11 U.S.C. §541; Property of the Estate; Judicial Admissions
In re Summit United Service, LLC (Summit United, LLC v. Meijer, Inc.), 2005 Bank. LEXIS 2161, Adv. No. 03-6247 (Bankr. N.D. Ga. September 19, 2005 (Drake)
Summit provided merchandise, fixtures, racks and signage to Meijer for use in Meijer’s department stores. After the filing of its Chapter 11 petition, Summit filed an adversary proceeding against Meijer seeking to recover the fixtures as property of the estate. Meijer responded that pursuant to the agreements between the parties, the fixtures became its property once they were installed in the stores.
Summit argued that the issue was controlled by offer and acceptance letters that provided that the fixtures remain the property of Summit. Conversely, Meijer contended that the issue was controlled by two written agreements – a Scan Based Trading Agreement and Vendor Agreement – that provided that the fixtures became their property after installation in the stores. Meijer further argued that the offer and acceptance letters relied upon by Summit did not constitute a valid agreement between the parties because Summit was not named in either letter and did not yet exist as a legal entity, and the person who signed on behalf of Summit did not purport to be acting on behalf of Summit.
In turn, Summit argued that the Scan Based and Vendor Agreements were no valid as they were executed by an individual who did not have authority to bind the company.
The court held that Summit judicially admitted the validity of the Scan Based Agreement by alleging in its complaint that Summit and Meijer “are parties to a scan-based trading agreement” covering eight stores, and by alleging that the agreement was an executory contract which Summit had not decided to assume or reject. Therefore, as the validity of the agreement was admitted with respect to the eight stores and the terms thereof stated that the fixtures were the property of Meijer, summary judgment for Meijer was appropriate.
With respect to the fixtures in stores other than the eight stores covered by the Scan Based Agreement, the court concluded that questions of fact remained as to which documents constituted binding agreements under state law. The court similarly held that questions of fact remained concerning Summit’s claims for amounts due for product provided to Meijer.