Southeastern Distributing Co. v. Miller Brewing Co.

237 S.W.3d 63, 366 Ark. 560
CourtSupreme Court of Arkansas
DecidedJune 15, 2006
Docket05-969
StatusPublished
Cited by15 cases

This text of 237 S.W.3d 63 (Southeastern Distributing Co. v. Miller Brewing Co.) is published on Counsel Stack Legal Research, covering Supreme Court of Arkansas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Southeastern Distributing Co. v. Miller Brewing Co., 237 S.W.3d 63, 366 Ark. 560 (Ark. 2006).

Opinion

Jim Gunter, Justice.

Appellant, Southeastern Distributing Company, Inc. (“Southeastern”), appeals an order of the Jefferson County Circuit Court granting summary judgment in favor of Miller Brewing Company (“Miller”) and dismissing all of Southeastern’s claims. We affirm in part and reverse and remand in part.

Southeastern operated a wholesale beer distributing company for Miller in southeastern Arkansas from 1977 until 2001. During that time, Charles “A.C” Freeman was the owner of Southeastern. Toward the end of 2000, George O’Conner, another Arkansas beer distributor, called Freeman and asked him if he would like to sell Southeastern. Freeman said no. On October 5, 2000, O’Conner met with representatives of Miller and indicated in an Arkansas Acquisitions book that he would like to buy Southeastern. In a telephone conversation in January 2001, Jim Young, a Miller representative, asked O’Conner if he would be interested in purchasing Southeastern. O’Conner replied that he was interested and had been interested for some time. Finally, on February 13, 2001, Young visited O’Conner at his office and discussed the potential acquisition by O’Conner of Southeastern.

On February 14, 2001, Young visited Freeman at Southeastern’s offices. Southeastern had begun experiencing financial problems in 2000, which continued into 2001. As a result of these problems, Southeastern missed payments to its suppliers, including Coors, Pabst, and Miller. Young asked Freeman about Southeastern’s payment problems with Pabst, and they discussed the business’s cash-flow issues. Freeman testified in his deposition that, after that discussion, Young asked him if he had ever considered selling his distributorship. Freeman stated that he asked, “Would you like for me to sell my distributorship?” Young allegedly replied, “Miller Brewing Company would like for you to sell your distributorship.” Young indicated that he would provide Freeman with a list of potential purchasers. Freeman testified that he decided to sell his business right then because he knew it was futile not to do what Miller wanted with regard to its distributorships.

Immediately thereafter, Freeman hired a professional beer-industry consultant, Sam Boyer, to assist in marketing and in finding a buyer for Southeastern. Shortly thereafter, it became clear to Freeman that Miller wanted O’Conner to purchase Southeastern. Freeman testified that, several weeks after their meeting, he spoke with Young, who did not provide a list of potential purchasers, but who instead told Freeman that Miller wanted O’Conner to purchase Southeastern. Freeman testified that Young told him not to waste his time submitting letters of intent from other potential purchasers because Miller wanted O’Conner to buy Southeastern. 1

Southeastern began contacting potential purchasers in March. While Southeastern did not contact O’Conner about the potential sale until late March, O’Conner told Pabst in early March that it had, or was close to having, a deal to purchase Southeastern. In a meeting to discuss a potential offer to purchase Southeastern, O’Conner told Boyer that he was wasting his time talking to other prospective purchasers because Miller had already identified him as the only buyer that it would approve. In response to several interested purchasers, Miller wrote letters in March stating that Miller was consolidating its distributor network and that there were no distributorships available in the geographic area encompassing Southeastern. In addition, Boyer and Freeman testified that while many potential purchasers initially considered buying Southeastern, most of the interest began to abate by early April.

In a letter dated May 1, 2001, Miller threatened to terminate Southeastern for an alleged failure to pay for a shipment on time. Freeman testified that Young called him when Miller discovered that the payment had been made and told him Miller would reinstate Southeastern’s credit if he would sell to O’Conner. While Freeman had received two offers in addition to O’Conner’s offer, both of these offers contemplated Freeman providing part of the financing, which was not acceptable given the precarious financial position of Southeastern. Boyer and Freeman testified that they thought they could get a better offer for Southeastern if they continued to negotiate, but Freeman testified that he and Southeastern were too financially strapped for him to continue to negotiate for a higher price. If Miller were permanently to terminate Southeastern’s credit, Freeman did not believe Southeastern would remain viable. Therefore, he claims that he was forced to accept O’Conner’s offer on May 17, 2001. O’Conner paid $5.4 million for Southeastern. The sale closed in June 2001.

On October 20, 2003, Southeastern filed an amended complaint against Miller alleging (1) violations of the Arkansas Beer Wholesaler’s Act; (2) violations of the Arkansas Franchise Practices Act; (3) fraud and deceit; (4) intentional interference with business expectancies; and (5) civil conspiracy. Essentially, Southeastern claims that it was unable to market its business freely and was forced to sell for substantially less than fair market value. Southeastern also sued O’Conner and his corporate entities, but has settled those claims. On June 27, 2005, the circuit court entered an order granting Miller’s motion for summary judgment and dismissed all of Southeastern’s claims against Miller. Southeastern filed this appeal.

I Rule 56

Southeastern’s first point on appeal is that the circuit court violated the mandatory time restrictions contained in Rule 56 of the Arkansas Rules of Civil Procedure governing summary judgment. Specifically, Southeastern argues that the trial court improperly conducted a hearing on Miller’s summary-judgment motion on April 4, 2005, instead of on or after April 20, 2005. Southeastern argues that the rationale for the time provisions set forth in Rule 56 is to ensure that the parties are provided adequate time to present the necessary evidence and argument and to ensure that the court is provided adequate time to review and consider the evidence and argument. Southeastern then quotes the Reporter’s notes to the 2001 Amendment to the Rule adding 56(c): Rule 56 “precludes the court from ruling on the motion until after the parties have had an opportunity to present their evidence.” Ark. R. Civ. P. 56, Addition to Reporter’s Notes, 2001 Amendment (2006).

Rule 56 states in pertinent part as follows:

(c) Motion and Proceedings Thereon. (1) The motion shall specify the issue or issues on which summary judgment is sought and may be supported by pleadings, depositions, answers to interrogatories and admissions on file, and affidavits. The adverse party shall serve a response and supporting materials, if any, within 21 days after the motion is served. The moving party may serve a reply and supporting materials within 14 days after the response is served. The court may by order enlarge the foregoing time periods. No party shall submit supplemental supporting materials after the time for serving a reply, unless the court orders otherwise. The court, on its own motion or at the request of a party, may hold a hearing on the motion not less than 14 days after the time for serving a reply.

Ark. R. Civ. P. 56(c)(1) (2006).

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Bluebook (online)
237 S.W.3d 63, 366 Ark. 560, Counsel Stack Legal Research, https://law.counselstack.com/opinion/southeastern-distributing-co-v-miller-brewing-co-ark-2006.