Stroh Brewery Co v. Western Maryland ( 1997 )


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  • UNPUBLISHED
    UNITED STATES COURT OF APPEALS
    FOR THE FOURTH CIRCUIT
    THE STROH BREWERY COMPANY,
    Plaintiff-Appellee,
    v.
    WESTERN MARYLAND DISTRIBUTING
    COMPANY, INCORPORATED,
    Defendant-Appellant,
    and                                                            No. 96-2705
    ALLEGANY BEER DISTRIBUTORS,
    INCORPORATED,
    Defendant,
    v.
    FREDERICK P. WINNER, LIMITED,
    Third Party Defendant.
    Appeal from the United States District Court
    for the District of Maryland, at Baltimore.
    Benson E. Legg, District Judge.
    (CA-95-2211-L)
    Argued: October 28, 1997
    Decided: December 3, 1997
    Before NIEMEYER, WILLIAMS, and MOTZ, Circuit Judges.
    _________________________________________________________________
    Affirmed by unpublished per curiam opinion.
    _________________________________________________________________
    COUNSEL
    ARGUED: Stephen Carroll Wilkinson, WILKINSON & MILLER,
    P.C., Cumberland, Maryland, for Appellant. Thomas Matthew Wil-
    son, III, TYDINGS & ROSENBERG, L.L.P., Baltimore, Maryland,
    for Appellee. ON BRIEF: Joseph F. Miller, WILKINSON & MIL-
    LER, P.C., Cumberland, Maryland, for Appellant. J. Hardin Marion,
    Michael H. Tow, TYDINGS & ROSENBERG, L.L.P., Baltimore,
    Maryland, for Appellee.
    _________________________________________________________________
    Unpublished opinions are not binding precedent in this circuit. See
    Local Rule 36(c).
    _________________________________________________________________
    OPINION
    PER CURIAM:
    This case arises out of a diversity declaratory judgment action
    brought by The Stroh Brewery Company against Western Maryland
    Distributing Company, Inc., and its co-defendant, Allegany Beer Dis-
    tributors, Inc. Western Maryland appeals from the district court's
    grant of summary judgment in favor of Stroh. We affirm.
    Stroh brews beer. In 1993, Stroh and Allegany entered into a fran-
    chise agreement whereby Allegany became the exclusive distributor
    of Stroh products in Allegany County, Maryland. This agreement
    required Allegany to obtain prior written consent from Stroh before
    Allegany could effect any significant "control change," including the
    transfer of Allegany's rights under the franchise agreement to another
    party. The franchise agreement provided that Allegany must notify a
    prospective transferee about the agreement and the consent provisions
    therein. By its terms, the franchise agreement would automatically
    terminate upon the occurrence of a control change to which Stroh had
    not given its prior written consent. Although Stroh agreed not to
    unreasonably withhold its approval, it reserved the right to disapprove
    any control change that it believed, in good faith, was adverse to its
    business interests.
    2
    On June 9, 1995, Allegany notified Stroh of its intention to transfer
    its assets, including its rights under the franchise agreement, to West-
    ern Maryland. On June 16, Stroh responded to Allegany by requesting
    information about Western Maryland. For the approval process to
    move forward, Allegany would have to provide the requested infor-
    mation to Stroh. On June 27, Allegany and Western Maryland signed
    an acquisition agreement that called for closing on July 15, but
    expressly allowed that date to be pushed back until approval was
    obtained from the breweries with which Allegany had franchise
    rights. Finally, on July 14, Western Maryland and Allegany went to
    closing on the acquisition agreement without Stroh's written consent,
    Western Maryland never having read the franchise agreement
    between Stroh and Allegany.
    Between June 9 and July 14, Western Maryland had several con-
    tacts with Stroh employees, including Stroh's local representative, its
    credit manager, and a records coordinator at Stroh's headquarters.
    None of the Stroh personnel stated that Stroh had decided to approve
    Western Maryland. At most they stated that they knew of no prob-
    lems, or that they had recommended approval. Relying on its past
    experience in the industry, and thinking that these conversations sig-
    naled forthcoming approval, Western Maryland closed the deal with
    Allegany. Stroh thereafter terminated its review process and treated
    the control change as having terminated any rights under the franchise
    agreement. Stroh eventually contracted with Frederick P. Winner,
    Ltd., a third-party defendant, as its new distributor for Allegany
    County.
    Stroh filed this action against Allegany and Western Maryland,
    seeking a declaration that Allegany's distributorship had terminated
    under the terms of the franchise agreement, that Western Maryland
    had no rights thereunder, and that Allegany had no rights under the
    Maryland Beer Franchise Fair Dealing Act, Md. Ann. Code art. 2B,
    § 17-101 et seq. (1996) (the "Beer Franchise Act"). Allegany asserted
    no counterclaims. Western Maryland, however, did counterclaim,
    asserting breach of contract, estoppel, fraudulent and negligent mis-
    representation, malicious interference with contract, and violation of
    the Beer Franchise Act.*
    _________________________________________________________________
    *Additional claims by Stroh involving Lanham Act violations and
    additional counter-claims by Western Maryland involving antitrust viola-
    tions were dismissed without prejudice pursuant to a consent order dated
    December 4, 1996.
    3
    In a careful, well-reasoned opinion, the district court granted sum-
    mary judgment to Stroh on its claims and Western Maryland's coun-
    terclaims. Western Maryland appeals only from the district court's
    order with regard to its claims of estoppel, fraudulent and negligent
    misrepresentation, and violation of the Beer Franchise Act. The dis-
    trict court concluded that: (1) the estoppel, fraudulent and negligent
    misrepresentation claims failed because no fair-minded jury could
    find that Western Maryland reasonably relied on the statements or
    conduct of Stroh's employees in closing its deal with Allegany; (2)
    the fraudulent misrepresentation claim also failed because no evi-
    dence existed that Stroh's statements were false when made or
    reflected false intentions; (3) the negligent misrepresentation claim
    also failed because no duty of care ran from Stroh to Western Mary-
    land; and (4) the Beer Franchising Act claim failed because Western
    Maryland lacked standing to pursue it -- an agreement between Stroh
    and Western Maryland never existed -- and the Act does not address
    the transfer of franchise rights. Having reviewed the record, briefs,
    and relevant statutes and case law, and having had the benefit of oral
    argument on the matter, we conclude that the district court's rulings
    were correct. Accordingly, we affirm on the reasoning of the district
    court opinion. See Stroh Brewery Co. v. Allegany Beer Distributors,
    Inc., Civil Action No. L-95-2211 (D. Md. Oct. 15, 1996).
    AFFIRMED
    4
    

Document Info

Docket Number: 96-2705

Filed Date: 12/3/1997

Precedential Status: Non-Precedential

Modified Date: 10/30/2014