Promotion in Motion, Inc. v. Beech-Nut Nutrition Corp. , 548 F. App'x 47 ( 2013 )

NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
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No. 12-4255
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PROMOTION IN MOTION, INC.; PIM BRANDS, LLC,
Appellants
v.
BEECH-NUT NUTRITION CORP., a HERO GROUP CORPORATION
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Appeal from the United States District Court
for the District of New Jersey
(D.C. Civil Action No. 02-09-cv-01228)
District Judge: Honorable William J. Martini
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Argued: September 24, 2013
Before: AMBRO, FISHER, and HARDIMAN, Circuit Judges
(Opinion filed: October 10, 2013)
William D. Wallach, Esquire (Argued)
McCarter & English
110 Mulberry Street
Newark, NJ 07102
Counsel for Appellants
Paul J. Dillon, Esquire (Argued)
Bloom & Dillon, P.C.
70 South Orange Avenue, Suite 240
Livingston, NJ 07039
Richard A. Cirillo, Esquire
Karen R. Kowalski, Esquire
David A. Joffe, Esquire
King & Spalding LLP
1185 Avenue of the Americas
New York, NY 10036
Counsel for Appellee
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OPINION
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AMBRO, Circuit Judge
Promotion in Motion, Inc. is a marketer and distributor of brand-name confections,
fruit snacks, and specialty foods. PIM Brands, LLC (together with Promotion in Motion,
“PIM”) operates a facility manufacturing food products for its own brand names and for
other private labels. Beech-Nut Nutrition Company (“Beech-Nut”) makes and sells baby
food products.
In late 2007, Beech-Nut solicited PIM to produce a new, all-natural gummy snack,
called “Fruit Nibbles,” for sale under the Beech-Nut brand. Beech-Nut directed the
development process, requesting particular colors, textures and flavors, though not
necessarily providing guidance as to the product’s specific formulation. PIM began mass
producing Fruit Nibbles in August 2008, and Beech-Nut contracted for approximately
230,000 cases of the product via four signed purchase orders. These purchase orders,
which are the only written agreements between the two parties, 1 provide in part that
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Although a draft “co-pack” agreement was negotiated, it was never consummated.
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[t]he terms and conditions set forth in [these orders] constitute the entire
agreement between the parties . . . and supersede . . . all previous verbal or written
representations, agreements and conditions . . . [unless modified in writing and
signed by all parties] . . . . [PIM] warrants that the goods . . . furnished under the
[purchase orders] will comply with the specifications, are fit for the purpose
intended, merchantable and free from defects of material and workmanship[,] and
. . . [upon] discovery of any defect, all rejections will be returned at [PIM’s] risk
and expense.
See, e.g., JA 293.
Beech-Nut received its first delivery of Fruit Nibbles in September 2008. After
entering the market, the product experienced quality issues, and Beech-Nut received
numerous complaints from consumers and retail outlets indicating that the Fruit Nibbles
were “powdery,” “dried out,” “shriveled,” “crusty,” “rotten,” “stale,” “moldy,” “wilted,”
had a “fermented” and “horrible” smell, “looked like dead toes,” and were generally
“disgusting.” In December 2008, Beech-Nut instituted a nationwide recall of the product
and accepted returns. PIM declined to accept those returns from Beech-Nut or to
compensate it for the rejected product and costs of withdrawal from the market. PIM
brought suit against Beech-Nut in New Jersey state court for breach of contract, breach of
the implied covenant of good faith, and estoppel. Beech-Nut removed the case to federal
court, and counterclaimed for breach of warranty and negligence under New York law.
Beech-Nut moved for summary judgment on all of PIM’s claims and its own
counterclaims. In a December 20, 2011 letter opinion, the District Court granted in part
and denied in part Beech-Nut’s motion, concluding that, “although at least some of the
shipped Fruit Nibbles breached PIM’s express warranties,” substantial impairment (such
that Beech-Nut was entitled to revoke acceptance of all Fruit Nibbles) was a factual issue
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to be decided by a jury. The District Court dismissed PIM’s claims against Beech-Nut in
their entirety.
Prior to trial, the parties stipulated that, “[p]ursuant to [the] Purchase Orders, PIM
expressly warranted that all shipped Fruit Nibbles would . . . be fit for their intended
purpose, merchantable, and free from defects of material and workmanship,” and the
Fruit Nibbles that were the subject of customer and retailer complaints “did not satisfy
the warranties in the purchase orders.” JA 937-38. After a three-day trial in September
2012, the jury concluded that PIM’s breach of its warranties substantially impaired the
value of all the Fruit Nibbles purchased by Beech-Nut, and awarded Beech-Nut
$2,222,000 in damages. PIM has appealed, seeking to reverse the District Court’s
summary judgment order, vacate the final judgment, and remand for a new trial.
We review a district court’s grant of summary judgment de novo and apply the
same standard as that court. 2 Doe v. Luzerne Cnty., 660 F.3d 169, 174 (3d Cir. 2011).
Viewing all inferences in the light most favorable to the nonmoving party, a court “shall
grant summary judgment if the movant shows that 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); see also Burton v. Teleflex, Inc., 707 F.3d 417, 425 (3d Cir. 2013). “We generally
review a trial court’s decision to admit or exclude evidence for abuse of discretion.”
United States v. Green, 556 F.3d 151, 155 (3d Cir. 2009). “[A] party is not entitled to
pursue a new trial on appeal unless that party makes an appropriate postverdict motion in
2
Here the District Court had jurisdiction under 28 U.S.C. § 1332, and we have appellate
jurisdiction under 28 U.S.C. § 1291.
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the district court.” Unitherm Food Sys., Inc. v. Swift-Eckrich, Inc., 546 U.S. 394, 404
(2006).
The District Court correctly dismissed PIM’s claims against Beech-Nut. Among
other things, PIM did not allege that Beech-Nut breached the terms of the purchase
orders, which are the only enforceable contracts between the parties.
PIM argues that the District Court erred by excluding evidence tending to indicate
that there were no specifications as to the Fruit Nibbles’ appearance, color or texture, and
that, as a result, the jury was asked to rule on whether PIM breached certain
specifications without ever being told what the specifications might have been or why
there were none. However, Beech-Nut does not argue that the Fruit Nibbles were non-
compliant for being the wrong color, taste or texture, and the jury was not asked to make
such a narrow determination; rather, it was instructed to consider the broader issue of
whether they were merchantable or fit for their intended purpose. Given the language of
the purchase orders that the Fruit Nibbles would be “fit for the purpose intended,
merchantable and free from defects of material and workmanship,” and PIM’s stipulation
that the product “did not satisfy the warranties in the purchase orders,” the District Court
correctly found that PIM had conceded warranting merchantability and a violation
thereof, and that arguments as to color, taste and texture were irrelevant.
The purchase orders provide that they are “the only contracts between the parties,”
that “their express terms governed the parties’ financial responsibilities for any defective
Fruit Nibbles,” and include the express warranty already noted. PIM nonetheless
attempted to introduce extrinsic evidence of negotiations underlying an un-ratified co-
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pack agreement as a “course of dealing” reflecting the parties’ understanding that there
were no warranties. The parties’ exchange of drafts and failure to agree to the terms of
the co-pack agreement do not constitute a “sequence of previous conduct . . . fairly to be
regarded as establishing a common basis of understanding.” N.Y. U.C.C. § 1-205(a).
The District Court correctly found that the purchase orders were never modified, that they
governed the rights and obligations of PIM and Beech-Nut with respect to the Fruit
Nibbles, and that the extrinsic evidence was inadmissible.
Finally, the jury verdict should not be overturned as unsupported by the weight of
the evidence. Given that PIM did not file post-trial motions for judgment as a matter of
law or for a new trial before the District Court, we cannot review this claim. See
Unitherm Food Sys., Inc. v. Swift-Eckrich, Inc., 546 U.S. 394, 404 (2006). Even if we
could review the jury verdict, there is no indication in the record that the jury’s verdict in
Beech-Nut’s favor was against the weight of the evidence.
For these reasons, we affirm.
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