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Barnstable jury finds bottler in breach of contract.
By JACK PERRY
BARNSTABLE - The Coca Cola Bottling Company of Cape Cod was ordered to pay a defunct Chatham company $2.52 million for failing to bottle and distribute its "Nantucket Natural" water.
A Barnstable Superior Court jury awarded the damages Thursday after concluding that the bottler had breached a contract with Cape Cod Coolers, Inc., doing business as Nantucket Natural.
Former Chatham resident William Buchanan and Chatham resident John D. Warner, principals in Cape Cod Coolers Inc., lost the opportunity to earn millions in the emerging bottled water business, according to James D. O'Brien Jr., an attorney for the Cape Cod Coolers.
"My client was on the cutting edge of what would become the billion dollar water industry and the timing of it was great, but we lost an opportunity over time that my client's company could not recover from," O'Brien said.
Warner said, "We felt we had a wonderful business opportunity that fell by the wayside. We were pleased that we had a thoughtful jury."
Warner and Buchanan had planned to branch out into other waters, but the problem with Coca Cola Bottling of Cape Cod led to the business's demise, Warner said.
In 1992, Cape Cod Coolers reached an oral agreement with the Coca Cola Bottling Company of Cape Cod to bottle and distribute Nantucket Natural, a mixture of spring water from Nantucket and other sources, O'Brien said.
But Coca Cola failed to follow-through on its agreement after Cape Cod Coolers Inc. terminated its relationships with other bottlers and spent $200,000 installing bottling equipment in the Sandwich plant, according to the lawsuit.
John Kayajan, president and chief executive officer of Coca Cola Bottling of Cape Cod, could not be reached for comment yesterday. Company attorney Kirk Griffin also could not be reached.
O'Brien said he did not know whether Coca Cola Bottling of Cape Cod would appeal.
The jury reached its verdict after six days of trial and about four hours of deliberation.
Cape Cod Coolers thought it had a long-term relationship with Coca Cola Bottling of Cape Cod to bottle and distribute millions of cases of water, O'Brien said.
"We felt this was a permanent relationship. Having installed equipment in their plant, we felt we had an agreement with them that was much closer to a partnership," O'Brien said.
Coca Cola Bottling of Cape Cod was to bottle the water and distribute it on Cape Cod. Other distributors were to distribute it to other parts of the country, including the West Coast, O'Brien said.
Cape Cod Coolers also thought it would benefit from Coca Cola's distribution muscle, said Michael Zawadzkas, an Orleans attorney who also represented Cape Cod Coolers.
But the agreement got off to a bad start. Eager to get the products into the market for the peak summer season in 1993, Cape Cod Coolers expected distribution to begin on Memorial Day, but it wasn't started until August, according to the suit.
Between July 1993 and July 1994, Coca Cola Bottling of Cape Cod bottled 8,500 cases of the water, substantially below the originally projected amount of 100,000, the suit said.
And some of the water it did bottle was contaminated because of the "negligent maintenance of the bottles" by Coca Cola of Cape Cod, the suit said.
Expert witnesses testified that Buchanan and Warner lost $3 million to $7 million because of the Sandwich company's failure to distribute and bottle its product, Zawadzkas said.
"Since 1993 until the present there's been tremendous growth in the still-water business. It's been close to double-digit increases in each of the last three or four years," he said.
With interest, the jury's award should approach $3.5 million, O'Brien said.