Eastern of Maine, Inc. v. Vintners Group Ltd.

495 A.2d 318, 1985 Me. LEXIS 754
CourtSupreme Judicial Court of Maine
DecidedJuly 5, 1985
StatusPublished
Cited by3 cases

This text of 495 A.2d 318 (Eastern of Maine, Inc. v. Vintners Group Ltd.) is published on Counsel Stack Legal Research, covering Supreme Judicial Court of Maine primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Eastern of Maine, Inc. v. Vintners Group Ltd., 495 A.2d 318, 1985 Me. LEXIS 754 (Me. 1985).

Opinion

GLASSMAN, Justice.

Eastern of Maine, Inc., (Eastern) appeals from a judgment of the Superior Court, Androscoggin County, finding that the termination of its franchise agreement by Vintners Group Ltd. (Vintners) was supported by good cause, as required by 28 M.R.S.A. § 667 (Supp.1984), that 28 M.R. S.A. § 669 (Supp.1984) did not afford Eastern a right to compensatory relief based on Vintners’ bare failure to give notice of termination, and that Eastern had not met its burden of proving damages sought pursu[320]*320ant to 28 M.R.S.A. § 672 (Supp.1984). We affirm the judgment.

I.

The facts of this case are set out in greater detail in Eastern of Maine, Inc. v. Vintners Group Ltd., 455 A.2d 936 (Me.1983) (Vintners I). Stated briefly, the facts are as follows. Vintners is a supplier of wines in New England, having its warehouse in Danvers, Massachusetts. Vintners is the certificate of approval holder with the right to sell Sebastiani wine products in Maine. During the period of time relevant to this action, Eastern was a wholesaler of wines with its principal place of business in Lewiston. In 1976, by oral agreement with Vintners, Eastern acquired the exclusive wholesale distributorship of Sebastiani wines in an area encompassing much of the state of Maine.

With Vintners’ knowledge and participation, Eastern attempted to negotiate the sale of its distributorship to a single wholesaler in late 1979 and early 1980, but no transfer resulted at that time. Between July and December 1980, Eastern divided its Sebastiani distribution area into three sections and sold each section to a different wholesale distributor without previously consulting Vintners.

In August 1980, Eastern wrote a letter to the Maine Bureau of Alcoholic Beverages, informing the agency of the first sale, which had occurred in July. Eastern sent a copy of the letter to Vintners, thus giving Vintners its initial notice of the sale. Vintners responded by letter dated September 18,1980, notifying Eastern of its opposition to the transfer and requesting Eastern’s resignation from its Maine distributorship. On September 23, the day after contracting for the second sale, Eastern met with Vintners, but the parties were unable to resolve their differences. In a letter dated September 25, Vintners terminated Eastern’s distributorship and conveyed its intention to appoint another distributor to cover its Maine territory.

On September 26, Eastern wrote a letter notifying Vintners of its transfer of the second portion of the distribution territory. Eastern requested Vintners’ consent to the transfer, which Vintners refused to give. Eastern assigned the remaining section of its territory to the third buyer on November 14. Later in the fall, Vintners stopped supplying Eastern with Sebastiani products and appointed Pine State Beverage (Pine State) as the new distributor covering Eastern’s former territory.

In December 1980, Eastern filed suit against Vintners and Pine State in Superior Court, seeking preliminary and permanent injunctions, compensatory and punitive damages, and litigation costs. After a jury-waived trial, the court entered judgment for Vintners.

Eastern appealed from the judgment. On appeal, we affirmed the judgment in part, holding that vintners had reasonably refused to consent to the assignments and that the transfers therefore had no legal effect. Vintners I, 455 A.2d at 943, 945. Because the record did not disclose the terms of the distribution agreement between Vintners and Eastern, we vacated the Superior Court’s finding that Eastern had violated the agreement and remanded the case for the trial court’s determination whether Vintners had good cause to terminate the agreement. Id. at 944. Finally, we held that Eastern’s “breach” would not necessarily relieve Vintners from complying with the notice requirements of 28 M.R. S.A. § 669. Id.

By agreement of the parties, the matter was resubmitted to the trial court on the original record. On remand, the Superior Court held.that Eastern’s unilateral implementation of the transfers without Vintners’ consent gave Vintners good cause to terminate the distribution agreement. The court found Vintners thereby relieved of liability under 28 M.R.S.A. § 671,1 and held [321]*321that the statute imparts no right to compensatory damages for the mere failure to give notice of termination. Finally, the court rejected Eastern’s claim of damages under section 672, finding insufficient evidence that Vintners had terminated Eastern’s distribution rights in bad faith.

II.

Eastern contends the Superior Court erred in finding on remand that Vintners had good cause to terminate the distribution agreement as required by 28 M.R. S.A. § 668.2 The parties agree that Eastern’s acts do not fall within the ambit of subsections (A) through (C) of section 668. Eastern contends that subsection (D) also does not apply because there is no evidence in the record that pretransfer approval of any sale of distribution rights by Eastern was a “reasonable and material requirement imposed” by Vintners on the wholesaler. Recognizing that section 668 expressly provides that the subsections are not exclusive illustrations of factual situations constituting good cause to terminate a distributorship agreement, Eastern notes that the circumstances in subsections (A) through (C) all pertain to the unfitness or inability of a wholesaler through economic failure or wrongdoing to distribute the certificate holder’s products effectively. Eastern argues that the failure to get prior consent to an assignment is not of a sufficiently similar nature to those examples to come within section 668.

We disagree. The statute charges a certificate of approval holder with filing in the Bureau of Alcoholic Beverages a list identifying the wholesalers authorized to distribute the certificate holder’s products and their respective exclusive territories. 28 M.R.S.A. § 667 (Supp.1984). The State thereby retains control of the sale of beer and wine in Maine through the certificate holders, who retain control of the distributors of their products. If a distributor were permitted to assign its sales territory without allowing the certificate of approval holder an opportunity to consider the suitability of the buyer, this sequence of responsibility would be seriously impaired.

Furthermore, while recognizing that the purpose of the Act is to address “the unequal bargaining power of the certificate of approval holder as compared to the wholesale licensee,”3 we stated in Vintners I:

The Legislature did not intend and the Act does not contemplate addressing the imbalance by tipping the scales in favor of the wholesaler. The express legislative goal of promoting “fair business relations” between certificate holders and [322]*322wholesalers will be achieved by eliminating capricious and arbitrary action by the certificate holder against the wholesaler, not by sacrificing sound economic and business judgment, on which the certificate holder’s business and any “business relations” depend.

455 A.2d at 942-43.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Cite This Page — Counsel Stack

Bluebook (online)
495 A.2d 318, 1985 Me. LEXIS 754, Counsel Stack Legal Research, https://law.counselstack.com/opinion/eastern-of-maine-inc-v-vintners-group-ltd-me-1985.