The opinion of the court was delivered by: Robert P. Patterson, Jr., U.S.D.J.
By motion dated September 30, 2005, Defendants/Counterclaim Plaintiffs Snapple Beverage Corp. ("Snapple") and Mistic Brands, Inc. ("Mistic") ("Defendants") moved for partial summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure ("Fed. R. Civ. P.") to dismiss the First Cause of Action of Plaintiff Multi-Juice, S.A. ("Multi-Juice") for breach of a distribution agreement between Snapple and Multi-Juice; dismiss the Fourth Cause of Action for breach by Snapple of the Settlement Agreement with Snapple Hellas S.A. ("Hellas"); grant Snapple summary judgment on its First Counterclaim for breach of contract against Multi-Juice and Counterclaim Defendants Arthur Tavantzis and Naoum Tavantzis ("the Tavantzises"); and grant Snapple summary judgment on its Second Counterclaim for attorneys' fees against Multi-Juice and the Tavantzises. By motion dated October 3, 2005, Plaintiff New Age Beverage Hellas ("New Age") moved pursuant to Fed. R. Civ. P. 56 for summary judgment against Mistic for breach of an exclusive distribution agreement entered into on October 13, 1995.
For the reasons that follow, Plaintiffs' First Cause of Action for breach of the distribution agreement between Snapple and Multi-Juice is dismissed; Plaintiffs' Fourth Cause of Action for breach of the Snapple Hellas Settlement Agreement is dismissed; and summary judgment is granted as to Defendant Snapple's counterclaim against Multi-Juice for goods sold and delivered but denied as to Defendants' motion for summary judgment for breach of contract and attorneys' fees. In addition, Plaintiff New Age's motion for summary judgment against Mistic is denied.
Plaintiffs commenced this action on June 14, 2002. In the First Cause of Action, Multi-Juice seeks damages for breach of a three- to five-year exclusive beverage distributorship agreement entered into between Snapple and Multi-Juice, a Greek corporation. The alleged exclusive distributorship agreement was entered into subsequent to a settlement in August 1997 of a lawsuit commenced by Snapple Hellas, S.A., a Greek distribution company owned by the Tavantzises, against Snapple and its prior parent corporation, the Quaker Oats Company ("Quaker"). In the Fourth Cause of Action, Plaintiffs seek damages from Snapple for breach of the Hellas Settlement Agreement. By motion dated September 30, 2005, Defendants moved for partial summary judgment pursuant to Fed. R. Civ. P. Rule 56. The background to this controversy is set forth in a prior opinion of this Court, Multi-Juice, S.A. v. Snapple Bev. Corp., No. 02 Civ. 4635 (RPP), 2003 U.S. Dist. LEXIS 7040 (S.D.N.Y. Apr. 24, 2003), familiarity with which is assumed.*fn1 By motion dated September 30, 2005, Plaintiff New Age moved for summary judgment pursuant to Fed. R. Civ. P. Rule 56 against Defendant Mistic.
Pursuant to Rule 56 of the Fed. R. Civ. P., a moving party is granted summary judgment when "the pleadings, dispositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed. R. Civ. P. 56(c). The summary judgment standard is "well-settled" in the Second Circuit. Marvel Characters, Inc. v. Simon, 310 F.3d 280, 285 (2d Cir. 2002). The Second Circuit stated:
The party seeking summary judgment has the burden to demonstrate that no genuine issue of material fact exists. In determining whether a genuine issue of material fact exists, a court must examine the evidence in the light most favorable to, and draw all inferences in favor of, the non-movant . . . Summary judgment is improper if there is any evidence in the record that could reasonably support a jury's verdict for the non-moving party.
Id. at 286 (citations omitted).
Claims of Plaintiffs Multi-Juice and Hellas Against Snapple and Counterclaim of Snapple
Unless otherwise indicated, the following facts taken from the Defendant's Local Rule 56.1 Statement are found to be true, as they have been admitted by Plaintiffs or are accepted by the Court as true due to Plaintiffs' failure to cite to any contrary evidence as required by Local Rule 56.1.
Plaintiffs are Multi-Juice, S.A. and Snapple Hellas, S.A. (collectively "Plaintiffs"). Defendant Snapple's Local Rule 56.1 Statement ("Def.'s 56.1") ¶ 1. Plaintiffs' sole owners and principals are Arthur Tavantzis and Naoum "Numi" Tavantzis. Id. ¶ 2. Defendant is Snapple. Id. ¶ 3. Multi-Juice and the Tavantzises are Counterclaim Defendants. Id. ¶ 4.
From approximately 1995 to August 1997, Hellas was engaged in the business of importing and distributing Snapple Brand beverages in Greece. Id. ¶ 5.*fn2 On or about February 23, 1996, Hellas brought suit against Snapple and its then-owner, the Quaker Oats Company, in the United States District Court for the Southern District of New York (Case No. 96 CV 1371) (the "Hellas Action"), claiming wrongful termination and breach of contract. Id. ¶ 6; Orr. Ex. 1 ¶¶ 8, 18.*fn3 In or about mid-1997, Triarc Companies, Inc. ("Triarc") acquired Snapple from Quaker. Def.'s 56.1 ¶ 7. The Hellas Action was settled on or about August 11, 1997, pursuant to a settlement agreement between Snapple (under Triarc ownership), Quaker, the Tavantzises individually, and Hellas (the "Hellas Settlement Agreement"). Id. ¶ 8; Orr. Ex. 7.
The Hellas Settlement Agreement provides, inter alia, that "Hellas and Snapple shall negotiate in good faith towards entering into a 3-5 year written agreement under which Snapple would convey to Hellas the exclusive right during the term of that agreement to distribute Snapple beverages in Greece." Def.'s 56.1 ¶ 9. The Hellas Settlement Agreement contains an integration clause, providing that "[t]his Agreement constitutes the entire agreement and understanding between the parties hereto with respect to the subject matter contained herein." Id. ¶ 10. The Hellas Settlement Agreement also contains a choice of law clause, providing that it "shall be governed by the substantive law . . . of the State of New York." Id. ¶ 11. The Tavantzises subsequently formed Multi-Juice, S.A. (together with the Tavantzises, "Multi-Juice"). Id. ¶ 12.
After the Hellas Settlement Agreement, Snapple and Multi-Juice negotiated and exchanged seven drafts of a written distribution agreement. Id. ¶ 13; Orr Exs. 8-15. The negotiations on behalf of Multi-Juice were conducted by Louis F. Burke ("Burke").
Def.'s 56.1 ¶ 14. Burke was authorized at all times to negotiate with Snapple on Multi-Juice's behalf. Id. ¶ 15.
On or about October 17, 1997, Burke sent a letter to Snapple's counsel, Gary Lyons ("Lyons"), stating, "I just wanted to follow-up with a letter regarding the status of the contract which is being negotiated between Arthur Travis [sic Tavantzis] and Snapple Beverage Corporation . . . a contract must be entered into by the end of October in order to set the stage for labels and production as well as pre-selling . . . we were hopeful that in view of settling this case back in late August/early September, a contract could have been finalized by this time." Id. ¶ 16; Orr Ex. 16. On or about November 12, 1997, Burke sent a letter to Lyons, stating "Arthur and Naoum are very anxious to finalize this agreement . . . ." Id. ¶ 16; Orr Ex. 17.*fn4
As a result of the negotiations between the parties, by December of 1997, Snapple and Multi-Juice reached agreement on all issues, with the exception of the provisions regarding termination. Orr Ex. 12. In a letter to Snapple, dated December 6, 1997, after addressing the termination provision, Burke stated, "We have agreed on all other issues." Id. Attached to Burke's letter is a draft of the distribution agreement, dated December 4, 1997 ("December Draft Distribution Agreement"). Id. ¶ 18.*fn5
The parties agreed, inter alia, on the following provisions contained in the December Draft Distribution Agreement:
a. Section 6.1: "Products may be ordered by DISTRIBUTOR only pursuant to written purchase orders on the form provided by SNAPPLE. Each such purchase order shall be subject to written acceptance by SNAPPLE at its sole discretion."
b. Section 7.1: "Unless SNAPPLE should otherwise agree in writing in each instance, payment for Products purchased by Distributor hereunder shall be in sterling pounds and payable to Snapple via certified check or electronic funds transfer [or] bank check . . . ."
c. Section 7.2: "The invoice price of each shipment of products shall become payable by DISTRIBUTOR in full in accordance with SNAPPLE's invoice terms."
d. Section 7.3: "[I]f DISTRIBUTOR is delinquent in payment, upon SNAPPLE's written notice to that effect, DISTRIBUTOR shall reimburse or pay SNAPPLE for all costs and expenses incurred by SNAPPLE in collecting the delinquent amounts, including, but not limited to, reasonable legal fees."
e. Section 12.7: "THIS AGREEMENT AND THE PERFORMANCE OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, UNITED STATES OF AMERICA."
f. Section 12.12: "This Agreement and the Exhibits hereto supersede all prior oral and written communications between the parties concerning, and constitute their sole and exclusive understanding with respect to, the subject matter hereof."
g. Exhibit 3: "TARGETED ANNUAL MINIMUM PURCHASES" provides that "Notwithstanding DISTRIBUTOR's obligation to maximize the distribution of each type and line of Products in the Territory, during the Term of the Agreement the targeted annual minimum volume of purchases by DISTRIBUTOR shall be: Year 1 -- 50,000 cases; Year 2 -- 100,000 cases; Year 3 -- 200,000 cases; Year 4 -- 300,000 cases; and Year 5 --400,000 cases."
Def.'s 56.1 ¶ 19. The Defendant's cited materials are admittedly authentic and accurately quoted. Except for the termination clause, Plaintiffs offer no evidence of disagreement on the above terms, which appear in all later draft agreements. Accordingly, paragraph 19 of Defendant's 56.1 statement is deemed admitted under Local Rule 56.1.
While the parties exchanged additional drafts of the distribution agreement after December of 1997, none of the material provisions changed. Def.'s 56.1 ¶ 20; Orr Exs. 13-15. Plaintiffs claim only that on January 9, 1998, Defendants changed the multiple of annual volume of sales upon an unjustified termination by Snapple in ¶ 11.4 of the termination provision from $3.00 to $2.00.*fn6 Plaintiffs' Response to Defendants' Statement Pursuant to Local Rule 56.1 ("Plaintiffs' Response to Def.'s 56.1") ¶ 20. Plaintiffs cite no other support for their denial. Accordingly, since Defendants have admitted that the termination provisions remained in dispute, paragraph 20 of Defendant's 56.1 Statement is deemed admitted.
Although none of the drafts of the distribution agreement were ever fully executed by the parties, Snapple and Multi-Juice "operated as if a written exclusive agreement for the distribution of Snapple products in Greece had been executed among them." Def.'s 56.1 ¶ 21. Orr Ex. 1 (Complaint) ¶ 28.
For each shipment of Snapple products from Snapple to Multi-Juice in 1998 and 1999, Multi-Juice received a detailed invoice of the products in the shipment. See, e.g., Orr Ex. 20. Both the prices of the shipment (in pounds sterling) and the terms of the invoice were printed clearly and plainly on each of the invoices that was sent to Multi-Juice in 1998 and 1999. Def.'s 56.1 ¶ 22; Orr Ex. 6.
Snapple extended to Multi-Juice a 60-day line of credit. Def.'s 56.1 ¶
23; Orr Ex.
21. From April 23, 1999 through June 18, 1999, Snapple sent invoices
to Multi-Juice totaling £54,648.50 for products received and accepted
by Multi-Juice. Def.'s 56.1 ¶ 24; Orr Exs. 20, 22-27.*fn7
On or about April 23, 1999, Snapple invoiced Multi-Juice
(Invoice No. 029-99) in the amount of £10,810.00. Def.'s 56.1 ¶ 23;
Orr Ex. 20. On or about April 23, 1999, Snapple invoiced Multi-Juice
(Invoice No. 030-99) in the amount of
£10,810.00. Def.'s 56.1 ¶ 26; Orr Ex. 22. On or about June 14, 1999,
Snapple invoiced Multi-Juice (Invoice No. 063-99) in the amount of
£11,243.20. Def.'s 56.1 ¶ 27; Orr Ex.
23. On or about June 14, 1999, Snapple invoiced Multi-Juice (Invoice
No. 064-99) in the amount of £11,773.30. Def.'s 56.1 ¶ 28; Orr Ex. 24.
On or about June 18, 1999, Snapple invoiced Multi-Juice (Invoice No.
067-99) in the amount of £10,452.00. Def.'s 56.1
¶ 29; Orr Ex. 25.
A handwritten entry from October 18, 1999 in Multi-Juice's desk calendar ("Date Book Entry") is entitled "Imports 1999." Def.'s 56.1 ¶ 30; Orr Ex. 26; Ex. 27 at 265:18-269:24. The Date Book Entry was written by Evangelia Tavantzis, Naoum's wife and Multi-Juice's bookkeeper. Def.'s 56.1 ¶ 30; Orr Ex. 27 at 266:10-13. The left side of the Date Book Entry lists the 1999 Invoices from Snapple by number and date. Def.'s 56.1 ¶ 31; Orr Ex. 26; Ex. 27 at 267:21-269:13. These invoices are broken down by flavors, number of cases, and pallets. Def.'s 56.1 ¶ 31; Orr Ex. 26. Each invoice also corresponds to an amount listed in British Pounds (sterling). Id. A box at the bottom of the Date Book Entry is labeled "TOTALS" and lists an amount of "£54,648.5." Id.
Multi-Juice failed to pay the amounts due and owing under the 1999 Invoices. Def.'s 56.1 ¶ 32; Orr Exs. 6, 28-33. Representatives of Snapple contacted Multi-Juice on numerous occasions regarding the amounts past due and owing. Def.'s 56.1 ¶ 33; Orr Exs. 6, 28, 30-33.*fn8 On or about October 27, 1999, Donna Bimbo of Snapple sent an e-mail to Multi-Juice stating, inter alia:
As agreed, we did extend your credit terms to 60 days from collection date. These terms were agreed upon based on a mutual understanding that you would pay on time . . .
We feel that Multi-Juice has not lived up to the terms agreed upon, not only has the 1998 balance just been cleared but we are now in a situation whereby transactions for calendar 99 for Multijuice are outstanding and overdue dating back to August 18th, 99.
This is a very serious situation that needs to be addressed immediately. We have tried unsuccessfully to contact both yourself and Arthur on numerous occasions dating back from September 13 continuing on to October 27th sometimes 2 to 3 times a day with no response.
Def.'s 56.1 ¶ 34; Orr Ex. 28.
In late 1999, Multi-Juice ceased operations without providing notice to Snapple. Def.'s 56.1 ¶ 35; Orr Exs. 31-34. Plaintiffs deny this allegation, citing the deposition of Naoum Tavantzis, Grey Ex. 6 at 342-46, and assert without citing to evidence that they believe Defendants were aware that Multi-Juice had ceased operations by at [the] latest December 1999 and that several of the subsequent purported attempts to communicate with Multi-Juice by Snapple were made by Snapple after it knew that Multi-Juice's office was closed "to set up Snapple's position for anticipated litigation." Naoum Tavantzis' testimony was as follows:
Q: What steps did Multi-Juice take to close down its operations? A: I told Paula the day before I had enough of this shit.
Q: Did you or Ms. Silva say anything else during the course of that conversation?
A: I think I just mentioned that the letter is ridiculous about the rules, I am with Snapple Beverage for 12 years, you are selling this product for about eight months, you don't even know what it is and you are telling me and Donna is telling me that there are rules here that if another product, I have to abide by the rules and if the Whipper sells more than the Snapples, it's your fault.
Id. at 344-45. When specifically asked if he informed Ms. Silva in that conversation that Multi-Juice would no longer be distributing products in Greece, Mr. Tavantzis admitted he did not do so: "Did I go over it like that? No." Id. at 344.
On or about January 31, 2000, Paula Silva of Snapple sent a fax to Multi-Juice stating, "I enclose a small summary of issues which we have been trying to address and unfortunately have not had any response from you." Def.'s 56.1 ¶ 36; Orr Ex. 31. On February 9, 2000, Evangelia ("Evie") Tavantzis forwarded a fax from Ms. Silva to Mr. Burke, containing the information from Ms. Silva's January 31, 2000 fax and including a note from Evie stating, "Mr. Burke, if you need the original copy please let me know and I will mail it to you, otherwise Numi can bring it to your office sometime next week upon his return from Greece." Orr Ex. 32. The fax states:
1) Outstanding balance calendar 1999 -- The balance of GBP 54,000 remains unpaid and we have not received any information or payment update. It is imperative that you solve this matter. As you are aware our trading terms are 60 days and most of these sales date back to early 99.
2) Product ordered October 99 -- Since November 8, 99 we have had your ordered container of product sitting at our copacker's warehouse for which we are incurring warehousing costs. We have requested several times that you collect it or give an update on this item to no avail. Please update us on this issue.
3) Snapple 330 ml budget projection -- We have not yet received your budget forecast for calendar 2000. Please submit these as promptly as possible.
4) Snapple Marketing funds -- In order to ascertain our marketing contribution for calendar 2000 we request that you submit ...