Court Opinion

ID: 2818770
Source: CourtListenerOpinion
Date Created: 2015-07-21 17:01:12.546888+00
Date Added: 2024-06-11T12:30:49.969496
License: Public Domain

NOT PRECEDENTIAL

                       UNITED STATES COURT OF APPEALS
                            FOR THE THIRD CIRCUIT
                                 ____________

                                       No. 14-3470
                                      ____________

     DERRICK J. JOHNSON; F & J HOLDINGS, INC.; CHARLES THOMPSON,
                                                        Appellants

             PITTSBURGH BAKER’S DOZEN, INC.; EDWARD GANDY
                         (Intervenors in District Court)

                                             v.

                      DUNKIN’ DONUTS FRANCHISING, L.L.C.,
                     a/k/a Dunkin’ Brands, Inc., a/k/a Dunkin’ Donuts
                                     ____________

                     On Appeal from the United States District Court
                        for the Western District of Pennsylvania
                                (D.C. No. 2-11-cv-01117)
                       District Judge: Honorable Nora B. Fischer
                                     ____________

                       Submitted Under Third Circuit LAR 34.1(a)
                                     May 1, 2015

               Before: FISHER, HARDIMAN and ROTH, Circuit Judges.

                                   (Filed: July 21, 2015)
                                       ____________

                                        OPINION*
                                      ____________

       *
        This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7 does
not constitute binding precedent.
HARDIMAN, Circuit Judge.

       This appeal is taken from the District Court’s summary judgment in favor of

Dunkin’ Donuts. We will affirm, essentially for the reasons stated by the District Court.

                                             I

       The facts of this case are explained in the District Court’s thorough opinion. In

brief, Dunkin’ Donuts began discussions in 2006 with Pittsburgh Baker’s Dozen, Inc.

(PBD) and its consultant, Charles Thompson, to build a Pittsburgh-area bakery to supply

fresh baked goods to potential Dunkin’ franchisees. When concerns arose about PBD’s

ability to house and fund the bakery, Derrick Johnson, another PBD consultant, helped

form F&J Holdings, Inc. to take PBD’s place in the negotiations. The bakery project

moved forward with Thompson, Johnson, and F&J (collectively, Plaintiffs) taking a more

active role.

       In August 2007, however, Dunkin’ told Thompson that it had developed a new

frozen donut technology that would render the Pittsburgh bakery project kaput. Plaintiffs

sued Dunkin’ for damages in the District Court, alleging, among other things, promissory

estoppel. The Court granted summary judgment for Dunkin’, and all Plaintiffs except

PBD appealed.1

       1
        The District Court had diversity jurisdiction under 28 U.S.C. § 1332, and we
have jurisdiction under 28 U.S.C. § 1291.

                                             2
                                             II

       We exercise plenary review over the District Court’s summary judgment and apply

the same standard it did. Blunt v. Lower Merion Sch. Dist., 767 F.3d 247, 265 (3d Cir.

2014). In doing so, we review the record in the light most favorable to the nonmovant, id.,

affirming summary judgment if there is no genuine dispute as to any material fact and the

movant is entitled to judgment as a matter of law, Fed. R. Civ. P. 56(a).

                                             III

       Plaintiffs proffer two arguments in this appeal. Their principal claim is that the

District Court erred in determining that no reasonable jury could find that they reasonably

relied on Dunkin’s promises and inducements. To bring a promissory estoppel claim

under Pennsylvania law, a plaintiff must show that “1) the promisor made a promise that

he should have reasonably expected to induce action or forbearance on the part of the

promisee; 2) the promisee actually took action or refrained from taking action in reliance

on the promise; and 3) injustice can be avoided only by enforcing the promise.” Luther v.

Kia Motors Am., Inc., 676 F. Supp. 2d 408, 421 (W.D. Pa. 2009) (citing Crouse v.

Cyclops Indus., 745 A.2d 606, 610 (Pa. 2000)). For the first prong, “the promisor must

have an objectively reasonable belief that a purported promise will induce action by the

promisee.” Burton Imaging Grp. v. Toys “R” Us, Inc., 502 F. Supp. 2d 434, 439 (E.D. Pa.

2007) (citing C & K Petroleum Prods., Inc. v. Equibank, 839 F.2d 188, 192 (3d Cir.

1988)). This prong is not satisfied if the promisee acts based on a mistaken judgment,

                                              3
because such reliance isn’t reasonable. Id. (citing Murphy v. Bradley, 537 A.2d 917, 919

(Pa. Commw. Ct. 1988)).

       The District Court rightly concluded that no reasonable jury could find that

Plaintiffs reasonably relied on Dunkin’s purported promises. In early 2007, Dunkin’ and

PBD entered an Approved Bakery Manufacturer Agreement designating PBD as an

approved supplier. That Agreement contained a number of explicit disclaimers. It stated,

among other things, that PBD was “granted no exclusive territory or service area under

this Agreement,” App. 317, and that Dunkin’ “made no commitment on its own behalf or

on behalf of its franchisees to purchase, distribute, or to cause to be purchased or

distributed any minimum amount of Products,” App. 317. Given these express

disclaimers, any reliance Plaintiffs might have had was based entirely on mistaken

judgment or misplaced hope, not on Dunkin’s representations. See Burton Imaging, 502
F. Supp. 2d at 439 (“[B]usinesses may not rely merely on their own interpretation of the

legal significance of a promise.”).2

       Plaintiffs also argue that there remains a question of material fact regarding

whether they were still PBD’s agents after May 12, 2007, when Thompson renounced his

agency by telling Dunkin’ that PBD could no longer participate in the bakery project. The

point is well taken, but it is immaterial to our disposition of the case. Even if Plaintiffs

       2
         In fact, Thompson himself didn’t seem to rely upon any kind of promise. He
testified that he was suspicious “right at the beginning,” App. 170, and spotted ample
evidence that Dunkin’ had no intention of building a bakery in Pittsburgh, App. 152.
                                               4
became principals, their reliance on the Agreement would still be mistaken, for the

reasons explained above.

      For the reasons stated, we will affirm.

                                            5