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L. FATATO, INC. v. MILLER BREWING CO.

March 22, 1984

L. FATATO, INC., N.Y.S. - T.S. BEVERAGE CORP., and VASILIOW CO., INC., Plaintiffs, against MILLER BREWING COMPANY


The opinion of the court was delivered by: MCLAUGHLIN

MEMORANDUM AND ORDER

McLAUGHLIN, District Judge

 Plaintiffs in this diversity-based action seek damages for breach of contract and unjust enrichment based on an alleged oral beer distribution agreement with defendant Miller Brewing Company ("Miller"). Miller has moved for summary judgment pursuant to Fed. R. Civ. P. 56, arguing that the contract claims are barred by New York's statute of frauds and that the unjust enrichment claim fails to state a claim upon which relief can be granted. For the reasons stated below, defendant's motion is denied.

 Facts

 Plaintiff corporations ("Fatato", "NYS-TS", and "Vasiliow") are wholesale beer distributors in New York State. Miller, a Wisconsin corporation doing business in New York State, is a brewer of beer. DeCrescente Distributing Co. ("DeCrescente") and the now-defunct Better Brands of New York, Inc. ("Better Brands") were New York distributors of Miller products. Plaintiffs allege that Better Brands, a wholly-owned subsidiary of Miller, was experiencing labor difficulties during the early part of 1979, causing an interruption in the flow of Miller beer into the New York City area.

 Plaintiffs allege that Miller, acting through DeCrescente as its agent, offered plaintiff Fatato an exclusive distributorship of its products in Kings, New York, Bronx, and Westchester Counties if Fatato could, despite the "strike activities" of Local 812 of the Soft Drink Workers Union, "maintain an uninterrupted flow of beer to all the major supermarkets, local home distributors, taverns, restaurants and pubs previously serviced by "Better Brands. In exchange for such distribution during the strike, Miller allegedly offered to continue the exclusive distributor with Fatato or its designees after the strike.

 Plaintiffs apparently agreed and began to distribute Miller beer. They allegedly spent large sums to improve their equipment and warehousing capabilities and also sustained property damage as a result of the labor unrest. They attribute these damages to their compliance with defendant's demand that the flow of Miller products be interrupted during the strike, and allege that Miller was thereby unjustly enriched "in the maintenance of its reputation and public image regarding the quality and availability of its products and in its profits."

 Plaintiffs next allege that in July 1980, after the strike had ended and Better Brands had ceased doing business, DeCrescente informed them that their orders for Miller products would no longer be honored. Defendant then granted distributorships in the counties in question to other concerns. As a result of defendant's alleged discharge of plaintiffs in breach of the agreement, plaintiffs claim to have suffered what they term "damage . . . and unjust enrichment to defendant" in the amount of one million dollars each.

 Defendants have moved for summary judgment dismissing the complaint, on the grounds that the claim for breach of contract is barred by New York's statute of frauds and the claim for unjust enrichment is insufficient as a matter of law.

 Discussion

 I. The Contract Claims

 Defendant asserts that plaintiffs' contract claims are barred by New York's statute of frauds' which provides:

 a. Every agreement, promise or undertaking is void, unless it or some note or memorandum thereof be in writing, and subscribed by the party to be charged therewith, or by his lawful agent, if such agreement, promise or undertaking:

 1. By its terms is not to be performed within one year from the making thereof or the performance of which is not be ...


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