Please ensure Javascript is enabled for purposes of website accessibility
Home / Courts / N.C. Business Court / Tort/Negligence – Fraudulent Concealment – Output Contract – Most Favored Nation Clause

Tort/Negligence – Fraudulent Concealment – Output Contract – Most Favored Nation Clause

The plaintiff-hog producer has failed to cite support for its contention that its production sales agreement, which included a most favored nation clause, imposed a duty on the defendant-purchaser to disclose to plaintiff any changes to the economic benefits that defendant offered other suppliers. Moreover, a contractual duty to disclose, if one exists, might support a claim for breach of contract, but it does not support a claim for fraud.

The court grants defendant’s motion to dismiss plaintiff’s fraudulent concealment claim. Otherwise, the motion is denied.

Plaintiff cites a statement – made “sometime in 2014” – by one of defendant’s representatives, Chuck Allison, that defendant “was already paying more for [plaintiff’s] hogs than it paid for any other supplier’s hogs.” Given that this dispute involves two large, sophisticated entities with a longstanding business relationship governed by a complex commercial contract, the court concludes that plaintiff has not pleaded enough circumstantial detail regarding the timing of Allison’s statement (a reference to one year in a relationship lasting three decades) or its content (a reference to “paying more” in the context of a complex contract involving formulas, matrices, discounts, and more). Nor has plaintiff alleged with particularity what it is that Allison’s statement supposedly concealed, such as which suppliers were receiving better terms at the time of the statement and what those terms were.

Maxwell Foods, LLC v. Smithfield Foods, Inc. (Lawyers Weekly No. 030-011-23, 13 pp.) (Adam Conrad, J.) Reid Phillips, Charles Coble, Eric David and Amanda Hawkins for plaintiff; Robert Harrington, Ethan White, Mark Hiller and Emma Perry for defendant. 2023 NCBC 11

Leave a Reply

Your email address will not be published. Required fields are marked *