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Mini Melts USA, Inc. v. Mini Melts, Inc.

United States District Court, D. Connecticut

September 18, 2017

MINI MELTS USA, INC., et al., Plaintiffs,
v.
MINI MELTS, INC., et al., Defendants.

          RULING ON CROSS-MOTIONS FOR SUMMARY JUDGMENT

          Jeffrey Alker Meyer United States District Judge

          It is a venerable principle of contract law that an “agreement to agree” does not itself constitute an enforceable agreement. That is true notwithstanding the parties' best of intentions that they will reach an agreement one day. Just as the freedom of contract allows parties to agree to be bound by an agreement, it equally allows for the parties to agree that they will not be bound unless they enter a future agreement.

         If the parties have expressly agreed that there will be no enforceable agreement unless they agree to one, it is not for the courts to imply that there exists an enforceable contract. It is not for the courts to balance all the equities and to decide that it would be unfair not to lock the parties into an agreement that they declined to reach in the first instance. As Justice Cardozo has observed, “we are not at liberty to revise while professing to construe.” Sun Printing & Publ'g Ass'n v. Remington Paper & Power Co., 235 N.Y. 338, 346 (1923).

         Plaintiffs here have sued defendants to enforce terms of a provision that anticipates defendants' sale of assets but is expressly conditioned upon the parties agreeing to “a mutually acceptable purchase agreement.” It is a classic agreement to agree. And it is unenforceable as a matter of law. Accordingly, I will grant summary judgment for defendants.

         Background

          “Mini Melts” is a cryogenically frozen ice cream product that is sold in many markets worldwide. Somewhat similar to the equally alliterative “Dippin' Dots” brand, Mini Melts are produced using nitrogen to flash freeze ice cream in the form of tiny colorful pellets.

         The plaintiffs in this case are Mini Melts USA and two of its principals, Shawn and Daniel Kilcoyne. The defendants are Mini Melts, Inc. (MMI), which owns the U.S. trademark for Mini Melts, and Thomas Mosey, the owner of patents used to produce the Mini Melts product.

         In 2004, the Kilcoynes entered into a customer agreement with MMI in order to become one of MMI's distributors. The Kilcoynes eventually became MMI's biggest customer. As the relationship between the parties progressed, they discussed the possibility of the Kilcoynes taking over and eventually purchasing MMI.

         On June 6, 2008, Mosey sent a Letter of Intent to the Kilcoynes. See Doc. #73-1 at 56- 57. In the letter, Mosey proposed to sell MMI to the Kilcoynes, offering several “purchase options.” The Kilcoynes did not purchase MMI in response to this letter, but the parties continued to discuss the possibility.

         In December 2009, after a series of discussions, the parties signed a non-binding Deal Terms document. The Deal Terms contemplated “two phases: (A) Turnover of operations to [plaintiffs], and (B) purchase of intellectual property.” Doc. #77-1 at 16. The document focused mostly on the first phase, the turnover of operations. This phase contemplated plaintiffs becoming the exclusive manufacturer of Mini Melts in the United States, discussed what assets would be transferred to plaintiffs, and discussed royalty payments to be paid to defendants by plaintiffs in return for their greater role in the manufacture of Mini Melts.

         As to the purchase of intellectual property, the Deal Terms stated that “at any time after closing, [plaintiffs] may purchase all U.S. intellectual property . . . for the price of $3, 000, 000 less any credits against the purchase price from Purchaser's royalty payments or sales of territories.” Id. at 17. The Deal Terms, however, also included the following language at the end: “These deal terms are not binding on either party unless or until they are included in a definitive, binding Purchase and Sale Agreement. Seller reserves the right to decline any offer in its sole discretion.” Ibid.

         In April 2010, the parties entered into a Manufacturing and Distribution Agreement (MDA). Under the MDA, plaintiffs became the exclusive manufacturer and distributor of Mini Melts within the United States. Id. at 21. The MDA specified that plaintiffs' term as manufacturer and distributor would last for five years and then automatically renew for an additional five years as long as plaintiffs were not in default and paid a specified royalty. Id. at 22. The MDA also gave plaintiffs the right to use two patents held by defendants and provided for the transfer and lease of certain equipment. Id. at 23.

         The MDA featured a standard “integration” clause, stating that the MDA “represents the complete and final understanding of the parties with respect to the subject matter hereof. It supersedes any previous understandings, oral or written, between the parties and any such prior understandings or agreements shall no longer have any force or effect.” Id. at 46.

         In addition, the MDA also contained the following “termination-by-purchase” clause that ...


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