Woodward & Dickerson, Inc. v. Yoo Hoo Beverage Co.

• Decision Date: 26 November 1980
• Docket Number: Civ. A. No. 78-4160.
• Citation: 502 F. Supp. 395
• Parties: WOODWARD & DICKERSON, INC., v. YOO HOO BEVERAGE COMPANY, INC., Defendant and Third Party Plaintiff, v. YOO HOO (AFRICA), LTD., Third Party Defendant.
• Court: U.S. District Court — Eastern District of Pennsylvania

502 F. Supp. 395

WOODWARD & DICKERSON, INC., v. YOO HOO BEVERAGE COMPANY, INC., Defendant and Third Party Plaintiff, v. YOO HOO (AFRICA), LTD., Third Party Defendant.

Civ. A. No. 78-4160.

United States District Court, E. D. Pennsylvania.

November 26, 1980.

COPYRIGHT MATERIAL OMITTED

Walter R. Milbourne, Obermayer, Rebmann, Maxwell & Hippel, Philadelphia, Pa., for plaintiff.

Leonard J. Bucki, Wolf, Block, Schorr & Solis-Cohen, Philadelphia, Pa., for defendant and third party plaintiff.

MEMORANDUM

RAYMOND J. BRODERICK, District Judge.

The plaintiff, Woodward & Dickerson, Inc., instituted this action for damages against the defendant, Yoo Hoo Beverage Company, Inc. (Beverage) for the alleged breach of three contracts involving the sale of cocoa powder by the plaintiff to Beverage. Beverage joined Yoo Hoo Africa, Ltd. (Africa) as a third party defendant pursuant to Fed.R.Civ.P. 14. This action, which was based on diversity jurisdiction, was tried before a jury from April 21, 1980 to April 29, 1980. The jury answered interrogatories that resulted in a verdict in favor of the plaintiff.¹ Beverage subsequently filed a motion for a judgment n. o. v. and/or a new trial. After carefully considering all of the grounds alleged by Beverage, this Court has determined that it will grant Beverage's motion for a judgment n. o. v. in connection with Count II of the complaint, and will deny its motion in all other respects.

Motions for a new trial require the exercise of discretion by the Court, whose "duty is essentially to see that there is no miscarriage of justice." 6A Moore's Federal Practice ¶ 59.085, at 59-160 (footnote omitted) (2d ed. 1974); Thomas v. E. J. Korvette, Inc., 476 F.2d 471, 474-75 (3d Cir. 1973). The jury's verdict may be set aside only if manifest injustice will result if it were allowed to stand. The Court may not substitute its own judgment for that of the jury merely because the Court may have reached a different conclusion. To grant a motion for judgment n. o. v., the Court must find as a matter of law that the plaintiff failed to adduce sufficient facts to justify the verdict. Neville Chemical Co. v. Union Carbide Corp., 422 F.2d 1205, 1210 (3d Cir.), cert. denied, 400 U.S. 826, 91 S.Ct. 51, 27 L.Ed.2d 55 (1970). Such a motion "may be granted only when, without weighing the credibility of the evidence, there can be but one reasonable conclusion as to the proper judgment." 5A Moore's, supra, ¶ 50.072, at 50-77 (footnote omitted); Korvette, supra, at 474.

I. The Evidence at Trial

The evidence at trial which was not controverted showed the following: The plaintiff is a Pennsylvania corporation with its principal place of business in Pennsylvania. It is engaged in the purchase and sale of large quantities of cocoa powder. Edward Staffenberg was the manager of the plaintiff's food products division responsible for the purchase and sale of cocoa powder. He commenced working for the plaintiff in 1975, and stated that for a number of years prior to that date the plaintiff had been selling cocoa powder to Beverage, a Delaware corporation with its offices and principal place of business in Carlstadt, New Jersey. Beverage is a going concern which continues to use large amounts of cocoa powder to manufacture a chocolate drink called "Yoo Hoo", which it distributes through franchisees. Africa is a franchisee of Beverage, and all of its stock is owned by a Mr. Eric Barischoff. Africa is not a going concern. There is no common equity ownership between Beverage and Africa.

The sales of cocoa powder between the plaintiff and Beverage were effectuated through the use of a food broker named Jack Wittpenn. Dr. Eric Hotelling, the senior vice-president of Beverage, was in charge of purchasing cocoa powder for Beverage. He was the only person at Beverage with whom Mr. Staffenberg and Mr. Wittpenn dealt.

In September 1976, Dr. Hotelling asked Mr. Wittpenn if he could place a contract for cocoa powder in the name of a Mr. Agar, a cocoa broker. The plaintiff advised Mr. Wittpenn that it did not enter into such contracts with anyone other than users of cocoa powder. Shortly thereafter Dr. Hotelling began to place some contracts for the purchase of cocoa powder in the name of Africa while continuing to make purchases of cocoa powder in the name of Beverage.

Dr. Hotelling negotiated all contracts between the plaintiff and Africa and the plaintiff and Beverage with Mr. Wittpenn, and always issued delivery instructions when a shipment of cocoa powder was ready for delivery. When Dr. Hotelling placed an order for cocoa powder, whether such order was in the name of Beverage or Africa, Mr. Staffenberg would send a printed form of contract to Mr. Wittpenn, which contract would be in the name of Africa or Beverage, and Mr. Wittpenn would then obtain signatures on the contract. Contracts between the plaintiff and Beverage were issued in the name of "YOO HOO BEVERAGE CO., 600 Commercial Ave., Carlstadt, N.J. 07072," whereas contracts between the plaintiff and Africa were issued in the name of "YOO HOO AFRICA, LTD., 511 New Bridge Ave., East Meadow, L.I., N.Y." Between September 1976 and mid-August 1977, which is the period immediately prior to the events in late August and September of 1977 for which the plaintiff claims payment in this action, Dr. Hotelling placed three cocoa powder contracts with the plaintiff in the name of Beverage and five contracts with the plaintiff in the name of Africa. In connection with these contracts, however, there were two occasions when Dr. Hotelling instructed the plaintiff that a shipment of cocoa powder covered by a contract with Beverage should be delivered to Africa and invoiced to Africa. There was also one occasion where Dr. Hotelling instructed the plaintiff that a shipment of cocoa powder covered by a contract with Africa should be delivered to Beverage and invoiced to Beverage.

The records of the plaintiff show that it maintained separate accounts for Beverage and Africa, that the two companies were billed separately, and that the plaintiff had different addresses and telephone numbers for Beverage and Africa. Checks issued by Beverage in payment for the cocoa powder which the plaintiff invoiced to it were drawn on a New Jersey bank. Checks issued by Africa in payment for the cocoa powder invoiced to it were drawn on the Nassau, Bahamas branch of the Royal Bank of Canada.

In connection with the sales of cocoa powder for which the plaintiff claims payment, four documents were admitted into evidence (Exhibits P19, P20, P35, and P49). Exhibit P19 is a printed form of sales contract dated September 20, 1977. The seller is "WOODWARD & DICKERSON, INC." The buyer is "YOO HOO BEVERAGE CO., 600 Commercial Ave., Carlstadt, N.J. 07072." The contract covers the sale of 120,000 pounds of cocoa powder to be delivered in three separate shipments-one promptly, one in November 1977, and one in December 1977. Mr. Barischoff signed the contract as follows: "YOO HOO BEVERAGE CO., by Eric Barischoff." Exhibit P35 is identical to Exhibit P19 except that the buyer's name is changed from "YOO HOO BEVERAGE CO., 600 Commercial Ave., Carlstadt, N.J. 07072" to "YOO HOO AFRICA, LTD., 511 Newbridge Ave., East Meadow, N.Y. 11554." Mr. Barischoff signed Exhibit P35 as follows: "YOO HOO AFRICA, LTD., by Eric Barischoff." Exhibit P20 is a similar printed form dated September 20, 1977. The seller is "WOODWARD & DICKERSON, INC." The buyer is "YOO HOO AFRICA, LTD., 511 Newbridge Ave., East Meadow, N.Y. 11554." This contract covers the sale of 40,000 pounds of cocoa powder to be delivered in one shipment in December 1977. Mr. Barischoff signed this contract as follows: "YOO HOO AFRICA, LTD., by Eric Barischoff." Exhibit P49 is the same type of form contract, dated August 23, 1977. The seller is "WOODWARD & DICKERSON, INC." The buyer is "YOO HOO AFRICA, LTD., 511 Newbridge Ave., East Meadow, N.Y. 11554." This contract covers the sale of 40,000 pounds of cocoa powder to be delivered in one shipment between September and December of 1977. Dr. Hotelling signed the contract as follows: "YOO HOO AFRICA, LTD., by E. B. Hotelling."

The controverted evidence at trial was as follows: On or about September 15, 1977, Mr. Staffenberg, Mr. Wittpenn and Dr. Hotelling met for lunch in Carlstadt, New Jersey. Both Mr. Staffenberg and Mr. Wittpenn testified that at this meeting Dr. Hotelling orally ordered three 40,000 pound shipments of cocoa powder for Beverage, one shipment to be delivered immediately, while the other two shipments were to be delivered in November and December. Mr. Staffenberg and Mr. Wittpenn also testified that at the same meeting Dr. Hotelling orally placed an order for one shipment of cocoa powder in the name of Africa, which was to be delivered in December. Dr. Hotelling's recollection of what took place at the meeting contradicted the testimony of Mr. Staffenberg and Mr. Wittpenn. Dr. Hotelling testified that at this meeting he ordered only three shipments of cocoa powder and that the three shipments were for Africa. He also testified that he informed Mr. Staffenberg and Mr. Wittpenn that Beverage did not need any cocoa powder at that time. He claims that he was asked if Africa would be in a position to take the three shipments and he responded affirmatively. Shortly after this meeting, Dr. Hotelling received two sales contracts from the plaintiff, one of which was Exhibit P19, and the other Exhibit P20. As previously stated, Exhibit P19 identifies the buyer as Yoo Hoo Beverage Co., and covers three shipments of cocoa powder totalling 120,000 pounds. It is signed as follows: "YOO HOO BEVERAGE CO., by Eric Barischoff." Exhibit P20 identifies the buyer as Yoo Hoo Africa, Ltd., and covers one 40,000 pound shipment of cocoa powder. It is signed as follows: "YOO HOO AFRICA, LTD., by Eric Barischoff." Dr. Hotelling testified that Exhibit P19 was incorrect in that the buyer should have been designated as...