Primarque Products Co. Inc. v. West

          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 (1^st 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 (1^st 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 ...