Shade Foods, Inc. v. Innovative Products Sales & Marketing, Inc.

Caution

78 Cal. App. 4th 847·93 Cal. Rptr. 2d 364

Court of Appeal of CaliforniaMarch 29, 2000A080316California25,316 words

Opinion

Swager, J.

Two insurance carriers, Northbrook National Insurance Company (Northbrook) and Royal Insurance Company of America (Royal) appeal from a judgment awarding compensatory and punitive damages to two insureds, Innovative Products Sales & Marketing, Inc. (IPS) and Shade Foods, Inc. (Shade). We reverse the judgments for punitive damages and modify a portion of the judgment pursuant to the other-insurance clause in the policies but otherwise affirm.

Factual and Procedural Background

Shade is a wholesale food manufacturer that makes ingredients for larger food product companies. According to Shade’s senior vice-president, General Mills is “by far” its largest customer and accounts for a “very large percentage” of its total sales. In cooperation with General Mills, Shade developed a process for manufacturing nut clusters composed mainly of diced almonds and congealed syrup with small portions of walnuts and pecans. Shade began manufacturing this product at a plant in Kansas in the late 1980’s for use in a General Mills breakfast cereal called “Clusters.” In 1993 and 1994, it sold about $12 million of the product to General Mills under a standard purchase order.

Shade initially…

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Parties

SHADE FOODS, INC.
Plaintiff
INNOVATIVE PRODUCTS SALES & MARKETING, INC.
Defendant

Judges

Swager

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