Title: MUSTANG BEV CO v SCHLITZ BREWERY

State: montana

Issuer: Montana Supreme Court

Document:

NO. 12323 I N THE SUPREME C O U R T OF THE STATE OF M O N T A N A 1973 M U S T A N G BEVERAGE C O M P A N Y , INC. , P l a i n t i f f and Appellant, JOS . SCHILTZ BRmING COMPAIY ; WALT' S BEVERAGES INC., et a l . Defendants and Respondents. Appeal from: D i s t r i c t Court of t h e Thirteenth J u d i c i a l D i s t r i c t , Honorable Robert L. Wilson, Judge presiding. Counsel of Record: For Appellant : Hutton, S c h i l t z and Sheehy, B i l l i n g s , Montana. John C.Sheehy argued, B i l l i n g s , Montana. For Respondents: Corette, Smith and Dean, Butte, Montana. Kendrick Smith and Gerald R. Allen argued, Butte, Montana. Moulton, Bellingham, Longo and Mather, B i l l i n g s , Montana. William S . Mather argued, B i l l i n g s , Montana. F i l e d : mkY 2 I( 7973 Submitted: April 25, 1973 Decided : m 2 9 I973 Clerk M r . Chief Justice James T. Harrison delivered the Opinion of the Court. This i s an appeal from an order of the district court of the thirteenth judicial district, Yellowst.one County, granting summary judg- ment to defendants. Plaintiff Mustang Beverage Company, Inc., hereinafter called Mustang, brought this action to recover damages from defendant 30s. Schlitz Brewing Company, hereinafter called Schlitz, resulting from the breach of, and interference with, certain alleged contractual arrangements for the distribution of brewery products manufactured by defendant Schlitz. De- fendant Brad Brown was the district representative for Schlitz in the Billings area. Plaintiff Mustang contended the remaining defendants intended to create a monopoly in the beer business in Billings. Atlas Beverages, Inc., Fred L. Briggs Distributing Company, Inc., Ace Beverage Company and Allied Distributors, Inc., were corporations holding wholesale beer licenses from the state of Montana. Peter Decker and Fred L . Briggs were two of the three officers of the Fred L. Briggs Distributing Company, Inc., and Mustang alleged these two defendants were also officers in the Atlas Beverages, Inc. It 5 0 , 7 / /l'< : , f I, Decker, Briggs and one Carl Kemble,, were w i t h the Ace Beverage Company of /h' Miles City, Montana, and are alleged to have conspired to form Walt's Beverages, Inc. Mustang was a duly licensed wholesale beer distributor in the state of Montana, through a permit and license issued by the Montana State Liquor Control Board. From 1958 until July 10, 1970, Mustang was the only wholesale beer distributor w h o distributed Schlitz products in Yellowstone, Big Horn, Carbon, Golden Valley, Musselshell and Stillwater Counties. The distribution area also included the town of Shawmut i n Mheatland County. On June 4 , 1958, Mustang and Schlitz entered into a written agree- ment entitled "Declaration of Terms" whereunder a buyer-seller relationship was establ i shed between Schl i tz as brewery se1 ler, and Mustang as wholesale buyer. The agreement carefully set out that the relationship between the parties was exclusively t h a t of buyer and s e l l e r . The agreement could be terminated by e i t h e r party a t any time without cause o r notice, and the buyer acknowledged t h a t the s e l l e r had granted no franchise o r exclusive t e r r i t o r y t o the buyer. Additionally, each time Mustang bought beer from Schlitz, f .o. b. Wisconsin, it ordered on a form provided by Schlitz which included the provisions from the "Declaration of Terms" a s a condition of sale. Relations between Mustang and certain personnel of Schlitz became strained. Schlitz unilaterally canceled the relationship with Mustang i n a l e t t e r t o i t on July 10, 1970. This s u i t arose out of the canceled con- tractual relationship, The first and essential issue on appeal is whether o r not the d i s - t r i c t court erred i n granting summary judgments against Mustang Beverage Company, I nc . This Court on a number of occasions has considered the propriety of granting o r denying motions f o r summary judgment. Rule 56(c), M.R.Civ.P., required t h a t summary judgment be granted i f : " * * * the pleadings, depositions, answers t o inter- rogatories, and admissions on f i l e show t h a t there i s no genuine issue a s t o any material f a c t and t h a t t h e moving party is e n t i t l e d t o a judgment a s a matter of law. * * *" The burden of establishing the absence of any issue of material f a c t is on the party seeking summary judgment. In R o o p e , ~ . Anaconda Company, 159 Mont. 28, 494 P.2d 922, 924, 29 St.Rep. 170, 174, t h i s Court held: "But where, a s here, the record discloses no genuine issue a s t o any material f a c t , the burden is upon the party opposing the motion t o present evidence of a material and substantial nature raising a genuine issue of fact." Again i n Calkins v. Oxbow Ranch, Inc., 159 Mont. 120, 495 P.2d 1124, 1125, 29 St. Rep. 244, 246, the Court stated: "In discussing a motion f o r summary judgment i n Gallatin Tr. & Sav. Bk. v. Henke, 154 Mont. 170, 172, 461 P.2d 448, 449, t h i s Court c i t i n g from Silloway v. Jorgenson, 146 Mont. 307, 406 P,2d 167, said: "' * * * the party opposing motion [for summary judg- ment] must present facts i n proper form - conclusions of law will not suffice; and the opposing party's facts must be material and of a substantial nature, not fanciful, frivolous, gauzy, nor merely suspicions. 6 Moore ' s Federal Practice 2d. s 56.15 [3] , pp. 2346, 2547; Hagar v. Tandy, 146 Mont. 531, 410 P.2d 477. ' I ' See also, Hannifin v. Butte Retail Clerks Union Number 4, - Mont . -- , From the record Mustang's complaint does not provide any genuine issue as to any material fact and defendants were properly granted summary judgments as a matter of law. The second issue on appeal is whether or not the d i s t r i c t court erred i n entering summary judgments for defendants, when the depositions of eight of the nine parties involved i n this action, while before the court, had not been filed, and when the d i s t r i c t court had no independent recollec- tion of having examined the depositions nor of having such depositions i n its possession. Counsel for a1 1 parties made extensive reference to the depositions and exhibits i n their briefs i n the d i s t r i c t court, and dupli- cate originals of the eight depositions have now been certified by the court reporter and filed w i t h the clerk of the d i s t r i c t court. The original dep- ositions and exhibits could properly be considered i n support of the summary judgments even i f the duplicate originals had not been filed. Failure of the court reporter to f i l e the f i r s t originals i n accordance w i t h Rule 30(f), M.R.Civ.P., was a t most harmless error. N o motion t o suppress the use of the depositions was ever made by counsel for Mustang, even though Mustang had ample time and opportunity to discover the depositions had not been filed. Also, three of the "missingM depositions were those of Mustang's own officers. This Court finds the "missing" depositions i n no way affect the d i s t r i c t court's rul i ng i n regard to the summary judgments. W e present the following points as they were presented in d i s t r i c t court, as this was the basis upon which the d i s t r i c t court granted the sum- mary judgments . Under the f i r s t claim of the complaint there was no unlawful con- spiracy by Schlitz w i t h any other defendant. The control1 ing point on this claim i s that the contract between Schlitz and Mustang specifically and clearly provided i n Paragraph 5: " * * * Buyer acknowledges that Seller has granted no franchise or exclusive territory to Buyer, and Seller may, a t any time without incurring any liability to Buyer, sell i t s products to others in the same trade area as Buyer. * * * I t This fully signed contract i s dated M a y 2, 1958, and was in full force and effect until July 10, 1970, when Schlitz notified Mustang that Schlitz would no longer sell beer to Mustang. The order forms for beer as the beverage was ordered by Mustang from Schlitz also supports this position. Paragraph 5 of each order form stated the same above quoted language. Mustang's claim is premised upon the existence of an exclusive right to distribute Schlitz products in this market area. However, the exis- tence of the alleged exclusive right i s completely be1 ied b y the very terms of the contract upon which the Mustang and Schlitz relationship was based. The contract and order forms uniformly state: "Buyer acknowledges that seller has granted no franchise or exclusive territory to Buyer and Seller may, a t any time without incurring any liability to Buyer, sell i t s products to others in the same trade area as Buyer." Under the facts shown in this record any argument by Mustang that some type of right of exclusive distributorship existed i s further precluded by the following language in Paragraph 6 of both the Declaration of Terms and order f orms : "6. NO P R O M I S E OR AGREEMENT HERETOFORE OR HEREAFTER MADE, AND NO W A I V E R OR MODIFICATION OF ANY PROVISION OF THIS OR ANY OTHER AGREEMENT, SHALL B I N D S E L L E R U N L E S S I N W R I T I N G AND S I G N E D BY SELLER'S PRESIDENT, VICE PRESIDENT OR SECRETARY, E X C E P T I N G THAT O R D E R S ARE ACCEPTED BY S T A M P I N G SELLER'S ACCEPTANCE THEREON. A s an inducement for and as part consideration of Seller's accepting any order from or making any shipment to Buyer, Buyer warrants and represents that no representation or promise incon- sistent with any o f the provisions of this Declaration of Terms has been made to Buyer by any officer or em- ployee of Seller, and that Buyer has no agreement or relationship directly w i t h Schlitz. N o failure of Seller to enforce any provision hereof i n any instance or instances shall be deemed a waiver of such provision i n other instances, nor can the terms hereof be a1 tered by custom or usage. The rights of the parties respect- i ng a1 1 transactions shall be governed by Wisconsin law." Under these facts, which cannot be disputed and are not disputed, there cannot be any possible right of recovery of any kind or character under any of the claims. In addition, W. J. Schumacher, an officer of Mustang, testified in his deposition that he used these order forms in making all of his orders, and w e quote: " Q . N o w I 'm going to show you what has been marked as Defendants' Exhibit C and C-1 from the deposition of Metz and ask you if you are acquainted with those forms. "A. Those are order blanks. " Q . Y o u are acquainted with them. "A. Yes. "Q. And C was used as an order blank before October of 1968 and C-1 was used thereafter, i s that right? "A. I'm assuming so, W e probably used them a long time after because they would give you two or three pads a t a time and you would use them until they were finished. "A. And they were sent to you without telling you there was a difference in them. "Q. Y o u used one or the other of these two order forms in making all of your orders? "A. (Nodded head in the affirmative.) "Q. Will you respond verbally, please, s i r . "A. Yes." Schumacher further stated in his deposition that he was aware of the printed matter on the order forms: " Q . In using these order forms, would you sign each of them by your corporate name, Mustang Beverage Company, Inc., by you or by some person in your organization? "A. The buyer i s Mustang Beverage Company (indicating) . The buyer here i s by m e or by a person designated by me-- "Q. Yes, s i r . "A. --and his t i t l e . "Q. And you would sign each of these when you would make an order. "A. Either m e or a person that was designated by m e t o do it. "Q. And you were acquainted with the reverse side of these exhibits and the printed matter contained thereon, were you not? "A. Very much so. "Q. Very much so. All right. "A. The big print t e l l s you what you're going to get and the l i t t l e print what they're going to take away from you. "Q. That would be your summary of the whole of the reverse side of C and C-1, i s that right? Is that right, s i r ? "A. Right. "Q. And the big type on Exhibit C , for instance says, in bold type, or big type, 'Buyer acknowledges that Seller has granted no franchise or exclusive territory to Buyer, and Seller may, a t any time without incurring any liability to Buyer, sell i t s products to others i n the same trade area as Buyer. Y o u noted that. "A. Yes. "Q. And i n the big type. "A. Yes. "Q. Sir? "A. Yes." In our view i t i s clear there was no contract binding upon Schlitz to con- tinue to sell beer to Mustang nor to treat Mustang as an exclusive whole- saler. This Court also recognizes Sinkoff Beverage Co. v. Jos. Schlitz Brewing Co., 273 N.Y.Supp.2d 364, where in a similar factual situation the N e w York Court held that the terms of the written agreement control led. Mustang had no exclusive right to distribute Schlitz products and Schlitz had the right to terminate the relationship a t any time without cause and without notice. Any claim of conspiracy based upon Schlitz's exercise of that right i s clearly without foundation. In McCusker v . Roberts, 152 Mont. 513, 520, 452 P.2d 408, Montana law clearly holds that: " * * * a combination of individuals for their joint benefits does not constitute a conspiracy. * * * the actionable element of conspiracy is the wrong done to the plaintiffs, not the combination of persons con- stituting the conspiracy. " Mustang was not merchandising the Schlitz products or handling the distributorship to the satisfaction of Schlitz. Accordingly, Schlitz, i n accordance w i t h the contract rights, terminated the relationship with Mustang and entered into negotiations w i t h the other defendants for dis- tribution of Schlitz products in the Billings area. Mustang a1 so claims unlawful interference in the contractual rights between Mustang and Schli tz by all of the other defendants, except Schlitz. The control1 ing point i s that Mustang was granted no exclusive right to distribute Schlitz products, and Mustang's allegations of interference with such an alleged right of distributorship are without foundation. The Dec- laration of Terms and order forms conclusively establish that Schlitz had no contractual obligations to Mustang other than a buyer-sel ler relationship with respect t o each beer purchase order. Therefore, there could be no unlawful interference by defendant Brad Brown nor the other defendants with the contractual relations because no such contractual relations existed. Mustang's t h i r d claim i s for an alleged breach of contract on the part of Schli tz. Again, w e refer to the written agreements that existed between Schlitz and Mustang. These documents establish the relationship as "exclusively that of buyer and seller and may be terminated by either party a t any time, without cause and without notice." W e refer to our prior com- ments in regard to the existence of a contract as support for the position that there was no breach of contract by Schlitz. The fourth and fifth claims of Mustang contend that defendants conspired w i t h each other to monopol ize the wholesale beer market i n the Bill ings area to the damage of Mustang. Since Mustang had no exclusive right to purchase from Schlitz a t wholesale, Mustang's allegations of a conspiracy by the wholesalers is clearly irrelevant. The law on monopoly and conspiracy t o monopolize is set forth i n 58 C.J.S. Monopolies, 5 15 e t seq. First, the element of an injury to the public and a power t o control prices, which i s not even remotely suggested or intimated here, and the power to suppress competition, which again was not even remotely contended b y Mustang, must be present. O f interest here i s further testimony of Schumacher in his dep- osition and w e quote: "Q. Now, I want you to state what facts you have of your own knowledge of meetings between the Defendants in which they conspired to deprive Mustang of i t s exclusive right to distribute Schlitz i n i t s market area. " M R . S H E E H Y : Now, l e t m e hear this question, please. (Question read by reporter. ) " M R . S H E E H Y : I have no objection to that. "A. Rumors i s all that I get." There i s no evidence in this record of any nature whatsoever whereby Mustang i s restrained by contract or otherwise from exercising the beer distribution business. Mustang was cancelled by Schlitz for deficiencies in the sale and distribution of i t s products. Fundamental to all of Mustang's allegations i s the alleged injury to Mustang by depriving i t of a "Schlitz dealership". However, w e find no such "dealership" ever existed. J%FFHqtionship between Schl i tz and Mustang was purely one of buyer and sel court ' s rul i ng . W e concur: / \ Mr. Justice Frank I . Haswell d i d not participate i n this cause. M r . Justice Gene B. Daly dissenting: I respectfully dissent t o the view of the majority a s it r e l a t e s t o defendant Jos. Schlitz Brewing Company. Rule 56 of the Montana Rules Civil Procedure setting forth the basis on which a summary judgment can be granted i s essentially identical t o the federal rule, In Kober & Kyriss v, ~ i l l i n g s Deaconess Hospital, 148 Mont. 117, 121, 417 P.2d 476, t h i s Court i n discussing the requirements of that r u l e stated: "In t h i s case, respondent has the burden of showing the absence of any genuine factual issue. 6 Moore F,P. 2d, 556.15 [3] starting a t p, 2335 reads: he courts a r e i n entire agreement that the moving party for a summary judgment has the burden of showing the absence of any genuine issue a s t o a l l the material facts, which, under applicable prin- ciples of substantive law, e n t i t l e him t o a judgment a s a matter of law. he he courts hold the movant t o a s t r i c t standard. To satisfy h i s burden the movant must make a showing that i s quite clear what the truth is, and that excludes any r e a l doubt as t o the existence of any genuine issue of material fact. " ' ~ i n c e it i s not the function of the t r i a l court t o adjudicate genuine factual issues a t the hearing on the motion for summary judgment, i n ruling on the mo- tion a l l inferences of fact from the proofs proffered a t the hearing must be drawn against the movant and i n favor of the party opposing the motion. And the papers supporting movant's position a r e closely scrutinized while the opposing papers are indulgently treated, ik determining whether the movant has satisfied h i s burden. I II (Emphasis added). The Court i n Kober. goes on t o c i t e with approval a California case standing for the proposition that the summary judgment statute cannot be used a s a substitute for the t r i a l of issues of f a c t and such motions should be denied without hesitance i f there existed any doubt a s t o the propriety of the motion. It appears defendant Jos. Schlitz Brewing Company relies salely on the language of the original "buy-sell agreement'' and the provisions printed on the back of i t s standard arder forms, contending that those writings constitute the entire agreement existing between it and plaintiff Mustang Beverage Company. Plaintiff Mustang Beverage Company alleged the existence a£ certain facts which substantially altered the nature of the contractual agreement between the parties: 1. Schlitz reserved the right to control the retail prices charged by Mustang for Schlitz products. 2, Schlitz demanded the right to inspect us tang's books and to require that certain records and books be kept. 3 . Schlitz reserved the right to set and enforce sales quotas. 4 . Schlitz required that Mustang expend money in advertising and promotion, including painting of trucks, without reimbursement from Schlitz. 5. Schlitz required that Mustang keep a certain amount of inventory. 6 . Schlitz set mandatory procedures for destruction, at the expense of Mustang, beer which was too old. 7. Schlitz reserved the right to object to us tang's taking on distribution of beer products from other brewers. 8 . Schlitz prescribed the method in which Schlitz products were housed in us tang's warehouses. Mustang further alleged the consideration provided to it by Schlitz for these various alleged conditions was an exclusive distributorship af Schlitz products in a particular area of the state. Mustang alleges this fact was admitted in sworn testimony by a district representative of Schlitz. It would appear that there were numerous factual issues presented to the trial court. If there is any validity to the allegations made by Mustang, then the writings upon which Schlitz relies are more in the nature of an elaborate waiver of rights I I than an accurate representation or integration" of the terms of the actual contractual agreement existing between these two litigants, This case involves a sales contract between merchants, and as such comes under the provisions of Montana's Uniform Commercial Code. Under a proper application of section 87A-2-202, R,C.M, 1947, the very fact that none of the requirements and agreements alleged by Mustang were included or even mentioned in the written contract would compel their admissibility, if provable. I would reverse and remand this portion of the cause for trial on the merits, ---- Associate Justice. N o . 12323 I1 I N THE S U P R E M E C O U R T I/ O F THE I1 STATE O F MONTANA 7 11 M U S T A N G BEVERAGE C O M P A N Y , INC. , P l a i n t i f f and Appellant, v. JOS. SCHLITZ BREWING C O M P A N Y ; WALT'S BEVERAGES, INC.; ATLAS dUH 2 7 I973 BEVERAGES, INC.; F R E D BRIGGS y i omad 8 . -hL+tr 3-J DISTRIBUTING C O M P A N Y , INC.; ACE QB,RRK OF SklPnE~fiE 66T1S BEVERAGE C O M P A N Y ; ALLIED DISTRIBUTORS, mlht~ OF MQRIAI~A INC.; F R E D L. BRIGGS; PETER DECKER; and BRAD BROWN, Defendants and Respondents. ORDER I Upon t h e p e t i t i o n of Ace Beverage Company; Fred L. 11 Briggs and Peter Decker, Defendants and ~ e s p o n d b n t s 11 named above, and t h e Court being s a t i s f i e d t h a t nothing I 2Q 11 appears i n t h e record on appeal t o support t h e statement 21 11 t h a t Briggs, Decker and Kembel were with t h e A c e 22 11 Beverage Company of M i l e s City, Montana, and good cause I 23 11 appearing therefore; 1 24 11 I T IS O R D E R E D t h a t t h e opinion i n t h e above I 25 11 e n t i t l e d matter dated May 29, 1973 be amended by d e l e t i n g 26 // t h e l a s t sentence of t h e t h i r d p r i n c i p a l paragraph I 27 11 appearing on page 2 , which reads a s follows: "Decker, Briggs and one C a r l Kembel were with t h e Ace Beverage Company of M i l e s City, Montana, and a r e alleged t o have conspired t o form Walt's Beverages, Inc." and by i n s e r t i n g i n its place t h e following: "Decker, Briggs and one Carl Kembel, the l a t t e r being with t h e Ace Beverage Company i n Miles City, Montana, are alleged t o have conspired t o form Wal't Beverages, Inc." DATED t h i s