Dunnaville v. McCormick & Co., Inc.

21 F. Supp. 2d 527, 1998 U.S. Dist. LEXIS 15368, 1998 WL 681575
CourtDistrict Court, D. Maryland
DecidedSeptember 29, 1998
DocketCIV. L-95-2341
StatusPublished
Cited by27 cases

This text of 21 F. Supp. 2d 527 (Dunnaville v. McCormick & Co., Inc.) is published on Counsel Stack Legal Research, covering District Court, D. Maryland primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Dunnaville v. McCormick & Co., Inc., 21 F. Supp. 2d 527, 1998 U.S. Dist. LEXIS 15368, 1998 WL 681575 (D. Md. 1998).

Opinion

MEMORANDUM

LEGG, District Judge.

In 1994 and 1995, the plaintiff, C. Christopher Dunnaville, negotiated with representatives from defendant McCormick & Company, Inc. (“McCormick”), to purchase McCormick’s subsidiary, defendant Golden West Foods, Inc. (“Golden West”). According to Dunnaville, McCormick’s representatives assured him that he “had a deal.” Based upon these assurances, Dunnaville contends that he was instrumental to successful efforts to save Golden West’s largest customer. The customer, a buying group for Burger King franchises, had been contemplating granting an exclusive buying arrangement to one of Golden West’s competitors.

After a number of fits and starts, the negotiation fell through and McCormick sold Golden West to another buyer who offered better terms. Dunnaville responded by bringing suit against McCormick, Golden West, McCormick’s broker J.H. Chapman Group, Ltd. (“Chapman”), and John W. Loeb, a Chapman partner. In his Complaint, Dun-naville raised many claims, among others, for tortious interference with contractual relations, unjust enrichment, and quantum meru-it. 1

After a series of referrals to a magistrate judge for settlement proved unproductive, the defendants filed a Motion for Summary Judgment. Because the parties have comprehensively briefed the issues, the Court will dispense with a hearing. See Local Rule 105.6 (D.Md.1997). For the reasons set forth below, this Court shall, by separate Order, GRANT the Motion for Summary Judgment with respect to all claims and ENTER JUDGMENT in favor of the defendants.

Simply put, the negotiations between Dun-naville and McCormick expressly contemplated that no binding commitments would be formed until a final written agreement was signed, which never occurred. Moreover, at the time negotiations broke off many important terms, including the price Dunnaville would pay and the financing McCormick would provide, remained up in the air. McCormick never agreed to compensate Dunnaville for his efforts to save the Burger King business. It is also clear that Dunna-ville sought to retain Burger King as a Golden West customer for his own reasons: (1) to enhance the value of the asset he wished to purchase, and (2) to persuade McCormick to accept a deal in which all of the purchase price save a small down payment would be raised from future profits of Golden West. The Burger King account was of crucial importance to the business prospects of Golden West.

While it was negotiating with Dunnaville, McCormick never agreed not to negotiate with other prospective purchasers, and Dun-naville’s proposal was overtaken by a better offer that McCormick was free to accept. Based upon the record, no reasonable jury could find otherwise and summary judgment must be granted to the defendants.

1. Background

In 1994, McCormick decided to sell off its subsidiary corporation, Golden West. (See PL’s Part. Opp’n Defs.’ Mot. Summ. J. (“Part. Opp’n”) Ex. A, Dep. Carroll D. Nordhoff (“Nordhoff Dep.”) at 14-15.) Golden West manufactures food products for use in fast food restaurants; its primary products are onion rings and French toast sticks that it supplies to Burger King franchises. 2 (See *530 Nordhoff Dep. at 9.) In 1993, for example, Golden West’s sales were approximately $24 million; sales to Burger King accounted for roughly one-third of that total. (See Nor-dhoff Dep. at 10.)

On or around October 11,1994, Dunnaville, a vice president and financial consultant at the investment firm Smith Barney, read in the Wall Street Journal of McCormick’s plan to sell or close Golden West. (See Mot. Summ. J., Dep. C. Christopher Dunnaville (“Dunnaville Dep.”) at 30.) Dunnaville contacted McCormick to express his interest; McCormick put Dunnaville in contact with its broker, Chapman. (See Dunnaville Dep. at 40.)

David Epstein, the Chapman representative with whom Dunnaville first spoke, was initially skeptical that Dunnaville, as an individual “financial” investor, as opposed to an established food service company, would be an appropriate buyer for Golden West. (See Dunnaville Dep. at 41.) Dunnaville, however, attempted to “put a different spin on the whole situation”:

And I said to him, Well, suppose I told you that I was a minority, an African American individual, that there was a $5 billion school lunch program that was looking for minority individuals, that the NAACP had just signed a fair-share agreement with Denny’s restaurant and there were other companies, fast-food companies, that were looking to do business with minority suppliers, that there was a very high likelihood that if this company were sold to a minority individual that in fact it would become the first minority-owned frozen food manufacturer in the United States.

(Dunnaville Dep. at 41-42.)

At the time, Burger King had committed to raising the percentage of its purchasing from minority- and women-owned businesses. (See Colabuono Dep. at 9.) As early as September 1994, Burger King had informed McCormick and Golden West that it would look favorably upon the sale of Golden West to a minority owner. (See Mot. Summ. J., Dep. Carroll D. Nordhoff (“Nordhoff Dep.”) at 82; Dep. John W. Loeb (“Loeb Dep.”) at 17; Metz Dep. at 35.) In fact, as Dunnaville learned, the possibility existed that Burger King might assist a prospective minority purchaser in the acquisition of Golden West, by offering to invest or to provide purchase money loans to the minority bidder. (See Dunnaville Dep. at 144-48.)

Shortly after his conversation with Epstein, Dunnaville signed a confidentiality agreement with Chapman, and Chapman sent Dunnaville a memorandum describing the Golden West offering. (See Dunnaville Dep. at 42.) After retaining legal and accounting help, Dunnaville began conducting due diligence and assembling the particulars of his offer. (See Mot. Summ. J. Ex. 2, Letter from Dunnaville to Loeb of 11/4/1994, at 2.) In November, Dunnaville initiated discussions with John W. Loeb, a Chapman partner, regarding the specifics of his potential purchase of Golden West. (See id.)

Negotiations between Dunnaville on the one hand and Chapman’s Loeb and McCormick’s Carroll Nordhoff on the other continued through November and December 1994. Dunnaville traveled to Virginia to meet representatives from Golden West and McCormick, and later traveled to Florida to meet Burger King representatives. Dunnaville’s discussions with Burger King were positive, and Dunnaville apprised McCormick via Nor-dhoff of the progress he was making.

On or around December 20 of that year, however, Dunnaville spoke to representatives from RSI, the Burger King franchisees’ purchasing cooperative. RSI expressed dissatisfaction with Golden West’s past performance and identified a competitor that was providing better and cheaper service. (See Mot. Summ. J. Ex. 4, Memorandum from RSI’s Moullet to Burger King’s Pinckney of 12/22/1994; Dunnaville Dep. at 302 & Dep. Ex.

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Bluebook (online)
21 F. Supp. 2d 527, 1998 U.S. Dist. LEXIS 15368, 1998 WL 681575, Counsel Stack Legal Research, https://law.counselstack.com/opinion/dunnaville-v-mccormick-co-inc-mdd-1998.