Dell's Maraschino Cherries Co. v. Shoreline Fruit Growers, Inc.

887 F. Supp. 2d 459, 78 U.C.C. Rep. Serv. 2d (West) 389, 2012 WL 3537009, 2012 U.S. Dist. LEXIS 114583
CourtDistrict Court, E.D. New York
DecidedAugust 14, 2012
DocketNo. 10 Civ. 3789(ILG)(RER)
StatusPublished
Cited by17 cases

This text of 887 F. Supp. 2d 459 (Dell's Maraschino Cherries Co. v. Shoreline Fruit Growers, Inc.) is published on Counsel Stack Legal Research, covering District Court, E.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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Dell's Maraschino Cherries Co. v. Shoreline Fruit Growers, Inc., 887 F. Supp. 2d 459, 78 U.C.C. Rep. Serv. 2d (West) 389, 2012 WL 3537009, 2012 U.S. Dist. LEXIS 114583 (E.D.N.Y. 2012).

Opinion

MEMORANDUM AND ORDER

GLASSER, Senior District Judge.

Plaintiff Dell’s Maraschino Cherries Co. Inc. (“Dell’s”), a Brooklyn-based producer of maraschino cherries — sweetened brine cherries often found in certain cocktails and on top of ice cream sundaes — on June 23, 2011 filed a second amended complaint against Shoreline Fruit Growers, Inc. (“Shoreline”), a corporation with its principal place of business in Traverse City Michigan, the self-proclaimed “Cherry Capital of the World.” Also named as defendants are several other Michigan-based defendants in the cherry business: Cherry Ke, Cherries-R-Us, and Great Lakes Packing Co. (“Great Lakes”) (together, “defendants”). Dell’s asserts claims for a violation of the Perishable Agricultural Commodities Act (“PACA”), 7 U.S.C. § 499a et seq., and state law claims for breach of contract and breach of the implied covenant of good faith and fair dealing against Shoreline, as well as state law' claims for. tortious interference and civil conspiracy against Cherries-R-Us, Cherry Ke, and Great Lakes. On July 22, 2011, defendants filed an answer to the second amended complaint and Shoreline asserted several affirmative defenses, along with counterclaims for breach of contract and violations of PACA.

All of the parties’ claims arise out of an alleged contract between Dell’s and Shoreline in which Dell’s agreed to purchase 100 truckloads of Michigan brine cherries from Shoreline at a price of $.49 per pound. Presently before the Court are cross-motions for summary judgment on Dell’s claims, Shoreline’s counterclaims, and its affirmative defense of commercial impracticability. For the reasons set forth below, the parties’ motions are GRANTED in part and DENIED in part.

I. BACKGROUND

Unless otherwise noted, the following facts are undisputed. Dell’s sells finished maraschino cherries to retail and wholesale customers. Plaintiffs Statement of Undisputed Material Facts Pursuant to Local Civil Rule 56.1 dated Mar. 30, 2012 ¶ 1 (“Pl.’s 56.1”) (Dkt. No. 75). Shoreline is an agricultural cooperative that at the time of the parties’ dispute was a wholesale seller of brine cherries. Pl.’s 56.1 ¶ 4;1 Defendants’ Statement of Undisputed Material Facts Pursuant to Local Civil Rule 56.1 dated Mar. 30, 2012 ¶2 (“Defs.’ 56.1”) (Dkt. No. 80). Great Lakes, an agent of Shoreline, processes, stores, and packs Shoreline’s brine cherries. Pl.’s 56.1 ¶ 7; Defs.’ 56.1 ¶ 9.2 Cherry Ke — a wholly-owned subsidiary of Cherries-R-Us, a cherry seller — is a business engaged in cherry orchard management services. [465]*465Defs.’ 56.1 ¶¶ 3, 6; Tata Decl. II Ex. C (Veliquette Dep.), at 326. Dean Veliquette (“Veliquette”) holds key positions within each of the companies: he is the “brine cherry manager” of Shoreline, President of Cherries-R-Us, Vice President and Chairman of the Board of Cherry Ke, and a board member of Great Lakes. Affidavit of Dean Veliquette dated Mar. 28, 2012 (‘Veliquette Aff”) ¶¶ 1, 10 (Dkt. No. 81).3

On July 13, 2009, Arthur Mondella, Dell’s President, entered into a written contract with Veliquette, the contract’s drafter, to purchase 100 truckloads of “Michigan Brine Cherries (regulars)” at a price of 49 cents per pound, FOB Kewadin, Michigan from Shoreline (the “contract”). PL’s 56.1 ¶¶ 2, 8; Second Amended Complaint dated June 23, 2011 (“Am. Compl.”) Ex. A (Dkt. No. 39).4 That price was a record low for brine cherries. Declaration of Robert Tata dated Mar. 28, 2012 (“Tata Decl.”) Ex. A (Reidy Dep.), at 19 (Dkt. No. 77). The contract also included the following provisions:

Terms: 30 days with credit limit of $130,000

Shipping/Freight/Containers: Buyer [Dell’s] arranges and pays for all trucking of cherries. Shipment of 10/loads per month average. 2008 crop shipped until used approximately 10 loads (above and beyond what is currently set aside for Dell[’]s at Great Lakes Packing Co. per Trudy Cullimore). Start shipping of the 2009 crop no later than October 15, 2009 and continue for a 12 month period. Buyer advises on size and load ship dates a minimum of 2 business days ahead of pickup. Seller [Shoreline] agrees to pay freight on bins and barrel return. Buyer assures Seller that the trucks will be fully loaded with bins and/or barrels in bins with no charge for empty bins. Seller to start using Buyer’s containers when processing starts back up in August 2009.

Am. Compl. Ex. A. Although Dell’s had purchased cherries from Shoreline in the past, the parties had never before entered into a written contract for 100 loads of cherries. Second Declaration of Arthur Mondella dated Apr. 26, 2012 (“Mondella Decl. II”) ¶ 14 (Dkt. No. 86). The contract did not require Dell’s to purchase cherries exclusively from Shoreline. Am. Compl. Ex. A.

Dell’s picked up the first shipment of cherries on October 12, 2009. PL’s 56.1 ¶ 11. And, in the months that followed, Dell’s requested and Shoreline provided cherries in varying amounts under the contract. Mondella Decl. II ¶¶ 16, 20. The parties used both Dell’s and Shoreline’s bins to ship the cherries. PL’s 56.1 ¶ 41; Tata Decl. Ex. A (Reidy Dep.), at 52. Although Shoreline initially attempted to charge Dell’s a “bin rental fee” for use of its bins, Dell’s refused to pay the fee, and Shoreline never again invoiced Dell’s for it. Id. Ex. A (Reidy Dep.), at 97.

During the contract’s term, Dell’s bought cherries from sources other than Shoreline, sometimes at a price equal to or lower than the contract price of $.49 per pound. See, e.g., Mondella Decl. II ¶ 29 (“In January 2010, Dell’s started purchasing cherries from [Traverse Bay Cherry Cooperative].”); Defs.’ 56.1 Ex. V (Dell’s [466]*466spreadsheet indicating that during the term of the contract Dell’s purchased cherries from companies other than Shoreline at or lower than the contract price of $.49 per pound).

On April 1 2010, Mondella and Veliquette had a telephone conversation regarding the remainder of loads of cherries due under the contract; Mondella and Veliquette remember the conversation differently. Mondella Decl. II ¶ 30; Veliquette Aff. ¶¶ 33-34. According to Veliquette, Mondella told him Dell’s would only take delivery of an additional 35 loads under the contract — an amount that fell short of the 100 truckloads the two had agreed upon. Veliquette Aff. ¶ 34; Tata Decl. Ex. N (Veliquette Dep.), at 83. Mondella testified that in response to Veliquette’s inquiry to him whether he was going to be able to take the remainder of the loads under the contract, he said that he would. Tata Decl. Ex L (Mondella Dep.), at 213, 217. After this conversation, Shoreline began selling its inventory to customers besides Dell’s. Veliquette Aff. ¶ 36.

Dell’s claims that shortly thereafter, in or around May 2010, Shoreline started restricting Dell’s purchase of cherries under the contract. Declaration of Arthur Mondella dated Mar. 30, 2012 ¶ 11 (“Mondella Decl.”) (Dkt. No. 78). Though Shoreline objects to this characterization of its actions and when they occurred, Defs.’ Counterstatement of Material Facts dated Apr. 27, 2012 ¶ 19 (“Defs.’ 56.1 Opp’n”) (Dkt. No. 90),5

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887 F. Supp. 2d 459, 78 U.C.C. Rep. Serv. 2d (West) 389, 2012 WL 3537009, 2012 U.S. Dist. LEXIS 114583, Counsel Stack Legal Research, https://law.counselstack.com/opinion/dells-maraschino-cherries-co-v-shoreline-fruit-growers-inc-nyed-2012.