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GOLDSTEIN v. S & A RESTAURANT CORP.

October 30, 1985

BERNARD GOLDSTEIN, as Assignee of LA BOUCHERIE BERNARD LTD., and Individually, Plaintiff,
v.
S & A RESTAURANT CORPORATION, Defendant



The opinion of the court was delivered by: PARKER

 Barrington D. Parker, District Judge:

 This matter comes before the Court on defendant's Motion for Summary Judgment. After consideration of the pleadings and the record, and for the reasons outlined below, the Court grants defendant's motion.

 I.

 BACKGROUND

 Plaintiff, Bernard Goldstein, is the majority stockholder of La Boucherie Bernard Ltd. ("La Boucherie"), *fn1" a District of Columbia corporation, now bankrupt. Defendant Steak & Ale Restaurant ("S & A") is a Delaware corporation, maintaining its principal place of business in Texas. La Boucherie and S & A entered into an arrangement whereby La Boucherie was to supply meat for S & A restaurants throughout the eastern United States and in Texas. By 1981, La Boucherie was supplying approximately 120 such restaurants.

 At all relevant times, the arrangement between the parties operated as follows. S & A purchased raw meat, which it stored in warehouses located in Nebraska and Colorado. La Boucherie would draw from this inventory, ship the meat to its Maryland warehouse, and after processing the meat, distribute it to designated S & A restaurants. Within seven days of receiving the meat at its warehouse, La Boucherie was to pay S & A for the raw meat, receiving payment later for the processed meat that it delivered to the individual S & A restaurants.

 In the spring of 1981, La Boucherie fell behind in its payments to S & A. By his own admission, Goldstein owed $1.15 million by June 24, 1981. (Deposition of Bernard Goldstein, Mar. 21, 1985, vol. I, at 148-49 and Exhibit 16 thereto) ("Goldstein depo."). This arrearage was caused, at least in part, by his decision to divert funds to his real estate ventures. Goldstein depo., vol. I, at 51-52. Meanwhile, S & A had been making substantial payments to La Boucherie, remitting approximately $3.2 million between April 1 and June 19, 1981.

 On June 22, 1981, to cover its account through May 31, 1981, La Boucherie, through Goldstein, tendered three postdated checks. No current payments were made. Again on July 1, 1981, Goldstein tendered three more postdated checks to cover the previous month. This time, however, the checks were not accepted. Instead, S & A demanded and received from Goldstein a 30-day, $1 million note. Shortly thereafter, Goldstein left on a trip to Europe.

 On July 10, 1981, while Goldstein was abroad, S & A removed approximately 60 restaurants from the role of outlets that were supplied by La Boucherie. On July 13, S & A filed suit in this Court, seeking to attach La Boucherie's inventory of meat held in Maryland. In return for S & A's voluntary dismissal of that suit, Robert Goldstein, Bernard Goldstein's son, executed an agreement with S & A, modifying their earlier arrangement. The agreement, dated July 14, 1981, acknowledged that La Boucherie owed S & A approximately $1.4 million, gave control of the Maryland inventory to S & A, contained a promise to pay S & A $1 million by August 4, 1981, and affirmed that that agreement was not in derogation of any other rights as between the parties.

 Upon his return to this country, Goldstein Senior traveled to Dallas, Texas, where he signed another agreement, dated July 21, 1981, acknowledging an indebtedness of $1.3 million as well as a limitation of La Boucherie's service area to 59 restaurants, and stating that the current relationship between La Boucherie and S & A could be terminated upon ten days' notice. By the end of August 1981, La Boucherie paid S & A approximately $1 million, using borrowed funds.

 In October 1981, S & A informed La Boucherie that the latter was being terminated as a supplier of meat *fn2" in ten days' time. After some negotiation, it was settled that La Boucherie was to continue as a supplier through December 1981. That agreement was confirmed in a letter dated October 19, 1981.

 This action, filed in July 1984, seeks relief for what plaintiff believes was a wrongful termination in 1981 of its contractual relationship with S & A. Plaintiff's complaint *fn3" raises four causes of action. The first alleges breach of contract; the second, breach of fiduciary duties; the third, breach of a "duty of good faith and fair dealing"; and the fourth, misrepresentation. All four claims press the same theory of damages -- that, because of defendant's alleged wrongdoing, La Boucherie lost profits, suffered injury to its business reputation, and was forced into bankruptcy. As recompense for these wrongs, plaintiff seeks $12 million in compensatory and $50 million in punitive damages.

 Crucial to plaintiff's theory of the case is his assertion that the agreements executed in July and October 1981 are the products of duress or undue influence and, hence, are nullities. Indeed, plaintiff admits in his pleadings that "what is principally in dispute are not the underlying facts but rather the interpretation of these facts and their application to the legal standards governing the issues to be resolved." Plaintiff's Statement of Facts to Which There is a Genuine ...


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