761 F.2d 1117 (5th Cir. 1985), 84-4797, Mid-South Packers, Inc. v. Shoney's, Inc.

Docket Nº:84-4797
Citation:761 F.2d 1117
Party Name:MID-SOUTH PACKERS, INC., Plaintiff-Appellee, v. SHONEY'S, INC., Defendant-Appellant.
Case Date:June 03, 1985
Court:United States Courts of Appeals, Court of Appeals for the Fifth Circuit

Page 1117

761 F.2d 1117 (5th Cir. 1985)

MID-SOUTH PACKERS, INC., Plaintiff-Appellee,


SHONEY'S, INC., Defendant-Appellant.

No. 84-4797

United States Court of Appeals, Fifth Circuit

June 3, 1985

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[Copyrighted Material Omitted]

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Tabue Sturdivant & DeWitt, Gary M. Brown, Nashville, Tenn., for defendant-appellant.

Wildman, Harrold, Allen, Dixon & McDonnell, Jerome Turner, Memphis, Tenn., for plaintiff-appellee.

Appeal from the United States District Court for the Northern District of Mississippi.

Before WILLIAMS, JOLLY, and HILL, Circuit Judges.


This diversity action on a Mississippi contract is before us following the district court's entry of summary judgment in favor of plaintiff Mid-South Packers, Inc., (Mid-South) and against defendant Shoney's, Inc., (Shoney's). We affirm.


The facts, as viewed in the light most favorable to Shoney's, 1 are as follows. In the spring of 1982, Mid-South and Shoney's engaged in negotiations for the sale by Mid-South to Shoney's of various pork products including bacon and ham. A business meeting was held between representatives of the two companies on April 17, 1982, at the offices of Mid-South in Tupelo, Mississippi. The discussion concerned prices and terms at which Mid-South could supply bacon and ham to Shoney's. At this meeting, Mid-South submitted a letter styled "Proposal" that set forth prices and terms at which Mid-South would supply Shoney's with various types of meat. The letter also provided that Shoney's would be informed forty-five days prior to any adjustment in price. The letter contained neither quantity nor durational terms. Shoney's expressed neither assent to nor rejection of the prices outlined in the letter. Shoney's estimated its needs from Mid-South at 80,000 pounds of meat per week. The legal effect of the letter proposal is the center of the controversy.

In July 1982, Shoney's began purchasing goods from Mid-South. The transactions were initiated by Shoney's, either through purchase orders or through telephone calls. On the day following each shipment, Mid-South sent invoices to Shoney's containing additional provisions for payment of both fifteen percent per annum interest on accounts not paid within seven days and reasonable collection costs, including attorney's fees. Shoney's bought vast quantities of bacon from Mid-South until August 12, 1982. On that date, Mid-South informed Shoney's at a meeting of their representatives that the price for future orders of bacon would be raised by $0.10 per pound, due to a previous error in computation by Mid-South. Shoney's objected to the price modification, apparently in reliance on the forty-five day notice provision contained in the disputed letter proposal. After negotiations, Mid-South agreed to increase the price by only $0.07 per pound. Shoney's neither agreed nor refused to purchase at the new price. Mid-South's new proposal was never reduced to writing.

On the first Shoney's purchase order sent after the August 12 meeting, Shoney's requested shipment at the old lower price. When Mid-South received the purchase order its representative, Morris Ates, called Shoney's representative, Ray Harmon, and advised Harmon that Mid-South would only deliver at the new higher price. The uncontradicted testimony of Ates is that Harmon told Ates to ship the bacon and to note

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the higher price on Shoney's purchase order. The bacon was shipped, and an invoice at the new price followed as did Shoney's payment, also at the new price.

From August 18 until October 5, 1982, Shoney's placed numerous orders for goods, including bacon, with Mid-South. Some if not all of these orders involved telephone conversations between representatives of the two companies, at which time Mid-South again quoted its increased selling price. The telephone conversations were followed by written purchase orders from Shoney's which quoted both the new price from Mid-South and a price computed at the original amount of $0.07 less per pound. In all cases, the orders were filled by Mid-South and invoiced at the new price. These invoices also included the additional terms providing for interest on delinquent accounts and reasonable collection costs. Shoney's paid Mid-South's quoted prices in all instances except the final order. On the final order before Shoney's began purchasing from another supplier, Shoney's offset the amount due on the invoice by $26,208, the amount allegedly overcharged on prior orders as a result of the $0.07 price increase.

Mid-South then brought this action to recover the amount offset plus interest and reasonable collection costs, including attorney's fees, as provided in the invoices. Shoney's admits that it owes $8,064.00 of the offset to Mid-South, inasmuch as this amount is attributable to orders placed after the expiration of the forty-five day notice period which, Shoney's contends, commenced on August 12 when Mid-South asked for the price increase.


Shoney's contends that it accepted the proposal of Mid-South to supply it meat by placing...

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