R.J. Dunn & Associates, Inc. v. Fleming Companies, Inc.

11 F. App'x 291
CourtCourt of Appeals for the Fourth Circuit
DecidedJune 7, 2001
Docket00-2399
StatusUnpublished

This text of 11 F. App'x 291 (R.J. Dunn & Associates, Inc. v. Fleming Companies, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fourth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
R.J. Dunn & Associates, Inc. v. Fleming Companies, Inc., 11 F. App'x 291 (4th Cir. 2001).

Opinion

OPINION

PER CURIAM.

R.J. Dunn & Associates, Inc. (“Dunn”) appeals the United States District Court for the District of Maryland’s order granting summary judgment to Ahold USA Support Services (“Ahold”) and Fleming Companies, Inc. (“Fleming”) (collectively “Appellees”). Dunn, an independent commercial real estate broker, initiated this civil action after learning that Ahold had sold one of Ahold’s supermarkets to Fleming. Dunn claims that Appellees owe it a commission on the sale. Because we conclude that the district court did not err in finding that Dunn had no entitlement to a commission, we affirm the district court’s order.

I.

Because this is an appeal from the entry of summary judgment in favor of Appellees, we accept the facts alleged by Dunn as true. Fleming owns and operates supermarkets and grocery distribution centers throughout the United States. Beginning in 1995, Dunn and Fleming were engaged in a business arrangement whereby Dunn assisted Fleming on a case-by-case basis in locating and leasing sites for Fleming’s new supermarkets. Dunn typically received a commission for its services pursuant to an individualized negotiation in each deal.

In or about April of 1996, Dunn and Fleming discussed the idea of forming a “strategic partnership,” in which Dunn would act as Fleming’s exclusive broker for its real estate acquisitions in the geographic area covered by Fleming’s York, Pennsylvania distribution center. (J.A. at 67, 71.) Although Fleming agreed to enter into this relationship, it declined to sign a formal written contract. Instead, Fleming and Dunn operated under an informal oral understanding based upon the terms of a written contract that Fleming had entered into with another regional broker in another part of the country. The contract was comprised of two parts: (1) a national agreement, which outlined the obligations of the contracting parties; and (2) a fee schedule, which controlled all the fees paid to the broker for its services. 1

The national agreement provided that the broker would perform several specific duties in rendering assistance to Fleming with the lease or purchase of supermarkets, and in Paragraph 5(a)(1), it stated that the broker would receive commissions from the landlord or seller rather than from Fleming. The commissions were determined by the fee schedule attached to the agreement. The fee schedule also required the broker to remit forty percent of *293 any commission paid by a landlord or seller to Fleming’s wholly owned subsidiary, Progressive Realty, Inc. (“Progressive”).

For several years, Fleming and Dunn operated under their oral agreement without difficulty. In at least eight deals, Fleming (through Progressive) drew up deal-specific written agreements that both Dunn and Fleming signed. Each agreement stated that (1) Dunn acknowledged it was entitled to a specific brokerage commission from the seller or lessor; and (2) Dunn agreed to pay Progressive a co-brokerage referral fee equal to forty percent of the earned commission. In each of these deals, Dunn negotiated its commission directly with the seller or lessor. Fleming’s subsequent contracts with the seller or lessor would then recognize Dunn’s status as broker and obligate the seller or lessor to pay a brokerage commission to Dunn.

II.

Ahold, a competitor of Fleming, also owns and operates supermarkets throughout the eastern portion of the United States. In 1998, Ahold sought to acquire the Giant Supermarket chain of stores, headquartered in Landover, Maryland. To obtain Federal Trade Commission (“FTC”) approval, Ahold agreed to divest itself of nine to ten retail supermarkets in Maryland and Pennsylvania. Ahold’s original plan was to sell the supermarkets in two clusters — one in each state.

Upon learning of the possible divestiture, Tom Strzelczyk, Fleming’s Director of Store Development for the York Distribution Service Area, asked Dunn to obtain additional information about the Maryland cluster of stores that Ahold was offering for sale. In July, on Fleming’s behalf, Dunn contacted Frank Curci, Ahold’s executive officer in charge of the divestiture. Dunn informed Ahold about Fleming’s potential interest in the supermarkets, but Ahold refused to release information about the supermarkets without a signed confidentiality agreement. Dunn obtained a copy of Ahold’s confidentiality agreement and forwarded it to Fleming for its signature. On July 8, 1999, after Fleming had signed the confidentiality agreement, Dunn faxed Ahold the signed agreement along with a letter stating that Dunn expected Ahold to pay Dunn a brokerage commission of two percent of the selling price of any supermarket bought by Fleming.

On July 9,1998, however, after receiving Dunn’s fax, Curci telephoned Robert Dunn, the president of Dunn, and informed him that Ahold did not utilize brokers and instead dealt directly with the buyers. Curci further stated that if Dunn was entitled to a commission for its services, it should seek such a commission from Fleming.

On July 14, Curci sent Fleming a letter listing the Maryland cluster of stores available for sale and informing Fleming that if Fleming wanted to purchase the cluster, the sale must occur within three days and without the detailed store information requested by Fleming. On July 16, Fleming informed Curci that Fleming declined to purchase the Maryland cluster on those terms. One week later, Fleming advised Dunn that its negotiations with Ahold had terminated.

In September 1998, after Ahold had failed to sell the Maryland supermarkets as a cluster, Ahold’s CFO, Ernie Smith, began selling individual supermarkets, some of which were part of the original Maryland cluster and some of which were not, to different purchasers. Smith contacted Strzelczyk directly to determine if Fleming was interested in purchasing one or more supermarkets. Smith testified in his deposition that he called Fleming because he believed Fleming would be approved by the FTC as an acceptable poten *294 tial buyer. Smith was aware that there previously had been contact with Fleming about purchasing the Maryland cluster, but he did not know who had been Ahold’s contact person at Fleming. When Smith called Fleming, he asked for the “CEO in the York division” at Fleming and was connected with Strelczyk. (J.A. at 125.)

Ultimately, Fleming agreed to purchase one supermarket from Ahold in Bel Air, Maryland. The supermarket that Fleming agreed to purchase was operated by the Martin’s chain of supermarkets and had not been included in the Maryland cluster. 2 The final contract for sale did not provide for Dunn to receive a commission.

III.

In November 1998, Dunn brought a breach of contract action against Fleming in the Circuit Court for Baltimore County. In January 1999, Appellees removed the case to the United States District Court for the District of Maryland. The parties filed cross-motions for summary judgment. Because the district court concluded that Dunn had not established any entitlement to a commission, whether by contract or in equity, it entered summary judgment in favor of Appellees on September 30, 2000.

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