Fresh Brew Group, USA v. Waste Management, Inc. ( 2004 )

Opinion issued November 24, 2004

    In The

Court of Appeals

For The

First District of Texas

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  NO. 01-03-01155-CV

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FRESH BREW GROUP, USA, Appellant

V.

WASTE MANAGEMENT, INC., Appellee

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On Appeal from the 333rd District Court

Harris County, Texas

Trial Court Cause No. 2002-32053

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MEMORANDUM OPINION

          Appellant, Fresh Brew Group, USA (Fresh Brew), sued appellee, Waste Management, Inc., for breach of contract. The trial court granted Waste Management’s motion for summary judgment, and Fresh Brew appealed. In two issues, Fresh Brew complains that Waste Management did not establish its entitlement to summary judgment because (1) it did not negate any element of Fresh Brew’s claim and (2) it did not prove its affirmative defense based on the statute of frauds. We affirm in part and reverse in part and remand for further proceedings.

BACKGROUND

          Fresh Brew, a coffee and vending services company, provides its customers with coffee and vending equipment, services, and products. Fresh Brew installs, services, and maintains the equipment and sells coffee, other beverages, and snacks to be dispensed by the machines. Fresh Brew and Waste Management entered into written agreements that stated Fresh Brew’s equipment and billing policies and provided for the length of the term of the agreement, cancellation, monthly fees, and other terms. Each agreement also contained a dissatisfaction clause that provided for cancellation in the event that the customer was dissatisfied with Fresh Brew’s service. These agreements, although similar in many respects, varied over the years.

          In November 1996, Fresh Brew began its relationship with Waste Management. Between November 25, 1996 and November 20, 2000, Fresh Brew and Waste Management executed ten agreements in connection with the equipment, services and products supplied by Fresh Brew to Waste Management. The term length of these agreements varied from one to five years, but all provided for automatic annual renewal thereafter, unless cancelled.

          On September 26, 2000, both parties signed a Fresh-Brew agreement form (the September contract). This agreement did not provide for the placement of any equipment, but has written in the comments section, “This agreement is for pricing adjustments for Waste Management (see attached). Prices will be effective upon signing of agreement.” The term of the agreement and the dissatisfaction clause were contained in the same paragraph as follows:

The term of this agreement is for five years and will automatically renew annually thereafter. If you are dissatisfied with the service, please notify us in writing the details of concern with our service, to our corporate office, attention: Director of Customer Service. If we fail to bring the level of service up to your expectations within 30 days, this agreement may be cancelled and the unit removed within 30 days.

A handwritten price list of products was attached to this agreement. The agreement did not specify any type or quantity of products to be purchased by Waste Management. The sections on “Billing Policy” and “Monthly Fees” were crossed out.

          On November 17, 2000, both parties signed a Fresh Brew agreement form (the November contract) that differed in several respects from the September contract. This form did not have a “Monthly Fees” section. The term provision stated, “The term of this agreement is for five years and will automatically renew annually thereafter unless canceled by either party with a 30 day written notice.” The dissatisfaction clause was in a separate section and stated, “If you are dissatisfied with the service for any reason, and we fail to bring the level of service up to your expectations, this unit may be removed with a 30 day written notice.” The agreement showed that 13 Bunn, 7 FBG (Fresh Brew Group) Soda and 7 snack vending machines were to be installed. Under “COMMENTS” it stated, “This will be a new location for Wastemanagement [sic]. FBG will be installing a total of 13- 3 burner automatic Bunn units, 7 soda & 7 snack machines in designated breakrooms.” The agreement made three specific references to the sale of products: “Coffee & Condiment supplies will be billed to you each month. Prices are based on current coffee market conditions and will be adjusted accordingly”; “EMERGENCY Supply Orders will be delivered within forty-eight (48) hours”; and “All products used with this unit must be purchased from F.B.G.” There was no reference to any quantity of products.

          On April 1, 2002, Waste Management informed Fresh Brew by letter that they would be ending the “coffee service contract” effective May 1, 2002 and asked Fresh Brew to remove their equipment within seven working days. The letter further stated that the “primary reason for this change is price” and that they “want[ed] to confirm that Fresh Brew has been a good vendor for us.”

          Fresh Brew sued Waste Management for breach of the September and November contracts. Waste Management filed a motion for summary judgment. Seven days before the hearing on Waste Management’s motion for summary judgment, Fresh Brew filed a second amended petition asserting that Waste Management had breached all ten contracts. The trial court granted Waste Management’s motion.

DISCUSSION

          On appeal, Fresh Brew contends that the central component of the agreements was the lease of the equipment, that the provision of services was secondary, and that, incidental to the lease of equipment, Waste Management agreed to buy from Fresh Brew all products to be used with the equipment. Fresh Brew argues that the consideration required for a valid contract is found in its agreement to lease the equipment and provide related services and Waste Management’s agreement to purchase the products from Fresh Brew. Fresh Brew also complains that Waste Management moved for judgment on only two of the ten contracts that were the basis of Fresh Brew’s suit.

          Waste Management responds that the two agreements were not valid and enforceable contracts because they did not satisfy the statute of frauds and they were too indefinite to be enforceable. Waste Management also contends that, even if the agreements were enforceable contracts, they were not breached because Waste Management had an “unfettered right” to terminate the contracts at its discretion. With regard to the eight contracts not addressed in the motion for summary judgment, Waste Management argues that Fresh Brew’s amended petition did not preclude summary judgment because all ten contracts contain similar language, and therefore the amended petition raised no new grounds to be addressed.

          We first consider whether the trial court properly rendered judgment on the September and November contracts. We then consider whether the remaining eight contracts raised new grounds to be addressed.

I.       Standard of Review

          Summary judgment under rule 166a(c) is proper only when the movant establishes that there is no genuine issue of material fact and that the movant is entitled to judgment as a matter of law. Tex. R. Civ. P. 166a(c); Randall’s Food Mkts., Inc. v. Johnson, 891 S.W.2d 640, 644 (Tex. 1995); Lawson v. B Four Corp., 888 S.W.2d 31, 34 (Tex. App.—Houston [1st Dist.] 1994, writ denied). In reviewing a summary judgment, we must indulge every reasonable inference in favor of the nonmovant and resolve any doubts in its favor. Johnson, 891 S.W.2d at 644; Lawson, 888 S.W.2d at 33. We will take all evidence favorable to the nonmovant as true. Id. As movant, the defendant is entitled to summary judgment if the evidence disproves as a matter of law at least one element of each of the plaintiff’s causes of action. Lear Siegler, Inc. v. Perez, 819 S.W.2d 470, 471 (Tex. 1991); Marchal v. Webb, 859 S.W.2d 408, 412 (Tex. App.—Houston [1st Dist.] 1993, writ denied). A defendant moving for summary judgment on an affirmative defense must establish that defense as a matter of law. Long Distance Int’l, Inc. v. Telefonos de Mexico, 49 S.W.3d 347, 350-51 (Tex. 2001). We will affirm the summary judgment if any of the theories advanced in the motion for summary judgment and preserved on appeal is meritorious. See Cincinnati Life Ins. Co. v. Cates, 927 S.W.2d 623, 626 (Tex. 1996).   

II.      Were the agreements valid and enforceable contracts?

          In its first issue presented, Fresh Brew contends that the trial court erred in rendering summary judgment in Waste Management’s favor because Waste Management did not conclusively negate at least one element of Fresh Brew’s claim. Fresh Brew argues that courts should be reluctant to hold a contract void for uncertainty or indefiniteness, but must view the entire document and interpret it in light of the intent of the parties, which may be a question of fact.

          A.      The September Contract

          Fresh Brew asserts that the September contract was a modification of the price on the existing equipment lease agreements.

          The September contract is not, on its face, a modification of an existing equipment lease agreement. The comments hand-written on the document indicate that it is a price adjustment, but the monthly fees for equipment are crossed out, and the attached price list is for products: coffee, tea, juices, condiments, paper goods, and plastic ware. The agreement is nothing more than an agreement by Fresh Brew to sell products at the stated price and by Waste Management to purchase those products, if at all, at that price. The four corners of the document do not establish any obligation on Waste Management to purchase any products, nor does it establish any obligation to use any Fresh Brew equipment.

          Fresh Brew points to the language in the September contract that states, “All products used with this unit must be purchased from [Fresh Brew]” and “Coffee & Condiment supplies will be billed to you each month” as evidence of a valid and binding contract. We first note that both statements are within the crossed-out portion of the agreement. Even if they were not intended to be deleted from the document, these statements do not provide a basis for requiring that Waste Management make any purchases from Fresh Brew. In fact, Fresh Brew concedes on appeal that “Waste Management was not obligated to purchase any products at all.”

          We conclude that the September contract is not valid and enforceable. Accordingly, we overrule Fresh Brew’s first issue as it relates to the September contract.

          B.      The November Contract

           Fresh Brew contends that the November contract was for the lease of the equipment itemized in the contract. Fresh Brew argues that the November contract “expressly designates . . . which pieces of Fresh Brew equipment are being leased by Waste Management.” Fresh Brew also refers to the provisions for monthly billing for supplies and the use of only Fresh Brew products with the equipment as indications of a valid and enforceable contract.

          Whether an agreement is an enforceable contract is generally a question of law. Farah v. Mafrige & Kormanik, P.C., 927 S.W.2d 663, 678 (Tex. App.—Houston [1st Dist.] 1996, no writ). The terms of a contract must be sufficiently definite to enable a court to determine the legal obligations of the parties. See T.O. Stanley Boot Co. v. Bank of El Paso, 847 S.W.2d 218, 221 (Tex. 1992).

          The November contract designates certain equipment to be installed by Fresh Brew in a Waste Management facility, although there is no language suggesting a lease and there is no provision for a lease fee. The contract provides that “All products used with this unit must be purchased from [Fresh Brew]” although no specific quantity of products is specified. Thus, Fresh Brew agreed to supply certain equipment, and Waste Management agreed to stock that equipment with products purchased from Fresh Brew. Such an agreement is not so indefinite as to make it impossible for a court to fix the legal obligations of the parties. We conclude that the November agreement was a valid and enforceable contract. We next consider whether Waste Management breached the November contract.

          The contract recites, “The term of this agreement is for five years . . . .” However, there is a dissatisfaction clause that provides, “If you are dissatisfied with the service for any reason, and we fail to bring the level of service up to your expectations, this unit may be removed with a 30 day written notice.” Although Waste Management did not have an “unfettered right” to terminate the agreement at its discretion, under this clause, Waste Management did not have to notify Fresh Brew of its dissatisfaction in writing and did not have to allow any specified period for Fresh Brew to improve its service.

          The deposition testimony attached to the motion for summary judgment established that Fresh Brew was aware, before April 1, 2002, that Waste Management was not satisfied with some of Fresh Brew’s services. Waste Management gave Fresh Brew notice on April 1 that it was terminating the Fresh Brew contract effective May 1, 2002. The notice stated that the primary reason for the cancellation was price, but that “other factors were involved.”

          Fresh Brew argues that the contract does not permit cancellation because of price. However, the contract’s dissatisfaction clause is very broad, stating, “If you are dissatisfied with the service for any reason.” We conclude that this language includes dissatisfaction with the price of Fresh Brew’s products.

          We hold that Waste Management complied with the November contract in its termination procedures. We further hold that Waste Management did not breach the November contract.

          We overrule Fresh Brew’s first issue as it relates to the November contract.

III.    The Remaining Eight Contracts

          Waste Management and Fresh Brew entered into seven contracts prior to the September contract and one contract after the November contract. Waste Management did not address these eight contracts in its motion for summary judgment, but attempts to include them in this appeal by asserting that all ten contracts contain similar language and are subject to the same analysis. We disagree.

          Five of the eight additional contracts are still in their primary term, and four of them have dissatisfaction clauses with requirements that differ from that in the November contract, including notification in writing of the details of the dissatisfaction. By rendering a take-nothing judgment on Fresh Brew’s breach-of-contract claim, the trial court granted relief on issues that were not presented in Waste Management’s motion. See Mafrige v. Ross, 866 S.W.2d 590, 592 (Tex. 1993) (holding that if judgment grants more relief than requested, it should be reversed and remanded), overruled on other grounds, Lehmann v. Har-Con Corp., 39 S.W.3d 191, 204 (Tex. 2001).

CONCLUSION

          In light of our ruling on Fresh Brew’s first issue that the September contract was not valid and enforceable and that the November contract was valid and enforceable, but was not breached, we need not reach Fresh Brew’s second issue.

          We affirm the judgment of the trial court that Fresh Brew take nothing on its breach-of-contract claims with regard to the September and November contracts. We reverse the judgment and remand the cause to the court below for further proceedings with respect to the remaining eight contracts.

                                                             Sam Nuchia

                                                             Justice

Panel consists of Justices Nuchia, Hanks, and Higley.