Frito-Lay, Inc. v. Willoughby, FRITO-LA

Citation274 U.S. App. D.C. 340,863 F.2d 1029
Decision Date23 December 1988
Docket NumberNo. 87-7141,INC,FRITO-LA,87-7141
Parties, 12 Fed.R.Serv.3d 894 , Appellant v. Barton WILLOUGHBY, d/b/a Willoughby Farms.
CourtUnited States Courts of Appeals. United States Court of Appeals (District of Columbia)

Appeal from the United States District Court for the District of Columbia (Civil Action No. 86-01657).

F. Joseph Nealon, with whom Amy S. Owen was on the brief, for appellant.

Stephen P. McCarron, for appellee.

Before WALD, Chief Judge, STARR and SENTELLE, Circuit Judges.

Opinion for the Court filed by Circuit Judge SENTELLE.

SENTELLE, Circuit Judge:

In this reparation proceeding under the Perishable Agricultural Commodities Act of 1930 ("Act"), 7 U.S.C. Secs. 499a et seq., Frito-Lay, Inc. ("Frito-Lay" or "appellant") appeals from the District Court's grant of summary judgment in favor of Barton Willoughby ("Willoughby" or "appellee"). The case was originally before the Secretary of Agriculture, who granted appellee's request for an order of reparation of $84,825.83. The Act makes appealable the Secretary's reparation orders and sets out the conditions for such appeals. It provides, inter alia, that "[s]uch suit in the district court shall be a trial de novo and shall proceed in all respects like other civil suits for damages, except that the findings of fact and order or orders of the Secretary shall be prima-facie evidence of the facts therein stated." 7 U.S.C. Sec. 499g(c) (1982).

This appeal presents an unusual application of Federal Rule of Civil Procedure 56 and requires this Court to consider whether summary judgment is appropriate under the Act when the District Court has before it the Secretary's decision in which are made factual findings adverse to the nonmovant, and when the nonmovant submits no supporting materials in opposing the motion.

Because we find that appellee adequately supported its motion and that appellant failed to oppose it properly, we answer the question in the affirmative, and affirm the District Court's grant of summary judgment.

I. BACKGROUND

The evidence before the Secretary was as follows: Appellant Frito-Lay, a potato buyer and chip maker, and appellee, a first-time potato grower, were parties to a written contract made in 1982 whereby appellee was to deliver to appellant 25,000 hundredweight of potatoes in three installments in June, 1983. Appearing in prominent type among the contract's terms was the following provision: "All potatoes shipped under this contract guaranteed ... to Frito-Lay's satisfaction upon arrival. Frito-Lay reserves the option of not accepting deliveries which do not meet the [agreed] shipping schedules." Joint Appendix ("J.A.") at A1. There were at least three conversations between appellee and two Frito-Lay employees, Messrs. Willingham and Anderson, concerning the parties' performances. Appellee claims that Frito-Lay orally agreed to accept appellee's entire crop at dates other than those specified in the contract, initially because appellee requested delay, but later because Frito-Lay itself preferred to take performance later. Frito-Lay's employees deny any such oral agreements.

After Frito-Lay issued a purchase order on June 30, 1983, appellee tendered 9,000 hundredweight of potatoes, $6,681.60 of which were accepted. Appellant's stated reason for refusing tender of the rest was their unsatisfactory quality. No other tender was attempted.

Secretary's Decision

Appellee filed a complaint before the Secretary of Agriculture on March 6, 1984, arguing that appellant (a licensed dealer, merchant, or broker under the Act) orally agreed to modify the contract and that appellant was obligated to pay the contract price (less mitigated damages) because it had breached the contract and thereby engaged in unfair conduct in violation of section 2 of the Act. 7 U.S.C. Sec. 499b. Appellant counterclaimed for recovery of an asserted overpayment for the potatoes it accepted.

A Judicial Officer held hearings on April 16 and 17, and, following an amendment of appellee's complaint, on September 19, 1985. By order dated May 14, 1986, the Judicial Officer ruled in appellee's favor and ordered appellant to pay as reparation $84,825.83, plus attorney's fees and interest. In reaching his decision, the Officer made numerous findings of fact favorable to appellee, among them that appellant's employees were agents capable of binding Frito-Lay; appellee was willing and able to make its first delivery on time, but when he requested an extension so as to allow maturation of his entire crop, Frito-Lay's employees agreed; when appellee eventually became ready to perform in full, appellant's employees asked to delay delivery, and thereafter continued to represent to appellee that Frito-Lay was interested in purchasing the entire crop; appellee's crop began to overripen and deteriorate in the ground, whereupon appellee tendered eighteen loads of potatoes, four of which were rejected by appellant.

According to the Judicial Officer, the critical issues presented were whether the written contract was varied by conduct, or, alternatively, whether by their conduct the parties created an entirely separate contract. He ruled that because the Alabama statute of frauds, Ala.Code Sec. 7-2-201, was merely procedural, it precluded enforcement of an oral contract as a remedy, but did not prevent the Secretary from "look[ing] at the facts standing behind an oral modification to a written contract to determine whether there has been a breach." J.A. at F13. Unaware "of any holding which precludes an integrated written contract subject to the statute of frauds from being modified by subsequent oral agreement," J.A. at F15, the Officer resolved that "the contract need not be strictly construed, but can be varied by the conduct of the parties." J.A. at F5. Based on his finding that appellant had in fact represented to appellee that it would accept late delivery, the Judicial Officer concluded that appellant had waived its right to receive the shipments on the dates specified in the contract, and by refusing tender, was the first material breacher. Accordingly, he entered judgment against appellant, and ordered reparation of $84,825.83, attorney's fees, and interest thereon.

District Court Decision

As provided by the Act, Frito-Lay appealed to the United States District Court, challenging both the Secretary's factual findings and its application of law to the facts as found. Pursuant to cross-motions for summary judgment, the District Court dismissed the appeal and affirmed the Secretary's order.

After reviewing the facts as found by the Secretary and examining the statute of frauds, the District Court rejected appellant's claim that the statute precluded waiver. The Court concluded as did the Secretary that the statute "does not bar a conclusion that Frito-Lay ... waived its right to refuse any deliveries not made on [the specified] dates." Memorandum Opinion ("Mem.Op.") at 5 (March 30, 1987) (J.A. at M5). The Court also rejected appellant's argument that the distinct delivery dates specified made the contract divisible, and, therefore, any waiver should operate divisibly, saying the argument was "not well-taken." Id. at 6 (J.A. at M6). Accordingly, appellant's motion was denied. Appellant has not preserved its statute of frauds arguments in the present appeal, and consequently we have no occasion to pass on them.

In considering appellee's cross-motion, the Court noted that under the Act, the Secretary's findings of fact constitute "the prima facie case" for purposes of appeal, "unless it is overcome by evidence submitted by the petitioner." Id. at 3 (J.A. at M3). The Court thrice noted that appellant had not stated any facts to negate the Secretary's findings, and "accordingly adopt[ed] the Secretary's findings of fact." Id. Thus, because the District Court found no error in the Secretary's application of the Alabama statute of frauds and because "[t]he parties have not presented any factual evidence," id., the Court granted appellee's motion for summary judgment. This appeal ensued.

II. ANALYSIS

The gravamen of appellant's challenge is the District Court's asserted failure to recognize that "[t]he dispute about who said what is material and precludes summary judgment." Br. for Appellant at 6. Moreover, the District Court was powerless to "decide what witness was telling the truth on summary judgment." Id. Instead, "[a]s in any trial de novo," appellant argues, "the district court should have made a 'fresh determination of the facts and issues.' " Id. at 7 (citation omitted). Thus, the Court "should have listened to the pivotal witnesses ...[, i]t should have listened to Mr. Willoughby's version ... [and, i]t should have listened to what Frito-Lay's employees said.... Only then could the district court determine de novo whether the written contract was modified or waived in any respect." Id. at 7-8.

Federal Rule of Civil Procedure 56(c) provides for summary judgment when the materials offered in support of and in opposition to the motion "show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Ordinarily, a dispute over who said what--such as the one here--precludes summary adjudication. This particular case is complicated by the unusual nature of the underlying statute, which provides for de novo review by the District Court of the Secretary's decision and simultaneously establishes the Secretary's findings of fact as prima facie evidence on appeal.

A. Duty of Appellee as Moving Party

The Supreme Court made clear in Celotex Corp. v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986), that the movant has no burden of introducing evidence negating the nonmovant's claim. Id. at 323, 106 S.Ct. at 2553. Rather, the moving party's duty to "support" its motion is discharged by its "informing the district court of the basis for its motion,...

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