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Nifty Foods Corp. v. Great Atlantic & Pacific Tea Co.

decided: January 24, 1980.

NIFTY FOODS CORPORATION, PLAINTIFF-APPELLANT,
v.
THE GREAT ATLANTIC & PACIFIC TEA COMPANY, INC. AND PET INCORPORATED, DEFENDANTS-APPELLEES .



Appeal from judgment in the United States District Court for the Western District of New York, Harold P. Burke, Judge, dismissing civil antitrust, breach of contract, inducement of breach and unfair competition action by former supplier of goods against former buyer and substituted supplier. Affirmed.

Before Lumbard, Smith and Mulligan, Circuit Judges.

Author: Smith

This is an appeal from a judgment of the United States District Court for the Western District of New York, Harold P. Burke, Judge, dismissing plaintiff's civil action based on antitrust, breach of contract, unfair competition and other claims.

This suit was prompted by a decision of the Great Atlantic & Pacific Tea Company ("A&P") to substitute Pet Incorporated ("Pet") for Nifty Foods Corporation ("Nifty") as the supplier of A&P's private label frozen waffles. Nifty filed a complaint in 1971, naming A&P and Pet as co-defendants and charging in seven counts breach of contract, unfair competition, tortious inducement of breach and violation of the antitrust laws. Since Nifty and A&P are both citizens of the State of New York, jurisdiction was apparently predicated on the alleged violations of the Sherman Act, 15 U.S.C. §§ 1 and 2, and 28 U.S.C. § 1331.

After seven years of discovery, Nifty indicated that it was ready for trial. A&P then moved for summary judgment on one count under Fed.R.Civ.P. 56 and for an order dismissing three other counts for failure to state a claim under Fed.R.Civ.P. 12(b)(6). Pet moved for summary judgment on all six of the counts in which it was named and A&P joined in the motion with respect to the counts remaining against A&P. In an order dated October 24, 1978, all of the above motions were granted, and all the claims against A&P and Pet were dismissed. Nifty filed a notice of appeal. For the reasons given below, we affirm.

I.

Nifty, a manufacturer of frozen foods, began supplying A&P with frozen waffles in 1961 under A&P's private label trademark "Sunnyfield." Until 1969, Nifty was the exclusive supplier of "Sunnyfield" waffles.

Pet entered the frozen waffle business in 1963. It tried to secure A&P's private label business, but had no success until 1969. In December 1968, Pet sent A&P a form letter announcing a limited duration advertising allowance for private and packer label frozen waffles. On January 6, 1969, A&P called Pet requesting a frozen waffle price list. A&P indicated in late May that Pet would become co-supplier, with Nifty, of "Sunnyfield" waffles.

On July 2, Nifty received a letter from A&P stating that Nifty would no longer be supplying certain A&P warehouses with waffles. The letter referred to a conversation several months earlier at which Nifty had expressed concern that it might lose some of the A&P business.

Nifty placed a large order for "Sunnyfield" cartons sometime in July with its carton supplier, The Brown Company ("Brown"). Brown in turn ordered the board for the cartons. On August 22, 1969, A&P called Pet to ask for assistance in verifying whether Nifty had placed a large "Sunnyfield" order with Brown, and if so, whether the order could be canceled. Pet called Brown and learned that an order had been placed, but that the status of the Nifty contract was "unclear." The board was in transit, Brown reported, but it could still be used for other orders. A&P then warned Nifty, in a letter date August 27, 1969, that A&P would not be responsible for any cartons other than those which Nifty already had on hand.*fn1

On October 10, A&P told Pet that it would become the sole supplier of "Sunnyfield" waffles effective November 15, 1969. Sometime after October 15, 1969, A&P bought all of Nifty's remaining inventory of "Sunnyfield" waffles. In March 1970, Nifty ceased doing business.

II.

Count I of the complaint alleged that A&P and Nifty entered into an exclusive requirements contract for the sale of "Sunnyfield" waffles, and that this contract contained an implied term requiring A&P to give Nifty reasonable notice of termination. Nifty alleges that A&P breached this implied term when it terminated Nifty in 1969. The district court concluded that the alleged contract was unenforceable, and notice was therefore unnecessary, because under the then-applicable New York Statute of Frauds,*fn2 Sections 31 and 85 of the New York Personal Property Law, Nifty had failed to present sufficient written evidence of the contract. We conclude that the alleged contract was invalid under Section 31(1). By its terms the alleged contract could not have been performed within one year, and Nifty failed to present a writing satisfying the requirements of the section.*fn3

A contract with a termination provision can be performed within one year if there is a possibility, however slight, that the termination can be unilaterally effected within one year. North Shore Bottling Co. v. C. Schmidt & Sons, 22 N.Y.2d 171, 292 N.Y.S.2d 86, 239 N.E.2d 189 (1968). A termination provision must be express, however, in order to excuse a contract from the writing requirement of the Statute of Frauds. Hausen v. Academy Printing & Specialty Co., 34 A.D.2d 792, 311 N.Y.S.2d 613 (2d Dept. 1970); see also Cohen v. Bartgis Bros., 264 App.Div. 260, 35 N.Y.S.2d 206 (1st Dept. 1942). Nifty concedes that the termination provision here was only implied. The alleged contract could no more be performed within one year, therefore, than could a requirements contract without a termination provision. See Shirley Polykoff Advertising, Inc. v. Houbigant, 43 N.Y.2d 921, 403 N.Y.S.2d 732, 374 N.E.2d 625 (1978). Hence Nifty was required under Section 31(1) to present a writing evidencing the contract and "subscribed by the party to be charged therewith." ...


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