Copeland v. Baskin Robbins U.S.A.

96 Cal.App.4th 1251 (2nd Dist. 2002)

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Nature of the Case

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Facts

Baskin Robbins operated an ice cream manufacturing plant in Vernon. Baskin announced its intent to close the plant and Copeland expressed an interest in buying it. Copeland made clear his agreement to purchase the plant was contingent on Baskin agreeing to purchase the ice cream he manufactured therein. After several months, a deal took shape in which Copeland would purchase the assets and sublease the plant property. Baskin, in turn, would purchase 7 million gallons of ice cream over a three-year period. Baskin sent Copeland a letter detailing the terms that had been reached and that if the terms were acceptable, they wanted a copy of the letter returned with a nonrefundable check for $3,000 and closing could be coordinated in 30 days. Copeland signed the letter agreeing to the terms and returned the letter and the deposit. After Copeland had accepted, the parties continued to negotiate the terms of the co-packing agreement. They agreed to the prices to be paid, the flavors, quality standards and controls, spoilage and trademark issues. Copeland believed that he had an oral agreement for a price of $.85 per tub but that they had not agreed on how the cost component was to be determined. Later that same year Baskin broke off negotiations, returned the deposit, and only wanted to proceed with a sale and lease of the plant assets but not the co-packing agreement. Copeland (P) sued for breach of contract in that Baskin (D) unreasonably and wrongfully refused to enter into the co-packing agreement. P claimed lost profits, lost employment opportunities and loss of reputation. D was granted a motion for summary judgment; the letter failed as a contract because the essential terms of the co-packing agreement were never reached. P appealed.