Elmhurst Dairy, Inc. v. Bartlett Dairy, Inc.

• Citation: 949 N.Y.S.2d 115,2012 N.Y. Slip Op. 05720,97 A.D.3d 781
• Parties: ELMHURST DAIRY, INC., appellant, v. BARTLETT DAIRY, INC., respondent, et al., defendants.
• Decision Date: 25 July 2012
• Court: New York Supreme Court Appellate Division

97 A.D.3d 781
949 N.Y.S.2d 115
2012 N.Y. Slip Op. 05720

ELMHURST DAIRY, INC., appellant,
v.
BARTLETT DAIRY, INC., respondent, et al., defendants.

Supreme Court, Appellate Division, Second Department, New York.

July 25, 2012.

[949 N.Y.S.2d 116]

The Scher Law Firm, LLP (Hodgson Russ LLP, Buffalo, N.Y. [Robert J. Fluskey, Jr. and Kevin J. Espinosa], of counsel), for appellant.

Hinman, Howard & Kattell, LLP, New York, N.Y. (Joseph N. Paykin of counsel), for respondent.

RUTH C. BALKIN, J.P., L. PRISCILLA HALL, PLUMMER E. LOTT, and JEFFREY A. COHEN, JJ.

[97 A.D.3d 781]In an action, inter alia, to recover damages for breach of contract, the plaintiff appeals from an order of the Supreme Court, Queens County (Kitzes, J.), dated August 3, 2011, which granted the motion of the defendant Bartlett Dairy, Inc., pursuant to CPLR 3211(a)(1) and (7) to dismiss the amended complaint insofar as asserted against it.

ORDERED that the order is reversed, on the law, with costs, and [97 A.D.3d 782]the motion of the defendant Bartlett Dairy, Inc., pursuant to CPLR 3211(a)(1) and (7) to dismiss the amended complaint insofar as asserted against it is denied.

The plaintiff, a milk processor, entered into a contract (hereinafter the Elmhurst/Bartlett contract) with the defendant Bartlett Dairy, Inc. (hereinafter Bartlett), which sells milk at wholesale. The Elmhurst/Bartlett contract states, inter alia, that Bartlett “is desirous of having all of its requirements of milk and milk products that [it] sells as a dealer” (hereinafter milk requirements) “processed and packaged at [the plaintiff's] plant.” The Elmhurst/Bartlett contract provides that while it is in effect, Bartlett would have all of its milk requirements processed and packaged exclusively by the plaintiff. The contract took effect on December 1, 2003, and was to continue at least through November 30, 2013. The parties operated under the Elmhurst/Bartlett contract for a number of years, during which time Bartlett purchased all of its milk requirements from the plaintiff for sale to various stores and other entities in and around New York City, including stores belonging to the defendant

[949 N.Y.S.2d 117]

Starbucks Corporation (hereinafter Starbucks).

According to the parties' pleadings, however, Bartlett eventually informed the plaintiff that, during the term of the Elmhurst/Bartlett contract, it would stop selling the plaintiff's milk to the Starbucks stores in and around New York City. Instead, under an alternate arrangement (hereinafter the delivery arrangement), the defendants Dean Foods Company and Tuscan/Lehigh Dairies, Inc. (hereinafter Dean and Tuscan, respectively), which also are in the business of processing milk, would sell milk directly to the Starbucks stores and, for a fee, Bartlett would deliver the milk processed by Dean and Tuscan to those stores.

The plaintiff commenced this action asserting, inter alia, causes of action against Bartlett to recover damages for breach of contract and breach of the covenant of good faith and fair dealing. The plaintiff alleged, among other things, that the delivery arrangement violated the exclusivity provision of the Elmhurst/Bartlett contract, and that Bartlett was unfairly circumventing the exclusivity provision of the Elmhurst/Bartlett contract. Bartlett moved to dismiss the amended complaint insofar as asserted against it pursuant to CPLR 3211(a)(1) and (7). The Supreme Court granted the motion. The plaintiff appeals, and we reverse.

Contrary to the plaintiff's contention, the Supreme Court properly determined that the Elmhurst/Bartlett contract is unambiguous and that, while the exclusivity provision of that [97 A.D.3d 783]contract prohibits Bartlett from selling or distributing milk that it purchased from a processor other than the plaintiff, it does not prohibit Bartlett from...