Orderline Wholesale Distributors, Inc. v. Gibbons, Green, Van Amerongen, Ltd.

675 F. Supp. 122, 1987 U.S. Dist. LEXIS 12100, 1987 WL 23551
CourtDistrict Court, S.D. New York
DecidedDecember 14, 1987
Docket85 Civ. 4973 (MGC)
StatusPublished
Cited by20 cases

This text of 675 F. Supp. 122 (Orderline Wholesale Distributors, Inc. v. Gibbons, Green, Van Amerongen, Ltd.) is published on Counsel Stack Legal Research, covering District Court, S.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Orderline Wholesale Distributors, Inc. v. Gibbons, Green, Van Amerongen, Ltd., 675 F. Supp. 122, 1987 U.S. Dist. LEXIS 12100, 1987 WL 23551 (S.D.N.Y. 1987).

Opinion

OPINION

CEDARBAUM, District Judge.

This action was commenced on June 27, 1985. The plaintiffs are Orderline Wholesale Distributors, Inc., (“Orderline”), an Ohio corporation, with its principal place of business in Maumee, Ohio, and Orderline’s vice-president, director, and 50% shareholder Elliot I. Fine, also a resident of Ohio. Plaintiffs sued Gibbons, Green, van Amer-ongen, Ltd., (“GGvA”), a New York corporation with its principal place of business in New York, Taylor Freezer Co., (“Taylor”), a Delaware corporation with its principal place of business in Illinois, and Daniel Greenwood, a resident of Illinois. This is a diversity case in which the parties agree that New York law applies. Discovery has been completed.

The complaint alleges that plaintiffs entered into an enforceable oral agreement with GGvA to participate in the acquisition of certain food service equipment companies, and that GGvA breached this agreement. Plaintiffs assert claims for breach of contract, together with companion claims of quantum meruit, breach of fiduciary duty, fraudulent inducement and constructive fraud. GGvA has moved for summary judgment pursuant to Fed.R. Civ.P. 56 on the ground that plaintiffs cannot make a showing sufficient to establish the existence of all elements essential to each of their claims against GGvA. For the reasons discussed below, GGvA’s motion for summary judgment is granted.

UNDISPUTED FACTS

Orderline is engaged in the business of purchasing and reselling food service equipment acquired from various sources. For a time, Orderline purchased and leased Taylor equipment to small food stores and restaurants. Fine was involved in the leas *124 ing of Taylor equipment and had on-going contacts with Taylor and some of its distributors. (Fine Dep. 9-10).

In July 1984, plaintiffs learned that Beatrice Cos. (“Beatrice”) intended to sell five companies engaged in the manufacture of food service equipment. (Fine Dep. 109). Those companies were Bloomfield Industries, Market Forge Co., Wells Manufacturing Co., World Dryer Corp., and Taylor Freezer Co., (collectively, “the five companies”).

Upon learning of the intended sale, Fine called Richard Vitkus, Beatrice’s vice-president and general counsel, to inquire about the planned sale of Taylor. Fine learned that Taylor would be sold only as part of a package of the five companies. (Fine Dep. 127).

On July 24, 1984, Beatrice publicly announced its plan to sell the five companies. A report of Beatrice’s announcement appeared in The Wall Street Journal and The New York Times on July 25, 1984, but the names of the individual companies were omitted. To assist in finding purchasers for the five companies, Beatrice retained Salomon Brothers (“Salomon”) and Lazard Freres & Co. (“Lazard”), which planned and implemented a bidding procedure.

Fine began to contact various people whom he believed might be interested in the five companies, and who might have the means and expertise to put a deal together for the purchase of the companies. (Fine Dep. 129). Fine, who had had no previous contact with GGvA, learned of GGvA from an article that appeared in late July in the Midwest Edition of The Wall Street Journal, reporting on GGvA’s role in the acquisition of Ekco Housewares. After reading the article, Fine decided to call GGvA. (Fine Dep. 149).

GGvA was then a New York corporation that had specialized in leveraged and management buyouts since 1969. Sometime after this action was commenced, the corporation was liquidated, and its activities were continued as a New York partnership.

On July 30, 1984, Fine telephoned the office of GGvA, and asked to speak to the person who handled acquisitions. (Fine Dep. 158-59). His call was referred to Todd Goodwin. (Fine Dep. 160-61). In this telephone conversation and possibly another telephone call made the following day, Fine told Goodwin about Orderline, his experience with Taylor and the food service equipment industry, the availability of the five companies, and the name of Richard Vitkus as the Beatrice officer in charge of the sale. (Fine Dep. 169-77). Fine relayed to Goodwin his understanding that GGvA did acquisitions of this sort, and expressed his interest in participating with GGvA in the acquisition of the five companies. (Fine Dep. 177). Fine’s hope was to establish an acquiring corporation to purchase all five companies, and eventually to spin off Taylor to the plaintiffs. (Fine Dep. 135-36).

Prior to these telephone conversations, neither Goodwin nor anyone else at GGvA had considered a possible acquisition of the five companies, nor had GGvA had any experience with similar deals in the food service equipment industry. Goodwin confirmed that the proposed acquisition sounded like the kind of deal that GGvA would be interested in. (Fine Dep. 173, 177).

Goodwin proceeded to call Vitkus on July 31 and was advised that Salomon and La-zard represented Beatrice. (Goodwin Dep. 21-22). Goodwin entered into a confidentiality agreement with Salomon on September 10, and received an overview of the five companies prepared by Salomon and La-zard. (PI. Ex. 2). GGvA was not authorized to show this report to Fine, and did not do so. (Goodwin Dep. 37-38).

Goodwin met with Beatrice at Salomon’s Chicago office on September 19, and thereafter requested and received financial information for GGvA. (PI. Ex. 6). In mid-October, Goodwin visited three of the five companies and met with their top management. (PI. Ex. 6).

Following the initial telephone calls, and over the course of the next three months, Fine and Goodwin spoke by telephone at least ten times regarding the sale of the five companies. (Fine Dep. 187). During *125 this period there was no written correspondence between the parties, no exchange of any written material, and no face-to-face meeting between any representatives of Orderline and GGvA. (Fine Dep. 185-187).

After the early conversations, Fine believed that GGvA was committed to him and Orderline, but that they were not committed to GGvA. (Fine Dep. 213).

Until October 5, 1984, Fine believed that he was free to deal with anyone else he wanted, and this was confirmed by Goodwin. Fine even told Goodwin that he was working with someone else. (Fine Dep. 213). By October 5, when Fine decided that he wanted to participate with GGvA, his other potential investors had withdrawn and GGvA was his only possible investment opportunity. (Fine Dep. 327-28).

On October 9, Goodwin met with Greenwood, who was then President of Taylor. In a memorandum written shortly after this October 9 meeting, Goodwin noted the following:

Fine has no relationship with Taylor or its distributors. Greenwood considers him a pleasant man but a “con artist” who does not represent the Taylor distributors. Fine has been in touch with Greenwood as well as TG [Goodwin]. Greenwood has no interest in Fine becoming involved in any way and suggests that he has no significant ability to invest.

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Cite This Page — Counsel Stack

Bluebook (online)
675 F. Supp. 122, 1987 U.S. Dist. LEXIS 12100, 1987 WL 23551, Counsel Stack Legal Research, https://law.counselstack.com/opinion/orderline-wholesale-distributors-inc-v-gibbons-green-van-amerongen-nysd-1987.