Eternal Beverages, Inc. v. Mayer Bros. Apple Products, Inc.
Attorneys and Parties
Brief Summary
Private-label bottled water manufacturing and pricing dispute, including cessation of a 2.5-liter product line and unpaid invoices after a price increase.
Supreme Court, Erie County denied in part defendant's motion for partial summary judgment, refusing to grant judgment on defendant’s counterclaims and to dismiss plaintiff’s breach of contract claim.
The Appellate Division modified by granting defendant summary judgment as to liability on its first counterclaim for breach of contract related to unpaid invoices for non-2.5-liter bottles.
Plaintiff accepted the November 2020 price increase by conduct—issuing purchase orders, paying invoices for over a year, and not objecting—thereby forming a binding contract under the Uniform Commercial Code (UCC) 2-201 [statute of frauds for sale of goods $500 or more], 2-204(1) [contract may be formed in any manner sufficient to show agreement], and 2-207(3) [conduct recognizing a contract is sufficient to establish a contract]. Plaintiff’s economic duress claim failed because it did not promptly repudiate the agreement after the alleged duress.
Background
The parties had a longstanding arrangement in which defendant bottled spring water for plaintiff in several sizes (600 milliliters, 1 liter, 1.5 liters). In 2019 they discussed and began producing a 2.5-liter bottle, but defendant ceased producing that size due to quality and cost issues. In November 2020, defendant issued a letter increasing prices for the other sizes. Plaintiff continued to issue purchase orders at the higher prices and paid invoices for over a year without objection, then stopped paying invoices dated December 2021 through April 2022. Plaintiff sued for breach of contract over cessation of 2.5-liter production; defendant counterclaimed for breach of contract and unjust enrichment based on the unpaid invoices.
Lower Court Decision
Supreme Court, Erie County (Colaiacovo, J.) denied in part defendant’s motion for partial summary judgment, declining to dismiss plaintiff’s breach of contract claim regarding the 2.5-liter bottles and declining to grant summary judgment to defendant on its counterclaims.
Appellate Division Reversal
The Appellate Division unanimously modified by granting defendant summary judgment on liability for its first counterclaim (unpaid invoices for 600-milliliter, 1-liter, and 1.5-liter bottles), holding that plaintiff accepted the price increase by conduct and could not rely on duress due to failure to repudiate. The court affirmed the denial as to damages on that counterclaim because factual issues remain regarding amounts owed. It also affirmed the denial of summary judgment dismissing plaintiff’s breach of contract claim concerning the 2.5-liter bottles due to factual disputes over the terms, duration (trial run vs. longer-term), responsibility for cessation, and production problems.
Legal Significance
Clarifies that a buyer’s continued ordering and payment after a price-increase proposal can establish contract modification and acceptance by conduct under the Uniform Commercial Code (UCC), and that an economic duress defense is unavailable absent prompt repudiation. Also underscores that summary judgment on liability may be appropriate even when damages remain in dispute.
Acceptance by conduct binds parties to price modifications when the buyer continues ordering and paying without objection; failing to promptly repudiate defeats a duress defense. However, fact disputes about a separate product line (here, a 2.5-liter bottle) can preclude summary judgment on that claim.