Alfred F. Pirrone, D/B/A Pirrone Wine Cellars v. Monarch Wine Company of Georgia

497 F.2d 25, 14 U.C.C. Rep. Serv. (West) 1298, 1974 U.S. App. LEXIS 7706
CourtCourt of Appeals for the Fifth Circuit
DecidedJuly 10, 1974
Docket73-2913
StatusPublished

This text of 497 F.2d 25 (Alfred F. Pirrone, D/B/A Pirrone Wine Cellars v. Monarch Wine Company of Georgia) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fifth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Alfred F. Pirrone, D/B/A Pirrone Wine Cellars v. Monarch Wine Company of Georgia, 497 F.2d 25, 14 U.C.C. Rep. Serv. (West) 1298, 1974 U.S. App. LEXIS 7706 (5th Cir. 1974).

Opinion

GEE, Circuit Judge:

This diversity contract action was brought by Alfred F. Pirrone (Pirrone), a California wine-maker of modest capacity, against Monarch Wine Company of Georgia (Monarch), the nation’s largest purchaser of peach brandy. From a jury verdict for Pirrone, Monarch appeals. We affirm in part and in part reverse.

Peach brandy is an off-season crop for California wine-makers such as Pirrone. Since peach production there occurs from late June into August, it is possible to produce this brandy and clear production facilities of it in time for the major activity, grape-crushing, which commences in late summer or early fall. In January of 1968, Pirrone executed a written contract with Monarch to produce and sell to it 150,000 proof gallons of the brandy for each of the 1968 and 1969 crop seasons at $.75 per proof gallon. Monarch was to have the option to buy 30,000 additional proof gallons each year should Pirrone produce so much, and Pirrone was to produce peach brandy for no one else during these years. A shipping schedule was provided by which about half the brandy was to be shipped during the period of production and the remainder in five equal monthly carloads thereafter.

For reasons not entirely clear, Monarch had no more than executed the Pirrone contract when it began to repent of it. Monarch witnesses at trial related that it had over-bought on brandy, and during 1968 the market price dropped to two-thirds of the contract price. By early June, Monarch executives were seeking to persuade Pirrone to modify the contract, then entirely ex-ecutory, to diminish its amounts. Pirrone refused, but a memorandum in Monarch’s files indicated a belief by its officials that Pirrone had agreed they need not take delivery of any of the 1968 brandy until December. At trial, Pirrone denied making such an agreement.

Agreement or no, Monarch took full advantage of the fact that Pirrone could ship no brandy whatever without a permit from the United States for each shipment — a permit which Monarch had to initiate. The record is clear that Monarch grossly violated the shipping schedules of the agreement. As a result, by late September, Pirrone was threatening to destroy the brandy unless he *27 received some shipment authorizations. And in late October Pirrone wrote to Monarch complaining of financial difficulties and requesting a substantial advance payment to tide him over. Monarch, however, maintained its position that the contract had been modified to require it take no shipments until December, though it did authorize one 16,-000 gallon carload in late September as a “favor” to Pirrone. Just before Christmas, 1968, Monarch at last proposed to take 40,000 gallons in February, and Pirrone responded insisting on monthly shipments each of 15,000 gallons commencing in December.

With his facilities thus stuffed with Monarch’s brandy and no sure relief in sight, Pirrone suggested in early January 1969 that the contract be ended. By his proposal, Monarch would take all the-brandy which he had produced for it on a shipping schedule which would clear his storage by July. To complicate matters, Pirrone had produced a 30,000 gallon surplus because of the unusual sweetness of the 1968 peach crop, and Pirrone thus sought to have Monarch take this off his hands. His proposal was embodied in a writing, styled “Termination Agreement” and signed by him.

Monarch’s response was to return to Pirrone a revised agreement, executed by its president and likewise dated in January 1969, under which Pirrone’s storage would not be cleared until August and Monarch would not purchase the surplus. Pirrone rejoined with a telegraphic ultimatum to sign the agreement prepared by him and forward a shipping permit or stand suit on the original contract. The following day, February 5, however, he took a different tack.

Under that date, he wrote to Monarch’s president, in pertinent part as follows:

Dear Mr. Gilsten:
This is intended as an addition and clarification to our termination agreement dated January 1969.
Monarch Wine Company of Georgia, Inc., will be required to take delivery of one hundred and thirty five thousand (135,000) proof gallons of peach high proof, excluding approximately fifteen thousand (15,000) proof gallons which Monarch has already received, on or before the 1st day of July, 1969.

The remainder of the letter consisted of bland references to housekeeping details. Pirrone’s letter crossed in the mails one from Monarch’s Georgia counsel to Pirrone stating flatly that Monarch would purchase none of the surplus brandy and urging execution of Monarch’s form of the termination agreement. During the spring and summer of 1969 the remainder of the 1968 brandy was finally ordered out and delivered to the accompaniment of threats and rumblings by Pirrone and remonstrances by Monarch, none of which produced any definitive resolution of what the parties by now rather plainly saw as the sole remaining live issue between them, the disposition of the surplus 30,000 gallons from the 1968 crop year.

At last, when only 8,000 gallons remained to be delivered, California counsel for Pirrone made letter demand on Monarch to take the surplus forthwith, noting “that Mr. Pirrone sent you a Termination Agreement in January of this year in which you agreed to remove all of this brandy. . . .” This arrived on the same day that Monarch forwarded to Pirrone the permit for shipment of the last 8,000 gallons covered by letter remarking: “This completes the total amount under our agreement.” Pirrone made no brandy for Monarch during the 1969 peach season, but in November filed a suit for lost profits on the 1969 portion of the original agreement in the California courts which was eventually dismissed, apparently for want of jurisdiction over Monarch’s person. About two years after the abortive filing in California, Pirrone brought this action on the original contract seeking in three counts, damages for (1) delays in taking delivery of the 1968 crop brandy, (2) loss of profits on the 1969 crop increment, and (3) failure of Monarch to take the 30,000 gallon surplus produced in 1968.

Trial produced only a little light beyond the above, which is drawn chiefly from the parties’ correspondence and memoranda introduced as exhibits. Both were ready writers. Two matters of some significance were, however, elicited in testimony. Pironne admitted, in ef *28 feet, that by the letter of February 5, 1969, quoted in part above, he meant to mislead Monarch into believing he agreed to Monarch’s conditions of terminating the contract, while maintaining a secret intent to force the 30,000 gallon surplus upon Monarch. He excused this by citing his desperation at having facilities clogged with brandy which he could not ship without Monarch’s by-your-leave, his financial problems, etc. A Monarch official, for its part, admitted under heavy cross-examination that had Pirrone not agreed to Monarch’s conditions, the remainder of the 1968 brandy would never have been ordered out at all. Pirrone’s basic theories were no executed termination agreement or, if one, duress invalidating it, and breach and anticipatory breach of contract. On a general charge incorporating these theories, as well as waiver and the effect of partial agreements under Georgia law, the jury found for Pirrone in damages on each of his three counts.

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Bluebook (online)
497 F.2d 25, 14 U.C.C. Rep. Serv. (West) 1298, 1974 U.S. App. LEXIS 7706, Counsel Stack Legal Research, https://law.counselstack.com/opinion/alfred-f-pirrone-dba-pirrone-wine-cellars-v-monarch-wine-company-of-ca5-1974.