Mustang Bev. Co. v. Schlitz Brewery

• Court: Montana Supreme Court
• Decided: May 29, 1973
• Docket: 12323
• Status: Published

Opinion

NO. 12323

I N THE SUPREME COURT OF THE STATE OF M N A A OTN

MUSTANG BEVERAGE COMPANY, I N C . , P l a i n t i f f and A p p e l l a n t ,

JOS . SCHILTZ BRmING COMPAIY ; WALT' S BEVERAGES I N C . , et a l .

Defendants and Respondents.

Appeal from: D i s t r i c t Court of t h e T h i r t e e n t h J u d i c i a l D i s t r i c t , Honorable Robert L. Wilson, Judge p r e s i d i n g .

Counsel o f Record:

For Appellant :

Hutton, S c h i l t z and Sheehy, B i l l i n g s , Montana. John C . S h e e h y a r g u e d , B i l l i n g s , Montana.

F o r Respondents:

C o r e t t e , Smith and Dean, B u t t e , Montana. Kendrick Smith and Gerald R. A l l e n a r g u e d , B u t t e , Montana. Moulton, Bellingham, Longo and Mather, B i l l i n g s , Montana. William S . Mather a r g u e d , B i l l i n g s , Montana.

Submitted: A p r i l 25, 1973

F i l e d :mkY 2 I( 7973 Decided : m 9 I973 2

Clerk Mr. Chief Justice James T. Harrison delivered the Opinion of the Court.

This i s an appeal from an order of the d i s t r i c t court of the thirteenth judicial d i s t r i c t , Yellowst.one County, granting summary judg- ment t o defendants. Plaintiff Mustang Beverage Company, Inc., hereinafter called Mustang, brought t h i s action t o recover damages from defendant 30s. Schlitz Brewing Company, hereinafter called Schlitz, resulting from the breach o f , and interference with, certain alleged contractual arrangements f o r the distribution of brewery products manufactured by defendant Schlitz. De- fendant Brad Brown was the d i s t r i c t representative f o r Schlitz in the Billings area. Plaintiff Mustang contended the remaining defendants intended to create a monopoly in the beer business in Billings. Atlas Beverages, Inc., Fred L. Briggs Distributing Company, Inc., Ace Beverage Company and Allied Distributors, Inc., were corporations holding wholesale beer licenses from the s t a t e of Montana. Peter Decker and Fred L . Briggs were two of the three officers of the Fred L . Briggs Distributing Company, Inc., and Mustang alleged these two defendants were also officers in the Atlas Beverages, Inc. It 5 , 0 , 7 / /l'< : f I,

Decker, Briggs and one Carl Kemble,,were w i t h the Ace Beverage Company of /h' Miles City, Montana, and are alleged to have conspired t o form Walt's Beverages, Inc. Mustang was a duly licensed wholesale beer distributor in the s t a t e of Montana, through a permit and license issued by the Montana State Liquor Control Board. From 1958 until July 10, 1970, Mustang was the only wholesale beer distributor who distributed Schlitz products in Yellowstone, Big Horn, Carbon, Golden Valley, Musselshell and Stillwater Counties. The distribution area also included the town of Shawmut i n Mheatland County. On June 4 , 1958, Mustang and Schlitz entered into a written agree- ment e n t i t l e d "Declaration of Terms" whereunder a buyer-seller relationship was establ i shed between Schl i t z as brewery se1 l e r , and Mustang as wholesale buyer. The agreement carefully s e t out that the relationship between the p a r t i e s was e x c l u s i v e l y t h a t of buyer and s e l l e r . The agreement could be terminated by e i t h e r p a r t y a t any time without cause o r n o t i c e , and t h e buyer acknowledged t h a t t h e s e l l e r had granted no f r a n c h i s e o r e x c l u s i v e t e r r i t o r y t o t h e buyer. A d d i t i o n a l l y , each time Mustang bought beer from S c h l i t z , f .o. b. Wisconsin, i t ordered on a form provided by S c h l i t z which included t h e provisions from t h e "Declaration of Terms" a s a c o n d i t i o n of sale. Relations between Mustang and c e r t a i n personnel of S c h l i t z became strained. S c h l i t z u n i l a t e r a l l y canceled t h e r e l a t i o n s h i p with Mustang i n a l e t t e r t o i t on J u l y 1 0 , 1970. This s u i t a r o s e o u t of t h e canceled con- tractual relationship, The f i r s t and e s s e n t i a l i s s u e on appeal i s whether o r n o t t h e d i s - t r i c t c o u r t e r r e d i n g r a n t i n g summary judgments a g a i n s t Mustang Beverage Company, I nc . This Court on a number o f occasions has considered t h e p r o p r i e t y of g r a n t i n g o r denying motions f o r summary judgment. Rule 5 6 ( c ) , M.R.Civ.P., required t h a t summary judgment be granted i f : "*** t h e pleadings, d e p o s i t i o n s , answers t o inter- r o g a t o r i e s , and admissions on f i l e show t h a t t h e r e i s no genuine i s s u e a s t o any material f a c t and t h a t t h e moving p a r t y i s e n t i t l e d t o a judgment a s a m a t t e r of law. * * *" The burden of e s t a b l i s h i n g the absence of any i s s u e o f m a t e r i a l f a c t is on t h e p a r t y seeking summary judgment. In R o o p e , ~ .Anaconda Company, 159 Mont. 28, 494 P.2d 922, 924, 29 St.Rep. 170, 174, t h i s Court held: "But where, a s here, t h e record d i s c l o s e s no genuine i s s u e a s t o any m a t e r i a l f a c t , t h e burden i s upon t h e p a r t y opposing t h e motion t o p r e s e n t evidence of a m a t e r i a l and s u b s t a n t i a l n a t u r e r a i s i n g a genuine i s s u e of f a c t . " Again i n Calkins v. Oxbow Ranch, I n c . , 159 Mont. 120, 495 P.2d 1124, 1125, 29 S t . Rep. 244, 246, t h e Court s t a t e d : "In d i s c u s s i n g a motion f o r summary judgment i n G a l l a t i n Tr. & Sav. Bk. v. Henke, 154 Mont. 170, 172, 461 P.2d 448, 449, t h i s Court c i t i n g from Silloway v . Jorgenson, 146 Mont. 307, 406 P,2d 167, s a i d : " ' * * * the party opposing motion [for summary judg- - ment] must present f a c t s i n proper form conclusions of law will not s u f f i c e ; and the opposing p a r t y ' s f a c t s must be material and of a substantial nature, not f a n c i f u l , frivolous, gauzy, nor merely suspicions. 6 Moore ' s Federal Practice 2d. s 56.15 [3] , pp. 2346, 2547; Hagar v . Tandy, 146 Mont. 531, 410 P.2d 477. ' I ' See a l s o , Hannifin v. Butte Retail Clerks Union Number 4, - .- - Mont ,

From the record Mustang's complaint does not provide any genuine issue as t o any material f a c t and defendants were properly granted summary judgments a s a matter of law. The second issue on appeal i s whether o r n o t the d i s t r i c t court erred i n entering summary judgments f o r defendants, when the depositions of e i g h t of the nine p a r t i e s involved i n this action, while before the court, had not been f i l e d , and when the d i s t r i c t court had no independent recollec- tion of having examined the depositions nor of having such depositions i n i t s possession. Counsel f o r a1 1 p a r t i e s made extensive reference t o the depositions and exhibits i n t h e i r b r i e f s i n the d i s t r i c t court, and dupli- c a t e o r i g i n a l s of the e i g h t depositions have now been c e r t i f i e d by the court reporter and f i l e d w i t h the clerk of the d i s t r i c t court. The original dep- o s i t i o n s and exhibits could properly be considered i n support of the summary judgments even i f the duplicate o r i g i n a l s had not been f i l e d . Failure of t h e court reporter t o f i l e the f i r s t o r i g i n a l s i n accordance w i t h Rule 3 0 ( f ) , M.R.Civ.P., was a t most harmless e r r o r . N motion t o suppress the use of o the depositions was ever made by counsel f o r Mustang, even though Mustang had ample time and opportunity t o discover the depositions had not been f i l e d . Also, three of the "missingMdepositions were those of Mustang's own o f f i c e r s . This Court finds the "missing" depositions i n no way a f f e c t the d i s t r i c t c o u r t ' s rul i ng i n regard t o the summary judgments. W present the following points as they were presented in d i s t r i c t e court, a s this was the basis upon which the d i s t r i c t court granted the sum- mary judgments . Under the f i r s t claim of t h e complaint there was no unlawful con- spiracy by Schlitz w i t h any other defendant. The control1 ing point on t h i s claim i s that the contract between Schlitz and Mustang specifically and clearly provided i n Paragraph 5: " * * * Buyer acknowledges that Seller has granted no franchise o r exclusive t e r r i t o r y t o Buyer, and Seller may, a t any time without incurring any l i a b i l i t y to Buyer, s e l l i t s products to others in the same trade area as Buyer. * * * I t

This f u l l y signed contract i s dated My 2 , 1958, and was in f u l l force and a e f f e c t until July 10, 1970, when Schlitz notified Mustang that Schlitz would no longer s e l l beer to Mustang. The order forms f o r beer as the beverage was ordered by Mustang from Schlitz also supports t h i s position. Paragraph 5 of each order form stated the same above quoted language. Mustang's claim i s premised upon the existence of an exclusive r i g h t to d i s t r i b u t e Schlitz products in t h i s market area. However, the exis- tence of the alleged exclusive right i s completely be1 ied by the very terms of the contract upon which the Mustang and Schlitz relationship was based. The contract and order forms uniformly s t a t e : "Buyer acknowledges t h a t s e l l e r has granted no franchise or exclusive t e r r i t o r y t o Buyer and Seller may, a t any time without incurring any l i a b i l i t y to Buyer, s e l l i t s products to others in the same trade area as Buyer." Under the f a c t s shown in t h i s record any argument by Mustang t h a t some type of right of exclusive distributorship existed i s further precluded by the following language in Paragraph 6 of both the Declaration of Terms and order f orms : "6. NO PROMISE OR AGREEMENT HERETOFORE OR HEREAFTER MADE, AND NO W I E OR MODIFICATION OF ANY PROVISION OF AV R THIS OR ANY OTHER AGREEMENT, SHALL BIND SELLER UNLESS IN WRITING AND SIGNED BY SELLER'S PRESIDENT, VICE PRESIDENT OR SECRETARY, EXCEPTING THAT O D R ARE ACCEPTED BY RES STAMPING SELLER'S ACCEPTANCE THEREON. A an inducement s f o r and as part consideration of S e l l e r ' s accepting any order from or making any shipment to Buyer, Buyer warrants and represents that no representation or promise incon- s i s t e n t with any o f the provisions of this Declaration of Terms has been made t o Buyer by any officer or em- ployee of S e l l e r , and t h a t Buyer has no agreement or relationship d i r e c t l y w i t h Schlitz. N f a i l u r e of Seller o to enforce any provision hereof i n any instance or instances shall be deemed a waiver of such provision i n other instances, nor can the terms hereof be a1 tered by custom or usage. The rights of the parties respect- i ng a1 1 transactions shall be governed by Wisconsin law." Under these f a c t s , which cannot be disputed and a r e not disputed, there cannot be any possible r i g h t of recovery of any kind o r character under any of the claims. In addition, W. J . Schumacher, an o f f i c e r of Mustang, t e s t i f i e d in his deposition that he used these order forms in making a l l of his orders, and we quote:

" Q . Nw I 'm going to show you what has been marked as o Defendants' Exhibit C and C-1 from the deposition of Metz and ask you i f you are acquainted with those forms. "A. Those are order blanks.

"Q. You are acquainted with them. "A. Yes.

"Q. And C was used as an order blank before October of 1968 and C-1 was used thereafter, i s that right? "A. I'm assuming so, W probably used them a long time e a f t e r because they would give you two or three pads a t a time and you would use them until they were finished.

"A. And they were sent to you without t e l l i n g you there was a difference in them. "Q. You used one or the other of these two order forms in making a l l of your orders? "A. (Nodded head in the affirmative.)

"Q. Will you respond verbally, please, s i r . "A. Yes." Schumacher further stated in his deposition t h a t he was aware of the printed matter on the order forms: " Q . In using these order forms, would you sign each of them by your corporate name, Mustang Beverage Company, Inc., by you or by some person in your organization? "A. The buyer i s Mustang Beverage Company (indicating) . The buyer here i s by m or by a person designated by me-- e "Q. Yes, s i r . "A. --and his t i t l e . "Q. And you would sign each of these when you would make an order. "A. Either me or a person t h a t was designated by me t o do i t .

"Q. And you were acquainted with the reverse side of these exhibits and the printed matter contained thereon, were you not? "A. Very much so. "Q. Very much so. All r i g h t . "A. The big print t e l l s you what you're going t o g e t and the l i t t l e print what t h e y ' r e going t o take away from you. "Q. That would be your summary of the whole of the reverse s i d e of C and C-1, i s t h a t right? I s t h a t r i g h t , s i r ? "A. Right.

"Q. And the big type on Exhibit C , f o r instance says, in bold type, or big type, 'Buyer acknowledges t h a t S e l l e r has granted no franchise or exclusive t e r r i t o r y t o Buyer, and S e l l e r may, a t any time without incurring any l i a b i l i t y t o Buyer, s e l l i t s products t o others i n the same trade area a s Buyer. You noted t h a t . "A. Yes. "Q. And i n the big type. "A. Yes. "Q. Sir? "A. Yes." In our view i t i s c l e a r there was no contract binding upon S c h l i t z t o con- tinue t o s e l l beer t o Mustang nor t o t r e a t Mustang a s an exclusive whole- saler. This Court a l s o recognizes Sinkoff Beverage Co. v . Jos. S c h l i t z Brewing Co., 273 N.Y.Supp.2d 364, where in a similar factual s i t u a t i o n the Nw York Court held t h a t the terms of the written agreement control led. e Mustang had no exclusive r i g h t t o d i s t r i b u t e S c h l i t z products and Schlitz had the r i g h t t o terminate the relationship a t any time without cause and without notice. Any claim of conspiracy based upon S c h l i t z ' s exercise of t h a t r i g h t i s c l e a r l y without foundation. In McCusker v . Roberts, 152 Mont. 513, 520, 452 P.2d 408, Montana law c l e a r l y holds t h a t : " * * * a combination of individuals f o r t h e i r j o i n t benefits does not c o n s t i t u t e a conspiracy. * * * the actionable element of conspiracy is the wrong done t o the p l a i n t i f f s , not the combination of persons con- s t i t u t i n g the conspiracy. " Mustang was not merchandising the Schlitz products or handling the distributorship to the satisfaction of Schlitz. Accordingly, Schlitz, i n accordance w i t h the contract r i g h t s , terminated the relationship with Mustang and entered into negotiations w i t h the other defendants f o r dis- tribution of Schlitz products in the Billings area. Mustang a1 so claims unlawful interference in the contractual rights between Mustang and Schli t z by a l l of the other defendants, except Schlitz. The control1 ing point i s t h a t Mustang was granted no exclusive right t o d i s t r i b u t e Schlitz products, and Mustang's allegations of interference with such an alleged right of distributorship are without foundation. The Dec- laration of Terms and order forms conclusively establish that Schlitz had no contractual obligations t o Mustang other than a buyer-sel l e r relationship with respect t o each beer purchase order. Therefore, there could be no unlawful interference by defendant Brad Brown nor the other defendants with the contractual relations because no such contractual relations existed. Mustang's t h i r d claim i s f o r an alleged breach of contract on the part of Schli t z . Again, w r e f e r to the written agreements that existed e between Schlitz and Mustang. These documents establish the relationship as "exclusively that of buyer and s e l l e r and may be terminated by e i t h e r party a t any time, without cause and without notice." W r e f e r t o our prior com- e ments in regard t o the existence of a contract as support f o r the position t h a t there was no breach of contract by Schlitz. The fourth and f i f t h claims of Mustang contend that defendants conspired w i t h each other to monopol ize the wholesale beer market i n the Bill ings area to the damage of Mustang. Since Mustang had no exclusive right to purchase from Schlitz a t wholesale, Mustang's allegations of a conspiracy by the wholesalers is clearly irrelevant. The law on monopoly and conspiracy t o monopolize is s e t forth i n 58 C.J.S. Monopolies, 5 15 e t seq. First, the element of an injury to the public and a power t o control prices, which i s not even remotely suggested or intimated here, and the power t o suppress competition, which again was n o t even remotely contended by Mustang, must be present. O i n t e r e s t here i s further testimony of Schumacher in his dep- f osition and w quote: e

"Q. Now, I want you to s t a t e what f a c t s you have of y o u r own knowledge of m e e t i n g s between t h e D e f e n d a n t s in which they conspired to deprive Mustang of i t s exclusive right to d i s t r i b u t e Schlitz i n i t s market area. "MR. SHEEHY: Now, l e t m hear t h i s question, please. e (Question read by reporter. ) "MR. SHEEHY: I have no objection t o t h a t . "A. Rumors i s a l l that I get." There i s no evidence in t h i s record of any nature whatsoever whereby Mustang i s restrained by contract or otherwise from exercising the beer distribution business. Mustang was cancelled by Schlitz f o r deficiencies in the sale and distribution of i t s products. Fundamental to a l l of Mustang's allegations i s the alleged injury to Mustang by depriving i t of a "Schlitz dealership". However, w find no e such "dealership" ever existed. J % F F H q t i o n s h i p between Schl i t z and Mustang was purely one of buyer and sel court ' s rul i ng .

W concur: e /

\ Mr. Justice Frank I . Haswell d i d not participate i n t h i s cause. M r . J u s t i c e Gene B. Daly d i s s e n t i n g : I r e s p e c t f u l l y d i s s e n t t o t h e view of t h e majority a s i t r e l a t e s t o defendant Jos. S c h l i t z Brewing Company. Rule 56 of t h e Montana Rules C i v i l Procedure s e t t i n g f o r t h t h e b a s i s on which a summary judgment can be granted i s e s s e n t i a l l y identical t o the federal rule, I n Kober & Kyriss v , ~ i l l i n g s Deaconess Hospital, 148 Mont. 117, 121, 417 P.2d 476, t h i s Court i n d i s c u s s i n g t h e requirements of t h a t r u l e s t a t e d : "In t h i s case, respondent has t h e burden of showing t h e absence of any genuine f a c t u a l i s s u e . 6 Moore F,P. 2d, 556.15 [3] s t a r t i n g a t p, 2335 reads: he c o u r t s a r e i n e n t i r e agreement t h a t t h e moving p a r t y f o r a summary judgment has t h e burden of showing t h e absence of any genuine i s s u e a s t o a l l t h e m a t e r i a l f a c t s , which, under a p p l i c a b l e p r i n - c i p l e s of s u b s t a n t i v e law, e n t i t l e him t o a judgment a s a matter of law. he he c o u r t s hold t h e movant t o a s t r i c t standard. To s a t i s f y h i s burden t h e movant must make a showing t h a t i s q u i t e c l e a r what t h e t r u t h i s , and t h a t excludes any r e a l doubt as t o t h e e x i s t e n c e of any genuine i s s u e of m a t e r i a l f a c t . " ' ~ i n c e i t i s n o t t h e function of t h e t r i a l c o u r t t o a d j u d i c a t e genuine f a c t u a l i s s u e s a t t h e hearing on t h e motion f o r summary judgment, i n r u l i n g on t h e mo- t i o n a l l i n f e r e n c e s of f a c t from t h e proofs p r o f f e r e d a t t h e hearing must be drawn a g a i n s t t h e movant and i n favor of t h e p a r t y opposing t h e motion. And t h e papers supporting movant's p o s i t i o n a r e c l o s e l y s c r u t i n i z e d while t h e opposing papers a r e indulgently t r e a t e d , ik determining whether t h e movant has s a t i s f i e d h i s burden. I II (Emphasis added). The Court i n Kober. goes on t o c i t e with approval a C a l i f o r n i a c a s e standing f o r t h e proposition t h a t t h e summary judgment s t a t u t e cannot be used a s a s u b s t i t u t e f o r t h e t r i a l of i s s u e s of f a c t and such motions should be denied without h e s i t a n c e i f t h e r e e x i s t e d any doubt a s t o t h e p r o p r i e t y of t h e motion. It appears defendant Jos. S c h l i t z Brewing Company relies s a l e l y on t h e language of t h e o r i g i n a l "buy-sell agreement'' and t h e provisions p r i n t e d on t h e back of i t s standard a r d e r forms, contending t h a t those w r i t i n g s c o n s t i t u t e t h e e n t i r e agreement e x i s t i n g between i t and p l a i n t i f f Mustang Beverage Company. Plaintiff Mustang Beverage Company alleged the existence a£ certain facts which substantially altered the nature of the contractual agreement between the parties: 1. Schlitz reserved the right to control the retail prices charged by Mustang for Schlitz products. 2, Schlitz demanded the right to inspect us tang's books and to require that certain records and books be kept. 3. Schlitz reserved the right to set and enforce sales quotas. 4. Schlitz required that Mustang expend money in advertising and promotion, including painting of trucks, without reimbursement from Schlitz. 5. Schlitz required that Mustang keep a certain amount of inventory. 6. Schlitz set mandatory procedures for destruction, at the expense of Mustang, beer which was too old. 7. Schlitz reserved the right to object to us tang's taking on distribution of beer products from other brewers. 8. Schlitz prescribed the method in which Schlitz products were housed in us tang's warehouses. Mustang further alleged the consideration provided to it by Schlitz for these various alleged conditions was an exclusive distributorship af Schlitz products in a particular area of the state. Mustang alleges this fact was admitted in sworn testimony by a district representative of Schlitz. It would appear that there were numerous factual issues presented to the trial court. If there is any validity to the allegations made by Mustang, then the writings upon which Schlitz relies are more in the nature of an elaborate waiver of rights II than an accurate representation or integration" of the terms of the actual contractual agreement existing between these two litigants, This case involves a sales contract between merchants, and as such comes under the provisions of Montana's Uniform Commercial Code. Under a proper application of section 87A-2-202, R,C.M, 1947, the very fact that none of the requirements and agreements alleged by Mustang were included or even mentioned in the written contract would compel their admissibility, if provable. I would reverse and remand this portion of the cause for trial on the merits,

---- Associate Justice. No. 12323

I1 I N THE SUPREME COURT

I/ O THE F

I1 STATE O MONTANA F

7 1 M S A G BEVERAGE COMPANY, I N C . UT N , P l a i n t i f f and A p p e l l a n t ,

v.

JOS. SCHLITZ BREWING C M A Y O P N ; dUH 2 7 I973 yi omad 8-hL+tr . WALT'S BEVERAGES, I N C . ; ATLAS BEVERAGES, I N C . ; FRED BRIGGS 3-J DISTRIBUTING COMPANY, I N C . ; ACE QB,RRK OF SklPnE~fiE66T1S BEVERAGE COMPANY; ALLIED DISTRIBUTORS, mlht~ MQRIAI~A OF I N C . ; FRED L . BRIGGS; PETER DECKER; and BRAD BROWN,

D e f e n d a n t s and Respondents.

ORDER I Upon t h e p e t i t i o n o f Ace Beverage Company; F r e d L.

1 B r i g g s and P e t e r Decker, D e f e n d a n t s and ~ e s p o n d b n t s

1 named above, and t h e C o u r t b e i n g s a t i s f i e d t h a t n o t h i n g I 2Q 1 a p p e a r s i n t h e r e c o r d on a p p e a l t o s u p p o r t t h e s t a t e m e n t

21 1 t h a t B r i g g s , Decker and Kembel were w i t h t h e A c e 22 1 Beverage Company of M i l e s C i t y , Montana, and good c a u s e I 23 1 appearing therefore; 1 24 25 11 I T I S ORDERED t h a t t h e o p i n i o n i n t h e above I e n t i t l e d matter d a t e d May 29, 1973 b e amended by d e l e t i n g

26 / t h e l a s t s e n t e n c e of t h e t h i r d p r i n c i p a l p a r a g r a p h I 27 1 a p p e a r i n g on page 2 , which r e a d s a s f o l l o w s :

"Decker, B r i g g s and o n e C a r l Kembel were w i t h t h e Ace Beverage Company o f M i l e s C i t y , Montana, and a r e a l l e g e d t o have c o n s p i r e d t o form W a l t ' s Beverages, I n c . "

and by i n s e r t i n g i n i t s p l a c e t h e f o l l o w i n g :

"Decker, B r i g g s and o n e C a r l Kembel, t h e l a t t e r being w i t h t h e Ace Beverage Company i n Miles C i t y , Montana, a r e a l l e g e d t o have c o n s p i r e d t o form W a l ' t Beverages, Inc."

DATED t h i s