Omnibus Trading, Inc. v. Gold Creek Foods, LLC
| Docket Number | Civil Action No. 2:19-CV-00166-RWS |
| Decision Date | 02 September 2021 |
| Citation | 591 F.Supp.3d 1334 |
| Parties | OMNIBUS TRADING, INC., d/b/a Chef's Corner, a California corporation, Plaintiff, v. GOLD CREEK FOODS, LLC, a/k/a Gold Creek Processing, LLC, a Georgia corporation, Defendant. |
| Court | U.S. District Court — Northern District of Georgia |
Albert Tong, Gregory R. Aker, Burke Williams & Sorensen, LLP, Oakland, CA, Seslee S. Smith, Ryan Chorkey Burke, Morris Manning & Martin, LLP, Atlanta, GA, for Plaintiff.
Louis R. Cohan, Emily Cohan, J. Bertram Levy, Jodi Kalson, Cohan Law Group, LLC, Atlanta, GA, Michelle L. Wein, Atlanta, GA, Robert A. Weber, Jr., Smith Gilliam Williams & Miles, Gainesville, GA, for Defendant.
RICHARD W. STORY, United States District Judge This case comes before the Court on Defendant Gold Creek Foods, LLC, a/k/a Gold Creek Processing, LLC's ("Defendant" or "Gold Creek") Motion for Summary Judgment [Dkt. 82] and Plaintiff Omnibus Trading, Inc., d/b/a Chef's Corner's ("Plaintiff" or "Chef's Corner") Motion for Partial Summary Judgment [Dkt. 85], as well as Defendant's Motion for Oral Argument [Dkt. 84] and Plaintiff's Request for Judicial Notice [Dkt. 86]. As a preliminary matter, the Court finds the briefing sufficient and does not believe oral argument is necessary. Accordingly, Defendant's Motion for Oral Argument [Dkt. 84] is DENIED. In addition, for the reasons discussed below, Defendant's Motion for Summary Judgment [Dkt. 82] is DENIED, Plaintiff's Motion for Partial Summary Judgment [Dkt. 85] is DENIED, and Plaintiff's Request for Judicial Notice [Dkt. 86] is GRANTED.
This case stems from a dispute over a purported arrangement between Chef ‘s Corner and Gold Creek to process chicken for school lunches.
Chef's Corner supplies and distributes fully-cooked food products to school districts through the U.S. Department of Agriculture's ("USDA") National School Lunch Program. Every year, it enters contracts with school districts and educational clients to provide them with certain amounts of food products for the school lunch programs at agreed-upon prices that are fixed for that school year. To meet its contractual obligations, Chef's Corner obtains donated commodity food products through the USDA's school lunch program and subcontracts with other companies to process those food products before providing them to customers.
Gold Creek is a poultry processor that processes raw chickens into ready-to-eat products. Prior to the events underlying this case, Gold Creek had never processed chicken for school lunch programs before.
In September 2017, Chef's Corner and Gold Creek began negotiations for Gold Creek to provide poultry processing services to Chef's Corner for Chef's Corner's school lunch program commitments. The parties exchanged numerous phone calls, text messages, and emails over the following months. Early in their negotiations, Gold Creek assured Chef's Corner that it would soon be able to handle all poultry processing steps from beginning to end.1
By the spring of 2018, the parties began discussing Chef's Corner's poultry product needs for the following school year. Chef's Corner states that it repeatedly told Gold Creek that, if they were to contract for Gold Creek's poultry processing services, Chef's Corner would need a yearlong commitment to supply a certain quantity of poultry products for fixed agreed-upon prices and established payment terms. Chef's Corner later told Gold Creek exactly how many cases of processed chicken at the required specifications it would require per truckload to meet its contractual obligations. Gold Creek apparently assured Chef's Corner that it could meet these requirements.
In mid-April 2018, Gold Creek requested a commitment from Chef's Corner so that it could order the necessary equipment. It also sent Chef's Corner a Credit Application & Open Account Agreement. Gold Creek promised that it would soon send over the final pricing for its poultry processing services per pound of chicken for the subsequent school year, which would give Chef's Corner "everything that [it] need[ed] to know to let us know (yes or no)." A few days later, on April 19, 2018, Gold Creek emailed Chef's Corner the final pricing. The email also detailed the volume of chicken that Chef's Corner would need to divert to Gold Creek from the USDA, the processing yields required by the USDA's guidelines, and the payment terms. Chef's Corner believed that this email constituted Gold Creek's contract offer. Then, about a week later, Gold Creek sent another email stating that it would be ready to fully handle Chef's Corner's poultry processing business if Chef's Corner agreed to work with it. Gold Creek also repeatedly encouraged Chef's Corner to transfer all its poultry processing business to it.
On April 25, 2018, Chef's Corner sent a letter of intent to Gold Creek, which apparently had some different terms than those outlined in Gold Creek's earlier final pricing email. The letter of intent also stated that it confirmed Chef's Corner's "interest" in working with Gold Creek and that Chef's Corner would be in touch "to forecast and plan for the year."
On April 27, 2018, the parties entered into a Subcontractor Agreement under Chef's Corner's National Master Processing Agreement with the USDA. Through the Subcontractor Agreement, Gold Creek agreed to "conform to all terms and conditions of [the Master Processing] Agreement." The USDA approved the Subcontractor Agreement in mid-May. Shortly thereafter, Chef's Corner instructed the USDA to divert several truckloads of chicken from Chef's Corner's existing poultry processors to Gold Creek in July 2018.
In June 2018, Gold Creek assured Chef's Corner that its equipment procurement and installation was on track and even ahead of schedule. Accordingly, at some point before July 2018, Chef's Corner apparently agreed to switch all its fully-cooked poultry processing business from its existing processors to Gold Creek.
Gold Creek's first production run and delivery was on July 9, 2018, and the production yield fell far short of Chef's Corner's expectations and what the parties had discussed. Gold Creek acknowledged to Chef's corner that it messed the first run up but promised that it would improve. Unfortunately, Gold Creek's next few deliveries in July and August 2018 also delivered much less processed chicken product than Chef's Corner expected.
This point is when the parties’ relationship began to sour. On August 15, 2018, Gold Creek sent a letter to Chef's Corner demanding immediate payment for the product it had delivered that had not been paid for, even though payment was not yet due under the terms the parties had previously discussed.2 Gold Creek also threatened to withhold future production if Chef's Corner did not immediately pay. The following day, Gold Creek sent another letter to Chef's Corner, in which it stated that "under the circumstances," it would be "necessary to revisit pricing with respect to your products." At that point, Gold Creek increased the prices and changed the payment terms of the parties’ poultry processing arrangement. Chef's Corner rejected these changes and asked Gold Creek not to withhold production, given that Chef's Corner still needed the processed chicken to meet its contractual commitments to school districts and other customers.
In response, Gold Creek sent another letter that pointed to a Terms Disclaimer and Terms and Conditions that appeared in small font in its earlier email communications with Chef's Corner. The Terms Disclaimer stated that "[a]ll prices, terms and conditions are subject to change upon 10 days’ written notice." Finally, Gold Creek sent another letter that effectively terminated any continued relationship or arrangement between the parties. It stated that Gold Creek's interpretation was that "there was never a formal, binding agreement entered containing all necessary terms," but even if there was, it contained the disclaimers permitting Gold Creek to unilaterally change the terms. In addition, Gold Creek said that "there does not exist an enforceable processing agreement between our companies" and that it would not accept any future poultry deliveries to process for Chef ‘s Corner. Neither party budged on its position.
At its core, this dispute centers on what type of business relationship Chef's Corner and Gold Creek had. Chef's Corner believes that the parties had an enforceable contract, but that the Terms Disclaimer was not part of that contract, and that it is entitled to damages for Gold Creek's breach and repudiation of their contract. Gold Creek, on the other hand, believes that the parties did not have an enforceable contract, but that if they did, the Terms Disclaimer was part of it. Instead, Gold Creek argues that the parties simply had an open account and Chef's Corner owes it money for the chicken that Gold Creek processed for it before their business relationship fell apart.
Chef's Corner first filed its complaint against Gold Creek almost three years ago [Dkt. 1]. In January 2020, Chef's Corner amended its complaint [Dkt. 46], asserting claims against Gold Creek for breach of contract (Count I), fraud (Count II), negligent misrepresentation (Count III), breach of the implied covenant of good faith and fair dealing (Count IV), declaratory relief (Count V), and attorneys’ fees under O.C.G.A. § 13-6-11 (Count VI). Gold Creek asserted counterclaims against Chef's Corner [Dkt. 47], including breach of contract (Count I), open account (Count II), promissory estoppel (Count III), quantum meruit (Count IV), unjust enrichment (Count V), fraud (Count VI), and conversion (Count VII).
On January 15, 2021, both Chef's Corner and Gold Creek filed motions for summary judgment [Dkt. 82, 85]. Chefs Corner moves for partial summary judgment on its own breach of contract claim, while Gold Creek moves for summary judgment on all of Chef's Corner's claims and its...
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