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Home My WebLink About98-04395 I I I , I I .. I i ~ I ~ . , Q " . ~ 1'! ... ~ I , ~ I I I ~ H . cr ~ l., """,., .. '~'-;t " " " r ~ .. :) ~ * d I i I , i ( I I,. , ~I - ! .. I ':) , . , - I v! "'! I 0-' r<l :t" . 001 c;:r' . ~\ I COUNT I BREACH OF CONTRACT COTT BEVERAGES USA, INC. v. RITE AID CORPORATION 8. The averments in paragraphs 1 through 7 above are hereby incorporated by reference. 9. On or about December 1, 1993, Cott entered into a written contract with Rite Aid (the "Rite Aid Agreement"). A true and correct copy of the Rite Aid Agreement is attached hereto as Exhibit A. 10. The Rite Aid Agreement provides, inter alia, that Cott would be the exclusive supplier of retail branded soft drinks at Rite Aid drugstores for a three-year period. As part of the Rite Aid Agreement, Rite Aid agreed, in numbered paragraph 6, to use its best efforts to purchase at least two million cases of soft drinks from Cott during each year of the Rite Aid Agreement, which was to have expired in April 1997. 11. At all times, Cott has fully and completely complied with its obligations under the Rite Aid Agreement. 12. In or about early 1995, Rite Aid, in blatant breach of the Rite Aid Agreement, ceased purchasing soft drinks from Cotto -3- 13. Rite Aid also breached the Rite Aid Agreement by refusing to pay Cott for certain invoices that had been outstanding at the time that Rite Aid improperly refused to purchase soft drinks from Cott and also by improperly refusing either to pay for or to return certain pallets that had been delivered to Rite Aid prior to the time that Rite Aid improperly refused to purchase soft drinks from Cotto 14. As a result of Rite Aid's breaches of the Rite Aid Agreement, Cott has suffered monetary damage in excess of $25,000.00. 15. Specifically, in addition to benefit of the bargain, consequential, incidental and lost profit damages, Plaintiff Cott has suffered the following losses as a result Rite Aid's breach of contract: Trade Receivables (invoices that were unpaid at the time of Rite Aid's breach of contract); Pallets Receivable (cost of pallets that had been delivered to Rite Aid but neither paid for nor returned by Rite Aid at the time of Rite Aid's breach of contract); Destroyed Full Goods (product specifically made for Rite Aid but which had to be destroyed as a result Rite Aid's breach of contract); Raw Materials (the value of raw materials unique to Rite Aid with which Cott was left as a result of Rite Aid's breach of contract); and Launch Fund (the amount invested by Cott pursuant to Rite Aid's promises and -4- commitments in the Rite Aid Agreement, which amount Cott has lost by virtue of Rite Aid's breach of the Rite Aid Agreement). As itemized on the Summary of Outstanding Balances, a copy of which is attached hereto as Exhibit D, the total amount of these specific items of damage is $887,290.00 (plus prejudgment interest) . 16. Despite repeated demands by Cott, Rite Aid has refused to compensate Cott for any of the damage which Cott has suffered because of Rite Aid's breach of the Rite Aid Agreement. WHEREFORE, Plaintiff Cott respectfully requests that this Court enter judgment in its favor and against Defendant Rite Aid for all monetary damage which Cott has suffered as a result of Rite Aid's breach of the Rite Aid Agreement. Cott further requests that the Court award Cott prejudgment interest as well as the costs which it has incurred and will incur in pursuing this litigation, including but not limited to attorney's fees, and that the Court grant such further relief as the court deems just and proper. -5- at the time that Perry improperly refused to purchase soft drinks from Cott and by improperly taking deductions from invoices which Cott had previously issued to Perry. 23. As a result of Perry's breach of the Perry Supply Agreement, Cott has suffered monetary damage in excess of $25,000.00. 24. Specifically, in addition to benefit of the bargain, consequential, incidental and lost profit damages, Plaintiff Cott has suffered the following losses as a result Perry's breaches of then Perry Supply Agreement: Trade Receivables (invoices that were unpaid at the time of Perry's breach of contract); Customer Deductions (amounts which Perry improperly deducted from invoices issued to it by Cott); and Raw Materials (the value of raw materials unique to Perry with which Cott was left as a result of Perry's breach of contract). As itemized on the Summary of Outstanding Balances, a copy of which is attached hereto as Exhibit D, the total amount of these specific items of damage is $27,172.00 (plus prejudgment interest) . 25. Despite repeated demands by Cott, Perry has refused to compensate Cott for any of the damage which Cott has suffered because of Perry's breach of the Perry Supply Agreement. -7- the price specified in the visi-Cooler Agreement, the Visi- Coolers which Cott had placed in Perry drugstores. 29. As stated above, in or about early 1995, in breach of the Perry Supply Agreement, Perry ceased to purchase soft drinks from Cotto 30. In addition to breaching the Perry Supply Agreement by refusing to purchase soft drinks from Cott, Perry breached the vis i-Cooler Agreement by refusing to pay for the visi-Coolers which had been placed in Perry drugstores pursuant to the visi-Cooler Agreement. 31. As a result of Perry's breach of the visi-Cooler Agreement, Cott has suffered monetary damage in excess of $25,000.00. 32. Specifically, as itemized on the Summary of Outstanding Balances, a copy of which is attached hereto as Exhibit D, the total amount owed to Cott for the required purchase of visi-Coolers is $187,695.00 (plus prejudgment interest) . 33. Notwithstanding that Cott has made repeated demands, Perry has refused to make any payments required under the Visi-Cooler Agreement. -9- .... '%It- MI'. Ddvld McDermott May 18, 1993 Page 3 The above per case upcharges reflect an estimated annual beverage volume to be vurchased by Perry lJrugs of (i) non-New Age beverages of 600,000 cases per year and (ii) of New Age heverages of 100,000 oases per year. If at the end of any year of the tena of this agreement the total number of cases of non-New Age and/or New Age Leverages, each calculated cumulatively, purchased and paid for by Perry Drugs does not accord with these estimates there will be II monetary adjusttnent between us within 30 days after the end of each such year of the term of this agreement (eg. if at the CIld of year 2, Perry Drugs has not purchased an~ paid for 1,200,000 cases of non-New Age beverages and/or 200,000 oases ofNcw Age beverages, an adjustment will have to be made). For the Pl1ll'oses hereo~ "year of the tenn" means llDnual periods the: fust of which commences on April 1, 1993 and the last of which COlIIIIleIlces on Aprill, 1997. The intention of the foregoing is that Colt will be reimbursed for its Costs through case upcharges and adjustments, if ncce!t~my, on an ongoing basis end will be fully reimbursed for its Costs (which are estimated at US $231,733.00 for 160 Machines) by no later than April 30, 1998. 7. PerI}' Drugs or other appropriate personnel will stock lII\d re-slock the Machines with product and clean and maintain the Machines, as required, to ensurp, the day to day opet"lIlion of tht! Machines. 8. In the eVt:ll.t that Cott ceases to be the sole supplier of Perry Drugs soft drinks to Peny Drugs or if Perry Drugs discontinues its Perry Drugs sort drink program, Cot\: may require Perry Drugs to purchase the Machines at the principal amoW'\t then oUlsbulding b<l:sed on a fully amortized ten (10) year lease with an implicit interest rate of 10% per annum. The principlll amount will indudt: the cost of the Machines plus documented installation costs. 9. Upon installation of the machines, Cott will train a minimum of two (2) Perry Drug's employPes at each location to operate the Machines. Any mechanical problems with the Machines shall be repaired by Cott at its expense aR soon as rCllSonably possiLIe after reporting by Perry Drug's, but in no event, later than three (3) business days after such reporting. . 10. Perry Drugs agrees to take rQasonablc care to ensul'~ the Machines are safeguarded. c RITE AID/ PERRY DRUGS SUMMARY OF OUTSTANDING BALANCES QUANTITY LIABILITY PERRY: TRADE RECEIVABLES $2,135 CUSTOMER DEDUCTIONS $11,650 PALLETS RECEIVABLE $0 OUT.OF. DATE FG'S $0 RAW MATERIALS 2L T LABELS(JCI LENEXA) 963077 LABELS $13,387 VENDING EQUIP LIAB 185 VISICOOLERS $187,695 LAUNCH FUND (AMT SPENT] $0 $214.867 $214,867 RITE.AID: TRADE RECEIVABLES S163.980 CUSTOMER DEDUCTIONS SO PALLETS RECEIVABLE 928 PALLETS S5,754 DESTROYED FULL GOODS COLA 6PK 13667cs $49.611 DIET COLA 6PK 11080cs $40,220 2LTCFDC 7S0 CS $2,723 S/F COLA CANS 1701 CS $6,175 CIF SIF COLA CANS 11,095 $40,275 S/F COLA 2L TR 4537 CS $16,469 C/F S/F COLA 2L TR 2533 CS $9,195 COLA 2L TR 4804 CS $17,439 S182,106 RAW MATERIALS: DIET COLA CAN BODIES 57,180 $3,139 DIET COLA LABELED 2L TR 1,000 $152 CF DIET COLA LABELED 2L TR 1,060 $161 COLA CAN BODIES 39,678 $2,178 CF SF COLA CAN BODIES 31.120 $1.708 COLA LABELED BTL 46,080 $7,004 COLA 2L TR LABELS 2,323.685 $35,715 S/F COLA 2L TR LABELS 1.771,400 $27,226 CFSF COLA 2L TR LABELS 1,182,000 $18.167 S95,450 VENDING EaUIP L1AB SO LAUNCH FUND (AMT SPENT] S440.000 $887,290 TOTAL PERRY DRUG $214,867 TOTAL RITE AID $887,290 GRAND TOTAL LIABILITY $1,102,157 Closing Exhibi t D 2120/98 .. 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