Court Opinion

ID: 3027026
Source: CourtListenerOpinion
Date Created: 2015-10-13 22:37:17.335185+00
Date Added: 2024-06-11T11:40:34.745828
License: Public Domain

UNITED STATES COURT OF APPEALS
                    FOR THE EIGHTH CIRCUIT
                          ___________

                       Nos. 00-3873 and 00-3877
                             ___________

CLEARLY CANADIAN                *
BEVERAGE CORPORATION,           *
                                *
        Appellee,               *
                                *
    v.                          *
                                *
AMERICAN WINERY, INC. d/b/a     * Appeal from the United States
BEVERAGE CONCEPTS, and          * District Court for the
HIGHLAND COMMUNITY BANK,        * Eastern District of Missouri.
                                *
        Appellants,             *        [PUBLISHED]
                          ___________

                              No. 00-3876
                             ___________

TIMOTHY J. RAND,             *
                             *
         Appellant,          *
                             *
    v.                       *
                             *
CLEARLY CANADIAN             *
BEVERAGE CORPORATION,        *
                             *
         Appellee.           *
                      ______________

                       Submitted: June 14, 2001
                         Filed: July 30, 2001
                           ______________
Before MORRIS SHEPPARD ARNOLD and RICHARD S. ARNOLD, Circuit Judges,
and BATAILLON,1 District Judge.
                      ______________

BATAILLON, District Judge.

      When one company’s fortunes take a turn for the worse, entities with whom it
contracts are often adversely affected. However, the degree to which an entity is
adversely affected will usually depend upon the contractual safeguards bargained for
and secured by the entity.

       Following a precipitous decline in demand for its product, Clearly Canadian
Beverage Corporation (“Clearly Canadian”) filed suit in federal district court against
American Winery, Inc. (“American Winery”) seeking recovery on a promissory note
as well as replevin of certain equipment which secured the note. Clearly Canadian
amended its complaint, joining Highland Community Bank (“the Bank”) as a defendant
and requesting a declaratory judgment that its security interest in American Winery’s
collateral was superior to the security interest of the Bank in the same collateral.
American Winery filed counterclaims for breach of contract, breach of the covenant of
good faith and fair dealing, and negligent and fraudulent misrepresentation.

       Timothy Rand (“Rand”), one of the owners of American Winery, filed a separate
action in Missouri state court against Clearly Canadian for fraudulent and negligent
misrepresentation. Rand’s suit was timely removed to federal court and consolidated
with Clearly Canadian’s pending federal action against American Winery and the Bank.

     Clearly Canadian, American Winery and Rand submitted a series of summary
judgment motions, all of which were decided by the district court in favor of Clearly

      1
      The Honorable Joseph F. Bataillon, United States District Judge for the District
of Nebraska, sitting by designation.
                                          2
Canadian. The district court entered a Final Judgment and Order of Replevin, entering
judgment in favor of Clearly Canadian on all its claims, dismissing American Winery’s
counterclaims and Rand’s claims with prejudice, and ordering that Clearly Canadian
was entitled to immediately replevy the collateral of American Winery. American
Winery, Rand, and the Bank appeal, and we affirm in part.

                           I. FACTUAL BACKGROUND

       Beginning in 1987, Clearly Canadian, a publicly traded company based in
Vancouver, Canada, began to produce, distribute, and market bottled beverages,
including flavored carbonated bottled water marketed under the trademark “Clearly
Canadian®.” Clearly Canadian contracted with distributors and “licensees” (i.e.,
distributors that also have approved production capabilities) to get its products to retail
markets. Clearly Canadian also entered into arrangements with bottlers, also called
“co-packers,” to produce its products for Clearly Canadian to supply to its distributors.
In 1989, Clearly Canadian entered into a non-exclusive bottling agreement with
American Winery, a bottling facility whose principal place of business is St. Louis,
Missouri.

A. Clearly Canadian’s Loans to American Winery

       When Clearly Canadian entered into the bottling agreement with American
Winery in 1989, Clearly Canadian advanced funds to American Winery for certain
capital improvements. The purpose of these capital improvements was to allow
American Winery to produce Clearly Canadian products in greater volume. Although
American Winery was to repay these advances through a $0.05 per case reduction in
the fees Clearly Canadian would owe American Winery for bottling services, the
bottling agreement did not require Clearly Canadian to order any specific minimum
volume of production from American Winery. Clearly Canadian had similar
arrangements with numerous other co-packers at the time.

                                            3
       In 1991, because of adverse financial circumstances, American Winery planned
for and filed a Chapter 11 bankruptcy reorganization proceeding. Prior to this filing,
the parties had discussed the possibility of Clearly Canadian advancing additional funds
to American Winery to facilitate its reorganization. On March 13, 1991, Clearly
Canadian entered into a Credit Agreement to advance American Winery funds through
two separate loans: a Facility A loan and a Facility B loan.

      Under the Facility A loan, Clearly Canadian would make term loans to American
Winery in an aggregate amount not to exceed $661,000 so that American Winery could
increase its production capacity to meet Clearly Canadian’s burgeoning production
demands. The parties agreed that American Winery could repay the Facility A loan
through the $0.05 per case credit repayment feature established in their original bottling
agreement.

       Under the Facility B loan, Clearly Canadian would advance working capital
equal to $0.20 per case of Clearly Canadian products bottled by American Winery.
The Facility A Loans were evidenced by a promissory note entitled “Facility A Note,”
and the Facility B Loans were evidenced by a promissory note entitled “Facility B
Note.” The bankruptcy court approved these arrangements. None of the agreements
entered into between Clearly Canadian and American Winery on March 13, 1991,
required Clearly Canadian to order any particular volume of production from American
Winery.

       In 1992, Clearly Canadian advanced an additional $650,000 to further increase
American Winery’s capacity to bottle Clearly Canadian beverages. American Winery
used these funds to convert a non-functioning canning line at American Winery’s plant
into a fully functioning bottling line dedicated solely to Clearly Canadian production.
Before this loan, the advances made to American Winery totaled $414,981 under the
Facility A loan and $985,678 under the Facility B loan. After all of the loan advances
had been made, the parties agreed in the summer of 1992 that all of the loans would be

                                            4
combined and redocumented in the form of an Amended and Restated Credit
Agreement (the “Amended Credit Agreement”), effective May 31, 1992.

        In connection with the Amended Credit Agreement, American Winery also
executed a promissory note in which American Winery promised to pay to Clearly
Canadian, on or before the “Facility Termination Date,” the principal sum of
$2,450,000 or, if less, the unpaid principal amount of the loan, plus interest as specified
in the Agreement (the “Promissory Note”). The “Facility Termination Date” was
defined in the Amended Credit Agreement as follows: “Facility Termination Date shall
mean the earlier to occur of (i) May 31, 1994, and (ii) the date on which the Liabilities
shall become due in accordance with Section 9.2.” Section 4 of the Amended Credit
Agreement provided, “The Loan shall mature and be payable in full on the Facility
Termination Date.”

       Under section 4 of the Amended Credit Agreement, American Winery was
required to make mandatory payments to Clearly Canadian prior to the Promissory
Note*s maturity date of May 31, 1994, in the form of a credit of five cents per case of
product produced by American Winery, plus payments from any “Available Funds,”
as defined in the Amended Credit Agreement, in excess of $500,000. The five cent
prepayments per case were offset against amounts Clearly Canadian owed American
Winery for bottling its products. American Winery never made any lump sum
payments from “Available Funds.”

       The Amended Credit Agreement further provided that American Winery was
to develop a Business Plan using data supplied by Clearly Canadian. Section 1.1 of the
Amended Credit Agreement defined the term “Business Plan” as follows:

      Business Plan means the projections for the period from the date hereof
      through May 31, 1994 prepared by Borrower and delivered to Lender
      prior to the date hereof, including the assumptions used in preparing such
      projections, provided that such projections may be amended and
      supplemented . . . by agreement of Borrower and Lender if the volume of

                                            5
      production required (or anticipated to be required) by Lender is different
      from the volume assumed to be required in such projections.

American Winery warranted that “absent circumstances beyond [its] control,
[American Winery] expects to be able to achieve the production levels with respect to
Cases of Lender*s Product specified in the Business Plan.” Likewise, American
Winery covenanted that it would “use its best efforts to achieve the levels of production
of Cases of Lender*s Product specified in the Business Plan.”

      Neither the Amended Credit Agreement nor the Promissory Note contains any
provision expressly requiring Clearly Canadian to order any particular volume of
production from American Winery. In addition, neither the Amended Credit
Agreement nor the Promissory Note provides that American Winery*s payment of
unpaid principal and interest on the loan was to be based solely on the volume of
production produced by American Winery for Clearly Canadian or limited to five cents
per case of product produced.

B. Clearly Canadian**s Business Operations

       In 1991, Clearly Canadian expected that demand for its products would continue
to increase. To meet this demand, Clearly Canadian attempted to locate additional
bottling capacity by expanding its production network. To that end, Clearly Canadian
entered into relationships with additional co-packers between April 1991 and February
1992. American Winery was aware that Clearly Canadian was entering into new
relationships with different co-packers.

      None of the relationships Clearly Canadian entered into with co-packers was
exclusive. Some co-packers, however, negotiated “take or pay” provisions in their
agreements with Clearly Canadian, pursuant to which Clearly Canadian agreed to bottle
a specified minimum amount of product with the co-packer. American Winery*s

                                           6
agreement with Clearly Canadian did not expressly contain such an obligation on the
part of Clearly Canadian.

       As Clearly Canadian*s production network expanded and it entered into
relationships with more co-packers, its ability to service its distributors improved.
Because it began using co-packers in more areas of the United States and Canada,
Clearly Canadian became able to provide its product to its distributors from co-packers
who were geographically closer to each distributor. Logistical and efficiency concerns
at times led to changing the co-packer that filled orders for a given distributor. The
reallocation of production among co-packers was permissible under Clearly Canadian*s
agreements with its co-packers.

       During 1991 and early 1992, Clearly Canadian did not have sufficient capacity
from its existing co-packers to meet anticipated demand for its product. As of early
1992, American Winery was producing Clearly Canadian product at maximum
capacity. In addition to expanding its production network and entering into
relationships with additional co-packers to meet the current and anticipated demand,
Clearly Canadian made every effort to obtain the maximum production available from
its existing co-packers, including American Winery. Accordingly, Clearly Canadian
sought assurances from American Winery that it could provide specific volumes of
production capacity to help meet Clearly Canadian*s anticipated demand.

        Not only did Richard Gibson, American Winery*s Plant Manager, and Dwight
Roscoe, Clearly Canadian*s Director of Materials & Distribution, have conversations
in early 1992 about production capacity, Clearly Canadian sent correspondence on the
subject as well. In a letter dated February 14, 1992, Roscoe wrote to American Winery
in reference to American Winery*s “Proposed 1992 Production Forecast.” In that
letter, Roscoe asked American Winery to commit to its capacity to produce Clearly
Canadian*s “requirements” -- specific numbers of cases that Clearly Canadian desired
American Winery to provide on a monthly basis in 1992. Clearly Canadian*s

                                          7
requirements for capacity from American Winery were restated in Roscoe*s letter dated
March 6, 1992. In his March 6, 1992, letter, Roscoe informed American Winery that
the projections were “minimum requirements for production in the months stated” and
requested that American Winery exert “every effort available to meet the requirements
of Clearly Canadian.” The volume amounts stated in Roscoe*s letters were ultimately
incorporated into the “Business Plan” referenced in the Amended Credit Agreement.

       At the time these discussions were pending regarding American Winery*s
capacity to meet Clearly Canadian*s projected volume requirements, Clearly Canadian
believed that demand for its product would continue to increase. The demand for
Clearly Canadian product dramatically increased from 1991 to late 1992, at which time
demand abruptly abated. From sales of fewer than 600,000 cases in 1988, demand
increased to more than 18,000,000 cases in 1991, and to almost 23,000,000 cases in
1992. In 1993, however, sales plummeted to fewer than 15,000,000 cases. The impact
of this downturn was exacerbated by the fact that Clearly Canadian had projected an
increase in demand during 1993.

      As the demand for its product decreased, Clearly Canadian*s demand for
capacity from its co-packers fell precipitously. Clearly Canadian reduced its
production orders from 1992 and 1993 substantially below the levels contemplated by
the Business Plan. The 1992 Business Plan levels were 8,027,626 cases in 1992 and
10,500,000 cases in 1993. However, Clearly Canadian only placed orders for
6,699,269 cases in 1992 – 82.4% of the 1992 case volume in the Business Plan. In
1993, Clearly Canadian placed orders for only 1,823,085 cases – 17.36% of the 1993
case volume in the Business Plan.

C. Clearly Canadian**s Offers To Purchase American Winery

      The dramatic downturn in Clearly Canadian*s business from 1993 forward
adversely affected Clearly Canadian and all companies with which it did business,

                                         8
including American Winery. The Facility Termination Date of May 31, 1994, came
without American Winery paying the amount due to Clearly Canadian. As American
Winery*s financial condition worsened, American Winery and Clearly Canadian began
looking for ways to alleviate the problem. Clearly Canadian was concerned about
repayment of its $2.4 million loan to American Winery. Clearly Canadian*s Stuart
Ross and American Winery*s Timothy Rand had a number of discussions regarding the
future of American Winery, as well as repayment of Clearly Canadian*s loan to
American Winery. Some of these discussions concerned the possibility of Clearly
Canadian purchasing American Winery so long as Rand insured that American Winery
remained solvent and a going concern. In view of these discussions, Rand invested
nearly $2.4 million of his personal funds in order to keep American Winery viable for
purchase by Clearly Canadian.

        Clearly Canadian made three separate offers to acquire American Winery. The
first offer was for $500,000 and occurred at some unidentified time. The second offer
was for $600,000 and occurred in August 1996 when Rand received a written proposal
from Ross concerning an asset purchase of American Winery, paying off the bank debt,
and assuming the Clearly Canadian debt and the lease obligations. Clearly Canadian
made a third offer in March 1997 to purchase American Winery for $850,000. Rand
rejected all three of Clearly Canadian’s offers. In June 1997, Clearly Canadian
demanded that American Winery make immediate payment of the outstanding principal
balance of the loan, all interest accrued thereon and all other Liabilities (as defined in
the Amended Credit Agreement). American Winery did not pay the amount due.

D. Clearly Canadian**s Security Interest in American Winery**s Property

       The Bank first loaned money to American Winery in 1985 for the purchase of
a bottling plant in St. Louis. The initial loan was secured by a lien on all of American
Winery’s assets, including its existing and after-acquired equipment. In 1988,

                                            9
American Winery refinanced the 1985 loan and the Bank extended additional credit to
American Winery, increasing American Winery’s total indebtedness to $400,000. In
exchange, the Bank was granted a blanket security interest in American Winery’s
property, including all of its current and after-acquired equipment. In September 1990,
the Bank loaned an additional $880,000 to American Winery which was secured by the
same collateral securing the 1988 loan.

       Clearly Canadian obtained a security interest in certain American Winery assets
in 1991. Pursuant to the Credit Agreement, Clearly Canadian received a security
interest in American Winery*s assets described as follows in Section 5.1 of the Credit
Agreement:

      all equipment, spare parts, supplies and other goods acquired with the
      proceeds of [Clearly Canadian’s] Facility A Loans (it being understood
      and agreed that all equipment, spare parts, supplies and other goods
      acquired by the Borrower after the date hereof shall be deemed to have
      been acquired with proceeds of the Facility A Loans absent a final and
      conclusive finding by the Bankruptcy Court to the contrary), and all
      attachments, substitutions, replacements and improvements thereto and
      therefor . . ., all general intangibles relating thereto . . . and all proceeds
      and products of all of the foregoing. . . .

       On March 22, 1991, American Winery filed a voluntary petition for
reorganization under Chapter 11 in the United States Bankruptcy Court. As part of the
restructuring, the bankruptcy court approved the Credit Agreement, and entered an
order granting Clearly Canadian a security interest in all “equipment, spare parts,
supplies and other goods acquired with the proceeds of [Clearly Canadian’s] Facility
A Loans. . . .”

      In May 1992, Clearly Canadian and American Winery entered into an Amended
Credit Agreement. The Amended Credit Agreement purported to provide Clearly
Canadian with a security interest extending to virtually all of American Winery*s
                                            10
property, except for certain property that had already been purchased with the Bank*s
money. Specifically, the security interest is described in Section 5.1 of the Amended
Credit Agreement as extending to:

      (i) all of [American Winery*s] equipment, spare parts, and supplies,
      excluding the Bank Equipment, (ii) all other goods acquired with proceeds
      of the Loan, (iii) all attachments, substitutions, replacements and
      improvements for any of the foregoing, (iv) all general intangibles relating
      to any of the foregoing (including without limitation all warranty claims
      and insurance contracts with respect thereto), and (v) all proceeds and
      products of all the foregoing. . . .

The Bank Equipment described in the Agreement included all equipment as to which
the Bank had a valid security interest that was perfected before confirmation of
American Winery*s reorganization plan. In effect, therefore, the Amended Credit
Agreement granted Clearly Canadian a security interest in a broad range of American
Winery equipment (with the exception of the narrowly defined Bank Equipment)
beyond that equipment which had been purchased with the proceeds of Clearly
Canadian’s loans.

     The Bank executed a “Waiver of Interest” on July 28, 1992. Through this
document, the Bank expressly waived any interest it might have in American Winery*s:

      (i) equipment, spare parts, supplies and other goods acquired with the
      proceeds of loans made to Debtor by [Clearly Canadian] (hereafter the
      “Clearly Related Equipment”, which excludes, however, any equipment,
      spare parts or supplies as to which Bank had a valid, perfected security
      interest upon confirmation of Debtor’s plan of reorganization as filed in
      the United States Bankruptcy Court . . .); (ii) all attachments,
      substitutions, replacements and improvements for any of the Clearly
      Related Equipment; (iii) all warranty claims, insurance contracts and other
      general intangibles relating to the foregoing; and (iv) all products and
      proceeds of the foregoing.

                                          11
                                   II. ANALYSIS

       We review the district court’s award of summary judgment de novo. See Gentry
v. Georgia-Pacific Corp., 250 F.3d 646, 649 (8th Cir. 2001). The question before the
district court, and this court on appeal, is whether the record, when viewed in the light
most favorable to the non-moving party, shows that there is no genuine issue as to any
material fact and that the moving party is entitled to judgment as a matter of law. See
Fed. R. Civ. P. 56(c); Land v. Washington County, Minn., 243 F.3d 1093, 1095 (8th
Cir. 2001). “One of the principle purposes of the summary judgment rule is to isolate
and dispose of factually unsupported claims or defenses and the rule should be
interpreted in a way that allows it to accomplish this purpose.” Prudential Ins. Co. v.
Hinkel, 121 F.3d 364, 366 (8th Cir. 1997) (citing Celotex Corp. v. Catrett, 477 U.S.
317, 323-24 (1986)). The parties agree that Missouri law applies in this diversity
action.

A. Clearly Canadian’s Claim on American Winery’s Note/American Winery’s
Counterclaim for Breach of Contract

       Arguing that Clearly Canadian was contractually obligated to order a minimum
number of cases of production from it, American Winery asserts that the district court
erred in granting summary judgment in favor of Clearly Canadian both on Clearly
Canadian’s claim on American Winery’s Note and on American Winery’s counterclaim
for breach of contract.

       American Winery first contends that Section 1.1 of the Amended Credit
Agreement bound Clearly Canadian to order the amount of production specified in the
Business Plan. Section 1.1 of the Amended Credit Agreement contained the following
definitional statement:

                                           12
      Business Plan means the projections for the period from the date hereof
      through May 31, 1994 prepared by Borrower and delivered to Lender
      prior to the date hereof, including the assumptions used in preparing such
      projections, provided that such projections may be amended and
      supplemented . . . by agreement of Borrower and Lender if the volume of
      production required (or anticipated to be required) by Lender is different
      from the volume assumed to be required in such projections.

American Winery claims that this provision obligated Clearly Canadian to order the
amount of production projected in the Business Plan unless American Winery expressly
consented to a change in the projections.

       We disagree. The cooperative preparation of projections between vendor and
vendee is a normal function of business. Section 1.1 confirms the cooperative nature
of that endeavor by a plain statement that the Business Plan projections could not be
amended without the agreement of American Winery. Section 1.1 does not purport to
obligate Clearly Canadian to actually order production from American Winery in an
amount equal to the Business Plan projections. Nor is there any ambiguous language2
that reasonably could be interpreted to place such a duty on Clearly Canadian. See
Halls Ferry Inv., Inc. v. Smith, 985 S.W.2d 848, 853 (Mo. Ct. App. 1998) (“While the
lease failed to state that no such obligation existed, an ambiguity cannot be created by
silence, especially when both parties are sophisticated bargainers.”).

      Notwithstanding Section 1.1’s plain language, American Winery argues that such
a construction would effectively render the provision meaningless. American Winery

      2
         “A contract is ambiguous only if its terms are susceptible of more than one
meaning so that reasonable [persons] may fairly and honestly differ in their construction
of the terms. If there is no ambiguity, the court need not resort to construction of the
contract, but rather the intent of the parties is determined from the four corners of the
contract.” Eisenberg v. Redd, 38 S.W.3d 409, 411 (Mo. 2001) (en banc) (alteration
in original; citations and quotation marks omitted).
                                           13
correctly notes that a construction that renders a provision without meaning is to be
avoided where another reasonable construction exists. See JEP Enter., Inc. v.
Wehrenberg, 42 S.W.3d 773, 776 (Mo. Ct. App. 2001) (“A construction attributing a
reasonable meaning to each phrase and clause, and harmonizing all provisions of the
agreement is . . . preferred to one that leaves some of the provisions without function
or sense.”). Because parties rarely include meaningless provisions in their contracts,
this rule of construction is really a corollary to the “cardinal rule” that a court “is to
determine the intention of the parties and to give effect to that intention.” In re
Marriage of Thompson, 27 S.W.3d 502, 506 (Mo. Ct. App. 2000). However, a court
should not attempt to impose a meaning on a provision that may not be borne by the
plain language of the provision. Cf. Peet v. Randolph, 33 S.W.3d 614, 618 (Mo. Ct.
App. 2001) (“It is presumed the parties’ intent is expressed by the natural and ordinary
meaning of the language in the contract.”).

       If American Winery had desired to assure itself that Clearly Canadian would
actually order production in an amount equal to the Business Plan projections,
American Winery could have so bargained. Indeed, other Clearly Canadian co-packers
did negotiate “take or pay” provisions in their agreements with Clearly Canadian,
pursuant to which Clearly Canadian agreed to bottle a specified minimum amount of
product with the co-packer. This court will not construe an unambiguous contract to
contain a “take or pay” provision where the parties chose not to include such a
provision.

      American Winery next contends that even if Clearly Canadian did not bind itself
in Section 1.1 to order production from American Winery in an amount equal to the
Business Plan projections, Clearly Canadian did so obligate itself through its
correspondence with American Winery in 1992. However, it is well established that

      [e]xtrinsic evidence of a prior or contemporaneous agreement is generally
      not admissible to vary, add to, or contradict the terms of an unambiguous

                                           14
      and complete written document, nor may such parol evidence be used to
      create ambiguity in an otherwise unambiguous document. The parol
      evidence rule is a rule of substantive law and not a mere rule of evidence.
      Evidence offered in violation of it must be ignored. The law conclusively
      presumes all prior and contemporaneous agreements have been merged
      into an unambiguous written contract, which becomes the final memorial
      of the agreement.

Union Elec. Co. v. Fundways, Ltd., 886 S.W.2d 169, 170 (Mo. Ct. App. 1994)
(citations omitted).

       In an attempt to avoid the bar against parol evidence, American Winery argues
that the aforementioned correspondence constituted independent, separate agreements
obligating Clearly Canadian to supply American Winery with specified levels of
production. In support, American Winery points to this court’s statement in C.L.
Maddox, Inc. v. Benham Group, Inc., 88 F.3d 592 (8th Cir. 1996) that “evidence of an
oral agreement that is an independent and separate agreement will not be barred by the
parol evidence rule, provided that the oral agreement is not inherently in conflict with
the written agreement.” Id. at 599 (applying Missouri law). However, C.L. Maddox
is readily distinguishable from the instant case. In C.L. Maddox, this court stated that
“[w]here the parties bargain for a contract, payment on that contract is made, and the
contract is fully performed, we have little difficulty in concluding that the parties
intended this interaction to constitute a separate contract.” Id. at 600. In contrast, the
correspondence in this case purportedly obligates Clearly Canadian to order certain
levels of production in the future from American Winery.

    In addition, the alleged oral agreement would inherently conflict with the
Amended Credit Agreement. The Amended Credit Agreement is an unambiguous and

                                           15
complete written document containing a standard integration clause.3 Through the
integration clause, the parties agreed that the Amended Credit Agreement constituted
the sole and final agreement of the parties. See Frisella v. RVB Corp., 979 S.W.2d
474, 477 (Mo. Ct. App. 1998) (“An integration clause generally confirms the all-
inclusive nature of the document.”). As such, any representations made by Clearly
Canadian prior to the execution of the Amended Credit Agreement were not integrated
into the Amended Credit Agreement and had no binding effect on Clearly Canadian.
Cf. Union Elec. Co., 886 S.W.2d at 170-71 (“The parol evidence rule is particularly
applicable in situations like this where the writing contains an integration clause and
requires any additions to or alterations in the contract to be in writing and signed by
both parties.”) (emphasis omitted).

      Finally, American Winery argues that even if Clearly Canadian was not
contractually obligated to order specific levels of production from American Winery,
American Winery should, nevertheless, be afforded relief under a promissory estoppel
theory. However, promissory estoppel cannot be used to create rights not included in
the contract. See Halls Ferry Inv., Inc., 985 S.W.2d at 853 (“Promissory estoppel
cannot be used to engraft a promise on the [contract] that is different from the written
terms of the [contract].”). Because this court has found the Amended Credit
Agreement unambiguous, American Winery may not use a promissory estoppel theory
to expand upon Clearly Canadian’s obligations contained therein.

      3
         Section 10.9 of the Amended Credit Agreement states as follows: “Entire
Agreement. This Agreement constitutes the entire agreement among the parties
pertaining to the subject matter hereof and supersedes all prior agreements and
understandings of the parties, whether oral or written.”
                                          16
B. American Winery’s Fraud Claims

       American Winery next asserts that the district court erred in granting summary
judgment in favor of Clearly Canadian on American Winery’s fraud defenses and
counterclaim. Arguing that even if Clearly Canadian was not contractually obligated
to order production from American Winery in an amount equal to the Business Plan
projections, Clearly Canadian made fraudulent misrepresentations regarding its intent
to do so.

      The elements of a submissible case of fraudulent misrepresentation are:
      (1) a false, material representation; (2) the speaker’s knowledge of its
      falsity or his ignorance of its truth; (3) the speaker’s intent that it should
      be acted upon by the hearer in the manner reasonably contemplated; (4)
      the hearer’s ignorance of its falsity; (5) the hearer’s reliance on its truth;
      (6) the hearer’s right to rely thereon; and (7) the hearer’s consequent and
      proximately caused injury.

Ziglin v. Players MH, L.P., 36 S.W.3d 786, 791 (Mo. Ct. App. 2001). As the Missouri
Supreme Court explained in Bank of Kirksville v. Small, 742 S.W.2d 127 (Mo. 1987)
(en banc), “[f]raud may be established by circumstantial evidence; however, it may not
be presumed, and a party’s case will fail if he can show only facts and circumstances
which are equally consistent with honesty and good faith.” Id. at 131.
Nonperformance, without more, does not make out a submissible case of fraudulent
misrepresentation. See id. at 132 (“A mere failure of performance does not establish
knowledge or intent of the speaker to defraud, nor does it shift the burden of proof.”).
In order to avoid summary judgment on its fraud defenses and counterclaim, American
Winery was required to introduce evidence to establish each of the seven elements.
See id. at 131.

       Viewing the evidence in the light most favorable to American Winery, the district
court concluded that even if Clearly Canadian had represented to American Winery that

                                           17
it would order production in the amounts equal to the Business Plan projections,
American Winery had presented no evidence that Clearly Canadian made this
representation knowing that it was false at the time it was made. Disagreeing with the
district court’s assessment of the record, American Winery points to two pieces of
evidence which it believes establishes that Clearly Canadian knew its representation
was false at the time it was made.

       American Winery first points to the deposition testimony of Clearly Canadian’s
Senior Vice President, Stuart Ross. Ross testified that the final decisions regarding the
allocation of production to its co-packers were not necessarily made on the basis of the
Business Plan projections, but, rather, on logistical concerns. Based on this testimony,
American Winery contends that Clearly Canadian knew that any representations
regarding the future ordering of production at American Winery were false because
Clearly Canadian knew that such decisions would ultimately be made on the basis of
logistical considerations.

       The second piece of evidence to which American Winery cites is Clearly
Canadian’s decision in 1991 to shift some production from American Winery to two
new co-packers. American Winery claims that retaining two new co-packers and
shifting some production from American Winery to the new co-packers indicates that
Clearly Canadian knew that its representations regarding the future ordering of
production from American Winery were false.

      We disagree. It is undisputed that in 1992 when Clearly Canadian allegedly
made its representations regarding the ordering of future production from American
Winery, Clearly Canadian believed that the demand for its product would continue to
increase dramatically as it had over the four previous years. It is also undisputed that
American Winery did not have adequate capacity in 1991 to bottle as much product as
Clearly Canadian projected it would need, requiring Clearly Canadian to contract with
other bottlers to meet its anticipated needs. In 1991 and 1992, Clearly Canadian

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regularly shifted business from one bottler to another to meet increasing demand and
to match bottlers with distributors in ways that were logistically sensible. Despite this
shifting of orders, Clearly Canadian ordered from American Winery at least as many
cases as it could produce until demand for Clearly Canadian’s products dropped in late
1992.

        All the evidence indicates that in 1992 Clearly Canadian fully expected to keep
all of its co-packers, including American Winery, very busy for the foreseeable future.
Accordingly, American Winery has failed to adduce evidence that Clearly Canadian
made false representations regarding its then present intent to order certain amounts of
production from American Winery in the future. American Winery’s failure to establish
an essential fraud element entitled Clearly Canadian to summary judgment on American
Winery’s fraud defenses and counterclaim.

        Additionally, it is undisputed that American Winery failed to pay the promissory
note according to its terms. Because American Winery has failed to establish a defense
to its obligations under the promissory note, Clearly Canadian was entitled to summary
judgment on the note.

C. Rand’s Fraudulent Misrepresentation and Negligent Misrepresentation
Claims

       Arguing that Clearly Canadian either fraudulently or negligently represented to
Rand that it would purchase American Winery so long as Rand kept the business
financially viable, Rand asserts that the district court erred in granting summary
judgment in favor of Clearly Canadian on Rand’s fraudulent misrepresentation and
negligent misrepresentation claims.

      In support of his fraudulent misrepresentation claim, Rand alleges that he
presented evidence to the district court that Clearly Canadian had concocted an

                                           19
elaborate scheme to avoid writing off the approximately $2.1 million dollars it had
loaned to American Winery. Namely, Rand claims that Clearly Canadian told him it
intended to purchase American Winery in the future if Rand continued to invest in
American Winery. Rand alleges that Clearly Canadian made these statements solely
for the purpose of convincing its auditors that it need not write off the American
Winery loans because Rand was committed to, and continuing to invest in, American
Winery. Rand primarily points to two statements Clearly Canadian made to its auditors
in March 1995:

      We are in the process of re-negotiating the Credit Agreement. We have
      left it in abeyance to give us an advantage in our negotiations with the
      principals of [American Winery] to acquire the bottling plant. We have
      made the decision recently to discontinue our attempt to purchase
      [American Winery’s] plant and will therefore move forward in our
      negotiation toward a new Credit Agreement and bottling contract.

In April 1996, Clearly Canadian further informed its auditors that it “prefer[red] not to
take over [American Winery] because they [sic] do not want to be in the bottling
business.”

        However, as the Missouri Supreme Court has noted, “a party’s [fraud] case will
fail if he can show only facts and circumstances which are equally consistent with
honesty and good faith.” Bank of Kirksville, 742 S.W.2d at 131. Far from establishing
a fraudulent intent on the part of Clearly Canadian, these statements merely show that
Clearly Canadian vacillated in its intention to purchase American Winery. The March
1995 statement indicates that Clearly Canadian had just “recently” decided not to
purchase American Winery. This indicates that Clearly Canadian had previously
intended to purchase American Winery. Just as Clearly Canadian had changed its
strategy in March 1995 regarding the purchase of American Winery, it could reverse
this decision in the future. Indeed, Clearly Canadian made three separate offers in 1996
and 1997 to acquire American Winery. Although Rand rejected all three offers after

                                           20
consulting with other American Winery shareholders, Rand considered these offers to
be “serious” and “sincere” at the time. Nor is there any evidence that Clearly Canadian
would not have followed through had Rand accepted any of the offers.

        Additionally, the fact that Clearly Canadian stated in April 1996 that it
“prefer[red] not to take over [American Winery] because they [sic] do not want to be
in the bottling business” has no bearing on whether Clearly Canadian actually intended
to purchase American Winery. This statement merely indicates that Clearly Canadian
would prefer not to purchase American Winery, not that Clearly Canadian had no
intention of purchasing American Winery.

      Rand does not claim Clearly Canadian ever suggested it would purchase
American Winery no matter the cost. Nor does Rand claim Clearly Canadian told him
it would purchase American Winery by any date certain. Accordingly, Rand’s
fraudulent misrepresentation claim fails for the same reason as did American Winery’s
fraudulent misrepresentation claim: Rand has adduced no evidence suggesting that
Clearly Canadian’s representations regarding its then present intent to take certain
actions in the future were false when made.

     Rand next argues that even if the district court properly entered summary
judgment on his fraudulent misrepresentation claim, the district court erred in entering
summary judgment on his negligent misrepresentation claim.

      A cause of action for negligent misrepresentation requires proof that: (1)
      the speaker supplied information in the course of his or her business
      because of some pecuniary interest; (2) due to the speaker’s failure to
      exercise reasonable care or competence in obtaining or communicating
      this information, the information was false; (3) the speaker intentionally
      provided information for the guidance of a limited group of persons in a
      particular business transaction; (4) the listener justifiably relied on the
      information; and (5) as a result of the listener’s reliance on the statement,

                                           21
       the listener suffered a pecuniary loss. A negligent misrepresentation claim
       is premised upon the theory that the speaker believed that the information
       supplied was correct, but was negligent in so believing. Failure to prove
       any one of the five elements of negligent misrepresentation defeats a
       litigant’s claim.

M&H Enter. v. Tri-State Delta Chem., Inc., 35 S.W.3d 899, 904 (Mo. Ct. App. 2001)
(citations and quotation marks omitted). Rand asserts he presented sufficient evidence
to satisfy all five elements of his negligent misrepresentation claim.

       We disagree. In Missouri, “a negligent misrepresentation claim cannot arise
from a statement regarding the speaker’s future intent.” Hoag v. McBride & Son Inv.
Co., 967 S.W.2d 157, 174 (Mo. Ct. App. 1998) (citing Jacobs Mfg. Co. v. Sam Brown
Co., 792 F. Supp. 1520, 1528 (W.D. Mo. 1992) (aff’d in part and rev’d in part, 19 F.3d
1259 (8th Cir. 1994)). A claim does not lie for negligent misrepresentation of a
speaker’s future intent because “it is impossible to be negligent in failing to ascertain
the truth or falsity of one’s own future intentions. Even if the speaker is merely
uncertain regarding the truth of the statement of future intention, the statement is
fraudulent rather than negligent because the speaker is ignorant of the statement’s
truth.” Id. (citation omitted). Because Rand, in effect, alleges that Clearly Canadian
was negligent in believing that it would purchase American Winery at some
undetermined point in the future for some unknown price, Rand’s negligent
misrepresentation claim must fail under Missouri law.

D. Clearly Canadian’s and the Bank’s Security Interests

        The Bank argues that the district court erred in two respects in ruling that Clearly
Canadian’s lien was superior to the Bank’s in the Amended Agreement Collateral.
First, the Bank alleges that the district court’s summary judgment ruling granting
Clearly Canadian a priority security interest with respect to the Amended Agreement
Collateral is erroneous on the merits. Second, the Bank contends that the district

                                            22
court’s summary judgment order is procedurally unsound because the bank was not
given the opportunity to present its arguments prior to the order being entered. We
shall first examine the Banks’s contention that the district court’s summary judgment
ruling was legally erroneous.

       As explained previously, the Bank loaned money to American Winery in 1985,
1988, and 1990. In exchange, American Winery granted the Bank a blanket security
interest in all its assets, including all of its current and after-acquired equipment. In
1991, Clearly Canadian obtained a security interest in certain American Winery assets.
Pursuant to the Credit Agreement, Clearly Canadian received a security interest in
American Winery*s assets described as follows in Section 5.1 of the Credit Agreement:

      all equipment, spare parts, supplies and other goods acquired with the
      proceeds of [Clearly Canadian’s] Facility A Loans (it being understood
      and agreed that all equipment, spare parts, supplies and other goods
      acquired by the Borrower after the date hereof shall be deemed to have
      been acquired with proceeds of the Facility A Loans absent a final and
      conclusive finding by the Bankruptcy Court to the contrary), and all
      attachments, substitutions, replacements and improvements thereto and
      therefor. . ., all general intangibles relating thereto . . . and all proceeds
      and products of all of the foregoing. . . .

The Bankruptcy Court approved the Credit Agreement, and entered an order granting
Clearly Canadian a security interest in all “equipment, spare parts, supplies and other
goods acquired with the proceeds of [Clearly Canadian’s] Facility A Loans. . . .”

       In May 1992, Clearly Canadian and American Winery entered into an Amended
Credit Agreement which purported to provide Clearly Canadian with a security interest
extending to virtually all of American Winery*s property, except for certain property
that had already been purchased with the Bank*s money. Specifically, the security
interest is described in Section 5.1 of the Amended Credit Agreement as extending to:

                                           23
      (i) all of [American Winery*s] equipment, spare parts, and supplies,
      excluding the Bank Equipment, (ii) all other goods acquired with proceeds
      of the Loan, (iii) all attachments, substitutions, replacements and
      improvements for any of the foregoing, (iv) all general intangibles relating
      to any of the foregoing (including without limitation all warranty claims
      and insurance contracts with respect thereto), and (v) all proceeds and
      products of all the foregoing. . . .

The Bank Equipment described in the Agreement included all equipment as to which
the Bank had a valid security interest that was perfected before confirmation of
American Winery*s reorganization plan. In effect, therefore, the Amended Credit
Agreement granted Clearly Canadian a security interest in a broad range of American
Winery equipment (with the exception of the narrowly defined Bank Equipment)
beyond that equipment which had been purchased with the proceeds of Clearly
Canadian’s loans.

     Two months later, the Bank executed a “Waiver of Interest.” Through this
document, the Bank expressly waived any interest it might have in American Winery*s

      (i) equipment, spare parts, supplies and other goods acquired with the
      proceeds of loans made to Debtor by [Clearly Canadian] (hereafter the
      “Clearly Related Equipment”, which excludes, however, any equipment,
      spare parts or supplies as to which Bank had a valid, perfected security
      interest upon confirmation of Debtor’s plan of reorganization as filed in
      the United States Bankruptcy Court . . .); (ii) all attachments,
      substitutions, replacements and improvements for any of the Clearly
      Related Equipment; (iii) all warranty claims, insurance contracts and other
      general intangibles relating to the foregoing; and (iv) all products and
      proceeds of the foregoing.

      The Bank argues that the district court’s summary judgment ruling granting
Clearly Canadian a priority security interest with respect to the Amended Agreement
Collateral is without support in the record. We agree.

                                          24
       The bankruptcy court’s final order approving the 1991 Credit Agreement
between Clearly Canadian and American Winery gave Clearly Canadian a senior lien
only with respect to “equipment purchased with [Clearly Canadian’s] Facility A loan
funds and property traceable to the funds.” The bankruptcy court’s order expressly
affirmed that (1) the Bank retained its blanket lien on American Winery’s equipment,
including after-acquired equipment, (2) the bank’s lien was not limited to the equipment
specifically listed in American Winery’s reorganization plan, and (3) such blanket lien
survived the bankruptcy proceedings. There is no suggestion in the bankruptcy court’s
order that the Bank’s lien was to be subordinated to Clearly Canadian’s lien with
respect to any equipment not purchased with Clearly Canadian’s Facility A loan.

       As for the Bank’s Waiver of Interest, the Bank only waived any interest it might
have in American Winery equipment “acquired with the proceeds of loans made to
debtor by Clearly Canadian. . . .” Thus, rather than affirmatively defining the Bank’s
security interest in American Winery assets, the Waiver merely described certain of
American Winery assets that the Bank was disclaiming all interest in. To the extent the
district court used the Waiver to determine which equipment (not addressed therein)
the Bank retained an interest in, said use was error.

       Notwithstanding the fact that the Amended Credit Agreement is nowhere
referenced in the Waiver, Clearly Canadian argues that the Waiver and the Amended
Credit Agreement (to which the Bank was not a party) should be “read together” to
cover the same equipment. We decline Clearly Canadian’s invitation to expansively
construe the Waiver by looking outside the four corners of the Waiver.

       Rather than “expansively” construe the language of the Waiver, we must give
the language of the Waiver its normal and ordinary meaning. Cf. Robbins v.
McDonnell Douglas Corp., 27 S.W.3d 491, 496 (Mo. Ct. App. 2000) (“To ascertain
the intent of the parties to an unambiguous contract, we give the language used its
natural, ordinary, and common sense meaning. . . .”). We need not look outside the

                                          25
Waiver to determine the intent of the parties because the language of the Waiver is
unambiguous. Cf. id. (“If a contract is not ambiguous, i.e., when the contract terms are
unequivocal, plain, and clear, the intent of the parties is determined from the contract
alone and the court is bound to enforce the contract as written.”). In addition, the
Waiver and the Amended Credit Agreement may not be construed together under the
law of Missouri because they were executed nearly two months apart and so construing
the Waiver would frustrate the intent of the parties. See Greenberg v. Dowdy, 930
S.W.2d 512, 514 (Mo. Ct. App. 1996) (“Several instruments made at the same time,
and relating to the same subject matter may be read together as one contract. This rule
is employed only for the purpose of giving effect to the intention of the parties and is
not applied arbitrarily and without regard to the realities of the situation.”) (emphasis
in original; citation omitted).

       The district court’s conclusion that Clearly Canadian had priority over the Bank
as a matter of law with respect to the Amended Agreement Collateral is without
support in the summary judgment record. Neither the bankruptcy court’s order nor the
Bank’s Waiver of Interest supports such conclusion. There is no other basis from
which to conclude that Clearly Canadian had such a sweeping priority. Therefore, to
the extent the district court concluded as a matter of law that Clearly Canadian had
priority over the Bank with respect to equipment not purchased with Clearly Canadian
loan proceeds, said judgment is reversed. Because the district court’s summary
judgment order granting Clearly Canadian a priority security interest with respect to the
Amended Agreement Collateral is reversed, we need not consider the Bank’s
procedural complaint regarding the summary judgment order.

                                 III. CONCLUSION

      The district court’s Final Judgment and Order of Replevin is affirmed in all
respects with the exception of its conclusion regarding the security interests of the Bank

                                           26
via-á-vis Clearly Canadian. Accordingly, the district court’s grant of summary
judgment in favor of Clearly Canadian with respect to its priority in the Amended
Agreement Collateral is reversed and the case remanded for further proceedings
consistent with this opinion.

      A true copy.

            Attest:

                     CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.

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