1

 As noted in the court’s February 20, 2007, order, in deciding the

motions for summary judgment the court is taking into account PMP’s objections

to Bimbo’s summary judgment evidence contained in PMP’s motion and brief in support filed on February 7, 2007.

IN THE UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF TEXAS

FORT WORTH DIVISION

BIMBO BAKERIES USA, INC., §

§

Plaintiff, §

§

VS. § NO. 4:06-CV-180-A

§

PINCKNEY MOLDED PLASTICS, §

INC., ET AL., §

§

Defendants. §

MEMORANDUM OPINION

and

ORDER

Before the court for decision are the motion of plaintiff,

Bimbo Bakeries USA, Inc., (“Bimbo”) for summary judgment as to

the counterclaims of defendant Pinckney Molded Plastics, Inc.,

(“PMP”) and the motion of PMP for summary judgment as to the

entire case. The court is granting Bimbo's motion and denying

PMP's motion in part and granting it in part.1

I.

Overview

Bimbo, a large bakery, claims that the bakery goods

containers, known as Universal Baskets (“UBs”), sold to it by PMP

breached the implied warranties of merchantability and fitness

for a particular purpose. Bimbo seeks relief in the form of

money damages. PMP claims that neither of these implied

warranties applies and that, regardless, there was no breach. 

PMP filed counterclaims against Bimbo alleging breach of

 

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2

 The undisputed facts section recites undisputed facts set forth in the

parties’ joint pretrial order filed March 19, 2007, as well as facts otherwise

supported by the record.

2

contract, unjust enrichment, fraud, and negligent

misrepresentation. Bimbo contends that no contract of the kind

claimed by PMP existed, that it did not engage in fraud or make

any misrepresentations, and that it was not unjustly enriched.

II.

Undisputed Facts

The facts set forth below are undisputed in the summary 

judgment record:2

As part of its baking operations, Bimbo utilizes plastic

baskets that take baked goods from the production line to the

final retail establishments for sale to the public. PMP is a

manufacturer of plastic baskets and holds itself out as having

over forty years of experience in manufacturing baskets and trays

for the baking industry. In 2001, Bimbo asked PMP to design and

manufacture a UB. Bimbo expected to achieve significant savings

by use of the UBs because they would make automation possible and

would allow Bimbo to replace most of its different-sized baskets

with the UBs.

PMP designed the UB with “tabs” located on the bottom of the

UB intended to fit into slots on the top of the lower basket when

stacked. On or about December 4, 2001, Bimbo and PMP entered

into the written agreement that obligated Bimbo to purchase 2.1

million UBs at a certain price that could fluctuate based on the

price of raw materials. PMP agreed to pay for the freight for

 

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3 In a letter dated February 14, 2005, Don Verna, President of PMP,

stated that “[i]n going through my files, I found the attached document. It

clearly states that we would pay for the freight on the first 2,100,000

baskets.” See App. to Pl.’s Mot. Summ. J. 2.

4 The parties dispute the meaning of the language “FOB our plant,”

contained in the written agreement, as it related to who would pay the

freight. App. to Pl.’s Mot. Summ. J. 1.

3

the first 2.1 million baskets sold.3 There was no express

agreement between the parties as to who would pay the freight

after the first 2.1 million UBs were delivered.4

In March 2002, Bimbo received its first shipment of the UBs. 

On September 1, 2004, Bimbo sent written notification to PMP that

one of Bimbo’s customers had complained that the tabs on the UBs

were breaking, causing stacks of baskets to fall and creating a

safety hazard for the people near the baskets. Bimbo installed

an automatic basket stacker in October 2004, and shortly

thereafter reported to PMP that the broken tabs were causing the

stacks of loaded UBs to fall when stacked with the automatic

stackers.

In October 2004, Rich Kruyer (“Kruyer”), one of PMP’s design

engineers, as well as other PMP employees, visited Bimbo to

determine the nature of the tab breakage problem. On October 27,

2004, Kruyer submitted a written PowerPoint presentation, which

included statements that if the tabs are broken, a basket may

shift fore and aft, causing other features to disengage, which

can permit a basket to collapse, and that this could explain a

complaint about broken corners. Kruyer’s presentation also

described possible design changes to address the tab breakage

problem. On April 16, 2005, PMP sent written correspondence to

 

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4

Bimbo stating that PMP had “analyzed returns over the past

several months to determine if the UB breakage was in any way the

result of product design” and that the “investigations found

breakage to have resulted from circumstances other than product

design.” App. Pl.’s Resp. Def.’s Mot. Summ. J. at 83-84.

After several additional meetings and proposals, in

September 2005 PMP modified the mold to strengthen the tabs. PMP

made the first shipment of re-designed baskets to Bimbo in midNovember 2005. By that time, Bimbo had purchased approximately

2.8 million of the older-style UBs.

In 2005, Bimbo began to notice shortages of baskets in its

operations. An inventory conducted in October 2005 revealed that

Bimbo had 1,443,797 UBs on hand with the rest unaccounted for.

On November 29, 2005, PMP offered a program whereby the

older-style UBs could be ground up and “re-shot” through a

revised mold. The “re-shot” baskets would have the strengthened

tab. The cost for this program would be $2.49 per basket plus

$0.58 freight per basket. Bimbo did not accept this offer.

III.

Summary Judgment Standard

A party is entitled to summary judgment on all or any part

of a claim as to which there is no genuine issue of material fact

and as to which the moving party is entitled to judgment as a

matter of law. Fed. R. Civ. P. 56(c); Anderson v. Liberty Lobby,

Inc., 477 U.S. 242, 247 (1986). The moving party has the initial

burden of showing that there is no genuine issue of material

fact. Anderson, 477 U.S. at 256. The movant may discharge this

 

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5

burden by pointing out the absence of evidence to support one or

more essential elements of the non-moving party's claim "since a

complete failure of proof concerning an essential element of the

nonmoving party's case necessarily renders all other facts

immaterial." Celotex Corp. v. Catrett, 477 U.S. 317, 323-25

(1986). Once the moving party has carried its burden under Rule

56(c), the non-moving party must do more than merely show that

there is some metaphysical doubt as to the material facts. 

Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S.

574, 586 (1986). The party opposing the motion may not rest on

mere allegations or denials of pleading, but must set forth

specific facts showing a genuine issue for trial. Anderson, 477

U.S. at 248, 256. To meet this burden, the nonmovant must

"identify specific evidence in the record and articulate the

'precise manner' in which that evidence support[s] [its]

claim[s]." Forsyth v. Barr, 19 F.3d 1527, 1537 (5th Cir. 1994)

(emphasis added). An issue is material only if its resolution

could affect the outcome of the action. Anderson, 477 U.S. at

248. Unsupported allegations, conclusory in nature, are

insufficient to defeat a proper motion for summary judgment. 

Simmons v. Lyons, 746 F.2d 265, 269 (5th Cir. 1984). “‘Summary

judgement, to be sure, may be appropriate, even in cases where

elusive concepts . . . are at issue, . . . if the nonmoving party

rests merely upon conclusory allegations, improbable inferences,

and unsupported speculation.’” Forsyth, 19 F.3d at 1533 (quoting

Krim v. BancTexas Group, Inc., 989 F.2d 1435, 1449 (5th Cir.

1993) (emphasis added)).

 

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6

The standard for granting a motion for summary judgment is

the same as the standard for rendering judgment as a matter of

law. Celotex Corp., 477 U.S. at 323. If the record taken as a

whole could not lead a rational trier of fact to find for the

non-moving party, there is no genuine issue for trial. 

Matsushita, 475 U.S. at 597. See also Boeing Co. v. Shipman, 411

F.2d 365, 374-75 (5th Cir. 1969) (en banc) (explaining the

standard to be applied in determining whether the court should

enter judgment on motions for directed verdict or for judgment

notwithstanding the verdict).

IV.

PMP’s Motion

Consistent with the discussions between the court and

counsel, and the rulings announced, during the pretrial

conference conducted in the above-captioned case on March 19,

2007, the court is granting PMP's motion as to Bimbo's claim that

PMP breached an implied warranty of merchantability and as to

Bimbo's claim for damages based on injuries suffered by third

persons by reason of falling UBs, and is denying it in all other

respects.

V.

Bimbo’s Motion

A. There is No Evidence of a Contract of the Kind Claimed

by PMP

PMP filed a counterclaim against Bimbo for breach of a

contractual commitment by Bimbo to pay the freight for all

baskets purchased after the initial 2.1 million. Bimbo argues,

 

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7

in its motion for summary judgment, that there never was a such a

contract. It is not in dispute that PMP agreed to pay the

freight on the first 2.1 million baskets and that in January of

2005 Bimbo agreed to begin paying the freight on the baskets sold

from that date forward. The issue is whether there is evidence

that there was a contract for Bimbo to pay the freight from June

2004, when delivery of the 2.1 million UBs was completed, through

January 2005.

The following elements are required for parties to form a

binding contract: (1) an offer, (2) acceptance in complete

agreement with the terms of the offer, (3) a meeting of the

minds, (4) parties’ consent to the terms, and (5) intent that the

contract be mutual and binding upon execution and delivery. 

Buxani v. Nussbaum, 940 S.W.2d 350, 352 (Tex.App. – San Antonio,

1997, no writ). For the contract to be enforceable, “the minds

of the parties must meet with respect to the subject matter of

the agreement and all its essential terms.” Weynand v. Weynand,

990 S.W.2d 843, 846 (Tex.App. – Dallas, 1999, pet. denied). In

evaluating whether there was in fact a meeting of the minds, the

court relies on objective standards of what the parties said and

did, rather than parties’ alleged subjective states of mind. 

Slade v. Phelps, 446 S.W.2d 931, 933 (Tex.Civ.App. – Tyler, 1969, 

no writ).

In deciding whether there was evidence of a meeting of the

minds, and thus a contract, for payment of freight during the

disputed time period, the court looks objectively at what parties

said and did. It is undisputed that Bimbo never agreed to pay

 

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8

the freight for any baskets until January 2005. Nevertheless,

PMP argues that “ordinary rules of construction permit custom or

usage evidence both to explain the meaning of language and to

imply terms, where no contrary intent appears from the terms of

the contract.” However, here, contrary intent did exist because

the evidence is clear that Bimbo never intended to pay the

freight. Thus, there was no meeting of the minds to form a

contract for which the court could imply terms. 

 

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9

B. There is No Evidence of Misrepresentation

In Texas, the elements for a negligent misrepresentation

claim are: 

(1) the representation is made by a defendant in

the course of his business, or in a transaction in

which he has a pecuniary interest; (2) the

defendant supplies “false information” for the

guidance of others in their business; (3) the

defendant did not exercise reasonable care or

competence in obtaining or communicating the

information; and (4) the plaintiff suffers

pecuniary loss by justifiably relying on the

representation.

Federal Land Bank Ass’n of Tyler v. Sloane, 825 S.W.2d 439,

442 (Tex. 1991) (adopting section 552 of the Restatement

(Second) of Torts). The type of false information required

to prevail is a misstatement of existing fact, not a promise

of future conduct. Allied Vista, Inc. v. Holt, 987 S.W.2d

138, 141 (Tex.App. – Houston [14th Dist.], 1999, pet.

denied). “A promise to act or not to act in the future

cannot form the basis of a negligent misrepresentation

claim.” Roof Systems, Inc. V. Johns Manville Corp., 130

S.W.3d 430, 439 (Tex.App. – Houston [14th Dist.], 2004, no

pet.).

PMP argues that Bimbo made misrepresentations to PMP,

namely, that if the UBs were “corrected” to fit Bimbo’s

specifications Bimbo would enter into a new long-term supply

agreement with PMP. In its response, Bimbo maintains that

the tort of negligent misrepresentation only applies to

professionals who give advice to others in the course of

their business, not to customers like Bimbo who are seeking

 

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5

 Because the court finds that PMP’s claim for negligent

misrepresentation fails on other grounds, the court does not visit the issue

of whether such a cause of action is applicable outside the context of a

professional giving advice to others in the course of the business of the

professional.

10

to buy goods. Alternatively, Bimbo claims that no such

representation was ever made, and, in the further

alternative, that the alleged misrepresentation is the sort

of future conduct that does not give rise to a negligent

misrepresentation cause of action. Assuming, arguendo, that

the alleged representation was made, the court agrees with

Bimbo that it is the sort of “promise to act or not to act

in the future” that “cannot form the basis of a negligent

misrepresentation claim.” Roof Systems, 130 S.W.3d at 439.5

C. There is No Evidence to Support the Fraud Counterclaim

Under Texas law, fraud occurs when (1) a party (a)

misrepresents a material fact, (b) knows the representation is

false or makes it recklessly without any knowledge of its truth,

and (c) makes the false representation with the intent that it

should be acted on by the other party, and (2) the other party

justifiably relies on the representation and suffers injury

because of it. Ernst & Young v. Pacific Mut. Life Ins. Co., 51

S.W.3d 573, 577 (Tex. 2001). Under certain circumstances, the

first element of fraud can be met if the party concealed or

failed to disclose a material fact. United Teacher Assocs. Ins.

Co. v. Union Labor Life Ins. Co., 414 F.3d 558, 566 (5th Cir.

2005).

In Texas, “a failure to disclose information does not

constitute fraud unless there is a duty to disclose the

 

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11

information.” Bradford v. Vento, 48 S.W.3d 749, 755 (Tex. 2001)

(citing Ins. Co. of N. Am. v. Morris, 981 S.W.2d 667, 674 (Tex.

1998)). Therefore, “silence may be equivalent to a false

representation only when the particular circumstances impose a

duty on the party to speak and he deliberately remains silent.” 

Bradford, 48 S.W.3d at 755 (citing SmithKline Beecham Corp. V.

Doe, 903 S.W.2d 347, 353 (Tex. 1995); Smith v. Nat’l Resort

Cmtys., Inc., 585 S.W.2d 655, 658 (Tex. 1979)). Whether such a

duty exists is not a question of fact, but a matter of law. See

Bradford, 48 S.W.3d at 755. While Texas courts of appeals have

held that a duty to disclose "may arise in an arm’s-length

business transaction when a party makes a partial disclosure

that, although true, conveys a false impression," id., the Texas

Supreme Court has never affirmed such decisions, see id. In

addition, the Court has explicitly declined to adopt section 551

of the Restatement (Second) of Torts, which recognizes a general

duty to disclose facts in a commercial setting. See id. at 755-

56 (stating that "[w]e have never adopted section 551"). Thus,

it is unclear whether the Texas Supreme Court would recognize a

duty to disclose absent a confidential or fiduciary relationship. 

United Teacher, 414 F.3d at 565-66.

To determine a question of state law, federal courts look to

final decisions of the state’s highest court. Erie R.R. Co. v.

Tompkins, 304 U.S. 64 (1938); St. Paul Fire & Marine Ins. Co. v.

Convalescent Servs., Inc., 193 F.3d 340, 342 (5th Cir. 1999). 

Although federal courts may look to intermediate appellate court

opinions for guidance, such opinions are not controlling. United

 

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6 Coburn Supply Co. v. Kohler Co., 342 F.3d 372, 377-78 (holding that a

confidential or fiduciary relationship must exist before the duty to disclose

will arise).

12

Teacher, 413 F.3d at 565-66 (citing Matheny v. Glen Falls Ins.

Co., 152 F.3d 348, 354 (5th Cir. 1998)). If the question of law

has not been decided by the state’s highest court, the federal

court must do its best to determine what the highest court of the

state would decide. Id. at 566 (citing St. Paul Fire, 193 F.3d

at 342)).

The Fifth Circuit’s opinion in United Teacher is

instructive:

A reasonable jurist might well conclude,

certainly after Bradford, that a duty to disclose

exists in Texas only in the context of a

confidential or fiduciary relationship. This

court has so held in Coburn6

, the only Fifth

Circuit case that discusses the relevant portion

of Bradford. However, apart from Coburn, it would

be fair to say that courts after Bradford

(including this court) have not gotten the

message, but have instead continued to find that a

duty to disclose can exist in Texas absent a

confidential or fiduciary relationship.

Id. at 566 (footnote added) (citing, for example, Rimade

Ltd. v. Hubbard Enterprises, Inc., 388 F.3d 138, 143 (5th

Cir. 2004); Lewis v. Bank of Am. NA, 347 F.3d 587 (5th Cir. 

2003)).

As the court stated in United Teacher, “[f]ortunately, we

need not decide whether a duty to disclose exists in Texas absent

a confidential or fiduciary relationship because even if such a

duty did exist, [the] fraud claim would fail." 414 F.3d at 566. 

Assuming Bimbo had a duty to disclose, PMP’s claim cannot survive

 

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13

the motion for summary judgment because there is no evidence that

Bimbo breached this duty. The fact that PMP implied from Bimbo’s

actions that Bimbo planned to enter into a supply contract with

PMP when in fact Bimbo was negotiating with another supplier does

not constitute actionable fraud. The summary judgment evidence

is that Bimbo informed PMP that it was “looking at other

vendors.” App. to Pl.'s Mot. Summ. J. 84. There is no evidence

that Bimbo concealed or failed to disclose a material fact, thus

PMP's fraud claim must fail and the court does not reach a

decision as to the other elements of the claim. 

D. There is No Evidence of Unjust Enrichment

The theory of unjust enrichment may apply when one person

has obtained a benefit from another by fraud, duress, or the

taking of undue advantage. Heldenfels Bros., Inc. v. City of

Corpus Christi, 832 S.W.2d 39, 41 (Tex. 1992). “Unjust

enrichment is not a proper remedy merely because it might appear

expedient or generally fair that some recompense be afforded for

an unfortunate loss to the claimant, or because the benefits to

the person sought to be charged amount to a windfall.” Id. at

42; HECI Exploration Co. v. Neel, 982 S.W.2d 881, 891 (Tex.

1998).

Here, assuming Texas law recognizes unjust enrichment as an

independent cause of action, Bimbo claims it is entitled to

summary judgment because there is no evidence of fraud, duress,

or undue advantage. Whether Bimbo received a “windfall” with

respect to the UBs is a disputed question of fact, but such a

 

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14

benefit cannot constitute unjust enrichment absent some type of

unlawful behavior. The court agrees that the summary judgment

record is devoid of evidence of fraud, duress, or undue 

advantage.

VI.

Order

For the reasons discussed above, the court concludes that

PMP’s motion for summary judgment should be granted in part and

denied in part, and Bimbo’s motion for summary judgment should be

granted. Therefore,

The court ORDERS that Bimbo's causes of action based on an

implied warranty of merchantability and for damages related to

injuries suffered by third persons because of falling UBs be, and

are hereby, dismissed.

The court further ORDERS that all of PMP’s claims and causes

of action against Bimbo in the above-captioned action be, and are

hereby, dismissed.

SIGNED March 20, 2007.

 /s/ John McBryde

JOHN McBRYDE

United States District Judge

 

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