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Milton Abeles, Inc. v. Farmers Pride

July 11, 2007


The opinion of the court was delivered by: Dora L. Irizarry, U.S. District Judge.


Plaintiff Milton Abeles, Inc. ("Abeles") brought suit against Farmers Pride, Inc. ("Farmers Pride") alleging that Farmers Pride (1) breached the exclusive distribution agreement between it and Abeles; (2) tortiously interfered in Abeles's relationships with sub-distributors; (3) engaged in unfair competition; and (4) was unjustly enriched by Abeles's effort to build goodwill between it and Abeles's sub-distributors. Farmers Pride brought a counterclaim against Abeles for payment of $911,674.35 allegedly owed by Abeles for goods sold and delivered. Farmers Pride moved for summary judgment, requesting that the court dismiss all of Abeles's claims. Further, Farmers Pride requested that the court grant it summary judgment on its counterclaim. By order dated July 19, 2006, this court referred the motion to U.S. Magistrate Judge William D. Wall for preparation of a Report and Recommendation ("R&R"). Judge Wall issued a R&R on March 30, 2007 and recommended that the court grant Farmers Pride's motion for summary judgment except as to Abeles' claims for unfair competition, conversion, unjust enrichment, and quantum meruit, and that the court grant Farmer's Pride's motion as to its counterclaims. Abeles and Farmers Pride both filed timely objections to the R&R on April 14, 2007. For the reasons set forth below, the court adopts the R&R in its entirety.

Statement of Facts

The court adopts the factual findings in the R&R, familiarity with which is assumed for purposes of this order.


Standard of Review

When reviewing a magistrate judge's report, a district judge must make a de novo determination with respect to those parts of the R&R to which any party objects. The district court may then "accept, reject, or modify the recommended decision, receive further evidence, or recommit the matter to the magistrate judge with instructions." Fed. R. Civ. P. 72(b);28 U.S.C. § 636(b); see also United States v. Raddatz, 447 U.S. 667, 673-76, 100 S.Ct. 2406, 65 L.Ed.2d 424 (1980).

Summary Judgment Standard

Abeles takes issue with the summary judgment standard employed by Judge Wall. Abeles claims that summary judgment is only appropriate if there is a "complete failure of proof" on the part of the non-moving party. See Abeles's Objections to the R&R ("Abeles's Objections") at 4. Abeles thus contends that summary judgment is inappropriate if it presents any evidence that tends to support its claims, or at least raises a material issue of fact with respect to its claims. Id. The court disagrees and finds that the magistrate judge applied the appropriate summary judgment standard.

Summary judgment is appropriate "where the pleadings, depositions, 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 judgment as a matter of law." Fed. R. Civ. P. 56(c). The court must view all facts in the light most favorable to the non- moving party but "the mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact." See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986) (citing Adickes v. S.H. Kress & Co., 398 U.S. 144, 158--59 (1970)). In order to defeat a summary judgment motion, the non-movant carries only "a limited burden of production," but "must 'demonstrate more than some metaphysical doubt as to the material facts,' and come forward with 'specific facts showing that there is a genuine issue for trial.' " Powell v. Nat'l Bd. of Med. Exam'rs, 364 F.3d 79, 84 (2d Cir. 2004) (internal citations omitted). Those specific facts must be more than "conclusory statements, conjecture, or speculation." Opals on Ice Lingerie v. Body Lines, Inc., 320 F.3d 362, 370 n. 3 (2d Cir. 2003) (quoting Kulak v. City of New York, 88 F.3d 63, 71 (2d Cir. 1996)). The Supreme Court has recently revised the summary judgment standard by requiring the court essentially to weigh the evidence presented by the non-moving party before allowing that evidence to be used to defeat a motion for summary judgment. Under the new standard, evidence presented by the non-moving party that is "blatantly contradicted by the record" should not be accepted by the court for purposes of defeating a motion for summary judgment. Scott v. Harris, 127 S.Ct. 1769, 1776, 167 L.Ed.2d 686 (2007). Indeed, as noted below, Judge Wall found that some of Abeles's contentions were blatantly contradicted by the record. For example, Abeles claims that Farmers Pride tortiously interfered in its contracts with its sub-distributors, but the record demonstrates that there were no such contracts.*fn1 R&R at 16.

Judge Wall also correctly observed that Abeles, as the non-moving party, did not comply with Local Rule 56.1 by providing a "correspondingly numbered paragraph responding to each numbered paragraph in the statement of the moving party." R&R at 8 (quoting Loc. Civ. R. 56.1 (b)). Instead, Abeles required the court to sift through a collection of allegations which purport to be a Local Rule 56.1 Counter-Statement. Significantly, Abeles's counter-statement does not refute many of Farmers Pride's facts and facts that are unopposed by Abeles cannot be used to create issues of material fact. See Alliance Security Products, Inc. v. Fleming Co., 471 F.Supp.2d 452 (S.D.N.Y. 2007).

Breach of Contract

The R&R recommends dismissing Abeles's breach of contract claims. Abeles's primary objection is that Judge Wall granted summary judgment despite some evidence that contracts existed. Abeles's Objections5. It is undisputed that only oral agreements existed between the parties, and there were no written agreements. Thus, viewing in the light most favorable to Abeles its allegation that binding oral agreements governed the parties' relationship, the issue is then whether these oral agreements were valid in light of New York's Statute of Frauds, codified in New York General Obligations Law § 5-701. R&R 8.Judge Wall found that the oral agreements did not satisfy the Statute of Frauds and, upon de novo review, this court agrees.

As an initial matter, the existence of a contract is an issue of law for the court to determine based on the undisputed facts.See Ronan Associates, Inc. v. Local 94-94A-94B, Intern. Union of Operating Engineers, AFL-CIO, 24 F.3d 447, 449 (2d Cir. 1994) ("[u]nder traditional principles of contract law, questions as to what the parties said, what they intended, and how a statement by one party was understood by the other are questions of fact; however, the matter of whether or not there was a contract, in light of the factual findings on these questions, is an issue of law"); Cortland Asbestos Products, Inc. v. J. & K. Plumbing ...

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