Nifty Foods Corp. v. Great Atlantic & Pac. Tea Co., Inc.

• Decision Date: 24 January 1980
• Docket Number: D,No. 20,20
• Citation: 614 F.2d 832
• Parties: 1980-1 Trade Cases 63,160 NIFTY FOODS CORPORATION, Plaintiff-Appellant, v. The GREAT ATLANTIC & PACIFIC TEA COMPANY, INC. and Pet Incorporated, Defendants-Appellees. ocket 79-7195.
• Court: U.S. Court of Appeals — Second Circuit

Page 832

614 F.2d 832

1980-1 Trade Cases 63,160

NIFTY FOODS CORPORATION, Plaintiff-Appellant, v. The GREAT ATLANTIC & PACIFIC TEA COMPANY, INC. and Pet Incorporated, Defendants-Appellees.

No. 20, Docket 79-7195.

United States Court of Appeals Second Circuit.

Argued Oct. 19, 1979.

Decided Jan. 24, 1980.

Philip B. Abramowitz, Buffalo, N. Y., Gross, Shuman, Brizdle, Laub & Gilfillan, Buffalo, N. Y., Douglas J. Lustig, Rochester, N. Y., Laverne, Sortino & Hanks, Rochester, N. Y., on brief, for plaintiff-appellant.

Marshall Cox, New York City (Cahill, Gordon & Reindel, New York City, Stacy J. Haigney and P. Kevin Castel, New York City, of counsel), for defendant-appellee Great Atlantic & Pacific Tea Company, Inc.

Richard W. Hulbert, New York City (Cleary, Gottlieb, Steen & Hamilton, New York City, Christopher H. Lunding and Jonathan I. Blackman, New York City, of counsel), for defendant-appellee Pet Incorporated.

Before LUMBARD, SMITH and MULLIGAN, Circuit Judges.

J. JOSEPH SMITH, Circuit Judge:

This is an appeal from a judgment of the United States District Court for the Western District of New York, Harold P. Burke, Judge, dismissing plaintiff's civil action based on antitrust, breach of contract, unfair competition and other claims.

This suit was prompted by a decision of the Great Atlantic & Pacific Tea Company ("A&P") to substitute Pet Incorporated ("Pet") for Nifty Foods Corporation ("Nifty") as the supplier of A&P's private label frozen waffles. Nifty filed a complaint in 1971, naming A&P and Pet as co-defendants and charging in seven counts breach of contract, unfair competition, tortious inducement of breach and violation of the antitrust laws. Since Nifty and A&P are both citizens of the State of New York, jurisdiction was apparently predicated on the alleged violations of the Sherman Act, 15 U.S.C. §§ 1 and 2, and 28 U.S.C. § 1331.

After seven years of discovery, Nifty indicated that it was ready for trial. A&P then moved for summary judgment on one count under Fed.R.Civ.P. 56 and for an order dismissing three other counts for failure to state a claim under Fed.R.Civ.P. 12(b)(6). Pet moved for summary judgment on all six of the counts in which it was named and A&P joined in the motion with respect to the counts remaining against A&P. In an order dated October 24, 1978, all of the above motions were granted, and all the claims against A&P and Pet were dismissed. Nifty filed a notice of appeal. For the reasons given below, we affirm.

I.

Nifty, a manufacturer of frozen foods, began supplying A&P with frozen waffles in 1961 under A&P's private label trademark "Sunnyfield." Until 1969, Nifty was the exclusive supplier of "Sunnyfield" waffles.

Pet entered the frozen waffle business in 1963. It tried to secure A&P's private label business, but had no success until 1969. In December 1968, Pet sent A&P a form letter announcing a limited duration advertising allowance for private and packer label frozen waffles. On January 6, 1969, A&P called Pet requesting a frozen waffle price list. A&P indicated in late May that Pet would become co-supplier, with Nifty, of "Sunnyfield" waffles.

On July 2, Nifty received a letter from A&P stating that Nifty would no longer be supplying certain A&P warehouses with waffles. The letter referred to a conversation several months earlier at which Nifty had expressed concern that it might lose some of the A&P business.

Nifty placed a large order for "Sunnyfield" cartons sometime in July with its carton supplier, The Brown Company ("Brown"). Brown in turn ordered the board for the cartons. On August 22, 1969, A&P called Pet to ask for assistance in verifying whether Nifty had placed a large "Sunnyfield" order with Brown, and if so, whether the order could be canceled. Pet called Brown and learned that an order had been placed, but that the status of the Nifty contract was "unclear." The board was in transit, Brown reported, but it could still be used for other orders. A&P then warned Nifty, in a letter date August 27, 1969, that A&P would not be responsible for any cartons other than those which Nifty already had on hand. ¹

On October 10, A&P told Pet that it would become the sole supplier of "Sunnyfield" waffles effective November 15, 1969. Sometime after October 15, 1969, A&P bought all of Nifty's remaining inventory of "Sunnyfield" waffles. In March 1970, Nifty ceased doing business.

II.

Count I of the complaint alleged that A&P and Nifty entered into an exclusive requirements contract for the sale of "Sunnyfield" waffles, and that this contract contained an implied term requiring A&P to give Nifty reasonable notice of termination. Nifty alleges that A&P breached this implied term when it terminated Nifty in 1969. The district court concluded that the alleged contract was unenforceable, and notice was therefore unnecessary, because under the then-applicable New York Statute of Frauds, ² Sections 31 and 85 of the New York Personal Property Law, Nifty had failed to present sufficient written evidence of the contract. We conclude that the alleged contract was invalid under Section 31(1). By its terms the alleged contract could not have been performed within one year, and Nifty failed to present a writing satisfying the requirements of the section. ³

A contract with a termination provision can be performed within one year if there is a possibility, however slight, that the termination can be unilaterally effected within one year. North Shore Bottling Co. v. C. Schmidt & Sons, 22 N.Y.2d 171, 292 N.Y.S.2d 86, 239 N.E.2d 189 (1968). A termination provision must be express, however, in order to excuse a contract from the writing requirement of the Statute of Frauds. Hausen v. Academy Printing & Specialty Co., 34 A.D.2d 792, 311 N.Y.S.2d 613 (2d Dept. 1970); see also Cohen v. Bartgis Bros., 264 App.Div. 260, 35 N.Y.S.2d 206 (1st Dept. 1942). Nifty concedes that the termination provision here was only implied. The alleged contract could no more be performed within one year, therefore, than could a requirements contract without a termination provision. See Shirley Polykoff Advertising, Inc. v. Houbigant, 43 N.Y.2d 921, 403 N.Y.S.2d 732, 374 N.E.2d 625 (1978). Hence Nifty was required under Section 31(1) to present a writing evidencing the contract and "subscribed by the party to be charged therewith." At the time of the making of the alleged agreement, New York law also required that a writing purporting to evidence a contract for the sale of goods contain all the terms of the contract. Poel v. Brunswick Balke-Collender Co., 216 N.Y. 310, 314, 110 N.E. 619 (1915).

Nowhere in the large file of correspondence which Nifty claims contains a memorandum of the contract is there a writing which meets these requirements. In particular, A&P did not sign the two letters which Nifty specifically cited as evidence of "the fact of agreement and many of the terms alleged." In short, Nifty presented no significant evidence that it entered into a long-term contract with A&P.

III.

Count II asserts that A&P and Nifty developed a "confidential relationship" and that "Pet maliciously interfered with the agreement between Nifty and A&P and induced and caused A&P to breach the same by summarily terminating Nifty," which on its face seems to allege nothing more than inducement by Pet of breach of a contract which the district court correctly held to be unenforceable. If we give Nifty the benefit of every inference, however, Count II might also be read to charge that A&P violated a duty of care arising from an alleged non-contractual, confidential relationship with Nifty, and that Pet interfered with this relationship.

To the extent that Count II alleges that Pet tortiously interfered with the alleged contract between A&P and Nifty, it was correctly dismissed. An essential element of the tort of inducement of breach of contract is the existence of a valid contract. See, e. g., Israel v. Wood Dolson Co., 1 N.Y.2d 116, 120, 151 N.Y.S.2d 1, 5, 134 N.E.2d 97, 99 (1956); Wegman v. Dairylea Cooperative, Inc., 50 A.D.2d 108, 114, 376 N.Y.S.2d 728, 736 (4th Dept. 1975); Red Wing Productions, Inc. v. American Broadcasting-Paramount Theatres, Inc., 213 N.Y.S.2d 315, 317 (Sup.Ct.N.Y.Co.1961). The contract here was unenforceable under the Statute of Frauds. Under New York law, a contract void under the Statute of Frauds was void for all purposes, including claims against third persons. Dung v. Parker, 52 N.Y. 494 (1873). This rule may have been relaxed to some degree. ⁴ Here, however, the existence of a valid contract is an explicit element of the cause of action. The plaintiff cannot rest his claim on a contract void under the Statute of Frauds, particularly where the term allegedly breached was only implied. ⁵

To the extent that Count II alleges that Pet interfered with Nifty's "confidential relationship" with A&P, it was also correctly dismissed. The only relevant tort recognized under New York law is interference with advantageous business relations. See generally, Beardsley v. Kilmer, 236 N.Y. 80, 140 N.E. 203 (1923). This tort requires proof that the defendant's sole motive was to inflict injury and that the defendant employed unlawful means to do so. Beardsley, supra, 236 N.Y. at 86-89, 140 N.E. 203; Rosenberg v. Del-Mar Division, Champion International Corp., 56 A.D.2d 576, 577, 391 N.Y.S.2d 452, 453 (2d Dept. 1977).

Pet was clearly acting in its interest as a seller of frozen waffles in attempting to become A&P's supplier. It was not motivated solely by a desire to inflict injury. Moreover, Nifty presented no evidence that Pet employed unlawful means in soliciting and acquiring the A&P business. Under New York law, "unlawful means" refers only to criminal or fraudulent conduct. Union Car Advertising Co. v. Collier, 263 N.Y. 386, 400, 189 N.E. 463, 469 (1934) ("(T)he interference of a competitor creates no cause of action. The thing the law looks for and seeks to redress when found is...