Minnesota Best Maid Cookie Co. v. Flour Pot Cookie Co.

412 N.W.2d 380, 1987 Minn. App. LEXIS 4801
CourtCourt of Appeals of Minnesota
DecidedSeptember 22, 1987
DocketC3-87-727
StatusPublished
Cited by4 cases

This text of 412 N.W.2d 380 (Minnesota Best Maid Cookie Co. v. Flour Pot Cookie Co.) is published on Counsel Stack Legal Research, covering Court of Appeals of Minnesota primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Minnesota Best Maid Cookie Co. v. Flour Pot Cookie Co., 412 N.W.2d 380, 1987 Minn. App. LEXIS 4801 (Mich. Ct. App. 1987).

Opinion

OPINION

HUSPENI, Judge.

On December 16, 1986, the trial court issued a temporary injunction which restrained Minnesota Best Maid Cookie Co., Inc. (Best Maid), from distributing gourmet cookie products to five named corporations on the confidential customer list owned by Flour Pot Cookie Company, Inc. (Flour Pot). The injunction was dissolved by order dated March 13, 1987.

This appeal is taken from the March order under Rule 103.03(b) of the Minnesota Rules of Civil Appellate Procedure. Appellant, Flour Pot, contends the temporary injunction should have been extended and that the order dissolving the injunction should be vacated on the basis that the trial judge made no findings of fact or conclusions of law as required by Minn.R.Civ.P. 52. We affirm.

FACTS

Flour Pot was formed by two Minneapolis homemakers who created a partnership to make and sell the gourmet soft chewy cookies and muffins they had developed. An agreement was reached between Flour Pot and Best Maid in 1982, which permitted Best Maid to manufacture cookies and muffins according to Flour Pot secret recipes and distribute them to Flour Pot confidential customers. Additionally Best Maid, its principals and employees were required to sign covenants to assure the confidentiality of Flour Pot recipes, manufacturing processes, know-how and customer information. In June 1985, Byron Erickson, president of Best Maid, gave written notice to Flour Pot of his intent to terminate the agreement between them.

Flour Pot owed Best Maid $150,731.41 for past due invoices at the time the business relationship was terminated. In November 1985, Best Maid sued in Minnesota state court to obtain the sum owed. Flour Pot then filed suit in federal court in Iowa. The two lawsuits were settled when the parties negotiated an Agreement and Release effective December 2, 1985. Both parties were represented by counsel. Alleged breaches of the Agreement resulted in the present litigation.

The relevant provisions in the December 1985 covenant not to compete were as follows:

For good and valuable consideration, the parties hereto agree as follows:
1. For a period of Fifteen (15) months from the Effective Date, (December 2, 1985), neither Best Maid * * *, shall not directly or indirectly sell, distribute or *382 otherwise transfer * * * Gourmet muffins and cookies * * * to, or directly or indirectly solicit orders for Cookie Products from, any customer * * * identified on the list attached hereto * * *.
c. * * * However, Best Maid will not be deemed to be in violation of this covenant if any Unrelated Distributor, not listed on Exhibit 1 resells Best Maid Cookie Products to any customer listed on Exhibit 1 if such customer’s identity is independently known to or discovered by the Unrelated Distributor and is not learned from or disclosed by Best Maid or any of the Individuals.
d. The term “Unrelated Distributor” means any entity in the business of purchasing and reselling food products which is not affiliated or associated with Best Maid * * * at any time prior to the termination of the August 31, 1982 Agreement.
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3. Confidentiality of Flour Pot Know-how. Best Maid and the Individuals hereto will keep confidential and not use or disclose to any person (or permit any Best Maid employee, director, officer or shareholder) to use or disclose any recipes furnished by Flour Pot to Best Maid or such persons (or learned by Best Maid or such persons) during the course of performance of the August 31, 1982, agreement. Best Maid and the Individuals .represent and warrant as of the Effective Date that none of them have disclosed such materials to any other person. This obligation shall continue throughout the terms hereof and thereafter shall cease only as to such portions of the foregoing information which have entered the public domain through no fault of Best Maid or any of the Individuals.
4. Best Maid Recipes. Best Maid and the Individuals hereto each represents and warrants that the recipes which Best Maid uses for its Cookie Products are substantially different from the recipes currently used by Flour Pot for the same types of products. The parties acknowledge that Best Maid may not use different ingredients for all types of Cookie Products listed in Exhibit 2 hereto, but Best Maid and each of such persons represents and warrants that if any of such Cookie Products use all of the same ingredients as the same type of Flour Pot products, then such type of cookie consists of substantially different measures of such ingredients. The representations and warranties set forth herein shall continue to be true throughout the term of this Agreement and thereafter as necessary to comply with the obligations of paragraph 3.
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7. Damages. The parties acknowledge that it would be difficult to determine Flour Pot’s actual damages resulting from any breach by Best Maid * * * of paragraph 1 of this agreement. Accordingly the parties agree that the measure of damages set forth below represents a fair and reasonable method for determining Flour Pot’s damages arising from any such breach and stipulate and agree that such measure shall be the exclusive method for determining such damages.
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b. The liquidated damages provisions, as set forth in this paragraph, shall be the exclusive remedy for any breach of paragraph 1 of this Agreement.
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8. Injunctive Relief. Without limiting any other remedy to which Flour Pot may be entitled hereunder or under applicable law, the parties acknowledge that in the event of any breach of the provisions of paragraph 2, 3 or 4 herein, Flour Pot shall be entitled to obtain an injunction prohibiting any further such violation.
9. Payment and Escrow Account
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c. If, on the due date for any of the foregoing payments, a breach of this Agreement has occurred and has not been resolved by judicial order or otherwise by the parties to their mutual *383 satisfaction, Flour Pot may instruct the Escrow Agent to hold back One hundred ten percent (110%) of the amount in dispute from the sum otherwise due and payable on such date.
* * * * * *
e. In the event Flour Pot instructs the Escrow Agent to hold back all or any portion of any funds otherwise payable * * * for an alleged breach of paragraph 1 of this Agreement, the alleged breach shall be submitted to arbitration under the rules of the American Arbitration Association * * * and Minnesota Uniform Arbitration Act.
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Pursuant to the agreement, an immediate down payment on the debt was to be made by Flour Pot and the remainder owing was to be deposited in an escrow fund and paid over a fifteen month period.

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Cite This Page — Counsel Stack

Bluebook (online)
412 N.W.2d 380, 1987 Minn. App. LEXIS 4801, Counsel Stack Legal Research, https://law.counselstack.com/opinion/minnesota-best-maid-cookie-co-v-flour-pot-cookie-co-minnctapp-1987.