Lago & Sons Dairy, Inc. v. HP Hood, Inc.

• Decision Date: 20 June 1995
• Docket Number: Civ. No. 92-200-SD.
• Citation: 892 F. Supp. 325
• Parties: LAGO & SONS DAIRY, INC.; Michael Lago v. H.P. HOOD, INC.
• Court: U.S. District Court — District of New Hampshire

892 F. Supp. 325

LAGO & SONS DAIRY, INC.; Michael Lago v. H.P. HOOD, INC.

Civ. No. 92-200-SD.

United States District Court, D. New Hampshire.

June 20, 1995.

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Charles J. Dunn, Manchester, NH, for plaintiff.

John V. Dwyer, Nasqua, NH, Philip D. O'Neill, Jr., Boston, MA, for defendants.

James F. Ogorchock, Manchester, NH.

Frank P. Spinella, Jr., Concord, NH.

ORDER

DEVINE, Senior District Judge.

Before the court are a series of summary judgment motions and a motion for reconsideration, all of which were filed by defendant H.P. Hood, Inc. Plaintiff Lago & Sons Dairy, Inc., has interposed objections to each motion.

Background

Defendant Hood is a manufacturer of dairy products. Hood sells its dairy products directly to certain retailers and indirectly, through a distributor, to other retailers.

This action arises out of the breakdown of a long-term relationship between Hood and one of its distributors, plaintiff Lago & Sons Dairy, Inc. Lago began distributing Hood products in 1979 pursuant to a written wholesale distribution agreement, under which Lago delivered products to Hood's direct-buy customers— its "house accounts" — and received a case commission fee in return. Lago also purchased Hood products to sell to its own retail customers.

Lago continued to distribute Hood products under a written contract until February 1990, when Hood exercised its contractual right not to renew the written agreement then governing the parties' relations. Thereafter Lago and Hood continued to do business together under an oral agreement. However, Lago alleges that in March 1992 Hood breached that oral agreement by taking away its house account business from Lago.

At this point the already strained relationship between Hood and Lago completely broke down. The instant action, which includes claims by Lago and counterclaims by Hood based on the distribution relationship between the parties, followed.

Discussion

1. Summary Judgment Standard

Under Rule 56(c), Fed.R.Civ.P., summary judgment is appropriate if the evidence before the court shows "that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law."

The summary judgment process

involves shifting burdens between the moving and the nonmoving parties. Initially, the onus falls upon the moving party to aver "`an absence of evidence to support the nonmoving party's case.'" Garside v. Osco Drug, Inc., 895 F.2d 46, 48 (1st Cir. 1990) (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 325, 106 S.Ct. 2548, 2554, 91 L.Ed.2d 265 (1986)). Once the moving party satisfies this requirement, the pendulum swings back to the nonmoving party, who must oppose the motion by presenting facts that show that there is a "genuine issue for trial." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256, 106 S.Ct. 2505, 2514, 91 L.Ed.2d 202 (1986) (citing Fed.R.Civ.P. 56(e)).

. . . . .

LeBlanc v. Great American Ins. Co., 6 F.3d 836, 841 (1st Cir.1993), cert. denied, ___ U.S. ___, 114 S.Ct. 1398, 128 L.Ed.2d 72 (1994).

"Essentially, Rule 56(c) mandates the entry of summary judgment `against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial.'" Mottolo v. Fireman's Fund Ins. Co., 43 F.3d 723, 725 (1st Cir.1995) (quoting Celotex Corp., supra, 477 U.S. at 322, 106 S.Ct. at 2552). When the nonmoving party bears the burden of proof at trial and fails to make such a showing, "there can no longer be a genuine issue as to any material fact: the failure of proof as to an essential element necessarily renders all other facts immaterial, and the moving party is entitled to judgment as a matter of law." Smith v. Stratus Computer, Inc., 40 F.3d 11, 12 (1st Cir.1994) (citing Celotex Corp., supra, 477 U.S. at 322-23, 106 S.Ct. at 2552-53), cert. denied, ___ U.S. ___, 115 S.Ct. 1958, 131 L.Ed.2d 850 (1995).

In determining whether summary judgment is appropriate, the court construes the evidence and draws all justifiable inferences in the nonmoving party's favor. Anderson, supra, 477 U.S. at 255, 106 S.Ct. at 2513-14; Data Gen. Corp. v. Grumman Sys. Support Corp., 36 F.3d 1147, 1159 (1st Cir.1994)

2. Hood's Renewed Motion for Summary Judgment on Count V and Part of Count VIII

In Count V of its complaint, Lago alleges that Hood breached the parties' oral agreement that Lago would continue to distribute Hood products until May 17, 1993, when, on February 14, 1992, Hood notified Lago that it was terminating Lago's service of Hood's fluid group house accounts in six weeks. Complaint ¶¶ 61-62. In Count VIII, Lago alleges, in relevant part, that Hood's wrongful termination of Lago and willful breach of contract constituted an unfair trade practice in violation of New Hampshire's Consumer Protection Act, New Hampshire Revised Statutes Annotated (RSA) 358-A.

Hood, in due course, moved for summary judgment on Count V on the ground that the alleged oral contract was unenforceable under New Hampshire's Statute of Frauds, RSA 506:2.¹ The court, in its order of September 6, 1994, determined that a genuine issue of material fact existed as to whether the doctrine of equitable estoppel prevented Hood from denying the enforceability of the oral contract and accordingly denied Hood's summary judgment motion. See Order of Sept. 6, 1994, at 18-21.

After additional discovery, Hood now renews its motion for summary judgment as to Count V on the ground that Lago is not entitled to invoke the doctrine of equitable estoppel because it cannot establish that it suffered the requisite injury.²

The essential elements of equitable estoppel are:

"(1) a representation or a concealment of material facts; (2) the representation must have been made with knowledge of the facts; (3) the party to whom it was made must have been ignorant of the truth of the matter; (4) it must have been made with the intention that the other party should act upon it; and (5) the other party must have been induced to act upon it to its prejudice."

Hawthorne Trust v. Maine Sav. Bank, 136 N.H. 533, 538, 618 A.2d 828, 831 (1992) (quoting Nottingham v. Lee Homes, Inc., 118 N.H. 438, 442, 388 A.2d 940, 942 (1978)). See also Great Lakes Aircraft Co. v. Claremont, 135 N.H. 270, 292, 608 A.2d 840, 854 (1992).³

It is well established that "the application of `estoppel rests largely on the facts and circumstances of the particular case.'" Great Lakes Aircraft, supra, 135 N.H. at 289, 608 A.2d at 852-53 (quoting Monadnock Regional School Dist. v. Fitzwilliam, 105 N.H. 487, 489, 203 A.2d 46, 48 (1964)). Further, "the party invoking estoppel has the burden of proving that its application is warranted, and `its existence is a question of fact to be resolved by the trier of fact....'" Id., 135 N.H. at 289, 608 A.2d at 853 (quoting Olszak v. Peerless Ins. Co., 119 N.H. 686, 690, 406 A.2d 711, 714 (1979)). See also Concord v. Tompkins, 124 N.H. 463, 468, 471 A.2d 1152, 1154 (1984) ("Each element of estoppel requires a factual determination.").

"Since the function and purpose of the doctrine of estoppel are the prevention of fraud and injustice, there can be no estoppel where there is no loss, injury, damage, detriment, or prejudice to the party claiming it." 28 AM.JUR.2D ESTOPPEL AND WAIVER § 78, at 715-16 (1966). Further, "the injury or prejudice involved must be actual and material or substantial and not merely technical or formal." Id. at 716.

Lago asserts that in early 1991 it purchased 17 trucks in reliance on Hood's assurances that the three-year oral contract between the parties was valid. Affidavit of Robert W. Lago ¶¶ 6-9 (attached to Lago's Objection as Exhibit B); Lago's Answer Interrogatory No. 11 of Hood's First Set of Interrogatories (attached to Defendant's Motion as Exhibit B). Lago spent approximately $600,000 to purchase the trucks in question. Lago Affidavit ¶ 9.

Hood now contends that Lago suffered no detriment from this truck purchase because (1) Lago's subsequent distribution agreement with Weeks/Crowley Dairy (Weeks) allowed Lago to meet its expenses as to thirteen of the trucks and (2) the remaining four trucks were sold, but at no loss to Lago. Hood further contends that even if Lago did incur a loss on the four trucks that were sold, it cannot rely on that loss to show injury here because Hood offered to buy the trucks from Lago at book value.

a. Lago's Agreement with Weeks

Hood allegedly breached its three-year oral distribution agreement with Lago on February 14, 1992, "by assuming the responsibility for delivery of dairy products to the house accounts then being delivered by Lago." Affidavit of Robert L. Lago ¶ 5 (Plaintiff's Exhibit C). Following Hood's termination of its oral agreement with Lago, Lago entered into an oral agreement with Weeks whereby Lago became a distributor of frozen and fluid Weeks products. Lago states that the distribution agreement with Weeks "was reached approximately one week prior to March 9, 1992 to commence on March 9, 1992." Lago's Supplemental Answers to Hood's Interrogatory No. 16 (Defendant's Exhibit C).

Hood asserts that Lago suffered no detriment as a result of its 1991 truck purchase because Lago's agreement with Weeks allowed Lago to meet its expenses as to thirteen of the seventeen trucks purchased.

Lago's agreement with Weeks is "a verbal agreement to purchase fluid, frozen or cultured products from Weeks with no specified time period and no restrictions to purchasing other competitive products." Lago's Supplemental Answer to Hood's Interrogatory No. 4. Lago concedes that this agreement "gave Lago a number of benefits and savings, such as seven week credit terms, turning over $2.2 million in direct bill ice cream business to Lago, inventorying Weeks/Crowley products free of charge, and free freight from Concord to...