United States District Court, D. New Jersey
MEMORANDUM AND ORDER
G. SHERIDAN UNITED STATES DISTRICT JUDGE
matter returns to the Court after remand from the Third
Circuit. Aliments Krispy Kernels, Inc. v. Nichols
Farms, 851 F.3d 283 (3d Cir. 2017). The Third Circuit
held that there were material issues of fact as to whether
the parties agreed to arbitrate, which precluded the Court
from entering judgment in either party's favor. Presently
before the Court are cross-motions for summary judgment. (ECF
Nos. 50, 61). For the reasons discussed herein, because there
remain material issues of fact, both parties' motions are
matter stems from a disagreement over whether the parties
agreed to arbitrate disputes arising out of the sale of
pistachios. Aliments is a Canadian company in the business of
producing various nut-based snacks for consumers, and has its
principle place of business in Quebec, Canada. (ECF No. 50-8,
"Aliments Statement of Material Facts [SOMF]" at
¶ 1). Nichols is a California-based company that grows
and sells pistachio nuts. (ECF No. 61-10, "Nichols SOMF,
" at ¶ 3).
to Aliments, in August 2012, it contacted its American
broker, Sterling Corporation, to purchase thousands of pounds
of pistachios. (Id. at ¶ 4). Thereafter, on
August 24, 2012, Aliments, through Sterling, contracted with
Nichols to purchase 1, 600 units of pistachios. (Aliments
SOMF at ¶ 2; ECF No. 21-1, "Sterling's August
Sales Confirmation"). This agreement was memorialized in
"Sales Confirmation" prepared by Sterling that same
day. (Id.). The Sales Confirmation states that
shipment would be made in October 2012 and includes a 30-day
credit term. (ECF No. 21-1, "Sterling's August Sales
Confirmation"). Additionally, this Sales Confirmation
includes the following arbitration provision: "Any
controversy or claim arising out of this contract shall be
settled by arbitration by the Association of Food Industries
of New York in accordance with its rules."
(Id.). Nichols never signed this Confirmation.
event, a month later, September 27, 2012, Aliments again
contracted with Nichols, through Sterling, for another order
of pistachios. (Aliments SOMF at ¶¶ 3-4; ECF No.
21-2, "Sterling's September Sales
Confirmation"). Again, Sterling prepared a Sales
Confirmation on Aliment's behalf, which included the same
terms and arbitration provision as Sterling's August
Sales Confirmation. (Id.). Moreover, as with the
August Sales Confirmation, it is undisputed that Nichols
never signed the September Sales Confirmation.
(Id.). Based on the preparation of these two Sales
Confirmations, Aliments contends that it had enforceable
contracts with Nichols for the sale of pistachios, which
would be subject to arbitration should any dispute arise.
However, to Aliments' surprise, after conducting a credit
check, Nichols' declined to extend credit to Aliments
and, instead, offered to sell the pistachios only after
receiving payment in full. (Nichols SOMF at ¶¶
12-13). As discussed below, Aliments refused to pay in
advance, and was ultimately forced to buy from another
however, provides a different account of these transactions.
According to Michael Lawrence, President of Pacific /
Atlantic Crop Exchange, Inc. (Pacific), an agricultural
broker, he received a call from Sterling on August 24, 2012,
about purchasing pistachios from Nichols. (ECF No. 61-2,
"Lawrence Declaration" at ¶ 4). Lawrence then
relayed this interest to Nichols' Sales Manager, Freddy
Fernandez, who gave Lawrence a verbal confirmation as to
price and quantity. (Id. at ¶ 5). That same
day, Lawrence prepared a Sales Confirmation, memorializing
the terms agreed upon, and emailed it to Sterling.
(Id.). The following month, September 2012, Sterling
contacted Pacific about making a second order for pistachios.
(Id. at ¶ 6). Again, Lawrence relayed this
information to Nichols and, after receiving verbal approval
from Fernandez, prepared a second Sales Confirmation that was
emailed to Sterling on September 27, 2012. (Id.).
August and September Sales Confirmations contain the same
terms, with regards to quantity and price, as Sterling's.
However, there were apparently two different versions of
Pacific's Sales Confirmations, one which included the
arbitration clause and one that did not. Specifically, the
August and September Sales Confirmations that Lawrence
emailed to Sterling did not include an arbitration clause.
(ECF No. 61-2 at 7, 9, 11, "Pacific's Emailed
Confirmations"). However, the versions attached to
Aliment's Motion to Confirm the Arbitration Award contain
an arbitration clause, which states:
ARBITRATION: Any controversy or claim arising out of this
contract shall be settled in binding arbitration by the
Association of Food Industries, Inc. of New York in
accordance with its rules then obtaining.
(ECF Nos. 21-5, -6). In his declaration, Lawrence identified
these versions as the transmitted copies that he sent to
Sterling. (Lawrence Declaration at ¶¶ 5, 6).
However, he did not explain why these versions included an
arbitration clause, but the emailed Sales Confirmations did
not. In any event, Lawrence did not understand the Sales
Confirmations to constitute binding agreements:
I did not discuss credit terms of the sale with [Sterling].
In the agricultural commodities business, an agreement on
credit terms is one of the elements that needs to be agreed
to in order for a binding contract to be created. As was the
case before, I did not discuss credit terms of the sale with
[Sterling] as I had no authority to do so.
(Lawrence Declaration at ¶ 5). He explained,
"[b]ased on my many years in the commodity brokerage
business, Nichols had the right to perform a credit check on
[Aliments], and require security or advance payment if it
thought it to be necessary." (Id. at ¶ 6).
Lawrence also acknowledged that he received Sterling's
August and September Sales Confirmations; however, because
they were not signed by Aliments, he did not forward them to
Nichols. (Lawrence Declaration at ¶ 8). Lawrence
[Pacific's] business practice, which I believe is
consistent with industry practice, is not to forward to the
seller unsigned confirmations. Instead, we wait to receive
(and pass on) either a written purchase order or a signed
confirmation from the buyer, which we then forward to the
seller, and/or a written contract or sales acknowledgement
from the seller, reflecting a firm offer to purchase product.
(Id.). According to Lawrence, Pacific never received
a signed confirmation from Sterling. ...