Dominion Liquid Techs., LLC v. GT Beverage Co.
| Decision Date | 14 March 2014 |
| Docket Number | Case No. 1:11-cv-444 |
| Parties | DOMINION LIQUID TECHNOLOGIES, LLC, Plaintiff, v. GT BEVERAGE COMPANY, LLC, et al., Defendants. |
| Court | U.S. District Court — Southern District of Ohio |
Litkovitz, M.J.
Plaintiff, Dominion Liquid Technologies, LLC (Dominion), brings this diversity action pursuant to 28 U.S.C. § 1332 against defendants GT Beverage Company, LLC (GT), GT employee Tom Weiss, and True Drinks, Inc.,1 raising various state law contract and tort claims. This matter is currently before the Court on Dominion and GT's summary judgment memoranda on Dominion's contract repudiation claim (Docs. 113, 114) and their respective rebuttal briefs (Docs. 115, 116).
Dominion filed its original complaint against GT and Weiss in July 2011 over a contract dispute between Dominion and GT; pursuant to the contract, Dominion was to provide bottling and delivery of GT's patented, spherical bottle. (Doc. 1). Dominion subsequently filed a second amended and supplemental complaint reflecting True Drinks, Inc.'s status as the successor in interest to GT. (Doc. 65). In the second amended and supplemental complaint, Dominion alleges that Tom Weiss sought to enter into an agreement with Dominion, a beverage blending, bottling, and packaging plant, whereby Dominion would become GT's Midwest bottling company. (Id., ¶¶ 9, 11, 13, 21). GT holds a patent on a specially designed, spherical bottle,invented by Tom Weiss, used in its sales of the Sportstastic sport beverage product. (Id., ¶¶11, 23). Given the unique design of the Sportstastic bottle and in order to serve as GT's Midwest bottling company, Dominion was required to install a new bottling line. (Id., ¶¶ 22, 23). Dominion alleges that despite delays in installing the bottling line, it complied with its contractual duties and that GT breached the contract with Dominion and is liable for the costs of purchasing and installing the bottling line, plus additional financial costs. (Id., ¶¶ 101-04). Dominion's second amended and supplemental complaint also includes claims of promissory estoppel against GT and a negligent misrepresentation claim against Tom Weiss. (Id., ¶¶ 105-14).
Following an unsuccessful attempt at mediation, this matter was reassigned to the undersigned Magistrate Judge upon consent of the parties. (Doc. 107). During a status conference with the Court, the parties explained that the issues raised in their previously filed summary judgment motions (Docs. 85, 86, 87) had been significantly streamlined. The parties agree that Dominion's breach of contract and promissory estoppel claims against GT are moot; thus, the only remaining claims at the summary judgment stage are Dominion's contract repudiation and reliance damages claims. See Doc. 111 at 1 n.1, n.2; Doc. 97 at 1-2. The Court ordered the parties to submit a joint statement of undisputed facts and narrowed summary judgment briefs addressing the limited issues. (Docs. 109, 112). The parties timely complied with the Court's order and this matter is now ripe for ruling.
In August 2010, Dominion and GT executed a Packaging Agreement (the Agreement). (Doc. 111, ¶ 1). The Agreement is a valid and binding contract between Dominion and GT. (Id., ¶ 2). See also, Doc. 111, Ex. A at PAGEID #3606-13, the Agreement. Pursuant to theAgreement, Dominion was to construct and install a new bottling line; this required Dominion to incur certain costs for which it now seeks reliance damages. (Id., ¶ 4).
The new bottling line installed by Dominion pursuant to the Agreement is composed of two main sections: the "front end," which is the "wet" end that mixes, bottles, and caps the Sportstastic product, and the "back end," which is the "dry" end that packages and wraps the Sportstastic product. (Id., ¶ 5). Dominion encountered significant unanticipated delays in making the "back end" of the bottling line functional and failed to meet the Agreement's deadlines for having an operational bottling line. (Id., ¶¶ 6-7). Pursuant to the Agreement, Dominion was to meet certain case volume production commitments; Dominion did not meet these commitments prior to GT's letter canceling the Agreement. (Id., ¶ 9). The Agreement does not include a "time is of the essence" provision. (Id., ¶ 8). In 2010 and 2011, GT utilized other co-packagers for business in the Northeast and Midwest. (Id., ¶ 10).
Throughout the course of their relationship, Dominion and GT exchanged numerous phone calls and email communications regarding the Agreement. (Id.,¶ 11). See also Doc. 111, Exs. B and C, PAGEID #3614-90, email communications; Doc. 111, Ex. D, PAGEID #3691, log of telephone calls.2 On April 1, 2011, GT requested that Dominion package an order for 60,000 cases of Sportstastic to be shipped to Wal-Mart on April 28, 2011 (the Wal-Mart Order); the Wal-Mart Order was the first and only order Dominion received from GT. (Id., ¶¶ 13-14). The parties exchanged emails throughout April 2011 discussing whether Dominion would be producing the Wal-Mart Order or if it would be produced by a co-packager. (Id., ¶ 15). See alsoDoc. 111, Exs. B and C, PAGEID #3614-90. Dominion sent an email to GT on April 6, 2011, stating that GT should use other co-packagers to fill the Wal-Mart Order. (Id., ¶ 16).
On April 18, 2011, Dominion received 5,000 GT bottles to test the new bottling line. (Id., ¶ 17). See also Doc. 111, Ex. B at PAGEID #3650, Shipping Document. On this same day, GT sent an email to Dominion stating that the Agreement was "cancelled effective this date." (Id., ¶ 18). See also Doc. 111, Ex. E at PAGEID #3692, April 18, 2011 cancellation letter. On April 27, 2011, Dominion sent an email to GT stating that its bottling line was ready to begin manufacturing the Sportstastic product. (Id., ¶ 19). See also Doc. 111, Ex. B at PAGEID #3649. Dominion did not produce any product relative to the Wal-Mart Order and after April 18, 2011, GT did not send any inventory to Dominion. (Id., ¶¶ 20-21).
A motion for summary judgment should be granted if the evidence submitted to the Court demonstrates that there is no genuine issue as to any material fact, and that the movant is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c). See Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247 (1986). Under Federal Rule of Civil Procedure 56(c), a grant of summary judgment is proper if "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law." Satterfield v. Tennessee, 295 F.3d 611, 615 (6th Cir. 2002). The Court must evaluate the evidence, and all inferences drawn therefrom, in the light most favorable to the non-moving party. Satterfield, 295 F.3d at 615; Matsushita Elec. Industrial Co., Ltd. v. Zenith Radio, 475 U.S. 574, 587 (1986); Little Caesar Enterprises, Inc. v. OPPC, LLC, 219 F.3d 547, 551 (6th Cir. 2000).
The trial judge's function is not to weigh the evidence and determine the truth of the matter, but to determine whether there is a genuine factual issue for trial. Anderson, 477 U.S. at 249-50. The trial court need not search the entire record for material issues of fact, Street v. J.C. Bradford & Co., 886 F.2d 1472, 1479-80 (6th Cir. 1989), but must determine "whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law." Anderson, 477 U.S. at 251-52.
If, after an appropriate time for discovery, the opposing party is unable to demonstrate a prima facie case, summary judgment is warranted. Street, 886 F.2d at 1478 (citing Celotex and Anderson). "Where the record taken as a whole could not lead a rational trier of fact to find for the non-moving party, there is no 'genuine issue for trial.'" Matsushita, 475 U.S. at 587.
Dominion contends that it is entitled to summary judgment on its contract repudiation claim given GT's April 18, 2011 letter unilaterally cancelling the Agreement. (Doc. 113). Dominion asserts that GT's letter represents a clear and unequivocal repudiation of its intent to perform and as Dominion clearly expressed to GT that it was ready and able to manufacture GT's product, Dominion is entitled to recover damages incurred in relying on the Agreement. Dominion concedes that it did not have a fully operational bottling line within the time frame originally contemplated by the Agreement but contends that timing of performance was not a material term of the Agreement and, further, that GT acquiesced to the delayed performance thus modifying the Agreement.
In opposition, GT maintains that Dominion's motion for summary judgment must fail because § 11c of the Agreement, the Indemnity and Insurance clause, precludes Dominion's claim. GT further argues that even if the claim is not precluded, Dominion materially breachedthe Agreement prior to GT's issuance of the cancellation letter by failing to meet the Agreement's timing provisions for completing the bottling line and by refusing to fulfill the Wal-Mart Order, thereby obviating GT's contractual obligations. To the extent Dominion argues that GT acquiesced to the delay or modified or waived the timing provisions of the Agreement, GT asserts that Dominion's arguments rely on disputed facts and, therefore, its motion for summary judgment must be denied.
Dominion's summary judgment motion requires resolution of several issues. As a threshold matter, the Court must determine whether Dominion's repudiation claim is precluded by § 11c of the Agreement. If yes, the inquiry ends and Dominion's claim fails. If no, the Court must then determine whether GT's April 18, 2011 cancellation letter amounts to a repudiation of the Agreement such that Dominion is entitled to reliance damages....
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