Smith v. CPC Intern., Inc., Docket No. 98-7503
| Citation | 177 F.3d 110 |
| Decision Date | 16 April 1999 |
| Docket Number | Docket No. 98-7503 |
| Parties | Michael D. SMITH, Edward M. Benish, Jeffrey C. Price, and William D. Robinson, for themselves, individually, and as class representatives, Plaintiffs-Appellants, v. CPC INTERNATIONAL, INC. and CPC Baking Distribution Co., Inc., Defendants-Appellees. |
| Court | United States Courts of Appeals. United States Court of Appeals (2nd Circuit) |
Scott A. Thornton, Jeffrey P. Soons, Kirk P. Thornton, Thornton & Partners, New York, New York, for Appellants.
Patrick W. Shea, Robert A. Horowitz, Karen Y. Bitar, Harold N. Eddy, Jr., Toby S. Soli, Paul, Hastings, Janofsky & Walker, LLP., Stamford, Connecticut, for Appellees.
Before: VAN GRAAFEILAND, CABRANES and NOONAN 1, Circuit Judges
Michael D. Smith, Edward M. Benish, Jeffrey C. Price and William D. Robinson ("plaintiffs") appeal the judgment of the District Court for the Southern District of New York (Barbara S. Jones, Judge ) in their suit against CPC International, Inc. and CPC Baking Distribution Co., Inc. ("CPC") asserting claims under ERISA, 29 U.S.C. §§ 1104, 1106 & 1140 and state laws claims of negligent misrepresentation, breach of contract, and breach of the implied covenant of good faith and fair dealing. The case involves the arrangements of the maker of Thomas English Muffins and other baked products with the distributors who deliver the goods to retail outlets. Holding that the agreements of the company with the distributors, read as a whole, restrict the company's right to termination to good cause, we reverse the district court's grant of summary judgment on the contract and covenant claims and remand.
The plaintiffs were in the business of using their own trucks to deliver Thomas English Muffins and other Thomas baked goods from a CPC depot in Milton, New York. Plaintiff Edward M. Benish acquired his delivery route by paying a predecessor deliveryman $15,000 in 1973; his route was in northeastern Orange County, including Cornwall, Highland Falls, Newburgh, Vails Gate, and West Point. Plaintiff Jeffrey C. Price took over his route from his father in March 1977; his father had previously paid a predecessor deliveryman for the route in the mid-1960s. His route lay in Dutchess County, including Authersburg, Hopewell Junction, LaGrange, Millbrook, Pleasant Valley, and Poughkeepsie. Plaintiff William D. Robinson acquired his route in December 1978 by paying $13,000 to his predecessor deliveryman. The route was in Dutchess and Putnam Counties, including Beacon, Brinkerhoff, Cold Spring, Fishkill, and Wappingers Falls. Plaintiff Michael Smith acquired his route by paying $14,000 to a predecessor deliveryman in December 1978. His route was in Orange County, including Goshen and Each plaintiff was given at the beginning of service on the routes a substantially identical letter from CPC accompanied by a document entitled "Distribution of S.B. Thomas Products Performance Standards." The letter stated:
Middletown, and, until 1993, in northern New Jersey, including Franklin, Milton, Sussex, and Vernon.
It is understood that we do not assign territory on a permanent basis and our decision to continue to ship products for your distribution is contingent upon our satisfaction with this arrangement in the future. It must also be understood that you do not have a franchise to deliver our products. We will conduct our relationship with you in an efficient, honorable and businesslike manner.
The Performance Standards attached to this letter were thirteen in number and included such matters as getting the product on shelves and on displays in line with Thomas's code, service of the routes a minimum of five days a week and an aggressive sales performance. The Performance Standards were introduced with this statement:
On February 4, 1997 each plaintiff was sent a substantially identical letter by CPC that began: "It is my pleasure to announce an exciting opportunity which I believe will assist Independent Operators, as well as the company, to recognize increased income and growth in the future." The exciting opportunity was to pay CPC for the right to distribute Thomas products on routes they were already operating. The letter stated that it also served "to formally notify you that our current relationship will terminate effective with the sale of our 'new' routes."
The plaintiffs did not avail themselves of this opportunity and their routes were terminated.
On April 22, 1997 the plaintiffs filed their amended complaint in the district court alleging breach of ERISA, breach of the New York Franchise Act, breach of the New Jersey Franchise Practices Act, negligent misrepresentation, breach of contract, and breach of the implied covenant of good faith and fair dealing. The district court dismissed the ERISA, franchise, and negligent misrepresentation claims for failure to state a cause of action. The district court granted CPC's motion for summary judgment on the contract and covenant claims. The district court ruled that the introductory letter sent to each plaintiff and the plaintiffs' acquiescence in it "for anywhere from eighteen to twenty-four years" made it a binding contract, under which CPC was free to terminate each distributor for business reasons. There was no material fact in dispute as to the business reasons for which CPC had acted. Therefore no issue remained for trial. Final judgment against the plaintiffs was entered on March 11, 1998.
The plaintiffs do not appeal...
To continue reading
Request your trial
-
McGuiggan v. Cpc Intern., Inc.
...did not discharge, harass, or discriminate against plaintiffs to deny them vested employee benefits." Smith v. CPC Int'l, Inc., Summary Order, Docket No. 98-7503, (2d Cir. April 16, 1999). It likewise affirmed this Court's dismissal of the negligent misrepresentation claim based on the Smit......
-
Smith v. Cpc Intern., Inc., 97 CIV. 1547 CM.
...issue to be decided is whether Defendant has shown "good cause" to terminate Plaintiffs' distributorships. See Smith, et al. v. CPC Int'l et al., 177 F.3d 110 (2d Cir.1999). Plaintiffs now move to amend the complaint to include claims brought under ERISA § 502(a)(1) for benefits they allege......