Court Opinion

ID: 2791022
Source: CourtListenerOpinion
Date Created: 2015-04-02 15:05:19.6948+00
Date Added: 2024-06-11T11:10:51.867746
License: Public Domain

State of New York
                   Supreme Court, Appellate Division
                      Third Judicial Department
Decided and Entered: April 2, 2015                     519567
________________________________

COCA-COLA REFRESHMENTS, USA,
   INC., Formerly Known as
   COCA-COLA ENTERPRISES, INC.,
                    Respondent,
      v                                     MEMORANDUM AND ORDER

BINGHAMTON GIANT MARKETS, INC.,
   Doing Business as BINGHAMTON
   GIANT MARKETS,
                    Appellant.
________________________________

Calendar Date:   February 10, 2015

Before:   Lahtinen, J.P., Garry, Lynch and Devine, JJ.

                             __________

      Hinman, Howard & Kattell LLP, Binghamton (Dennis P. Sheehan
of counsel), for appellant.

      Ganz Wolkenbreit & Siegfeld, Albany (Matthew M. Zapala of
counsel), for respondent.

                             __________

Garry, J.

      Appeal from an order of the Supreme Court (Cerio Jr., J.),
entered October 17, 2013 in Broome County, which, upon renewal,
denied defendant's motion for, among other things, summary
judgment dismissing the complaint.

      Beginning in the 1930s, defendant operated a chain of
grocery stores in Broome County. For approximately 70 years,
plaintiff and defendant enjoyed a successful business
relationship whereby defendant regularly purchased products from
plaintiff to be sold in defendant's stores. However, the parties
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never formalized the terms of their relationship in a contract.
In August 2009, defendant sold its grocery operations to another
company. After defendant tendered its final payment of all
amounts due to plaintiff, plaintiff claimed that there was a
balance remaining in the sum of approximately $10,000; defendant
disagreed and provided documentation and, in February 2010,
plaintiff reduced the claimed amount to about $6,000.
Thereafter, in July 2010, plaintiff sent a collection letter
claiming that the amount owed was approximately $53,000 and, in
November 2010, increased the claim to roughly $69,000.

      Defendant refused to pay and, in February 2011, plaintiff
commenced this action asserting claims for breach of contract and
account stated. Defendant moved, as pertinent here, for summary
judgment dismissing the complaint, and Supreme Court denied the
motion. Following discovery, defendant moved to renew its prior
motion. The court granted the motion for renewal, but denied the
underlying summary judgment motion. Defendant appeals.

      Initially, we agree with defendant that plaintiff's claim
for an account stated is without merit. "An account stated is an
agreement between parties to an account based upon prior
transactions between them with respect to the correctness of the
account items and balance due" (Whiteman, Osterman & Hanna, LLP v
Oppitz, 105 AD3d 1162, 1163 [2013] [internal quotation marks and
citations omitted]). Here, it is undisputed that the parties
never reached such an agreement. Plaintiff did not oppose
defendant's request for dismissal of this claim in Supreme Court
and made no related arguments on this appeal. Accordingly,
defendant is entitled to summary judgment dismissing this cause
of action (see M & A Constr. Corp. v McTague, 21 AD3d 610, 611-
612 [2005]; Joe O'Brien Investigations v Zorn, 263 AD2d 812, 815
[1999]).

      As for the breach of contract claim, an implied contract
exists when the parties have not entered into an express
contract, but their course of conduct indicates that they have
reached a meeting of the minds that is sufficient to constitute
an enforceable contract (see DG & A Mgt. Servs., LLC v Securities
Indus. Assn. Compliance & Legal Div., 52 AD3d 922, 923 [2008];
Berlinger v Lisi, 288 AD2d 523, 524 [2001]). A contract may be
                              -3-                519567

implied "as an inference from the facts and circumstances of [a]
case, although not formally stated in words, and is derived from
the presumed intention of the parties as indicated by their
conduct" (Jemzura v Jemzura, 36 NY2d 496, 503-504 [1975]
[internal quotation marks and citations omitted]; see Matter of
Pache v Aviation Volunteer Fire Co., 20 AD3d 731, 732-733 [2005],
lv denied 6 NY3d 705 [2006]). Here, the parties agree that they
had a longstanding implied contract, but disagree as to whether
the terms of this agreement included the amounts that plaintiff
now seeks to collect. Plaintiff asserts that these amounts
represent debts resulting from systematic underpayments by
defendant dating back to 2006. However, defendant contends that
it was the parties' longstanding practice to resolve payment
disputes shortly after each payment came due, and that plaintiff
gave defendant no reason to believe that any such disagreements
were not resolved or that any charges remained outstanding.

      In support of its summary judgment motion, defendant
submitted the affidavits and deposition testimony of several
executives and employees who participated in the parties'
relationship. This evidence establishes that, for many years,
the parties' representatives held weekly meetings in which they
agreed upon that week's prices, which were then recorded in
defendant's accounting systems. Upon each delivery, defendant
compared its price records to plaintiff's invoices, advised
plaintiff of any discrepancies and, when differences existed,
paid the lesser of the two amounts pending later reconciliation.
According to both parties, this initial payment of the lesser
amount is a standard industry practice. The parties then
corrected any discrepancies through a reconciliation process by
which plaintiff provided defendant with monthly statements
itemizing current invoices and prior charges that remained in
question. Defendant's accounting personnel investigated
discrepancies, annotated the statements to reflect adjustments,
and returned the statements to plaintiff with payment. According
to defendant, plaintiff routinely accepted these payments without
objection and later removed the charges from its statements,
after which defendant believed that any related disputes had been
resolved. Throughout the parties' relationship, plaintiff never
sought payment for any charges that had been removed from its
statements following this process, never advised defendant that
                              -4-                519567

it believed any such charges remained outstanding, and never
informed defendant that it considered any charges to be owed
other than those appearing on the monthly statements. This
showing was sufficient to demonstrate on a prima facie basis that
the intention of the parties pursuant to their implied contract,
as revealed by their conduct (see Jemzura v Jemzura, 36 NY2d at
503-504), was to resolve price disagreements on an ongoing basis
based upon the monthly statements and that all such disagreements
were resolved. Accordingly, defendant met its prima facie burden
to demonstrate its entitlement to judgment as a matter of law on
the breach of contract claim, thus shifting the burden to
plaintiff to demonstrate that material issues of fact require a
trial.

      Plaintiff's claims are based primarily on the testimony of
Shaun Harris, a collection process administrator who based his
testimony on a record review and had no personal knowledge of the
parties' business relationship. Harris stated that the removal
of a charge from plaintiff's monthly statements did not indicate
that the charge had been satisfied. Instead, as a matter of
policy, plaintiff permanently removed all charges from its
statements nine months after they came due. Plaintiff then
recorded any charges that it believed were still outstanding in a
private internal ledger, and now seeks to recover from defendant
the charges contained in this ledger. However, Harris testified
that, as a matter of policy, plaintiff never advised defendant –
or any other customer – that the ledger existed, nor did it
inform defendant that it routinely removed charges from its
statements even when it still considered them to be outstanding.
Harris claimed that, under plaintiff's general business practice,
defendant should have been informed of all outstanding charges
through "rebill packages."1 However, no records that would
confirm whether this occurred now exist, as plaintiff discarded

    1
        Logs of communications between the parties' accounting
personnel confirm that such rebill packages existed, but do not
reveal their contents. Notably, these logs – which cover several
years – include no indication that plaintiff ever advised
defendant of a cumulative debt based on past charges or that it
believed that defendant was making systematic underpayments.
                              -5-                519567

its copies of the rebill packages when it switched to an
electronic record-keeping system.

      The only witnesses for plaintiff who had personal knowledge
of the parties' relationship – a sales manager and a sales
representative – provided no support for plaintiff's position
that defendant accumulated an outstanding debt. Both stated that
they were unaware of any payment problems, pricing issues or
outstanding charges while working on the account. The sales
representative stated that he routinely reviewed the parties'
records and any disputed invoices to ascertain that agreed-upon
prices were billed and paid, that any errors he discovered were
corrected, and that, to his knowledge, no debts remained
outstanding when he stopped servicing the account. He understood
that plaintiff's monthly statements fully reflected all
outstanding charges, and was not aware that plaintiff had any
other process for recording or collecting indebtedness.

      Although plaintiff now contends that it never deemed the
charges listed in its ledger to be resolved or intended to
discharge defendant from liability for them, "[w]hether a
contract has been formed does not depend on either party's
subjective intent; instead, the determination must be based on
'the objective manifestations of the intent of the parties as
gathered by their expressed words and deeds'" (Brighton Inv.,
Ltd. v Har-Zvi, 88 AD3d 1220, 1222 [2011], quoting Brown Bros.
Elec. Contrs. v Beam Constr. Corp., 41 NY2d 397, 399 [1977]).
Plaintiff's private ledger cannot constitute such an objective
manifestation of intent, as plaintiff concealed the ledger's
existence from defendant until after their relationship ended.
No other evidence in the record reveals that plaintiff manifested
an intent to collect additional charges after it had accepted
payments and removed the charges from its monthly statements, and
as defendant had no reason to believe that plaintiff had this
intent, it cannot be inferred that there was any mutual assent
(see Maas v Cornell Univ., 94 NY2d 87, 93-94 [1999]; Restatement
[Second] of Contracts [Formation of Contracts] § 19 [b]).
Moreover, the record is devoid of any evidence that plaintiff
ever challenged defendant's payments on the ground that it had
systematically failed to pay the agreed-upon price, nor is there
any evidence that the allegedly unpaid charges listed in
                              -6-                519567

plaintiff's internal ledger resulted from such failures.

      Plaintiff's contentions on appeal are largely based on
alleged flaws in defendant's reconciliation procedures. However,
the record includes no indication that plaintiff objected to
these procedures during the life of the parties' relationship.
This failure to raise timely objections supports defendant's
contention that both parties relied upon the reconciliation
process and deemed any disputes to be resolved once that process
was complete. Plaintiff's behavior in discarding the rebill
packages that provided the only documentary support for its
current claim that defendant should have known that the charges
remained outstanding is inconsistent with its claim that it
intended to collect these charges, as is its failure to inform
defendant that it had any such intention until many months after
the relationship ended. Further, plaintiff submitted no evidence
that it ever objected to defendant's practice of paying the
lesser price upon delivery and later resolving any differences.
Plaintiff's conduct in accepting the practice without objection
throughout the relationship is inconsistent with its current
claim that it never affirmatively consented to the practice, as
is its admission that the practice is standard in the industry.

      In short, the uncontradicted evidence reveals that,
throughout the relationship, both parties treated all pricing
disputes as resolved after plaintiff accepted payment and removed
the charges from its statements. Plaintiff put forward no
admissible evidence giving rise to issues of fact as to whether
defendant was on notice that plaintiff considered any charges to
be outstanding after this process was complete, or that defendant
agreed, explicitly or implicitly, that it was liable for them.
Thus, defendant established as a matter of law that there was no
breach of contract, and its motion for summary judgment
dismissing the cause of action for breach of contract should have
been granted (see Yankee Lake Preserv. Assn., Inc. v Stein, 68
AD3d 1603, 1604-1605 [2009], lv denied 15 NY3d 706 [2010];
compare Brighton Inv., Ltd. v Har-zvi, 88 AD3d at 1223).

      Defendant's remaining contentions are rendered academic by
this determination.
                              -7-                  519567

     Lahtinen, J.P., Lynch and Devine, JJ., concur.

      ORDERED that the order is reversed, on the law, without
costs, motion granted, summary judgment awarded to defendant and
complaint dismissed.

                             ENTER:

                             Robert D. Mayberger
                             Clerk of the Court