Appeals from the United States District Court for the Northern District of Illinois, Eastern Division. No. 00 C 2820--Harry D. Leinenweber, Judge.
Before Flaum, Chief Judge, and Manion and Kanne, Circuit Judges.
The opinion of the court was delivered by: Kanne, Circuit Judge
SNA Nut Company ("SNA"), a debtor in Chapter 11 bankruptcy, sued Häagen-Dazs ("HD") for the alleged breach of five supply contracts. Following trial in an adversary proceeding, the bankruptcy court issued proposed findings of fact and conclusions of law. Based on these proposed findings and conclusions, the district court entered judgment in favor of SNA. On appeal we modify the judgment of the district court and affirm the judgment as modified.
Beginning in the 1980s, SNA manufactured and supplied nut products to HD for use in the manufacture of ice cream, and by 1994, SNA was HD's exclusive supplier of nut products. The products that SNA sold to HD were manufactured according to unique recipes that were developed jointly by SNA and HD. HD would purchase the nut products pursuant to supply contracts, agreeing to purchase a set volume of nut products over a set period of time for a set price. HD's purchasing director, Clifford Stecker until January 1994 and Richard Reider starting in 1994, negotiated these supply contracts with SNA's outside broker, Hank Rich. After agreeing on the quantity, price, and duration, SNA would send to HD a sales contract setting forth the terms of their agreement. HD would respond by sending back to SNA a purchase order containing identical terms. Neither party would sign the other's document. The following five supply contracts are the subject of this litigation:
Contract for: Amount (Pounds)
Duration of Contract Price/Pound
630,000 10/4/93 - 8/31/94 $3.85
Diced Walnuts 121,020 11/29/93 - 9/30/94 $4.10 .02/month or $3.95
Macadamia Brittle 35,000 6/12/94 - 12/31/94 $2.735
Diced Almonds 325,000 6/2/94 - 12/31/94 $2.735
Macadamia Fines Macadamia Minis
200,000 6/9/94 - 12/31/94 $2.735
HD would not take delivery of an entire order at any one time. Rather, the managers of HD's individual plants would notify SNA when and how much nut product they wanted "to pull." Although SNA would not remind HD to schedule orders, SNA would send HD a monthly "contract balance" report, which recited the terms of the contracts between the parties and showed how much of each product had been pulled under each contract as of the date of the report.
In March 1994, several of SNA's creditors filed an involuntary bankruptcy petition against it, and SNA then converted the petition into a voluntary bankruptcy under Chapter 11 of the Bankruptcy Code. Due to financial problems associated with the bankruptcy, Hank Rich notified HD in March 1994 that SNA was temporarily unable to process almonds and suggested that HD secure an alternate almond supplier. Later that month, SNA expressed to HD that it was willing and able to resume fulfilling its obligations under the diced almonds contract. Three months later, Reider sent Rich a letter explaining that during the months of March, April, and May, HD had secured 217,950 pounds of almonds from alternate suppliers per Rich's suggestion. He further requested that the contract be reduced to reflect this difference, but SNA refused to do so.
In January 1995, the bankruptcy court confirmed a Chapter 11 reorganization plan for SNA. One month later, SNA filed a lawsuit against HD to collect payments that HD allegedly owed it for pecan and other nut products (the "first adversary complaint"), which SNA had delivered to HD after the filing of their bankruptcy petition. HD then filed a counterclaim in that adversary action. Additionally, HD moved for leave to file a late proof of claim in SNA's Chapter 11 bankruptcy case, and the bankruptcy court granted HD's request.
Then, on September 6, 1996, SNA filed the adversary action at issue in this appeal, alleging that HD breached the five aforementioned supply contracts (the "second adversary complaint"). One week later, HD filed its proof of claim in SNA's Chapter 11 case, and on September 27, HD filed a timely jury demand in the second adversary action. Subsequently, the bankruptcy court disallowed HD's proof of claim in SNA's Chapter 11 bankruptcy case with prejudice, approved a settlement agreement between the parties in the first ...