Indian Coffee Corp. v. Procter & Gamble Co., Civ. A. No. 76-1362.

• Decision Date: 14 January 1980
• Docket Number: Civ. A. No. 76-1362.
• Citation: 482 F. Supp. 1098
• Parties: INDIAN COFFEE CORP., a corporation, and Penn-Western Food Corp., a corporation, Plaintiffs, v. The PROCTER & GAMBLE COMPANY, a corporation, and The Folger Coffee Company, a corporation, Defendants.
• Court: U.S. District Court — Eastern District of Pennsylvania

482 F. Supp. 1098

INDIAN COFFEE CORP., a corporation, and Penn-Western Food Corp., a corporation, Plaintiffs, v. The PROCTER & GAMBLE COMPANY, a corporation, and The Folger Coffee Company, a corporation, Defendants.

Civ. A. No. 76-1362.

United States District Court, W. D. Pennsylvania.

January 14, 1980.

John L. Laubach, Jr., Stevens, Clark, Laubach & Semple, Pittsburgh, Pa., for plaintiffs.

William Aluah Stewart, III, Cloyd R. Mellott, John W. Ubinger, Jr., Eckert, Seamans, Cherin & Mellott, Pittsburgh, Pa., John W. Beatty, Edward W. Merkel, Jr., Mark Silbersack, Dinsmore, Shohl, Coates & Deupree, Cincinnati, Ohio, for defendants.

OPINION

DIAMOND, District Judge.

Plaintiffs, Indian Coffee Corporation (Indian) and its wholly-owned subsidiary Penn-Western Food Corporation (Penn-Western), filed this suit alleging that the defendants, The Procter & Gamble Company (Procter & Gamble) and its wholly-owned subsidiary The Folger Coffee Company (Folger), violated § 2(a) of the Clayton Act, as amended by the Robinson-Patman Act, 15 U.S.C. § 13(a), by granting discriminatory prices in the sale of "Folger's" brand coffee in the Cleveland-Pittsburgh market area during 1971-1974.

Two defense motions are presently before the court. The first, made by both defendants, requests that summary judgment be entered as to all of Penn-Western's claims on the ground that it lacks standing to bring the instant suit. The second, filed by only defendant Procter & Gamble, seeks a dismissal of the complaint as to Procter & Gamble for lack of in personam jurisdiction over it. For the reasons set forth below, we will grant both motions.

I. THE MOTION FOR SUMMARY JUDGMENT

In the motion for summary judgment, the defendants contend that Penn-Western's cause of action was one of the many assets it sold to Wechsler Penn Coffee Corporation (Wechsler), and that, therefore, Penn-Western has no standing to bring this suit.

The defendants' motion is based on the plaintiffs' amended complaint and the written contract attached thereto entitled "Sale And Purchase Of Assets" (Agreement) among Indian Coffee Corporation, Penn-Western Food Corporation and Wechsler-Penn Coffee Corporation. Of course, therefore, there is no genuine issue as to any material fact concerning the existence and contents of the Agreement, Rule 56 Fed.R.Civ.P. The plaintiffs have submitted the affidavit of one James H. Deily, a shareholder of Indian and officer and director of both Indian and Penn-Western. To this affidavit was attached, as exhibit 1, a copy of an "Assignment and Bill of Sale" from Indian and Penn-Western to Wechsler dated April 5, 1974. From our examination of the foregoing, we conclude that there is no genuine issue of material fact regarding the alleged transfer of the right to this cause of action from Penn-Western to Wechsler; that it was in fact transferred, and, therefore, the motion for summary judgment must be granted.

Prior to April 5, 1974, Indian and Penn-Western were engaged in the production of coffee for sale in this region. On that date, however, they sold most of the assets related to their respective coffee businesses to Wechsler. The assets that were to be transferred in the sale were listed generally in ¶ 1 of the Agreement and its related sub-paragraphs. After setting forth a series of specific properties included in the sale, ¶ 1 concludes with the provision that:

1.10 All other properties and assets of sellers as the same exists on the date hereof, such as office supplies, promotional materials, display materials, fixtures, processes, customer lists, leasehold improvements, excluding, however . . (iv) any monetary award or other damages recovered by Indian in connection with the proceedings instituted by it and pending before the Federal Trade Commission or any civil action or any settlement fee or award related thereto . . (emphasis supplied).

The only other relevant portion of the contract is ¶ 14 entitled "Miscellaneous", specifically ¶ 14.8 entitled "Reservation By Sellers" which provides:

14.8 Reservation By Sellers. It is specifically understood and agreed that Indian shall retain all of its right, title and interest in its claim filed with the Federal Trade Commission, which proceedings commenced by Indian are still pending. Indian, in addition, shall retain all right to any civil action which may be hereinafter instituted, as well as to the proceeds of any settlement negotiated with any of its competitors in connection therewith . . ..

Those two provisions make it clear, defendants argue, that the parties to the Agreement contemplated that anti-trust suits might arise as a result of activities by plaintiffs' competitors, but that only Indian excepted and reserved the right to retain and maintain any preexisting right of action following the sale.

Plaintiffs counter with three basic arguments. First, they say that a chose in action was not the sort of asset referred to in the catch-all provisions of ¶ 1.10. They argue in their brief that the language "such as office supplies, promotional materials, display materials . . ." contemplated the transfer of ". . . trade assets, not assets of a non-essential, non-business nature," and that law suits, unlike office supplies, and the like, are not trade assets.

Their second, and most persistently urged, argument is that even if ¶ 1.10 did have the legal effect of transferring rights to maintain law suits, the parties did not intend for it to do so. In support of that position, plaintiffs submitted the affidavit of James A. Deily. Deily, an officer and director of both Indian and Penn-Western, states that he was present at the April 5, 1974, closing and that the parties understood that no litigation rights were being transferred. Plaintiffs contend that this view of the transaction is substantiated by Deily's further affirmation that Wechsler has known about the present law suit since August of 1977, but that to date it has never received or requested any records relative to this case, has never sought to intervene in this litigation, and has never indicated that it believed that Penn-Western's maintenance of this action constituted a breach of the April 4, 1975, agreement of sale. It is clear from this affidavit, say plaintiffs, that the defendants' construction of the contract is a highly technical one and is at variance with the transaction as contemplated and performed by the parties.

Finally, plaintiffs argue that even if the parties intended to transfer Penn-Western's chose in action, Wechsler's lack of involvement indicates that this portion of the agreement was never performed and, therefore, the right to maintain the suit remains in Penn-Western.

We are not persuaded by plaintiffs' arguments. First, it is clear to us that ¶ 1.10 did have the legal effect of transferring Penn-Western's cause of action. While it may be, as plaintiffs argue, that a chose in action is so different from the other assets enumerated in the "such as" clause of ¶ 1.10 that one would not ordinarily include it therein, that argument loses weight in light of other language in the agreement. For instance, the exclusionary clause of ¶ 1.10 which follows the "such as" phrase indicates that the drafters felt that the preceding language did include, inter alia, a "civil action," for they made it a point, but as to Indian only, to specifically exclude it from transfer. The same is true under, ¶ 14.8, "Reservation By Sellers" where they specifically reserve, but, again, as to Indian only ". . . all right to any civil action which may be hereinafter instituted . . .." We find this to be compelling evidence that the parties believed and intended that the conveying language of the agreement include future law suits as to both Indian and Penn-Western.

As to plaintiffs' contention that the parties did not intend that the agreement convey Penn-Western's chose in action, we do not believe that the record contains sufficient facts to permit such a conclusion, or to raise a genuine issue of material fact in that regard. It is true, of course, that the interpretation given a contract by its signators is generally favored by the courts. 4 Williston on Contracts (4th ed.) § 623. However, in view of the plain language of the agreement, the onus of proving that the parties intended something different is on plaintiffs. Here, however, they have not cited facts sufficient for us to conclude that there is even a genuine issue of a material fact relating to the interpretation which the parties placed on the agreement. Instead, Penn-Western simply makes the bald assertion that the agreement was not intended to convey its claim, and provides us with no information by affidavit or otherwise regarding the circumstances and discussions which led to the drafting of ¶¶ 1.10 and 14.8.

Secondly, we note that plaintiffs have only offered their interpretation of the contract. We have no affirmative indication on the record regarding Wechsler's interpretation. Instead, we are asked to draw inferences as to Wechsler's motive, intent, and interpretation from what it did not say or do. This we decline to do. For, assuming, as plaintiffs contend, that Wechsler has expressed no interest whatever in this suit, that fact is ambiguous at best and could indicate, inter alia, that Wechsler has little faith in the merits of the claim, or a belief that the cause of action is not theirs or any number of other things.

Plaintiffs' final argument that regardless of the parties' intent, since Wechsler in fact has not requested transfer of the various documents relating to the suit, it, therefore, still remains with Penn-Western, is not legally or logically sound for the same reasons we expressed in rejecting their second point. Because Wechsler has apparently failed to request transfer of "records, ledgers, and other information necessary to maintain this law suit," plaintiffs want us to conclude that Wechsler did not believe it was owner of...