United States District Court, D. Massachusetts
PRIMARQUE PRODUCTS CO. INC., Plaintiff,
v.
WILLIAMS WEST & WITTS PRODUCTS COMPANY, d/b/a INTEGRATIVE FLAVORS, Defendant.
ORDER AND MEMORANDUM OF DECISION
TIMOTHY S. HILLMAN DISTRICT JUDGE.
Background
Plaintiff,
Primarque Products Co. Inc. (“Plaintiff” or
“Primarque”) filed claims against Defendant,
Williams West & Witts Products Company d/b/a Integrative
Flavors (“Defendant” or “WWW”)
alleging claims for Breach of Contract (Count I), Promissory
Estoppel (Count II), Intentional Interference with Business
Relations (Count III), and violation of the Massachusetts
Consumer Protection Act, Mass.Gen.L. ch. 93A (“Chapter
93A”)(Count IV). WWW filed a counterclaim against
Primarque alleging a claim for breach of contract (Count I).
Prior to trial, this Court entered summary judgment against
Primarque on its promissory estoppel and Chapter 93A claims,
limited its breach of contract and intentional interference
with business relations claims and entered judgment in favor
of WWW on its counterclaim.
The
matter went to trial and the jury entered judgment in favor
of Primarque for $51, 000 on its breach of contract claim and
$204, 000 on its tortious interference claim. This Memorandum
and Order of Decision addresses the following motions: (1)
Defendant/Counter-Plaintiff's Motion For Judgment
Notwithstanding the Verdict, To Alter or Amend the Judgment,
or Reduce the Awards (Docket No. 271); (2) Primarque Product
Co., Inc.'s Motion To Alter or Amend the Judgment and to
Award Costs (Docket No. 275); (3) Defendant's Motion For
Disallowance and Objection to Plaintiff's Bill of Costs
(Docket No. 277); and (4) Primarque Products Co., Inc.'s
Motion to Strike the Defendant's “Supplemental
Reply” Memorandum (Docket No. 285).[1]
Discussion
WWW's
Motion for Judgment Notwithstanding the
Verdict[2]
WWW
requests that the Court enter judgement notwithstanding the
verdict, or in the alternative to alter or amend the judgment
by reducing the verdict as the jury's awards are against
the manifest weight of the evidence.[3] In reviewing a motion for
directed verdict, the Court examines ‘the record in the
light most favorable to the nonmovant and will reverse
‘only if reasonable persons could not have reached the
conclusion that the jury embraced' ”. Sindi v.
El-Moslimany, 896 F.3d 1, 13 (1st Cir. 2018).
At the same time, it is this Court's “ ‘duty
to set aside the verdict and grant a new trial if [it] is of
the opinion that the verdict is against the clear weight of
the evidence, or is based upon evidence which is false, or
will result in a clear miscarriage of justice.' ”
Mayo v. Schooner Capital Corp., 825 F.2d 566, 570
(1st Cir. 1987).
Whether
WWW is Entitled to Judgement Notwithstanding the Verdict on
Primarque's Breach of Contract Claim
In
Ruling on WWW's motion for summary judgment prior to
trial, this Court found that there was no binding written or
oral agreement between the parties and therefore, WWW did not
have an obligation to provide Primarque with 90 days'
notice prior to terminating their distribution arrangement.
See Order and Memorandum of Decision, dated March 29
2018 (Docket No. 171)(“Prior Decision”). I
further found that: “under Massachusetts law,
distributorship agreements which do not expressly agree to a
durational term are terminable at will by either party upon
reasonable notice. Moreover, the reasonableness of the notice
is measured in terms of the ability of the party affected by
the termination to obtain a substitute arrangement. Damages
in such cases are limited to the “the time period
of what constitutes reasonable notice.” Prior
Decision, at pp. 25-26 (internal citations, internal
quotation marks and citation to quoted cases
omitted)(emphasis in original). Finally, I found that
“there is a disputed issue of material fact as to who
breached the contract in the first instance-did Primarque
breach the contract by surreptitiously moving business to
other suppliers and/or attempting to replicate WWW's soup
bases? Or, did WWW breach the contract by abruptly
terminating the distributorship agreement without giving
Primarque reasonable notice, that is, sufficient notice for
Primarque to obtain a substitute supplier.”
Id., at p. 27. As to this last issue, I noted that
“under Massachusetts law, there exists an implied
covenant of good faith and fair dealing implicit in every
contract. The covenant provides that neither party shall do
anything that will have the effect of destroying or injuring
the rights of the other party to receive the fruits of the
contract … Actions which may not breach an explicit
contract provision may still breach the implied covenant of
good faith and fair dealing where it was undertaken in bad
faith, for example, or otherwise violated public
policy.” Id., at p. 27 n. 6.
WWW
asserts that because as part of its pretrial rulings this
Court found that there was no written or oral agreement
between the parties, as a matter of law, it was not required
to give Primarque notice prior to terminating their
distribution arrangements. WWW argues that the jury's
verdict to the contrary cannot stand. WWW further asserts
that the jury's award of $51, 000 is against the
substantial weight of the evidence. In the alternative, WWW
asserts that any obligation it had under Massachusetts law to
provide reasonable notice of termination was excused because
Primarque breached its obligations to WWW in the first
instance by securing substitute arrangements with other
suppliers, and by helping WWW's competitors replicate
WWW' product lines- that is, Primarque was purchasing
from and surreptitiously transitioning business to other
suppliers without notifying WWW.
In
ruling on WWW's motion for summary judgment, I found that
there was no binding written or oral agreement between the
parties. I then looked to Massachusetts statutory and common
law to determine what rules governed the parties'
relationship. Ultimately, I found that the parties'
relationship was governed by Mass.Gen.L. ch. 106, §2-309
(Absence of Specific Time Provisions; Notice of Termination)
(“Section 2-309”). I did so despite the fact that
Primarque had not asserted such a claim in its Amended
Complaint. For the following reasons, I do not find that this
was error. While Primarque did not assert a claim under
Section 2-309 in its Amended Complaint, it did allege that
WWW breached the covenant of good faith and fair dealing
implicit in every contractual arrangement.
‘[T]he rule is clear in Massachusetts that every
contract is subject to an implied covenant of good faith and
fair dealing.' Good faith and fair dealing in a
distributorship agreement may be construed, by analogy, with
reference to the Uniform Commercial Code. [Section] 2-309(3),
provides that a contract which is terminable at the will of
either party requires reasonable termination notice. Whether
[a party's] termination notice constituted reasonable
notice under commercial standards of good faith and fair
dealing [is] a question … [for] the jury …
.'
Cherick Distributors, Inc. v. Polar Corp., 41
Mass.App.Ct. 125, 127, 669 N.E.2d 218, 220 (1996).
Accordingly,
the Jury was instructed:
If you find that the parties had an agreement under which the
Defendant, WWW, would provide periodic shipments of goods to
the Plaintiff, Primarque for an indefinite, but reasonable
period of time, that contract may be terminated at any time
by either party. However, any termination requires
‘reasonable notification.' The Plaintiff claims
that they were not given this reasonable notice. What is
reasonable notice is measured in terms of the amount of time
that will give the other party reasonable time to obtain a
substitute arrangement, which in this case means whether
Primarque had secured substitute arrangements. In this case,
I am instructing you that reasonable notice would be a period
not to exceed ninety (90) days.
The use
of the term “agreement, ” in the first sentence,
rather that the term “arrangement, ” was
perhaps an unfortunate word choice. If so, it is an
oversight which would not have influenced the jury's
deliberations. Considering the instructions as a whole, I
find ...