Whetstone Candy Co. v. Kraft Foods, Inc.

351 F.3d 1067, 57 Fed. R. Serv. 3d 653, 2003 U.S. App. LEXIS 24017, 2003 WL 22783271
CourtCourt of Appeals for the Eleventh Circuit
DecidedNovember 25, 2003
Docket03-10272
StatusPublished
Cited by58 cases

This text of 351 F.3d 1067 (Whetstone Candy Co. v. Kraft Foods, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Eleventh Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Whetstone Candy Co. v. Kraft Foods, Inc., 351 F.3d 1067, 57 Fed. R. Serv. 3d 653, 2003 U.S. App. LEXIS 24017, 2003 WL 22783271 (11th Cir. 2003).

Opinion

KRAVITCH, Circuit Judge:

The main issue in this appeal is one of contract interpretation. We must decide whether a settlement agreement between Kraft Foods North America, Inc. (“Kraft NA”) and Whetstone Candy Co. (“Whetstone”) binds Kraft NA’s subsidiary, Kraft Foods UK, Ltd. (“Kraft UK”). Kraft UK *1071 was not a party to the agreement and the express terms of the agreement do not reflect an intention to bind Kraft UK. We, therefore, uphold the express language that the parties agreed upon and conclude that the agreement does not bind Kraft UK. We deny Whetstone’s appeal and affirm the district court’s grant of summary judgment in favor of Kraft NA on that and all other issues.

I. Background

Whetstone, a Florida corporation with its principal place of business in Florida, manufactures, sells, and delivers confec-tionary products, including a “Chocolate Orange.”

Defendant Kraft NA is a Delaware corporation with its principal place of business in Illinois. 1 Kraft NA manufactures, sells, and distributes food products, including confectionary products. Kraft NA wholly owns its subsidiary, Kraft Foods International, Inc. (“Kraft International”). Kraft International, in turn, owns 99.995% of Kraft Foods UK, Ltd. (“Kraft UK”), originally also a defendant'in this action. Kraft UK is a business entity organized under the laws of the United Kingdom and has its principal place of business there. Kraft UK manufactures, sells, and distributes food products, including a chocolate-orange product called “Terry’s Chocolate Orange.” 2

This case involves the legal construction of a settlement agreement between Kraft NA and Whetstone regarding the packaging of Whetstone’s chocolate-orange product. The events leading up to the current litigation began in 1999. In June of that year, Kraft NA became aware that Whetstone was preparing to market a chocolate-orange product. Kraft NA asserted that Whetstone’s packaging infringed upon Kraft NA’s trade dress rights in Terry’s Chocolate Orange. 3 Whetstone retained counsel who negotiated a Settlement Agreement with Kraft NA. In the Settlement Agreement, Whetstone agreed to modify the packaging of its chocolate-orange product; in exchange, Kraft NA released Whetstone from any claims it may have against Whetstone regarding a possible trade dress violation. 4

*1072 Subsequent to the signing of the Settlement Agreement in 2001, Whetstone attempted to market its chocolate-orange product in the United Kingdom through Hall Pride, Ltd. (“Hall Pride”), a London-based distributor. Upon learning of this plan, representatives from Kraft UK threatened legal action against Hall Pride if Hall Pride did not cease marketing Whetstone’s product. 5 In addition, Whetstone alleges that, in the United States, Kraft NA representatives visited one of its customers, Phar-Mor drugstores, and warned that “they [Kraft NA] have a lawsuit against [Whetstone]” and that Whetstone “might not be around to deliver the product.” Phar-Mor, however, apparently disregarded the warning and purchased Whetstone’s product.

Whetstone filed a three-count complaint based on the above events. In Count I, Whetstone sought a declaratory judgment as to its rights under the Settlement Agreement and judgment for damages in its favor against Kraft NA and Kraft UK. In Count II, Whetstone alleged that Kraft NA and Kraft UK knew about Whetstone’s relationship with both Hall Pride and Phar-Mor, and that representatives from *1073 the Kraft corporations interfered with those business relationships by threatening unjustified legal action against Hall Pride and by telling Phar-Mor that the product was not legitimate. Whetstone sought damages for this alleged tortious interference. Finally, in Count III, Whetstone sought injunctive relief against Kraft NA and Kraft UK to prohibit them from interfering with the sale and distribution of Whetstone’s chocolate-orange product.

After receiving the complaint, defendant Kraft UK filed a Motion to Dismiss and, among other arguments, asserted that it was not subject to in personam jurisdiction in the district court. The district court granted Kraft UK’s motion and dismissed it from this action for lack of personal jurisdiction. Later in the proceedings, Whetstone filed a Motion for Partial Summary Judgment with respect to Count I. Defendant Kraft NA, at the same time, sought the entry of summary judgment with respect to all counts. The district court concluded that there were no genuine issues of material fact and granted summary judgment in favor of Kraft NA on all issues. Whetstone appeals. 6

II. Standard of Review

We review a district court’s grant of summary judgment de novo. Pennington v. City of Huntsville, 261 F.3d 1262, 1265 (11th Cir.2001). Summary judgment is appropriate where the “pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(c). We view the facts and inferences in the light most favorable to the non-moving party. Pennington, 261 F.3d at 1265.

III. Does the Settlement Agreement Bind Kraft-UK?

Generally, a contract does not bind one who is not a party to the contract, or who has not in some manner agreed to accept its terms. Consolidated Resources Healthcare Fund I, Ltd. v. Fenelus, 853 So.2d 500, 503-04 (Fla.Dist.Ct.App.2003); CH2M Hill Southeast, Inc. v. Pinellas County, 598 So.2d 85, 89 (Fla.Dist.Ct.App.1992). Here, it is undisputed that only Whetstone and Kraft NA signed the Settlement Agreement, but Whetstone advances several arguments positing that Kraft UK is bound by the Settlement Agreement. We consider these arguments in turn and reject each of them. 7

A. The Plain Language of the Settlement Agreement

1. The “Whereas” Clause

Whetstone argues that the first “whereas” clause’s reference to Kraft NA’s subsidiaries operates to bind Kraft UK to the Settlement Agreement. That clause states: “WHEREAS, Kraft or one of its subsidiaries have been involved in the production and marketing of a ‘Chocolate Orange’ confectionery product which is sold in a particular container (the ‘Kraft Trade Dress’).” (Emphasis added). Whetstone argues that the purpose of the *1074

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351 F.3d 1067, 57 Fed. R. Serv. 3d 653, 2003 U.S. App. LEXIS 24017, 2003 WL 22783271, Counsel Stack Legal Research, https://law.counselstack.com/opinion/whetstone-candy-co-v-kraft-foods-inc-ca11-2003.