Case Title: A.E. Robinson Oil Co. v. County Forest Products, Inc.

Citation: 

Docket Number: 

State: maine

Court: Maine Supreme Court

Date: 2012-03-08T00:00:00Z

Document:
MAINE SUPREME JUDICIAL COURT  
 
 
 
 
Reporter of Decisions 
Decision: 
2012 ME 29 
Docket: 
Pis-11-257 
Submitted 
   On Briefs: January 30, 2012 
Decided: 
March 8, 2012 
 
Panel: 
ALEXANDER, LEVY, SILVER, MEAD, GORMAN, and JABAR, JJ. 
 
 
A. E. ROBINSON OIL CO., INC. 
 
v. 
 
COUNTY FOREST PRODUCTS, INC. et al. 
 
 
GORMAN, J. 
 
[¶1]  County Forest Products, Inc. and Galen R. Porter Jr. appeal from the 
District Court’s (Dover-Foxcroft, Stitham, J.) judgment in favor of A. E. Robinson 
Oil Co., Inc. on A. E. Robinson’s complaint seeking payment on a fuel products 
account.  Porter and County Forest challenge the trial court’s decision to hold them 
jointly and severally liable for the debt as well as its award of financing charges 
and attorney fees.  We modify the judgment to remove the award of attorney fees 
and affirm as modified. 
I.  BACKGROUND 
[¶2]  We present the evidence and the trial court’s findings in the light most 
favorable to A. E. Robinson as the prevailing party.  See Lyman v. Huber, 
2010 ME 139, ¶ 2, 10 A.3d 707.  Porter is the sole shareholder in County Forest, a 
corporation that has existed since 1986.  In 2004, Porter spoke with a vice 
 
2 
president of A. E. Robinson at a charity golf event.  Subsequently, the two orally 
agreed that A. E. Robinson would begin delivering fuel products to G. R. Porter & 
Sons,1 another corporation with which Porter was involved.  In 2005, Porter began 
operating a fuel delivery business as Porter Cash Fuel but never registered that 
name with the Secretary of State.  Porter testified that he intended to operate Porter 
Cash Fuel as a trade name of County Forest and not as a separate sole 
proprietorship.  The record reveals that Porter ordered fuel and gas over the phone 
from A. E. Robinson in a series of transactions that continued for three years and 
eventually gave rise to this suit. 
[¶3]  Several types of writings confirmed these oral agreements.  Within two 
days after A. E. Robinson delivered its products, it mailed invoices directed to 
Porter Cash Fuel.  A. E. Robinson also regularly sent Porter Cash Fuel statements 
of account.  Further, an authorization for direct payment listed “Porter Cash Fuel” 
and bore two signatures, one of which belonged to Porter.  None of the writings 
made any reference to County Forest and none indicated the corporate status of 
Porter Cash Fuel.  All of A. E. Robinson’s dealings were with Porter or with Porter 
Cash Fuel; it had no reason to believe it was dealing with County Forest. 
[¶4]  Over the years of this business relationship, A. E. Robinson added 
terms to the bottom of its invoices asserting its entitlement to financing charges, 
	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  
1  G. R. Porter & Sons was named as a defendant in this case, but the trial court granted its unopposed 
motion to dismiss it from the case prior to trial. 
 3 
collection costs, attorney fees, and court costs.  Although Porter never expressly 
agreed to these terms, when Porter paid sporadically, some of the payments were 
applied to financing charges, and Porter never complained.  Ultimately, the 
business relationship deteriorated, and A. E. Robinson refused to deliver any more 
products.  A. E. Robinson sued County Forest and Porter seeking payment on the 
account.  Following a non-jury trial, the court entered judgment for A. E. Robinson 
jointly and severally against County Forest and Porter in the amount of the 
invoices plus financing charges and attorney fees.  County Forest and Porter appeal 
from the entry of that judgment. 
II.  DISCUSSION 
[¶5]  First, County Forest and Porter contend that the trial court erred in 
holding them jointly and severally liable for the debt.  Porter testified at trial that 
he intended to operate Porter Cash Fuel as a trade name of County Forest, and he 
did not establish a separate sole proprietorship unrelated to County Forest.  By 
operating under an unregistered assumed or trade name, Porter violated Maine 
corporation law.  See 13-C M.R.S. §§ 204, 404(6) (2011). 
[¶6]  Porter became personally liable, as did County Forest, based on 
principles of agency.  In his transactions with A. E. Robinson, Porter, through 
Porter Cash Fuel, was acting as an agent for an undisclosed principal—County 
Forest.  The Restatement (Third) of Agency, which we cited with approval in 
 
4 
Treadwell v. J.D. Construction Co., 2007 ME 150, ¶¶ 20, 30, 938 A.2d 794, states 
that “[w]hen an agent acting with actual authority makes a contract on behalf of an 
undisclosed principal . . . unless excluded by the contract, the principal is a party to 
the contract,” as is the agent.  Restatement (Third) of Agency § 6.03 (2006).  This 
rule is justified because “a third party’s reasonable expectations will receive 
adequate protection only if an undisclosed principal is liable on a contract made on 
its behalf by an agent.”  Id. cmt. b.  Notably, however, “[a]n undisclosed principal 
only becomes a party to a contract when an agent acts on the principal’s behalf in 
making the contract.”  Id. cmt. c. 
[¶7]  Here, Porter testified that he intended to operate Porter Cash Fuel as a 
trade name of County Forest.  His brief to this Court reiterates that this was his 
intent.  This testimony establishes that he was not operating Porter Cash Fuel as a 
separate sole proprietorship, which might have permitted County Forest to escape 
liability.  Because Porter operated Porter Cash Fuel as an agent for County Forest 
without disclosing that County Forest was the principal, he and County Forest are 
parties to the contract.  See Restatement (Third) of Agency § 6.03.  This result is 
consistent with the outcome of our prior cases.  Treadwell, 2007 ME 150, 
¶¶ 19-23, 938 A.2d 794; Me. Farmers Exch. v. McGillicuddy, 1997 ME 153, 
¶¶ 2-4, 10-11, 697 A.2d 1266; Estate of Saliba v. Dunning, 682 A.2d 224, 226 
(Me. 1996); see also Bank of Am., N.A. v. Barr, 2010 ME 124, ¶¶ 26-27, 9 A.3d 
 5 
816 (holding that a sole proprietor was personally liable for a contract she made 
before incorporating her business). 
[¶8]  Our cases from an earlier era endorsed the election rule, which requires 
a third-party to elect between the principal and the agent in obtaining relief.  See, 
e.g., Libby v. Long, 127 Me. 293, 296, 143 A. 66 (1928).  This approach has not 
been the prevailing view for decades.  See Restatement (Third) of Agency § 6.09 
reporter’s note c (collecting cases from the 1980s rejecting the rule). The 
“satisfaction” rule, in which only the satisfaction of a judgment will discharge the 
liability of an undisclosed principal or an agent who contracted on behalf of an 
undisclosed principal, “is consistent with the contemporary view that a judgment 
against one person who is liable for a loss does not terminate the claim that the 
injured party may have against another party who may also be liable for the loss.”  
Id. cmt. c.  To move our jurisprudence to the contemporary view, Libby and its 
progeny are overruled.  Thus, the trial court properly held Porter and County Forest 
jointly and severally liable.2 
[¶9]  Second, County Forest and Porter assert that the trial court erred in 
interpreting section 2-207 when it enforced the financing charges and attorney fees 
clauses added to A. E. Robinson’s invoices over the course of the business 
	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  
2  We do not reach the parties’ arguments regarding the trial court’s interpretation of their stipulations 
at trial because, on the facts of this case, County Forest and Porter are jointly and severally liable as a 
matter of law. 
 
6 
relationship.  We review the trial court’s interpretation of a statute de novo.  
Bonney v. Stephens Mem’l Hosp., 2011 ME 46, ¶ 11, 17 A.3d 123.  In a transaction 
between merchants for the sale of goods, additional terms contained within a 
written confirmation of an oral agreement become part of the contract unless those 
additional terms materially alter the oral agreement.  11 M.R.S. § 2-207(2)(b) 
(2011); see also Redlon’s Inc. v. Gilman, Inc., 485 A.2d 661, 662 (Me. 1984).  The 
test for materiality is objective.  1-2 Murray on Contracts § 50[D][1] (LEXIS 
2011).  An additional term materially alters the oral agreement if it would result in 
unreasonable surprise or hardship to the buyer.  U.C.C. § 2-207 cmts. 4-5, 
11 M.R.S.A. § 2-207 (1995).  Even additional terms that materially alter the oral 
agreement become part of the contract, however, if they are consistent with trade 
usage or the parties’ course of performance.  11 M.R.S. §§ 1-1201(3), 1-1303 
(2011); James J. White & Robert S. Summers, 1 Uniform Commercial Code 
§ 1-3(6) at 77 (5th ed. 2006). 
[¶10]  Here, the court correctly awarded financing charges to A. E. Robinson 
because within the meaning of section 2-207(2)(b), the addition of a financing 
charge does not materially alter an oral agreement between merchants.  See U.C.C. 
§ 2-207 cmt. 5, 11 M.R.S.A. § 2-207.  In addition, the course of performance 
followed by these parties included the payment of financing charges.  A provision 
requiring payment of attorney fees in the event of a breach, however, does 
 7 
materially alter an oral agreement unless such charges are consistent with trade 
usage or the parties’ course of performance.  See Johnson Tire Serv., Inc. v. Thorn, 
Inc., 613 P.2d 521, 521-23 (Utah 1980).3  The record does not support a finding 
that the addition of the attorney fees provision was consistent with either trade 
usage or the parties’ course of performance.  Absent such evidence, the trial court 
erred in awarding attorney fees to A. E. Robinson. 
The entry is: 
Judgment modified to remove the award of 
attorney fees.  As modified, judgment affirmed. 
 
 
 
 
 
 
 
 
On the briefs: 
 
Russell B. Pierce, Esq., and David A. Goldman, Esq., Norman, 
Hanson & DeTroy, LLC, Portland, for appellants County Forest 
Products, Inc. and Galen R. Porter, Jr. 
 
Curtis E. Kimball, Esq., and Brent A. Singer, Esq., Rudman 
Winchell, Bangor, for appellee A.E. Robinson Oil Co., Inc. 
 
 
 
Dover-Foxcroft District Court docket number CV-2010-127 
FOR CLERK REFERENCE ONLY 
	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  
3  We acknowledge a line of cases holding that materiality is a question of fact.  See, e.g., Am. Ins. Co. 
v. El Paso Pipe & Supply Co., 978 F.2d 1185, 1189-192 (10th Cir. 1992) (remanding the case for a trial 
court to determine, as a matter of fact, whether the addition of an attorney fees clause was material); 
Comark Merch., Inc. v. Highland Grp., Inc., 932 F.2d 1196, 1202-03 (7th Cir. 1991) (holding that a trial 
court did not clearly err in finding that an attorney fees clause materially altered a contract).  We decline 
to follow this reasoning in interpreting section 2-207.  The law already accommodates the factual nuances 
of a particular dispute by permitting adjudication of the factual questions surrounding trade usage and the 
parties’ course of performance.