NOT RECOMMENDED F OR FUL L -TEXT PUB L I CATI ON File Na me: 11a0353n.06 Nos. 09-6041, 09-6043 UNITED STAT ES COURT OF AP P EALS F OR THE S IXTH CIRCUIT TERRY CROUCH, Plaintiff-Appellant,

v. PEPP ERI DGE F ARM, I

NC., THE KROGER CO. , Def endants-A

ppellees, and SCHNUCK MARKETS I NC., Def endant ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ON APPEAL FROM THE UNI TED ST ATES DI STRI CT COURT FOR THE WES TERN DI STRI CT OF TENNESSEE

Be fore : KEI TH, MCKEAGUE , and KETH L EDGE, Circuit Judges. KETHL EDGE, Circuit Judge

. Terr y Crouch delivere d Pepperidg e Fa rm brea d products to reta il store s around Memphis. When K rog er suspected Crouch of theft throug h improper billings, it banned Crouch from its stores. Crouch later sold his distributorship, an d Pepperidg e Fa rm deducte d Krog er’ s losses from the proce eds of the sale. Crouch sued Pepperidg e Fa rm, Krog er, and another reg ional g roce r alleg ing brea ch of c ontrac t, conver sion, and interfe renc e with his business relationships. The district court g ran t ed t h e d efe ndants summary judgme nt on all of Crouch’s claims. We reve rse a s to Crouch’s conve rsion claim but aff irm as to the re st.Nos. 09-6041, 09-6043

Crouch v. Pe

pperidge Farm I

. Crouch was an independe nt Pepperidg e Fa rm distributor in the Memphis are a from 1993 to 2007. On J anuar

y 17, 2005, Crouch and Pepperidg e Fa rm signe d a consig nment ag ree ment that g rante d Crouch the exclusive rig ht to deliver products to thirteen stores, including five Krog ers and t h re e S chnuck Marke ts. Crouch was responsible for delivering new product, removing stale o r damag ed product, verif

y i n g t h e quantity of outgoing and incoming product with eac h store’s

rec eiving clerk, and cre diting or billing the store acc ording ly

. Crouch rec eived a commission for product de livered, a

nd an off set for pr oduct re moved. I n the fall of 2006, Krog er beg an review ing inventory -diffe renc e repor ts throug hout the reg ion wher e Crouch worke d. Krog er d i s co v er ed that store #430, which is on Crouch’s delivery route, was billed for significa ntly more P epper idge Fa

rm p roducts than a compar able store, #405, in another county

. Krog er then compar ed the am o u n t of Pepperidg e Fa rm product eac h store

rec eived to the amount purcha sed by customers. Store #430 paid for $38,367 more product than it

s o l d , wh i l e store #405 had jus t $91 varia nce in the s ame product during the s ame period. Kr o ger then conduc ted surveillanc e and ma nual inventories to find the sour ce of the discre pancie s. On J anuar

y 25, 2007, Krog er a

naly st Ronny

J oy ner inve ntoried Pepper idge Fa rm products at store #430. The next morning , sever al Krog er risk-mana g ement employ e e s monitored the secur ity

came ras as Crouch made his delivery

. These employ ees testified by deposition that the Krog er

rec eiving cler

k, Galveste r Sanders, never verifie d the quantity of products taken in or out, as require d by Krog er procedur e. They also testified t hat C rouch did not leave a delivery ticket. Krog er say s it has video evidenc e that supports its position. Both Crouch and Sander s d i s p u t e Krog er’ s -2-Nos. 09-6041, 09-6043

Crouch v. Pe

pperidge Farm al l ega t i o n . They eac h testified that Sanders verifie d the product counts, that Crouch draf ted a handwr itten ticket beca

use his computer was not functioning , and that Sanders signe d the ticket that day

. Crouch acknow ledg es that thes e ac t i o n s ar e not seen on the video, but sug g ests that they

occur red ou tside the came ra’ s sight. After the delivery , J oy ner ag ain inventoried the Pepperidg e Fa rm product. On J anuar

y 30, 2007, during his ne x t delivery , Crouch g ener ated a computer ticket fo r t he J anuar

y 26 delivery

. On t hat t icket, C rouch claimed t o have delivere d 288 more loaves o f brea d (at a

cost of appr ox imately

$548) than Joy

ner’ s manual inventory

ref lected. On Marc h 16, 2007, Krog er risk-mana g ement personne l met with Crouch and asked him to explain the inventory discrepa ncies. When Crouch offe red no explanation, Krog er’ s risk manag er, Tim Dave y , banned Crouch from servicing any Krog er store. During the meeting , Crouch called his Pepperidg e Fa

rm reg ional contac t, Fr ed Sala, and told him of Krog er’ s acc usations. Sala also spoke with Dave y , who confirme d that another distributor would need to service Krog er. Around Marc h 2 0 , 2 0 07, Schnuck Markets, a reg ional g roce r on Crouch’s route, lear ned of Krog er’ s acc usatio n s ag ainst Crouch and pr ohibited Crouch from se rvicing its stores. Crouch believed that without Krog er and Schnucks, his distributorship was no longe r viable. He ne g otiated the sale of his route to another distributor, and set the pric e at $55,000. The parties signe d a contra ct of sale around Marc h 22, 2007. Under that contra ct, Pepperidg e Fa rm was entitled to retain funds f

rom the sale pr ocee ds to repay any debts Crouch owe d to Pepperidg e F arm. On May 30, 2007, Pepperidg e Fa rm authorized Krog er to wit h h o l d $ 3 8,367, the amount Krog er believed it had been overc har ged , fr om its next invoice pay ment. Then, to repa

y itself,

-3-Nos. 09-6041, 09-6043

Crouch v. Pe

pperidge Farm Pepperidg e Fa

rm withheld the same amount from the proce eds of the sale of C ro u ch’s distributorship. Crouch there afte r filed suit ag ainst Pepperidg e Fa rm, alleg ing that it conver ted his proper

ty by improperly reta ining his money a n d b r e a c h e d th e consig nment ag ree ment by prohibiting him from servicing stores within his territory

. Crouch also sued Krog er and Schnucks, al l egi n g that eac h tortiously interfe red with his contra ct or business relationship with Pepperidg e Fa rm by banning him from its stores. The defe ndants moved for summary judgme nt, and the district cour t gr anted their motions. Crouch now appea ls from the judgme nt in favor of Krog er and Pepperidg e Fa rm, arguing that g enuine issues of material fa ct exist on his claims. I I

. We first addre ss an evidentiar y issue. Crouch argues that both Krog er and Pepperidg e Fa rm rely upon an unauthentica ted hear say document in support of their motions for summary judgme nt. Specifica lly , Krog er auditor Fr ank Nahlen cre ated the sprea dsheet detailing the inventory shortag es in Peppe ridg e Fa

rm product at stores #430 a nd #405. Nahlen never g ave a deposition or provided

an aff idavit authenticating the sprea dsheet. Krog er and Pe p p eridge Fa rm respond that Crouch waived this arg

ument by not proper ly raising it in the district court, and that, in any event, the document mee ts the business-rec ord hea rsay exception under F eder al Rule of Evidenc e 803(6)

. We need not resolve this dispute. I n this case , the sprea dsheet does not state that Crouch is responsible for Krog er’ s losses, so it cannot be used to est ab l i s h h i s culpability

. Instead, the document mere ly demonstrates that Kr o ger and Pepperidg e Fa rm—the rea ders of the sprea dsheet—be lieved that Kr o ger #430 suffe red vast and disproportionate losses in Pepperidg e -4-Nos. 09-6041, 09-6043

Crouch v. Pe

pperidge Farm Fa rm products. We there fore consider the document only for the non-hea rsay purpose of evaluating its eff ect on Krog er and Pepperidg e Fa rm. See Anthony v. DeW

itt , 295 F.3d 554, 563 (6th Cir. 2002). We find the document was adequa tely authenticated for this purpose b y K r og er analy st Ronny J oy

ner and Krog er risk manag er Tim Dave y , who testified to their knowledg e of the sprea dsh eet and the inventory losses it subst antiates. See Fe d. R. Evid. 901(a). I I I

. A. We r eview the district c ourt’s g rant of summary judgme nt de novo, draw ing all rea sonable fac tual infere nces in favor of Crouch. See Dowling v. Cleveland Clini c Found. , 593 F.3d 472, 476 (6th Cir. 2010). Summary judgme nt is appropr iate when “ther e is no g enuine issue as to any materia l fac t.” Fe d. R. Civ. P. 56(c) (2) (2009). A g enuine issue of materia l fac t exis ts when there is sufficie nt evidenc e “such that a rea sonable jury could return a verdic t for the nonmoving party .” Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 248 (1986). B. 1. Crouch claims that Pepperi d ge Fa rm brea ched the consig nment ag ree ment by preve nting Crouch from servicing the Krog er and Schnucks stores in his territory , “eve n though this was done at Kroge r’s and Schnucks’ request.” Acc ording to Crouch, P epper idge Fa rm’s enf orce ment of its customers’ demands resulted in an anticipatory brea ch of the consig nment ag ree ment. In Tenne ssee,

an anticipatory brea ch occur s when one contra cting party voluntaril y co mmits an act rende ring it unable to perf

o rm u n d er t h e contra ct, or, throug h its words and conduct indicates its “total and -5-Nos. 09-6041, 09-6043

Crouch v. Pe

pperidge Farm unqualified ref

usal to perf

orm th e co n t ra ct

. ” UT Med. Grp., Inc. v. Vogt , 235 S.W .3d 110, 120 (Tenn. 2007) (interna l quotation marks omitted)

. He re , Pepperidg e Fa rm never indicated any unwillingness or inability to perf o rm under the contra ct; it was Crouch who could not meet his delivery obligations. Crouch attempts to shift responsibility back to Pepperidg e Fa rm by citing Allen v. Elliott Rey nolds Motor Co. , 230 S.W .2d 418 (Tenn. Ct. App. 1950). He argues that Pepperidg e Fa rm was require d to provide him with an ex clusive di stributorship, and that Pepperidg e Farm’s inabilit y to obtain consent from Kr o g er or Schnucks does not excuse that obligation. Allen held t hat where a contra ct does not s p ec i fi cally allocate the risk of failure to obtain nece ssary consent from a third party , the risk lies with the party responsible for obtaining consent, and that the responsible party is not excused from its contrac tual obligations by its inabili ty

to do so. See id. at 423-24. Our c ase is diffe rent. The consig nment ag ree ment here includes two re levant par ag raphs: I f, by rea son of illnes s o r vacation or any other cause , [C rouch] shall be unable at any tim e to provide or maintain the eff icient distribution service contemplated by this Ag ree ment, [C rouch] will make other suitable arr ang ements at his/her own expense . . . but if [C rouch] is unable or fails to do so, [P epper idge Fa rm] is authorized in its discretion to provide and/or maintain such service as [C rouch’ s] ag ent and at [ Crouch’s] expense and risk. I f [C rouch] fails for an

y r e a s o n to p r o v ide or maintain satisfac tory distribution to any seg men t o f t h e Territory or t o any reta il store withi n the Territory , and such failure is not reme died within five day s afte r written notice there of from [P epper idge Fa rm], [P epper idge Fa

rm]

. . . may make other arr ang ements, on either a perma nent or t em p o rar

y basis, in the discretion of [P epper idge Fa rm], for the service of such store or seg ment of the Terr itory , as the case may be. I f such arr ang ements for service are made on a perma nent basis, the reta il store or seg ment of th e Terr itory involved shall be deeme d to be no longe r included in the Terr itory

. . . all without compensation or remuner ation to [ Crouch].

-6-Nos. 09-6041, 09-6043

Crouch v. Pe

pperidge Farm This languag e expressly authorizes Pepperidg e Fa rm to service any store that Crouch cannot service for a

ny rea son. Thus, unlike in Allen , the contra ct her e conte mplates Crouch’s ina bility to obtain consent to distribute w ithin his terr itory , assig ns that risk to Crouch, and g rants Pepper idge Fa rm the discretion to provide substitut e service without co m p ensation to Crouch. We there fore conclude that Allen does not apply to this case. We also ag ree with the district court’s conclusion that Pepperidg e Fa rm did not terminate the consig nment ag ree ment, with or without cause . As the district court found, the parties mutually and voluntarily terminated the contra ct when Crouch sold his distributorship. As a resu l t , Pepperidg e Fa rm committed no brea ch, and the district court prope rly dismiss ed this claim. 2. T o es tablish a claim for conver sion under Tenne ssee law, Crouch must demonstrate t h at Pepperidg e Fa

rm exercised control over his prope rt y , without his consent, for Pepperidg e Fa rm’s benef it. See Mammoth Cave Prod. Credit Ass’n v. Oldham , 569 S.W .2d 833, 836 (Tenn. Ct. App. 1977). Pepper idge Fa

rm’s g ood faith is g ener ally immaterial. Id

. Crouch co n t ends that Pepperidg e Fa rm improperly withheld $38,367 from the sale of his route. Peppe ridg e Fa

rm responds that Crouch failed to present “ aff irmative evide nce . . . to r efute Krog er’ s losses.” The appropr iate question, howeve r, is not whether Krog er suffe red losses—there is no rea l dispute that it did—but why

. As the district co u rt stated and both parties conce de, if Crouch caused Krog er’ s losses, Pepperidg e Farm was entitled to retain the mone y . But if Crouch did not cause the losses, Pepperidg e F arm c onverte d Crouch’s f unds.

-7-Nos. 09-6041, 09-6043

Crouch v. Pe

pperidge Farm The dist rict court held t hat C rouch’ s mere c laim that he did not cause Krog er’ s losses was insufficient to rebut Krog er’ s evidenc e that he did. We disag ree . Crouch offe rs his own deposition testimony deny

ing any wrong doing, which we must acc ept as true. See Schreibe r v. Moe , 596 F.3d 323, 333 (6th Cir. 2010). At his deposition, Crouch did more th an j u s t d en y wrong doing; he aff irmatively testified that he followed the proper p ro ce dures in delivering and removing product from store #430. That test i mony , even if it was the only evidenc e disputing Krog er’ s claims, is sufficie n t to cre ate a g enuine issue of m ater ial fac t and avoid summary judgme nt. See id ; Fe d. R. Civ. P . 56(c) (2) ( 2009)

. But we have more than Crouch’s word on the matter. First, Crouch provides a copy of the J anuar y 26, 2007, handwr itten invoice that Krog er claims he never cre ated. The invoice shows the signature of Sanders, the Krog er rec eiving cler k on duty , who confirme d throug h deposition testimony that he counted the product and si g ned the invoice that day

. Pepperidg e Farm counters t h at C ro u ch should have produce d the i nvoice earlier , and that Sanders is not cre dible beca use he

was implicated as an acc omplice in the theft. But those are fac t issues. Second, Crouch o ff er s testimony from both r ece iving cler ks at Krog er #430, who state that Crouch alway s complied with the che ck-in proc edure s, and neither had knowledg e that would implicate Crouc h in the inventory discrepa ncies. Pepperidg e Fa

rm counter s that “[t] he witnesses’ lack of knowledg e on the subject is not aff irmative proof rebutting Krog er’ s claimed losses.” But ag ain, the fac t of the losses is not the issue here

. And third, Crouch offe rs evidenc e that Krog er’ s inventory -loss calc ulat i o n did not

acc ount for other fac tors (such as shoplifting, reshopping , and other P ep p eridg e Fa rm product deliverie s) that theore tically could have contributed to the discr epanc ies.

-8-Nos. 09-6041, 09-6043

Crouch v. Pe

pperidge Farm When revie wing a summary judgme nt motion, we may no t weigh the evidenc e or make

cre dibilit y deter

minations. Schreibe r , 596 F.3d at 333. That is what Pepperidg e Fa rm asks us to do here . The district cour

t erre d in gr anting summary judgme nt on this claim. C. 1. Crouch claims that Krog er caused Pepperi d ge Fa rm to brea ch the consig nment ag ree ment by banning h i m fr o m Kr o g er stores. Tenne ssee recog nizes a common-law tort for inducement of brea ch of contra ct. See Freem an Mgmt. v. Shurgard Storage Ctrs. , 461 F. Supp. 2d 629, 637 (M.D. Tenn. 200 6 ). T o s ucce ed on this claim, Crouch must establish that Krog er’ s actions cause d Pepperidg e Fa

rm to brea ch the consi gnment ag ree ment. See id

. But we have alre ady found that there was no brea ch, so there can be no inducement of a brea ch. The district court proper ly g rante d summary judgme nt on this claim. 2. Crouch also claims that Krog er, by improper means or with improper motive, interfe red with “his business rela

tionship with Pepperidg e Fa rm.” Tenne ssee re cently rec og nized the tort of intentional interfe renc e with business relationships. See Trau-Med of America, Inc. v. Allstate Ins. Co. , 71 S.W .3d 691, 701 (Tenn. 2002)

. But this tort protec ts non-contra ctual business relationships,

so we will not apply it to the contra ctual relationship betwee n Crouch and Pepperidg e Fa rm. See id. at 698-701 & n.4. We also ag ree with the district court’s deter mination that Crouch has not established that Krog er intended to interfe re with his business relationship, or that Krog er acte d wi t h improper -9-Nos. 09-6041, 09-6043

Crouch v. Pe

pperidge Farm motive or means. The court’s analy sis on these fac t ors was thoroug hly rea soned, so we see no

rea son to repeat it here. The district court prope rly g rante d summary

judgme nt on this claim. The district court’s judgme nt is reve rsed with respe ct to Crouch’s conver sion claim ag ainst Pepperidg e Fa

rm; that claim is rema

nded to the district court for further proce eding s consistent with this opini on. The district cour t’s judgme nt is otherwise af firmed.

-10-