| Coca-Cola Refreshments, USA, Inc. v Binghamton Giant Mkts.,Inc. |
| 2015 NY Slip Op 02834 [127 AD3d 1319] |
| April 2, 2015 |
| Appellate Division, Third Department |
[*1]
| Coca-Cola Refreshments, USA, Inc., Formerly Knownas Coca-Cola Enterprises, Inc., Respondent, v Binghamton Giant Markets, Inc.,Doing Business as Binghamton Giant Markets, Appellant. |
Hinman, Howard & Kattell LLP, Binghamton (Dennis P. Sheehan of counsel),for appellant.
Ganz Wolkenbreit & Siegfeld, Albany (Matthew M. Zapala of counsel), forrespondent.
Garry, J. Appeal from an order of the Supreme Court (Cerio Jr., J.), entered October17, 2013 in Broome County, which, upon renewal, denied defendant's motion for, amongother things, summary judgment dismissing the complaint.
Beginning in the 1930s, defendant operated a chain of grocery stores in BroomeCounty. For approximately 70 years, plaintiff and defendant enjoyed a successfulbusiness relationship whereby defendant regularly purchased products from plaintiff tobe sold in defendant's stores. However, the parties never formalized the terms of theirrelationship in a contract. In August 2009, defendant sold its grocery operations toanother company. After defendant tendered its final payment of all amounts due toplaintiff, plaintiff claimed that there was a balance remaining in the sum ofapproximately $10,000; defendant disagreed and provided documentation and, inFebruary 2010, plaintiff reduced the claimed amount to about $6,000. Thereafter, in July2010, 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 actionasserting claims for breach of contract and account stated. Defendant moved, as pertinenthere, for summary judgment dismissing the complaint, and Supreme Court denied themotion. [*2]Following discovery, defendant moved torenew its prior motion. The court granted the motion for renewal, but denied theunderlying summary judgment motion. Defendant appeals.
Initially, we agree with defendant that plaintiff's claim for an account stated iswithout merit. "An account stated is an agreement between parties to an account basedupon prior transactions between them with respect to the correctness of the account itemsand balance due" (Whiteman,Osterman & Hanna, LLP v Oppitz, 105 AD3d 1162, 1163 [2013] [internalquotation marks and citations omitted]). Here, it is undisputed that the parties neverreached such an agreement. Plaintiff did not oppose defendant's request for dismissal ofthis 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. vMcTague, 21 AD3d 610, 611-612 [2005]; Joe O'Brien Investigations vZorn, 263 AD2d 812, 815 [1999]).
As for the breach of contract claim, an implied contract exists when the parties havenot entered into an express contract, but their course of conduct indicates that they havereached a meeting of the minds that is sufficient to constitute an enforceable contract (see DG & A Mgt. Servs., LLCv Securities Indus. Assn. Compliance & Legal Div., 52 AD3d 922, 923[2008]; Berlinger v Lisi, 288 AD2d 523, 524 [2001]). A contract may be implied"as an inference from the facts and circumstances of [a] case, although not formallystated in words, and is derived from the presumed intention of the parties as indicated bytheir conduct" (Jemzura v Jemzura, 36 NY2d 496, 503-504 [1975] [internalquotation marks and citations omitted]; see Matter of Pache v Aviation Volunteer Fire Co., 20 AD3d731, 732-733 [2005], lv denied 6 NY3d 705 [2006]). Here, the parties agreethat they had a longstanding implied contract, but disagree as to whether the terms of thisagreement included the amounts that plaintiff now seeks to collect. Plaintiff asserts thatthese amounts represent debts resulting from systematic underpayments by defendantdating back to 2006. However, defendant contends that it was the parties' longstandingpractice to resolve payment disputes shortly after each payment came due, and thatplaintiff gave defendant no reason to believe that any such disagreements were notresolved or that any charges remained outstanding.
In support of its summary judgment motion, defendant submitted the affidavits anddeposition testimony of several executives and employees who participated in the parties'relationship. This evidence establishes that, for many years, the parties' representativesheld weekly meetings in which they agreed upon that week's prices, which were thenrecorded in defendant's accounting systems. Upon each delivery, defendant compared itsprice records to plaintiff's invoices, advised plaintiff of any discrepancies and, whendifferences 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 industrypractice. The parties then corrected any discrepancies through a reconciliation process bywhich plaintiff provided defendant with monthly statements itemizing current invoicesand prior charges that remained in question. Defendant's accounting personnelinvestigated discrepancies, annotated the statements to reflect adjustments, and returnedthe statements to plaintiff with payment. According to defendant, plaintiff routinelyaccepted these payments without objection and later removed the charges from itsstatements, after which defendant believed that any related disputes had been resolved.Throughout the parties' relationship, plaintiff never sought payment for any charges thathad been removed from its statements following this process, never advised defendantthat it believed any such charges remained outstanding, and never informed defendantthat it considered any charges to be owed other than those appearing on the monthlystatements. This showing was sufficient to demonstrate on a prima facie basis that theintention 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 pricedisagreements on an ongoing basis based upon the monthly statements and that all [*3]such disagreements were resolved. Accordingly, defendantmet its prima facie burden to demonstrate its entitlement to judgment as a matter of lawon the breach of contract claim, thus shifting the burden to plaintiff to demonstrate thatmaterial issues of fact require a trial.
Plaintiff's claims are based primarily on the testimony of Shaun Harris, a collectionprocess administrator who based his testimony on a record review and had no personalknowledge of the parties' business relationship. Harris stated that the removal of a chargefrom 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 itsstatements nine months after they came due. Plaintiff then recorded any charges that itbelieved were still outstanding in a private internal ledger, and now seeks to recover fromdefendant the charges contained in this ledger. However, Harris testified that, as a matterof policy, plaintiff never advised defendant—or any other customer—thatthe ledger existed, nor did it inform defendant that it routinely removed charges from itsstatements even when it still considered them to be outstanding. Harris claimed that,under plaintiff's general business practice, defendant should have been informed of alloutstanding charges through "rebill packages."[FN*] However, no records that wouldconfirm whether this occurred now exist, as plaintiff discarded its copies of the rebillpackages 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 nosupport for plaintiff's position that defendant accumulated an outstanding debt. Bothstated that they were unaware of any payment problems, pricing issues or outstandingcharges while working on the account. The sales representative stated that he routinelyreviewed the parties' records and any disputed invoices to ascertain that agreed-uponprices were billed and paid, that any errors he discovered were corrected, and that, to hisknowledge, no debts remained outstanding when he stopped servicing the account. Heunderstood that plaintiff's monthly statements fully reflected all outstanding charges, andwas not aware that plaintiff had any other process for recording or collectingindebtedness.
Although plaintiff now contends that it never deemed the charges listed in its ledgerto be resolved or intended to discharge defendant from liability for them, "[w]hether acontract has been formed does not depend on either party's subjective intent; instead, thedetermination must be based on 'the objective manifestations of the intent of the partiesas 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 anobjective manifestation of intent, as plaintiff concealed the ledger's existence fromdefendant until after their relationship ended. No other evidence in the record reveals thatplaintiff manifested an intent to collect additional charges after it had accepted paymentsand removed the charges from its monthly statements, and as defendant had no reason tobelieve 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] ofContracts [Formation of Contracts] § 19, Comment b). Moreover,the record is devoid of any evidence that plaintiff [*4]ever challenged defendant's payments on the ground that ithad systematically failed to pay the agreed-upon price, nor is there any evidence that theallegedly unpaid charges listed in plaintiff's internal ledger resulted from suchfailures.
Plaintiff's contentions on appeal are largely based on alleged flaws in defendant'sreconciliation procedures. However, the record includes no indication that plaintiffobjected to these procedures during the life of the parties' relationship. This failure toraise timely objections supports defendant's contention that both parties relied upon thereconciliation process and deemed any disputes to be resolved once that process wascomplete. Plaintiff's behavior in discarding the rebill packages that provided the onlydocumentary support for its current claim that defendant should have known that thecharges remained outstanding is inconsistent with its claim that it intended to collectthese charges, as is its failure to inform defendant that it had any such intention untilmany months after the relationship ended. Further, plaintiff submitted no evidence that itever objected to defendant's practice of paying the lesser price upon delivery and laterresolving any differences. Plaintiff's conduct in accepting the practice without objectionthroughout the relationship is inconsistent with its current claim that it neveraffirmatively consented to the practice, as is its admission that the practice is standard inthe industry.
In short, the uncontradicted evidence reveals that, throughout the relationship, bothparties treated all pricing disputes as resolved after plaintiff accepted payment andremoved the charges from its statements. Plaintiff put forward no admissible evidencegiving rise to issues of fact as to whether defendant was on notice that plaintiffconsidered any charges to be outstanding after this process was complete, or thatdefendant agreed, explicitly or implicitly, that it was liable for them. Thus, defendantestablished as a matter of law that there was no breach of contract, and its motion forsummary judgment dismissing the cause of action for breach of contract should havebeen granted (see Yankee LakePreserv. Assn., Inc. v Stein, 68 AD3d 1603, 1604-1605 [2009], lvdenied 15 NY3d 706 [2010]; compare Brighton Inv., Ltd. v Har-Zvi, 88AD3d at 1223).
Defendant's remaining contentions are rendered academic by this determination.
Lahtinen, J.P., Lynch and Devine, JJ., concur. Ordered that the order is reversed, onthe law, without costs, motion granted, summary judgment awarded to defendant andcomplaint dismissed.
Footnote *:Logs of communicationsbetween the parties' accounting personnel confirm that such rebill packages existed, butdo not reveal their contents. Notably, these logs—which cover severalyears—include no indication that plaintiff ever advised defendant of a cumulativedebt based on past charges or that it believed that defendant was making systematicunderpayments.