Ash v. Hack Branch Distributing Co., Inc.

54 S.W.3d 401, 2001 Tex. App. LEXIS 5262, 2001 WL 872638
CourtCourt of Appeals of Texas
DecidedAugust 1, 2001
Docket10-99-322-CV
StatusPublished
Cited by103 cases

This text of 54 S.W.3d 401 (Ash v. Hack Branch Distributing Co., Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Ash v. Hack Branch Distributing Co., Inc., 54 S.W.3d 401, 2001 Tex. App. LEXIS 5262, 2001 WL 872638 (Tex. Ct. App. 2001).

Opinion

OPINION

DAVIS, Chief Justice.

The owners of several McLennan County restaurants and taverns filed suit against four beer distributors alleging violations of the Texas Free Enterprise and Antitrust Act of 1983 and tortious interference with existing and prospective business relationships. The court granted motions for summary judgment filed by Hack Branch Distributing Company, Inc. and Dudley Haas Distributing Company, Inc. and severed the plaintiffs’ claims against the other two defendants. The plaintiffs claim on appeal that the court abused its discretion by overruling their objections to portions of the defendants’ summary judgment evidence and that the court erred in granting the summary judgments because genuine issues of material fact exist on their claims.

BACKGROUND

The plaintiffs/appellants include John and Stacy Ash (the Ashes), George Betros, *406 and Bill Snider. The defendants in the underlying suit consist of Hack Branch Distributing Company, Inc. (“Branch”), Dudley Haas Distributing Company, Inc. (“Haas”), Jack Hilliard Distributing Company, Inc. (“Hilliard”), and Brazos Beverages, Inc. (“Brazos”). Branch and Hilliard are the Anheuser-Busch distributors for McLennan and Brazos Counties respectively. Haas and Brazos are the Miller distributors for those counties respectively.

According to the record, major national breweries sell beer in Texas through the use of exclusive territorial distributors. Each brewery contracts with one distributor in each territory, giving that distributor the exclusive right to sell that brewery’s product on the wholesale market in that territory. The territorial limits are strict, and the breweries prohibit each distributor from selling directly to retailers in other territories. Texas law, however, strictly honors the right of retailers to purchase beer from any distribution territory in the state. See Tex. Alco. Bev.Code Ann. § 102.53 (Vernon 1995). As a result, while a distribution agreement may validly prevent a distributor from delivering beer directly to retailers in another territory, it may not prevent a retailer from purchasing directly from a distributor in another territory and transporting the beer back into the retailer’s home territory. Id.

Appellants’ antitrust claims center around allegations that the owners of Branch and Haas have conspired to raise the wholesale price of,freer in McLennan County and maintain the price at inflated levels. Appellants allege that the conspiracy is facilitated through the owners’ membership in the McLennan County Wholesale Beer Distributors Association (the “Association”), which is composed entirely of McLennan County beer distributors. Appellants allege that the Association routinely holds closed meetings at which the members discuss and agree upon wholesale beer prices to be charged within McLennan County in violation of Texas antitrust law.

The Ashes further allege that Branch and Haas impermissibly exerted pressure on Hilliard and Brazos to prevent the Ashes from purchasing beer on the wholesale market in Brazos County. The Ashes contend that this conduct amounts to a tor-tious interference with prospective business relations between the Brazos County distributors and themselves.

Facts Pertinent to the Tortious Interference Claim

In December 1994, Branch and Haas each announced a $2.00-per-keg price increase, scheduled to take effect on the same day. The Ashes claim that, during that time period, the wholesale price of beer kegs in Brazos County was approximately twenty dollars cheaper than in McLennan County. As a result, the Ashes traveled to Brazos County to purchase keg beer from J.J.’s, a wholesale store in Bryan. They testified by deposition that, prior to making the sale, the owner of the store verified the propriety of the sale with Brazos’s vice-president and general manager Jim Pillans, who indicated that a sale to an extra-territorial retailer was permissible.

Pillans testified that Haas’s general manager Mark SoRelle later contacted him and expressed concern about Bryan wholesalers selling beer to Waco retailers. Pil-lans told SoRelle that he would investigate the matter. He then contacted J.J.’s and verified his suspicion that the buyers about whom J.J. had previously inquired were the same buyers about whom SoRelle was concerned. Pillans testified that, after reviewing his contract with Miller, he concluded that he could not permit J.J.’s to *407 sell keg beer to the Ashes. He then called J.J.’s to inform its operators that he would stop selling to J.J.’s if it continued to sell beer to the Ashes.

When the Ashes were told that they could no longer purchase beer from J.J.’s, John Ash contacted the Texas Alcoholic Beverage Commission and confirmed that his attempt to purchase beer from a wholesaler outside the McLennan County territory was lawful. He then decided to attempt to purchase keg beer directly from Hilliard and Brazos. Due to his suspicions that these Brazos County distributors were engaging in illegal conduct, Ash secretly taped his conversations with the representatives of the distributors.

Ash initially attempted to purchase keg beer from Brazos. He testified that Pil-lans refused to sell him any beer. Pillans’s deposition testimony confirms Ash’s account and reflects that he refused to sell beer to Ash because he believed that Brazos’s distributorship agreement with Miller prevented him from selling to anyone who would take the product out of Brazos’s designated territory.

Ash then proceeded to Hilliard’s where he presented his valid licenses and permits and sought to purchase keg beer. The receptionist referred Ash to the Sales Manager, Dave Smith. Smith acknowledged in his deposition that he was aware at this time that Ash was from McLennan County. While Ash was waiting to meet with Smith, Smith accepted a call from Hilliard president, Jack Hilliard, Jr. Ash also presented the affidavit of Larry Salter who stated that a Branch employee told him that someone from Hilliard called Branch while Ash was there regarding the fact that Ash was in Bryan attempting to purchase keg beer. In his deposition, Smith confirmed that he spoke with Jack Hilliard but denied speaking with anyone at Branch.

After speaking with Jack Hilliard, Smith told Ash that he would not sell him any beer. Ash testified that Smith, like Pil-lans, justified this refusal by indicating his belief that the distributorship agreement with Anheuser-Busch prevented him from selling to retailers outside the Brazos County territory. Smith further explained the decision as an “unwritten rule” between Anheuser-Busch distributors to honor each other’s territory, and indicated that Jack Hilliard had prevented the sale because “he just didn’t want to get into it with [Haskell].”

Facts Pertinent to the Antitrust Claims

Appellants allege that Appellees’ attempts to illegally enforce their distribution districts is related to their participation in a conspiracy to fix the wholesale price of beer in McLennan County. In support of these contentions, Appellants allege several operative facts. Initially, Appellants note that the price of different brands of keg beer in McLennan County has been uniform throughout the relevant time periods.

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Bluebook (online)
54 S.W.3d 401, 2001 Tex. App. LEXIS 5262, 2001 WL 872638, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ash-v-hack-branch-distributing-co-inc-texapp-2001.