Minute Maid Corp. v. United Foods, Inc.

United Foods, Inc. (United) (defendant), a broker of frozen foods, became an authorized direct buyer of Minute Maid Corporation (Minute Maid) (plaintiff) products. Minute Maid offered direct buyers discounts for bulk purchases and provided protections against price declines, as the market conditions affecting frozen food products can cause significant price variance. Direct buyers also received considerable advance notice of price increases. As a result, if a direct buyer purchased in large quantities, it could both maximize the discounts for bulk purchases and earn a profit through speculation in inventories. United lacked the financial ability to purchase the products in large enough quantities. Accordingly, United entered into a written agreement with United States Cold Storage Corporation (Cold Storage) (defendant). Cold Storage loaned money to United with interest and took a collateral interest in the purchased products and accounts receivable for sales of the same, if acceptable to Cold Storage. The agreement also provided for a “Special Account” managed by Cold Storage to be billed with warehouse and other charges, and credited with Minute Maid’s discounts and allowances, as well as the profits earned from United’s sale of the products. At the end of the year, Cold Storage was to close the Special Account and pay United half of any credit balance or charge United half of any debit balance. Cold Storage and United terminated the contract early and split the $22,000 Special Account credit balance. United owed Minute Maid $143,141.66 for products purchased during its agreement with Cold Storage. Minute Maid sued United and Cold Storage, arguing they were engaged in a partnership, making Cold Storage equally liable for the debt. The trial court found no partnership relationship. Minute Maid appealed.