Metz Beverage Co. v. WYOMING BEVERAGES

• Decision Date: 07 February 2002
• Docket Number: No. 00-287.,00-287.
• Citation: 2002 WY 21,39 P.3d 1051
• Parties: METZ BEVERAGE COMPANY, a Wyoming corporation, Appellant (Defendant), v. WYOMING BEVERAGES, INC., a Wyoming corporation, Appellee (Plaintiff).
• Court: Wyoming Supreme Court

39 P.3d 1051

2002 WY 21

METZ BEVERAGE COMPANY, a Wyoming corporation, Appellant (Defendant), v. WYOMING BEVERAGES, INC., a Wyoming corporation, Appellee (Plaintiff).

No. 00-287.

Supreme Court of Wyoming.

February 7, 2002.

Representing Appellant: John C. Smiley, Stephen C. Peters, and Todd E. Mair of Lindquist & Vennum P.L.L.P., Denver, CO. Argument by Mr. Peters.

Representing Appellee: John W. Davis of Worland, WY; and David G. Palmer and Brian L. Duffy of Zevnik, Horton, Guibord, McGovern, Palmer & Fognani, L.L.P., Denver, CO. Argument by Messrs. Davis and Palmer.

Before LEHMAN, C.J., and GOLDEN, HILL, and VOIGT, JJ., and BROOKS, District Judge.

BROOKS, District Judge.

[¶ 1] This case is brought by the appellant, Metz Beverage Company (Metz), against the appellee, Wyoming Beverages, Inc. (Wyoming Beverage), alleging the wrongful termination of a distributorship contract.

[¶ 2] Metz had distributed Pepsi products for approximately 30 years in northeast Wyoming for Wyoming Beverage. In June 1997, Wyoming Beverage notified Metz that their long-term business arrangement would be terminated effective in October of 1997. Thereafter, Wyoming Beverage filed a declaratory action seeking a resolution of the relationship. Metz filed a counterclaim asserting, among other things, breach of contract, fraud, unjust enrichment, promissory estoppel, and a claim seeking an accounting.

[¶ 3] After extensive discovery and the filing of voluminous motions, the district court granted summary judgment against Metz on Metz's breach of contract, fraud, and unjust enrichment claims. The matter is now before this court upon Metz's appeal of the district court's order and certification pursuant to W.R.C.P. 54(b).

ISSUE

[¶ 4] The issue on appeal is straightforward:

Did the District Court have a proper legal and factual basis to grant summary judgment against Metz as to Metz's claims of breach of contract, fraud and unjust enrichment.

FACTUAL BACKGROUND

[¶ 5] In 1967, Metz began to distribute Pepsi products in northeast Wyoming for Wyoming Beverage. That relationship, which continued for 30 years, started as an oral agreement between Forrest Clay of Wyoming Beverage and Buster Metz for Metz. The relationship and agreement appears to have been profitable and amicable for much of the 30 years.

[¶ 6] In May of 1996, Buster Metz died. On June 12, 1997, Mr. Clay wrote a letter to Dorothy Metz, Buster's widow, stating:

We believe that our oral agreement is terminable at will and that competitive circumstances and business necessities dictate termination of the distribution arrangement....

It is our intention to accomplish the transfer to direct distribution on October 1, 1997[.]

It is undisputed that the original agreement made by Mr. Clay and Mr. Metz, in addition to being oral, was indefinite in terms of its duration. In 1990, the parties began discussing a written agreement. The initial attempts to reach a written agreement failed apparently as a result of the parties' inability to agree as to the proper length of the agreement. Metz sought an agreement that was significantly longer in duration than that proposed by Wyoming Beverage.

[¶ 7] Between 1992 and 1994, Metz and Wyoming Beverage again tried to negotiate a written contract. Wyoming Beverage insisted on a limited three-year contract with no right of renewal. Metz continued to seek a longer agreement with a provision that any agreement could only be terminated for cause. During the negotiations, there was extensive communication and correspondence among Mr. Clay and Dorothy and Diana Metz. Diana Metz, Buster's daughter, had become deeply involved in the family business by that time.

[¶ 8] Mr. Clay, in his correspondence with Metz, often expressed dissatisfaction with the performance of Metz's obligations under the contract and indicated that the failure to correct Metz's performance problems would result in termination of the oral agreement. Ultimately, the parties did not reach a written agreement. Buster Metz died in 1996. Wyoming Beverage terminated the relationship with Metz in October of 1997, and Wyoming Beverage itself took over direct distribution of the Pepsi products in northeast Wyoming.

STANDARD OF REVIEW

[¶ 9] Summary judgment is appropriate when no genuine issue exists as to any material fact and the moving party is entitled to judgment as a matter of law. Covington v. W.R. Grace-Conn., Inc., 952 P.2d 1105, 1106 (Wyo.1998). A genuine issue of material fact exists when a disputed fact, if it were proven, would establish or refute an essential element of a cause of action or a defense that the parties have asserted. Allmaras v. Mudge, 820 P.2d 533, 535 (Wyo. 1991). The movant bears the initial burden of establishing a prima facie case for summary judgment. If the movant carries his burden, the party who is opposing the motion for summary judgment must present specific facts to demonstrate that a genuine issue of material fact exists. Weber v. McCoy, 950 P.2d 548, 551 (Wyo.1997). This court evaluates the propriety of a summary judgment by employing the same standards and by using the same materials as the district court employed and used. We examine the record in the light most favorable to the party who opposed the motion for summary judgment, and we give that party all the favorable inferences that may fairly be drawn from the record. We accord no deference to the district court's decisions on issues of law. Marchant v. Cook, 967 P.2d 551, 554 (Wyo.1998).

BREACH OF CONTRACT CLAIM

[¶ 10] It is the position of Wyoming Beverage that any contract which existed with Metz was terminable at will by either party. Wyoming Beverage asserts that any such contract was unenforceable or limited because of the statute of frauds and the fact that the agreement had no specific duration. Metz, however, contends there was a valid enforceable contract that was only terminable for cause and that Wyoming Beverage breached its agreement with Metz by simply terminating the contract without cause.

A. The Contract

[¶ 11] Wyoming Beverage has, at times in the record, contested the existence of a contract with Metz. Wyoming Beverage has instead referred to an arrangement or relationship with Metz. However, there is no doubt that an agreement of some nature existed between the parties from 1967 to 1997. The agreement was acknowledged in various pieces of correspondence sent by Mr. Clay to Metz. For example, in a letter to Diana Metz dated December 6, 1993, Mr. Clay stated:

If you fail to meet these obligations by the dates indicated, the oral agreement between Wyoming Beverages and Metz Beverages will be terminated, effective April 15, 1994.

(Emphasis added.) Similarly, on April 25, 1994, Mr. Clay wrote to Dorothy Metz: "As I mentioned to you then, we have no desire to cancel our oral agreement" (emphasis added). We, therefore, conclude what the parties have essentially conceded that there was a contract between Metz and Wyoming Beverage.

B. The Statute of Frauds

[¶ 12] Wyoming Beverage next contends that the agreement between the parties was void because it violated the statute of frauds. The parties acknowledge that the agreement in question was one for the sale of goods and, therefore, the Wyoming statutes incorporating the Uniform Commercial Code at §§ 34.1-2-101 et seq. apply.

[¶ 13] The statute of frauds relating to the Uniform Commercial Code is found at Wyo. Stat. Ann. § 34.1-2-201 (LexisNexis 2001), which provides as follows:

(a) Except as otherwise provided in this section a contract for the sale of goods for the price of five hundred dollars ($500.00) or more is not enforceable by way of action or defense unless there is some writing sufficient to indicate that a contract for sale has been made between the parties and signed by the party against whom enforcement is sought or by his authorized agent or broker. A writing is not insufficient because it omits or incorrectly states a term agreed upon but the contract is not enforceable under this paragraph beyond the quantity of goods shown in such writing.

...

(c) A contract which does not satisfy the requirements of subsection (a) but which is valid in other respects is enforceable:

...

(ii) If the party against whom enforcement is sought admits in his pleading, testimony or otherwise in court that a contract for sale was made, but the contract is not enforceable under this provision beyond the quantity of goods admitted[.]

[¶ 14] During discovery Mr. Clay testified in a deposition as follows:

Q: You sold him [Metz] all the product he could order. It was that simple?

A: I sold him what he ordered that I could sell him, yes.

Pat Reed, one of Wyoming Beverage's managers, also testified as follows:

Q: Metz Beverages was encouraged to order however much product it could sell, wasn't it?

A: Yes.

Q: And Wyoming Beverages would supply to Metz Beverage, again, however much product Metz would require?

A: Yes.

From the foregoing letters, there is documentary evidence wherein Wyoming Beverage admitted that there was an agreement. Furthermore, there is evidence in the form of letters, testimony, and a 30-year ongoing business relationship that Wyoming Beverage would sell to Metz all of the Pepsi products that Metz needed to satisfy its customers. Thus, there is evidence of the agreement and that the agreement was a requirements contract.

[¶ 15] This court has previously held that the Uniform Commercial Code parol evidence rule is intended to liberalize the rigidity of the common law. In addition, we noted the Uniform Commercial Code is intended to expand commercial practices through custom and usage as well as by agreement between the parties. Century Ready-Mix Co. v. Lower & Co., 770 P.2d 692, 697 (Wyo.1989). Thus, rigid adherence to the statute of frauds is contrary to the philosophy of the Uniform Commercial Code, and it is this court's policy to sustain a contact whenever possible. This court will not seek...