Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

MATTERN HATCHERY v. BAYSIDE ENTERPRISES

August 29, 1991

MATTERN HATCHERY, INC., ET UX., PLAINTIFFS,
v.
BAYSIDE ENTERPRISES, INC., DEFENDANT.



The opinion of the court was delivered by: McCLURE, District Judge.

MEMORANDUM

I. BACKGROUND

Plaintiffs Mattern Hatchery, Inc. ("Mattern") and Empire Kosher Poultry, Inc. ("Empire")*fn1 allege in this diversity action*fn2 that Bayside Enterprises, Inc. ("Bayside") breached express and implied warranties and fraudulently misrepresented the genetic history and quality of a breed of poultry known as the Penobscot which Bayside sold to Empire in July, 1988.

Empire is the world's largest kosher processors of chicken. Prior to 1988 when it sold the breed to Empire, Bayside ran a breeding operation (centered in Belfast, Maine) and a processing operation. For nearly twenty years, it sold eggs and birds to Empire, and was Empire's sole supplier of the Penobscot breed, which, unlike most other commercial breeds, is well-suited to Kosher processing techniques.*fn3 (Swanger deposition, pp. 15-17 and 50; Katz deposition, pp. 13 and 35)

In approximately 1987, Bernie Lewis, the president and principal shareholder of Bayside began to consider selling the Bayside operation, principally because at that time he was in failing health. When he was unsuccessful in locating a buyer for the entire operation, he approached Murray Katz, the president and principal shareholder of Empire, with an offer to sell the breed alone. Initially, his offer met with rejection, but after giving the matter further consideration, Katz decided to purchase the Penobscot breed and related assets from Empire. This decision was made in August of 1987, when Katz instructed his staff to "make it happen". (Katz deposition, pp. 37-38; 48-50, 57 and 59) Lewis and Katz negotiated a sale price of $1.2 million, $800,000 less than Lewis' initial asking price.

After many months of discussions and exchanges of information between the staffs of the two companies, the sale was finally completed on July 7, 1988. Not long thereafter, Empire experienced troubling difficulties with the breed. It noticed a dramatic decline in the final weight of the roasters, a serious problem because even a seemingly small decline in average weight per bird translates into a considerable sales loss. Empire calculates its total losses at $1 million.*fn4

This was not, however, its first inkling that there was some difficulty with the breed in this respect. As early as 1985, Empire had noted a distinct and very discernible trend of declining broiler weights. It alleges, however, that the post-sale decline was far more precipitous and serious.

Empire contends that the decline in broiler weights is due exclusively to genetic mismanagement of the breed by Bayside prior to the sale. The deplorable conditions of Bayside's genetic selection procedures was kept from Empire until after the sale. Empire contends that, although it was aware prior to the sale that Bayside's genetic program was lacking in some respects, it was wholly unaware of the degree of the decline and the seriousness of the problem until it gained access to genetic selection records and other information after the sale. Empire further contends that Bayside took steps to conceal this information from it and to reassure it that all was well with the program prior to the sale.

Empire also alleges that Bayside breached an implied oral contract pre-dating the sale of the breed. (Plaintiffs' complaint, Count V). It contends that during the period when Bayside was acting as its supplier, Bayside had an implied obligation to supply birds which would gain sufficient weight to assure profitability.

Bayside asserts a counterclaim for the balance of the promissory note which Empire executed to secure payment of the remainder of the purchase price. Empire stopped paying on the note, not long after it began voicing complaints about the quality of the breed. Under the terms of the note, Bayside now seeks to recover the balance due, plus counsel fees.

Trial is scheduled for September, 1991. Before the court are: (1) a motion (Record Document No. 48, filed April 1, 1991) for summary judgment filed by Bayside; (2) a motion (Record Document No. 50, filed April 19, 1991) to compel filed by Bayside; and (3) a motion (Record Document No. 71, filed June 7, 1991) by plaintiffs for leave to file an additional brief in opposition to Bayside's summary judgment motion.

For the reasons discussed below, the court will enter an order: (1) granting Bayside's summary judgment motion; (2) denying Bayside's motion to compel as moot, and (3) denying plaintiffs' motion for leave to file an additional brief.

II. DISCUSSION

Summary judgment standard

  Summary judgment is appropriate if the "pleadings,
depositions, answers to interrogatories, and admissions on
file, together with the affidavits, if any, show 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." Fed.R.Civ.P.
56(c)

   . . [T]he plain language of Rule 56(c) mandates
  the entry of summary judgment, after adequate time
  for discovery and upon motion, against a party who
  fails to make a showing sufficient to establish
  the existence of an element essential to that
  party's case, an on which that party will bear the
  burden of proof at trial. In such a situation,
  there can be `no genuine issue as to any material
  fact,' since a complete failure of proof
  concerning an essential element of the nonmoving
  party's case necessarily renders all other facts
  immaterial. The moving party is `entitled to
  judgment as a matter of law' because the nonmoving
  party has failed to make a sufficient showing on
  an essential element of her case with respect to
  which she has the burden of proof.

Celotex v. Catrett, 477 U.S. 317, 323-24, 106 S.Ct. 2548, 2553, 91 L.Ed.2d 265 (1986).

The moving party bears the initial responsibility of stating the basis for its motions and identifying those portions of the record which demonstrate the absence of a genuine issue of material fact. He or she can discharge that burden by "showing . . . that there is an absence of evidence to support the nonmoving party's case." Celotex, supra, 477 U.S. at 323 and 325, 106 S.Ct. at 2552 and 2553.

Issues of fact are "genuine only if a reasonable jury, considering the evidence presented, could find for the non-moving party." Childers v. Joseph, 842 F.2d 689, 694 (3rd Cir. 1988), citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986). Material facts are those which will affect the outcome of the trial under governing law. Anderson, supra, 477 U.S. at 248, 106 S.Ct. at 2510. In determining whether an issue of material fact exists, the court must consider all evidence in the light most favorable to the non-moving party. White v. Westinghouse Electric Company, 862 F.2d 56, 59 (3rd Cir. 1988).

Breach of warranty claim

Empire alleges breach of warranty under the sale contract in two respects. It contends that underperformance of the breed post-July 1988 breaches an implied warranty of fitness for a particular purpose read into the contract under the Uniform Commercial Code ("UCC").*fn5 It also contends that the decline is linked to Bayside's breach of an express warranty that to ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.