiming breach of contract and unlawful enticement of a key employee, sought damages and injunctive and declaratory relief.

 The plaintiff had for some years operated the food and beverage facilities of the Old Swiss House in Busch Gardens, Tampa, Florida, a unique tourist attraction owned by the corporate defendant. The corporate defendant terminated the relationship as of July 9, 1975 and took over the operation of those facilities, hiring the employee (Sidney Sherman) who had been plaintiff's general manager for operations at Busch Gardens to manage Old Swiss House on its behalf.

 The background has been set out in the Court's opinion denying a preliminary injunction. Restaurant Associates Industries, Inc. v. Anheuser-Busch, Inc., 397 F. Supp. 1213 (S.D.N.Y. 1975). Most of the significant facts were agreed to by the parties in the pretrial order herein. These will be deemed incorporated hereby. The basic disputes tried to the Court were whether there was an existing contract between the parties at the time the corporate defendant elected to take over and manage the operation itself, and whether Sherman was free to receive and accept the corporate defendant's offer of employment which was effective upon the termination of plaintiff's right to manage Old Swiss House.

 For the reasons detailed hereafter, the plaintiff is not entitled to any relief herein.

 Applicable Law

 In this diversity action, the law of the forum state, including its choice of law rules, must be applied. Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 61 S. Ct. 1020, 85 L. Ed. 1477 (1941). New York's conflicts rules provide that contracting parties may choose the state law by which their agreement is to be governed as long as the state whose law is chosen has a reasonable connection with the controversy. A. S. Rampell, Inc. v. Hyster Co., 3 N.Y.2d 369, 382, 165 N.Y.S.2d 475, 486, 144 N.E.2d 371 (1957).

 The Management Agreement under which the parties operated provides that it shall be governed by the laws of Florida, the state in which the Agreement was performed. Consequently, Florida law is to be applied to plaintiff's breach of contract claim.

 Florida law is also applicable to plaintiff's unlawful enticement claim since Florida is the jurisdiction with the most significant contacts with that issue. See Babcock v. Jackson, 12 N.Y.2d 473, 240 N.Y.S.2d 743, 191 N.E.2d 279 (1963). Florida courts, however, have not addressed many of the legal issues raised in the present lawsuit. The parties have cited cases from various jurisdictions as indicative of the decisions Florida courts would be likely to reach, and this Court has proceeded on that basis.

 The Breach of Contract Claim

 Restaurant Associates Industries, Inc. (Associates, or plaintiff, hereafter) began operating the food and beverage facilities at Busch Gardens for Anheuser-Busch, Inc. (Busch, or defendant, hereafter) in late 1969. The parties subsequently entered into a formal Management Agreement for a term to end December 25, 1973. The Management Agreement contained a clause (Paragraph 4(b)) providing for automatic annual renewal unless either party gave written notice of termination at least 90 days before the expiration of the initial or some additional term.

 The Management Agreement was the last written agreement entered into by the parties. Busch sent written notice of termination of this agreement on September 24, 1973 to Associates. However, Associates continued to manage Old Swiss House until the relationship was terminated as of July 9, 1975 pursuant to notice given May 27, 1975.

 Resolution of plaintiff's breach of contract claim depends solely on whether the letter sent by Busch on September 24, 1973 terminated the Management Agreement at the end of its initial term. *fn1" The evidence establishes that the term contract was ended ...


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