Mastaba, Inc. v. Lamb Weston Sales, Inc.

23 F. Supp. 3d 1283, 2014 U.S. Dist. LEXIS 72865, 2014 WL 2207884
CourtDistrict Court, E.D. Washington
DecidedMay 27, 2014
DocketCase No. CV-13-5049-EFS
StatusPublished
Cited by9 cases

This text of 23 F. Supp. 3d 1283 (Mastaba, Inc. v. Lamb Weston Sales, Inc.) is published on Counsel Stack Legal Research, covering District Court, E.D. Washington primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Mastaba, Inc. v. Lamb Weston Sales, Inc., 23 F. Supp. 3d 1283, 2014 U.S. Dist. LEXIS 72865, 2014 WL 2207884 (E.D. Wash. 2014).

Opinion

ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT LAMB WESTON’S MOTION FOR PARTIAL SUMMARY JUDGMENT; GRANTING PLAINTIFF MASTABA’S MOTION FOR PARTIAL SUMMARY JUDGMENT; AND GRANTING PLAINTIFF MASTABA’S MOTION FOR RELIEF FROM LIMITATION ON DISCOVERY

EDWARD F. SHEA, Senior District Judge.

A hearing occurred in the above-captioned matter on May 13, 2014. Plaintiff Mastaba, Inc. was represented by Kyle Silk-Eglit. Gerald Kobluk appeared on behalf of Defendants Lamb West Sales, Inc., Lamb-West, Inc., ConAgra Foods Lamb Weston, Inc., Michael Neal, and Kenneth Soh (collectively, “Lamb Weston”). Before the Court was Lamb Weston’s Motion for Partial Summary Judgment, ECF No. 32. Also before the Court without oral argument was Mastaba’s Motion for Partial Summary Judgment, ECF No. 39, and Mastaba’s Motion from Limitation on Requests for Production, ECF No. 37. After reviewing the record and relevant authority and listening to the arguments of counsel, the Court was fully informed. For reasons set forth below, the Court denies in part and grants in part Lamb Weston’s motion, grants Mastaba’s motion for summary judgment, and grants Mastaba’s Motion from Limitation on Requests for Production.

I. Factual Background1

Mastaba handles the sale of frozen potato products in the Philippines. Lamb Weston produces potato products for sale worldwide. Between 1998 and 2012, Masta-ba and Lamb Weston entered into letter agreements, each with a one-year term, from January 1 to December 31 of each year.2 Under the one-year service agreements, Lamb Weston was Mastaba’s sole supplier of potato products and paid Mas-taba a fee per net pound of French fry sales.

Beginning in 2011, Mastaba and Lamb Weston entered into discussions regarding their business relationship. On February 18, 2011, Lamb Weston sent two employees to the Philippines, new Director of Sales and Businesses Development Michael Neal and Sales Agent Kenneth Soh to meet with Mastaba. Mastaba alleges [1289]*1289that at this meeting Lamb Weston encouraged Mastaba to commence capital investments, including a “test kitchen,” hiring of additional sales staff, and creating a succession plan. ECF No. 49 ¶ 10. Mastaba contends that Patrick Johnson, Mastaba’s General Manager, expressed concern over the price of the test kitchen, and informed Lamb Weston that in order to make such an investment, it would need a long-term contract. Id. ¶ 17. According to Mr. Johnson’s declaration, Mr. Neal responded .that Mastaba’s “long term position as Lamb Weston’s broker is secure” and if Mastaba made the investments, he “would get Mastaba a long term contract.” Id. ¶ 19.

Mastaba proceeded to undertake the capital investments, building a test kitchen over the course of 2011. ECF No. 33 ¶ 8; ECF No. 42. Lamb Weston oversaw much of the test kitchen’s planning and construction. ECF No. 49. ¶¶ 22-30. On February 28, 2011, Mr. -Neal, in an e-mail to Mr. Johnson, instructed Mastaba to “build a professional looking kitchen.” ECF No. 49, Ex. A. Mr. Neal then directed Mastaba to buy a commercial 501b fryer and daylight florescent lights. Id. In response, Mr. Johnson inquired from Mr. Soh the reason for the purchase of such an expensive model for a fryer, and Mr. Soh replied because “it is a long term investment.” ECF No. 49 ¶8. In addition to other specific requests, Lamb Weston requested Mastaba send weekly reports informing Lamb Weston of details on the test kitchen’s progress. Id., Ex. F. Mr. Soh also forwarded an e-mail exchange relating to the test kitchen between Mr. Johnson and he to Mr. Neal and Mr. Howe writing, “not bad, he is working fast now ...” Id.

In an e-mail written on June 5, 2011, Mr. Neal congratulated Mastaba on its good work, ending with “we look forward to your continued support for the year of 2011/2012 & many more years ...” ECF No. 49, Ex. P.

On September 7, 2011, as a result of the completion of the test kitchen, Mr. Johnson sent Mr. Neal a letter regarding the long-term contract as one for a term of five years. ECF No. 51 ¶ 17; ECF No. 49, Ex. R. Mr. Neal responded in agreement, saying the letter “accurately states the current state of affairs.” ECF No. 49, Ex. S. However, Mr. Neal indicated to Mr. Johnson that he may not possess the authority to enter into a 5-year agreement, stating “I do not know if we can do a 5-year agreement? Don’t think ConAgra allows such with its brokers/agents?” ECF No. 49, Ex. S. Mastaba contends this was the first time it had heard Mr. Neal lacked such authority. ECF No. 49 ¶ 71.'

In November 2011, Lamb Weston offered three iterations of a limited term service agreement. Mastaba contends these new agreements had less favorable terms for Mastaba than the previous service agreements. Id. ¶ 56. The proposed agreements reduced commission from 2.1% to 1%'and deprived Mastaba of commission on post termination sales. Id. One agreement would also have allowed termination without cause after sixty days. ECF No. 49, Ex. T. Mastaba contends these agreements would have made its business unprofitable. ECF No. 51 ¶ 9.

On April 25, 2013, Mastaba filed this lawsuit. It asserts claims of breach of contract, promissory estoppel, quantum meruit, unjust enrichment, negligent misrepresentation, and fraud. ECF No. 1.

Lamb Weston filed a motion for partial summary judgment, ECF No. 32, on March 10, 2014. Mastaba filed a motion for partial summary judgment, ECF No. 49, on March 17, 2014, and a Motion from Limitation on Requests for Production on March 12, 2014.

[1290]*1290II. Summary Judgment Standard

Summary judgment is appropriate if the record establishes “no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). The party opposing summary judgment must point to specific facts establishing a genuine dispute of material fact for trial. Celotex Corp. v. Catrett, 477 U.S. 317, 324, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). If the non-moving party fails to make such a showing for any of the elements essential to its claim for which it bears the burden of proof, the trial court should grant the summary judgment motion. Celotex Corp., 477 U.S. at 322, 106 S.Ct. 2548.

III. Lamb Weston’s Motion for Summary Judgment

Lamb Weston requests partial summary judgment for dismissal of Mastaba’s claims for damages related to a) an unwritten long-term contract, b) future sales or services beyond 2011 service agreement, and c) Mastaba’s 2011 operating expenses and capital investments. ECF No. 32.

A. Damages Relating to Unwritten Long-Term Contract

At the heart of Lamb Weston’s motion for partial summary judgment is whether there is sufficient evidence that Lamb Weston informed Mastaba it would enter into a long-term contract in exchange for Mastaba building a test kitchen and making other capital investments. Mastaba’s claims rely on occurrence of this commitment during this discussion. ECF No. 1.

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Bluebook (online)
23 F. Supp. 3d 1283, 2014 U.S. Dist. LEXIS 72865, 2014 WL 2207884, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mastaba-inc-v-lamb-weston-sales-inc-waed-2014.