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