Warrick Beverage Corp. v. Miller Brewing Co.

• Decision Date: 27 July 1976
• Docket Number: No. 1--1075A194,1--1075A194
• Citation: 352 N.E.2d 496,170 Ind.App. 114
• Parties: , 20 UCC Rep.Serv. 46 WARRICK BEVERAGE CORPORATION, Plaintiff-Appellant, v. MILLER BREWING COMPANY and Central Beverage Company, Defendants-Appellees.
• Court: Indiana Appellate Court

Page 496

352 N.E.2d 496

170 Ind.App. 114, 20 UCC Rep.Serv. 46

WARRICK BEVERAGE CORPORATION, Plaintiff-Appellant, v. MILLER BREWING COMPANY and Central Beverage Company Defendants-Appellees.

No. 1--1075A194.

Court of Appeals of Indiana, First District.

July 27, 1976.

William D. Powell, Frick & Powell, Evansville, for plaintiff-appellant.

Franklin A. Morse, II, Thornburg, McGill, Deahl, Harmon, Carey & Murray, South Bend, for defendants-appellees.

LOWDERMILK, Judge.

STATEMENT OF THE CASE:

Plaintiff-appellant Warrick Beverage Corporation (Warrick) appeals from an interlocutory order denying its complaint for a temporary injunction against defendant-appellees, Miller Brewing Company (Miller) and Central Beverage Company (Central).

FACTS:

The facts necessary for our disposition of this appeal are as follows: Warrick is licensed by the State of Indiana to engage in the business of purchasing and selling alcoholic malt beverage products as a wholesale beer distributor. Prior to June 30, 1972, Warrick was a distributor of Meister Brau and Meiser Brau Lite beers in Warrick, Posey and Vanderburgh Counties. These counties represented Warrick's 'area of responsibility' for the wholesale distribution of Meister Brau products. Meister Brau had designated no other distributor for its products in these three counties.

On or about June 30, 1972, Miller purchased some of the assets of Meister Brau, Inc., among which were Meister Brau and Meister Brau Lite beers together with all rights attendant to the manufacture and sale of such beer products.

On June 30, 1972, Miller sent all former Meister Brau distributors the following letter:

'Gentlemen:

As you know, the Miller Brewing Company, has purchased the 'Meister Brau,' 'Lite,' 'Buckeye' and other trademarks from Meister Brau, Inc.

While we have not assumed any of Meister Brau's rights or obligations under any agreement or arrangement you might have had with Meister Brau, Inc. we, as seller, hereby make sales to you, as buyer, or its Buckeye Division, with the understanding that you bear the responsibility actively and aggressively to market and distribute such brands of beer to retailers and other persons to whom you are legally authorized to sell beer in the Area of Responsibility previously set forth for you by Meister Brau, Inc., or its Buckeye Division.

With regard to your Area of Responsibility, Miller does not restrict you as to where or to whom you may resell beer. State laws (such as Illinois) may do so. Our relationship is that of seller and buyer and in no other respect is any relationship established between us. You are not required to place orders, nor are we required to accept orders for beer. As is the custom in our industry, these sales are made on a shipment-to-shipment basis only, and either of us can terminate this relationship at any time without incurring liability to the other. You are and shall remain an independent business and neither of us is in any sense to be regarded as the principal or agent or employee of the other.

All beer sold to you will be sold F.O.B. our plant and the title and risk of loss passes to you (with a lien thereon reserved by Miller until payment is received) at the time the beer is delivered to you or to a carrier for shipment to you. All sales to you are to be on a cash basis or on such credit terms as may, from time to time, be established by Miller. Order and shipment procedures will be explained to you when you call the Regional Office listed below.

We are sending this letter to you in duplicate with the understanding that the terms hereof do not become effective until one copy, signed by you in the space below, has been returned to us within fifteen days of your receipt of this letter.' (Our emphasis.)

Following the return of the signed copy of this letter to Miller, Warrick began purchasing and distributing the new Miller Lite beer. In the latter part of 1974 Miller concluded that it was not economically feasible to continue to distribute its new Lite beer exclusively through the twenty-two Meister Brau distributors in this State.

To realize its goal of maximum market saturation for its new product Miller entered into a distributorship agreement with Central which allowed it to distribute Miller's new Lite beer in Posey, Vanderburgh, Warrick, and Gibson Counties. It was this second distributorship agreement which precipitated this suit.

The trial court made findings of fact and conclusions of law, the pertinent portions of which were as follows:

'CONCLUSIONS OF LAW

'1. This action is predicated upon the alleged violation by the defendants of the following Indiana statute (hereinafter referred to as 'the Statute'):

"CONTRACTS--UNLAWFUL CONDUCT--It is unlawful for a beer wholesaler or a brewer in this state, or a brewer or other person located outside this state who sells beer to a permittee in this state for the purpose of importation and resale within this state to:

'(2) Cancel or terminate an agreement or contract between a beer wholesaler and a brewer for the sale of beer, unfairly and without due regard for the equities of the other party. (I.C.1971, 7.1--5--5--9, as added by Acts 1973, P.L. 55, 1, p. 290.)

* * *'

'7. The letter agreement of June 30, 1972 (hereinafter referred to as 'the Contract') is a binding and enforceable agreement upon the parties thereto, Miller and Warrick.

'8. The Contract is not ambiguous as a matter of law; therefore, under Indiana common law, extrinsic evidence cannot be used to aid in its interpretation.

'9. Under Indiana common law, evidence of a custom or usage of trade cannot be admitted where the term or provision of the written agreement is neither ambiguous nor missing.

'10. Under the Uniform Commercial Code as adopted by Indiana, evidence of a usage of trade may be introduced to explain or supplement a writing even though no ambiguity is evident; however, such evidence of usage of trade may be admitted only when it is consistent with the express language of the written instrument.

'11. The evidence of usage of trade introduced by the plaintiff to explain or supplement the contract was inconsistent with the express language of the Contract and, accordingly, cannot be considered by the court in construing, interpreting or applying the terms of the Contract.

'12. An agreement between a brewer and a wholesaler for the purchase and sale of beer is governed by the Uniform Commercial Code as adopted by Indiana.'

We reverse.

ISSUES:

1. Did the trial court err in finding the letter of June 30, 1972, sent by Miller to Warrick constituted the complete contract of the parties?

2. Did the trial court err in excluding evidence of trade usage as it relates to the relationship between beer manufacturers and their distributors?

3. Did the trial court err in finding that Miller did not violate IC 1971, 7.1--5--5--9 (Burns Code Ed.) when it allowed Central to distribute its new Lite beer in counties where Warrick had previously been the only distributor?

4. Did the trial court err in denying Warrick's complaint for a temporary injunction?

ISSUE ONE:

Warrick argues the trial court erred in finding that the letter sent to it from Miller on June 30, 1972, was a complete and unambiguous contract. Warrick points out that the letter does not bind Miller to accept any orders for beer, nor does it require Warrick to place any beer orders. The letter also fails to establish any purchase price for individual beer sales which might be consummated between the parties.

The Michigan District Court had occasion to construe the very letter we now have before us in the case of Oak Distributing Co., et al. v. Miller Brewing Company (E.D.Mich.1973), 370 F.Supp. 889. The court stated therein at page 906:

'Under the rationale of the aforementioned decision, it is beyond doubt that the letters of agreement in question are unenforceable for lack of mutuality. Either party, Miller or plaintiffs, could terminate said letter agreements at will without cause. Furthermore, said agreements neither obligated Miller to sell, nor plaintiffs to buy, the beer products involved herein.

'This conclusion, however, is merely a restatement of the obvious. It is the clear intent of the agreement to obviate any obligation of future performance with respect to both parties. The absence of mutuality is not the result of mistake or machination, nor is it concealed in clever or cunning language; it is the clear intent of the agreement and, presumably, that of the signators thereto.

'Moreover, it is not accurate to say that such an agreement is null or void. It is merely prospectively unenforceable. With regard to past or present...