Bonchon LLC v. LKRG Provisions & Holdings, LLC, No. 1:2020cv03938 - Document 48 (S.D.N.Y. 2021)
Court Description: OPINION and ORDER re: 33 MOTION for Summary Judgment . filed by LKRG Provisions & Holdings, LLC, 38 MOTION for Summary Judgment . filed by Bonchon LLC: Bonchon's May 7, 2021 motion for summary judgment is granted. The Clerk of Court shall enter judgment for Bonchon and close this case. (Signed by Judge Denise L. Cote on October 29, 2021) (ide) Transmission to Orders and Judgments Clerk for processing.
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Bonchon LLC v. LKRG Provisions & Holdings, LLC Doc. 48 UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK -------------------------------------- X BONCHON LLC, Plaintiff, -v- 20cv3938 (DLC) OPINION AND ORDER LKRG PROVISIONS & HOLDINGS, LLC d/b/a FRONTIER FOOD GROUP, Defendant. -------------------------------------- X APPEARANCES: For plaintiff and counterclaim defendant Bonchon LLC: Kevin Michael Shelley Kaufmann Gildin & Robbins LLP 767 Third Ave, 30th Floor New York, NY 10017 For defendant and counterclaim plaintiff LKRG Provisions & Holdings, LLC d/b/a Frontier Food Group: Andrew C. Lang Steven Jay Harfenist Harfenist Kraut & Perlstein 3000 Marcus Ave, Suite 2el Lake Success, NY 11042 DENISE COTE, District Judge: Bonchon LLC ("Bonchon") and LKRG Provisions & Holdings, LLC d/b/a Frontier Food Group ("Frontier") dispute whether an agreement was a binding contract that obligated Bonchon to purchase certain quantities of food products from Frontier. Plaintiff Bonchon has moved for s mmary judgment on its claim for a declaratory judgment that it did not breach the agreement, Dockets.Justia.com contending that the agreement was not a binding and enforceable contract between Bonchon and Frontier. Defendant Frontier has moved for summary judgment on a counterclaim for breach of contract, premised on its assertion that the agreement was enforceable and Bonchon breached it by failing to make purchases as required by the agreement. For the following reasons, Bonchon's motion for summary judgment is granted. Background The following facts are derived from the parties' submissions in connection with their cross-motions for summary judgment. Any facts in dispute are construed in favor of Frontier, unless otherwise noted. Bonchon is a national restaurant chain. Some Bonchon locations are owned and operated by Bonchon directly, and the company also licenses its intellectual property to franchisees. Frontier is a food wholesaler that manufactures products for The purchases of food items that are sold in restaurant chains. Bonchon restaurants are made through three distributors (the "Distributors n }. The Distributors purchase food items from producers like Frontier and then resell them to individual Bonchon restaurants. In 2019, Bonchon's corporate chef, Henry Balle, met with Frontier's co-founders and principals, Ricardo Garcia and Lauren 2 the Frontier Products for a "sales trial." Kenworthy and Balle signed the Supply Agreement on August 26, 2019. 1 After Kenworthy and Balle signed the Supply Agreement, Kenworthy completed five spreadsheets provided by Bonchon -- one for each Frontier Product -- that contained certain additional information about storage and shipping. These spreadsheets refer to an average monthly volume of cases to be shipped to the Distributors but do not include language indicating that the Distributors were, in fact, obligated to purchase that average monthly volume. Indeed, the spreadsheets contemplate a minimum order of as few as one case at a time. On September 6, Bonchon instructed the Distributors to place an initial order for the Frontier Products, and over the course of that month, the Distributors submitted purchase orders to purchase a total of 2,161 cases of the Frontier Products at a total price of $151,863.80. 2 In response to these orders, Frontier produced the quantity ordered and continued to manufacture the Frontier Products even after the orders had been fulfilled, manufacturing an additional 4,010 cases of the The parties dispute whether Balle had actual or apparent authority to enter contracts on behalf of Bonchon. The cross motions for summary judgment may be resolved without addressing this factual dispute. 1 2 Frontier does not dispute that it was paid for these orders. 4 Frontier Products. Effective September 19, Frontier made two modifications to the Supply Agreement, reducing the estimated annual volume of vegetable dumplings from 80,000 pounds to 40,000 pounds and the price of bulgogi from $5.85 per pound to $5.65 per pound. 3 While Balle acknowledged the changes in an email to Kenworthy, neither Balle nor any other representative of Bonchon initialed or signed the modified Supply Agreement. Bonchon's franchisees, however, were reluctant to purchase the Frontier Products from the Distributors and on November 20, Bonchon informed Frontier that the Distributors would not be purchasing additional inventory of the Frontier Products at that time. In an email of November 21 , Kenworthy informed Bonchon that "[Frontier] will not produce anymore [sic]" of the Frontier Products and that it was her understanding "Bonchon will continue to purchase what is produced and in inventory" at the Distributors. Between November 2019 and January 2020, Bonchon and Frontier made efforts to find buyers for the unsold Frontier Products that had already been produced but not purchased by the Distributors. These efforts proved largely unsuccessful, and on January 28, 2020, Bonchon's supply chain director informed 3 While the Agreement provided that the bulgogi price could be modified, it also provided that there would be no adjustment to the bulgogi price before February 28, 2020. 5
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