Cherryfield Foods v. Brown

STATE OF MAINE - SUPERIOR COURT

CUMBERLAND, ss. , ... , . CIVIL ACTION

DOCKET NO. CV-04-768

CHERRYFIELD FOODS, INC.

Plaintiff

ORDER ON

PLAINTIFF'S MOTION

FOR PARTIAL SUMMARY

TIMOTHY BROWN, d / b / a JUDGMENT

BLUEBERRY LAND

MANAGEMENT

Defendant

Before the court is Plaintiff Cherryfield Foods, Inc.'s ("Cherryfield")

motion for partial summary judgment on counts 11, IV, V, VI, VII, IX and X of

Defendant Timothy Brown, d / b/ a Blueberry Land Management's ("Mr. Brown")

amended counterclaim.

UNDISPUTED FACTS

On April 20, 1998, Cherryfield and Mi-. Brown entered into an agreement

by which Mr. Brown was to act as Cherryfield's "leaseholder" for a nine-year

period, from 1998 through 2007. In 1998, Cherryfield was the owner or

leaseholder of approximately 800 acres of blueberry land in western Maine and

eastern New Hampshre (known as "Division 5 properties"). Both Cherryfield

and Mr. Brown were in the business of growing, managing and harvesting wild

blueberries. Their agreement contemplated Mi-. Brown managing the Division 5

properties for a commission equal to five cents per pound of blueberries, plus

one and a half cents for abnormal travel distances to the grower fields and one

cent per pound station use for all blueberries delivered to Cherryfield through

the Brown station in Gray, Maine. The agreement describes the parties1

relationship and responsibilities as follows:

3. BROWN wishes to act as [Cherryfield's] leaseholder for the time

period of 1998 through 2007 and [Cherryfield] wishes BROWN to

act as its leaseholder and in its best interest for the time period of

1998 through 2007.

NOW, THEREFORE, the parties hereto agree as follows:

4. BROWN shall be responsible for the following:

a. Perform all management and maintenance on said 800 + / -

acres

b. Maintain all necessary records of field activities.

c. Invoice [Cherryfield] in a timely fashon for billable field

work performed at the rates listed in Exhbit A.

d. Necessary labor to carry out said field activities.

e. Local contact with growers, arrange land purchases and

leases for Cherryfield.

f. Maintain and manage the BROWN blueberry station in

Gray, Maine.

5. [Cherryfield] shall provide to BROWN and be responsible for the

following:

a. Management consulting services as necessary.

b. Advance necessary chemicals including fertilizers and

pesticides as needed.

c. Advance money for harvesting.

d. Provide additional equipment as necessary.

e. Invoice said growers and debit land lease accounts.

f. Make all payments to growers and land lease rental

payments to landlords.

g. Splitting the operational costs related to harvest camps

amongst its growers.

The agreement further provided:

7. BROWN shall provide [Cherryfield] certificates of insurance

coverage concerning Comprehensive General Liability, Automobile

Liability, and Workers' Compensation insurances.

8. The field work rates per Exlubit A' may be renegotiated at the

end of any crop year by either party.

Tlus rate schedule has not been submitted to the court.

9. In the case of an unsolvable dispute between [Cherryfield.]and

Brown, after reasonable efforts by both parties, t h s agreement will

end immediately without further notice.

10. This agreement may not be assigned by either party without

the express written consent of the other.

Between 1998 and 2003, Mr. Brown regularly performed fieldwork on the

properties within his territory, and sent invoices t o Cherryfield for his work at

the scheduled rates. In addition to paying these invoices2, Cherryfield

periodically advanced money to Mr. Brown upon his request. Mr. Brown only

received a commission check at the end of one season, either in 2001 or 2002.

Cherryfield SMF, ¶ 24; T. Brown Depo. p. 71. During the 1998-2003 period, Mr.

Brown acquired three leases of property in his own name for blueberry

properties in New Hampshre. Cherryfield learned of these leases3,and required

Mr. Brown to turn them over, implying that it would cease doing business with

him if he did not do so. Mr. Brown turned over the leases to Cherryfield, and

continued for some time thereafter to work with them. During the entire course

of their relationshp, through the fall of 2003, neither Mr. Brown nor Cherryfield

asked the other for payment on any outstanding debt.

On August 21,2003, Mr. Brown terminated the parties' contract with a fax

that stated, "Please consider t h s the official notification of my resignation of the

position of lease holder of Division 5, effective immediately.'' This resignation

was accepted by Ragnar Kamp, Cherryfield's president, who indicated that he

and Mr. Brown should meet to resolve outstanding business issues. In the fall of

2003, Mr. Brown and Mr. Kamp had a meeting at whch Mr. Kamp informed Mr.

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Mr. Brown disputes that Cherryfield paid all of the invoices, citing to the deposition of his wife,

Marilyn Brown, who was the Blueberry Land Management bookkeeper. In her deposition Ms.

Brown testified that she could not remember any invoices not paid by Cherryfield, but that she

had not gone looking through all of the bills.

Neither party specifies when Mr. Brown acquired the leases, when Cherryfield learned of them,

or when Mr. Brown turned them over to Cherryfield.

Brown that Cherryfield had advanced h m approximately $98,000 more than the

amounts to whch he was entitled under the contract. Mr. Kamp demanded that

Mr. Brown repay Cherryfield this amount of money, and Mr. Brown refused.

DISPUTED ISSUES

The parties dispute whether the periodic advances made to Mr. Brown

were covered by a budget based on an estimated blueberry crop yield, or

whether advances were made with the understanding that Mr. Brown would be

independently responsible for repaying any advanced amounts not covered by

his year-end commission. Mr. Brown maintains that, although advances were

to be taken out of h s crop-time commission, Cherryfield never advanced money

to h m that wasn't part of their estimated budget for the incoming crop. Mr.

Brown also argues that some of the advances Cherryfield made to him were to

have been invoiced to c grower^"^ and debited on "land lease accounts" under

paragraph 5(e) of the agreement and not debited against his commission at all.

Finally, Mr. Brown claims that Cherryfield failed to pay him for capital

improvements he had made to Division 5 properties, whch he asserts he made

outside of the scope of the parties' contract, but with a reasonable expectation of

payment.

Cherryfield contends that, between 1998 and 2003, it advanced to Mr.

Brown more money throughout the season than he was entitled to receive as a

commission at the end of the year. This is the basis for $98,000 of the claim

Mr. Brown asserts this budget was based o n a 1 million pound blueberry yield. According to

Cherryfield's information, the crop yields were 781,989 pounds in 1999, 823,765 pounds i n 2000,

1,268,740 pounds i n 2001,595,438 pounds in 2002, a n d 751,952 pounds in 2003. Cherryfield does

not supply a crop yield for 1998.

Cherryfield's agreement with Mr. Brown made him its "leaseholder" for Division 5 properties. Some of

the properties in Division 5 were owned by Cherryfield, but others were owned by third parties who leased

their lands to Cherryfield. These parties are the "growers" referred to by the agreement. The court has no

information on the terms of the leases between these growers and Cherryfield.

against Mi. Brown. Equipment belonging to Cherryfield and allegedly retained

by Mi. Brown is the basis for the other $17,000 of Cherryfield's claim.

DISCUSSION

I. Request for an Accounting

Count I1 of Mi. Brown's counterclaim is a request for an accounting. Mr.

Brown claims that his relationship with Cherryfield is alun to a joint venture,

since his compensation was tied to the success of the venture. This assertion is

supported by reference to the contract between the parties, which calls for a

commission to be paid to Mr. Brown based on the blueberry yield. A joint

venture is a trust relationship that may properly form the basis for an

accounting. See Horton & McGehee, Maine Civil Remedies § 8.2. Thus, Mr. Brown

has pointed to a material factual dispute concerning his entitlement to an

accounting, sufficient to survive a motion for summary judgment.

11. Economic Duress / Business Compulsion, Conversion, and Negligent

and Fraudulent Misrepresentation

Mr. Brown alleges in Count VI of his amended counterclaim that

Cherryfield should be held liable for economic duress or business compulsion,

because Cherryfield demanded that Mi. Brown turn over the Leases, and t h s

demand was backed by an implicit threat to cease doing business with Mr.

Brown if he chose not to do so. Maine has not yet recognized a claim for

economic duress / business compulsion, but, in City of Portland v. Gemini

Concerts, Inc. the Law Court indicated that it may recognize it. 481 A.2d 180, 183

(Me. 1994). Under Gemini:

The basic concept of the doctrine of business compulsion is the

same as the forms of duress previously recognized in this

jurisdiction -- wrongful acts or threats which subvert the will of the

threatened party. Actions which are not wrongful cannot result in

duress. Whenever a party to a contract seeks the best possible

terms, there can be no rescission merely upon the grounds of

"driving a hard bargain." Merely taking advantage of another's

financial difficulty is not duress. Rather, the person alleging

financial difficulty must allege that it was contributed to or caused

by the one accused of coercion. [citations omitted.]

481 A.2d at 183.

If Maine were to recognize the tort of business compulsion, h s would not

be the case in which to do so. See id. Paragraphs 3 and 4 of the parties' contract

state that "[Cherryfield] wishes [Mr.] Brown to act in its best interest" during the

contract period and that "[Mr.] Brown shall be responsible . . . [to] arrange land

purchases and leases for [Cherryfield.]" Mr. Brown's actions in arranging leases

for himself rather than for Cherryfield could reasonably be understood by

Cherryfield as in derogation of their arrangement, and they were entitled to

demand that Mr. Brown turn the leases over to them. Cherryfield's alleged

"threat" of ceasing to do business with Mr. Brown is not a "wrongful act,"

however, because Paragraph 9 of the contract provides that, in the event of an

"unsolvable dispute" between Mr. Brown and Cherryfield, the parties'

agreement would come to an end. Mr. Brown had the choices presented to him

by contract: he could keep the leases, creating an "unsolvable dispute," and

causing the contract to dissolve, or he could have turned them over to

Cherryfield and kept the relationshp. Cherryfield's presentation of h s choice to

Mr. Brown cannot, as a matter of law, be the basis of a claim for business

comp~lsion.~

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Mr. Brown also claims that Ragnar Kamp of Cherryfield told him that he would be blackballed

from the blueberry industry if he did not turn the leases over to Cherryfield. Brown's opposing

SMF 4[4[ 32-33. However, Mr. Brown's deposition, upon whch this statement is based, reveals

that this statement was purported to have been made well after Mr. Brown had turned over the

Because the undisputed facts establish that Mr. Brown made a legally

enforceable choice to assign the Leases to Cherryfield, he cannot maintain a

conversion claim (Count IV) against Cherryfield for lost profits on these leases.

See Doughty v. Sullivan, 661 A.2d 1112, 1122 (Me. 1995). Consent is an absolute

bar to a claim for conversion. See id. (stating, "the gist of conversion is an

invasion of a party's possession or right to possession." (emphasis added.))

Nor can Mr. Brown sustain claims for negligent and fraudulent

misrepresentation against Cherryfield (Counts V and VII). These claims are

based on Mr. Brown's alleged reliance on Cherryfield's representations about the

nature of their contract and whether it allows for Mr. Brown to acquire leases for

himself. Such representations are not factual but rather are assertions of opinion

about the terms of the parties' contract. See Rand v. Bath Iron Works Carp., 2003

ME 122, ql9; 832 A.2d 771,773. Mr. Brown has not asserted that Cherryfield had

sole access to the terms of the contract, nor has he asserted that he was unable to

interpret the contract for himself. Thus, Mr. Brown has failed to assert a prima

facie case for both fraudulent and negligent misrepresentation. See id.

111. Quantum Meruit and Unjust Enrichment

Mr. Brown claims in counts IX and X of his counterclaim that he made

capital improvements to Division 5 properties for whch Cherryfield failed to pay

him. The contract between the parties does not contemplate Mr. Brown malung

capital improvements, but Mr. Brown asserts he made improvements with a

reasonable expectation of payment, and thus that Cherryfield is liable to h m for

their value.

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leases, after the parties had ended their contractual relationship and in the context of Mr. Kamp

pressing Mr. Brown for return of the money purportedly owing to Cherryfield.

A valid claim for quantum meruit requires proof of the following elements:

(1) services . . . rendered to the defendant by the plaintiff;

(2) with the knowledge and consent of the defendant; and

(3) under circumstances that make it reasonable for the plaintiff to expect

payment.

Smith v. Cannell, 1999 ME 19, 9 12.

Although Mr. Brown alleges that he made "capital improvements" to

Division 5 property, Brown SMF ¶ 12, the record citations after h s paragraph do

not elaborate on what these improvements were, when they were made, or how

much effort they cost him. T. Brown Depo. at 70:21-71:24; 82:6-85:25. Nor does

Mr. Brown allege the factual basis of his claimed reasonable expectation of

payment for these improvements. Id. Thus, Mr. Brown has not set forth a prima

facie case for recovery in quantum meruit, and summary judgment on this count

is proper. Smith v. Cannell, 1999 ME 19 at ¶ 6; cf. Stanley v. Hancock County

Mr. Brown does not defend his claim for unjust enrichment in his

opposition to Cherryfield's motion for summary judgment, and summary

judgment is granted on that count.

The entry is:

Plaintiff's motion for partial summary judgment on Count IV

(conversion), Count V (negligent misrepresentation), Count VI

(business compulsion), Count VII (fraudulent misrepresentation),

Count IX (quantum meruit) and Count X (unjust enrichment) of

Defendant's counterclaim is GRANTED. Plaintiff's motion for

partial summary judgment on Count I1 (accounting) of Defendant's

counterclaim is DENIED.

Dated at Portland. Maine this 3Pfl day of

~ b b e rE.

t Crowley

Justice, Superior court

' COURTS

nd County

3x 287

le 041 12-0287

WILLIAM KAYATTA ESQ

MARK PORADA ESQ

PIERCE ATWOOD

ONE MONUMENT SQUARE

PORTLAND ME 04101

= COLIRTS

nd County

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le 041 12-0287

WILLIAM ROBITZEK ESQ

PAUL MACRI ESQ

BERMAN & SIMMONS

PO BOX 961

LEWISTON ME 04243-0961