1995 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

8-22-1995

Cooper v Amana

Precedential or Non-Precedential:

Docket 94-5569

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Recommended Citation

"Cooper v Amana" (1995). 1995 Decisions. Paper 231.

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1 

UNITED STATES COURT OF APPEALS 

FOR THE THIRD CIRCUIT 

____________ 

No. 94-5569 and 94-5570 

____________ 

COOPER DISTRIBUTING CO., INC., 

a New Jersey Corporation, 

Appellant in 94-5570 

v. 

AMANA REFRIGERATION, INC., 

a Delaware Corporation, 

Appellant in No. 94-5569 

____________________ 

ON APPEAL FROM THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF NEW JERSEY 

(D.C. Civ. No. 91-05237) 

____________________ 

Argued: May 5, 1995 

Before: SLOVITER, Chief Judge, ALITO, Circuit Judge

and SCHWARZER, Senior District Judge* 

(Opinion Filed: August 22, 1995) 

____________________ 

 STEPHEN J. HOLTMAN, ESQ. (Argued) 

 DAVID A. HACKER, ESQ. 

 LEONARD T. STRAND 

 SIMMONS, PERRINE, ALBRIGHT & ELLWOOD 

 1200 Firstar Bank Building 

 Cedar Rapids, IA 52401-1266 

Attorneys for Appellant and Cross-Appellee,

Amana Refrigeration, Inc.

 FRANZBLAU DRATCH 

 A Professional Corporation 

 3 ADP Boulevard 

 Roseland, New Jersey 07068 

_______________ 
2 

*Hon. William W Schwarzer, Senior United States District Judge 

for the Northern District of California, sitting by designation. 
3 

On the Brief: 

KENNETH K. LEHN, ESQ. (Argued) 

Of Counsel: 

S. M. CHRIS FRANZBLAU, ESQ. 

Attorneys for Appellee and Cross-Appellant,

Cooper Distributing Co., Inc.

 BERTRAM P. GOLTZ, JR., ESQ. 

 Office of Attorney General of 

 New Jersey 

 124 Halsey Street 

 P. O. Box 45029 

 Newark, New Jersey 07101 

For the Attorney General of the State of

New Jersey

 

____________________ 

OPINION OF THE COURT 

____________________ 

ALITO, Circuit Judge: 

 Defendant Amana Refrigeration, Inc. ("Amana"), a 

manufacturer of home appliances, appeals a judgment for 

$9,375,000 in favor of plaintiff Cooper Distributing Co., Inc. 

("Cooper"), a distributor of Amana home appliances. After 

supplying Cooper with its products for approximately 30 years, 

Amana attempted to terminate its relationship with Cooper. Cooper 

sued, claiming that the termination and the circumstances 

surrounding it gave rise to a variety of state law claims. At 

trial, Cooper asserted four claims against Amana: (1) illegal 

termination of a franchise, in violation of the New Jersey 

Franchise Practices Act ("NJFPA" or "the Act"), N.J.S.A. § 56:10-

1 et seq.; (2) breach of contract; (3) breach of the implied 
4 

obligation of good faith and fair dealing; and (4) tortious 

interference with prospective business advantage. At the 

conclusion of a five-week trial, the jury returned a verdict of 

liability on all four counts and awarded damages as follows: (1) 

$4.375 million on Cooper's NJFPA claim, (2) $2 million on 

Cooper's breach of contract claim, (3) $0 on Cooper's claim for 

breach of the obligation of good faith and fair dealing, (4) $0 

in actual damages on Cooper's tortious interference claim, and 

(5) $3 million in punitive damages on Cooper's tortious 

interference claim. The district court upheld the entire 

$9,375,000 verdict and denied Amana's post-trial motions 

attacking the liability verdicts on Cooper's NJFPA, the breach of 

contract, and the tortious interference claims. 

 Amana appeals from the district court's denial of these 

motions, and Cooper cross-appeals from the district court's 

denial of its motion for prejudgment interest on its NJFPA claim. 

For the reasons discussed below, we (1) affirm the district 

court's denial of Amana's post-trial motions attacking the NJFPA 

claim, (2) reverse the district court's denial of Amana's motion 

for a new trial on NJFPA damages, remanding for a new trial on 

damages, (3) reverse the district court's denial of Amana's 

motion for judgment as a matter of law on the breach of contract 

claim, (4) reverse the award of punitive damages on Cooper's 

tortious interference claim, and (5) affirm the denial of 

Cooper's motion for prejudgment interest on its NJFPA claim. 

 I. FACTS AND PROCEDURAL HISTORY 
5 

 Amana began to manufacture home appliances in the 

1940's. App. 3954. Currently, Amana is a "full line" home 

appliance manufacturer: it offers for sale a full set of home 

appliances, including refrigerators, cooking and laundry 

appliances, dishwashers, and air conditioners. App. 680. For 

many years, Amana employed a two-step process in the distribution 

of its products. It would sell its products to a network of 

independent wholesale distributors, who, pursuant to agreements 

with Amana, would sell to retail dealers located in the wholesale 

distributors' contractually recognized sales regions. The retail 

dealers would then sell the products to consumers. 

 Cooper began operating as an independent wholesale 

distributor in 1931. App. 3954. In 1961, Cooper started to 

distribute Amana products. Cooper and Amana signed an agreement 

permitting Cooper to distribute Amana's products in New Jersey 

and New York and have periodically signed new agreements over the 

years. Their most recent Distribution Agreement (the 

"Agreement"), which was signed in 1990, allowed Cooper to 

distribute Amana products in New Jersey, New York, Connecticut, 

and Pennsylvania. App. 3978-3983. The Agreement stated that it 

was to be construed "in accordance with the laws of the State of 

Iowa." App. 3982. 

 Beginning in the late 1970's, the majority of Cooper's 

business (78% to 100%) was derived from the sale of Amana 

products. App. 644. Cooper also distributed other major brands 

of appliances, including Hardwick, In-Sink-Erator, and Dacor, 
6 

App. 959, although Amana occasionally subjected Cooper to 

competitive restraints. App. 961-62. 

 During its relationship with Amana, Cooper operated a 

showroom/marketing center, first in Newark and subsequently in 

Englewood Cliffs, New Jersey. Cooper used this facility for 

Amana product demonstrations, App. 2005-08, dealer training in 

Amana products, App. 2006, and dealer open houses. App. 690. 

Cooper's sales managers studied the Amana product line, App. 

2013-2017, and in turn gave Amana product training to retail 

dealers. App. 690-92. Cooper also placed Amana advertisements 

in the yellow pages and newspapers, App. 1021-22, advertised as 

an authorized Amana servicer, App. 4016-17, instructed its 

servicemen to wear Amana uniforms, App. 1963, distributed 

promotional items bearing the Amana name, App. 1023, and, 

pursuant to the Agreement, promised to "use its best efforts to 

promote sales" of Amana products. App. 3979. Cooper's dealers 

perceived Amana and Cooper as being one and the same. App. 1748. 

 In the early 1980's, the marketing of appliances began 

to change, and by the late 1980's most full-line manufacturers 

had eliminated the first step in the two-step distribution 

process. App. 1169, 1679-81. Instead of selling to wholesale 

distributors, the manufacturers sold directly to retail dealers. 

Consistent with this trend, Amana started to depart from its 

previous practice of selling its products to the wholesale 

distributors. Instead, Amana began to sell directly to certain 

retail dealers located in the wholesale distributors' sales 

regions. Amana first sold its appliances directly to "national" 
7 

retail dealers like Sears. App. 988. The Agreement explicitly 

permitted Amana to make such sales to national retailers. App. 

3981. Then, in the summer of 1991, Amana went further. Relying 

on a provision of the Agreement that reserved for Amana the 

"right to make sales directly," App. 3981, Amana began to deal 

directly for the first time with a non-national retail dealer in 

Cooper's region, P.C. Richard & Son ("P.C. Richard"). P.C. 

Richard had a chain of 20 retail stores and represented Cooper's 

largest account. App. 3955. Amana also sold its products 

directly to other smaller local retail dealers. Until Amana 

began selling to the national and local retailers, Cooper had 

been the exclusive distributor in its region for nearly 30 years. 

App. 988, 2504-06. 

 At the same time that the home appliance industry saw 

the elimination of two-step distribution, Amana's marketing 

responsibilities changed. Amana's parent company, Raytheon, 

which also sold other appliance brands such as Speed Queen and 

Caloric, decided to consolidate the distribution of its brands. 

App. 2322-23. The result was that several of the distributors 

that sold one but not all of Raytheon's brands were eliminated. 

In November 1991, Amana terminated its relationship with Cooper 

pursuant to a provision of the Agreement that allowed either 

party to terminate the Agreement on ten days written notice. App. 

3981. At the same time, Amana also terminated its relationships 

with 20 of the other 23 remaining Amana wholesale distributors 

across the country. App. 2825. 
8 

 In response to its termination, Cooper commenced this 

action in New Jersey state court alleging, among other things, 

that Amana had (1) violated section 5 of the NJFPA, N.J.S.A. 

§56:10-5, by terminating Cooper's franchise without good cause; 

(2) breached the 1990 Agreement by selling to the local 

retailers in Cooper's region; (3) breached the Agreement's 

implied obligation of good faith and fair dealing; and (4) 

tortiously interfered with Cooper's prospective economic 

advantage. App. 26-46. In November 1991, the state court issued 

a temporary restraining order prohibiting termination of or 

interference with Cooper's Amana distributorship. App. 2157. 

After the case was removed by Amana to federal court,0 a 

preliminary injunction was entered on February 10, 1992, 

enjoining Amana "from taking any action whatsoever to limit . . . 

or in any way interfere with Cooper's activities as a distributor 

of Amana products."0 App. 100-54, 2157. 

 During the pendency of the injunction, Amana dropped 

Cooper from its mailing list, thereby allegedly leaving Cooper --

and Cooper's retail dealers -- unaware of Amana discounts and 

model changes. App. 1067-73. Additionally, Amana refused to 

support Cooper in its attempt to sell Amana air conditioners to 

 

0

Cooper was incorporated and had its principal place of business 

in New Jersey; Amana was a Delaware Corporation with its 

principal place of business in Amana, Iowa. The district court 

properly exercised jurisdiction pursuant to 28 U.S.C. § 1441. 

0

The Attorney General of the State of New Jersey intervened 

because Amana raised a Commerce Clause challenge to the 

extraterritorial application of the NJFPA. We have since held 

that the NJFPA does not violate the Commerce Clause. See

Instructional Systems, Inc. v. Computer Curriculum Corp. 35 F.3d 

813 (3d Cir. 1994), cert. denied, 115 S. Ct. 1176 (1995). 
9 

Trader Horn, one of Cooper's larger retail dealers. App. 1047-

61. 

 Trial commenced in February 1994, and after five weeks 

the jury returned a verdict for Cooper totalling $9.375 million. 

The jury first found that Cooper had proved that it possessed a 

franchise under the NJFPA and that Amana's attempted termination 

violated the Act. For this violation, the jury awarded Cooper 

$4.375 million in compensatory damages, a sum that corresponded 

to the value of the franchise in November 1991, as estimated by 

Cooper's expert. The jury also awarded Cooper $2 million on its 

breach of contract claim, finding that the Agreement had granted 

Cooper an exclusive regional distributorship and that Amana had 

violated the Agreement by selling directly to P.C. Richard and 

other local retailers. The jury likewise found for Cooper on its 

claims for breach of the implied covenant of good faith and fair 

dealing and for tortious interference with prospective business 

advantage. With respect to the tortious interference claim, the 

jury found that Amana had tortiously interfered with Cooper's 

business relations both by its direct sales to Cooper's local 

retail dealers and by other unjustifiable conduct occurring after 

the entry of the preliminary injunction. Although the jury 

awarded no actual damages to Cooper on either the implied 

covenant or tortious interference claims, it did award $3 million 

in punitive damages on the tortious interference claim. 

 After trial, the district court entered judgment for 

Cooper in the amount of $9,375,000 and dissolved the preliminary 

injunction. App. 5000-02. Amana moved for post-trial judgment 
10 

as a matter of law pursuant to Fed. R. Civ. P. 50(b) and, 

alternatively, for a new trial pursuant to Fed. R. Civ. P. 59(a). 

Amana argued: (1) that it was entitled to a judgment or a new 

trial as to liability under the NJFPA; (2) that it was entitled 

to a new trial as to damages on the NJFPA claim; (3) that it was 

entitled to a judgment or a new trial as to liability for breach 

of contract; (4) that it was entitled to judgment on the tortious 

interference claim; and (5) that it was entitled to judgment or a 

new trial on the issue of punitive damages. App. 4927-77. 

 Cooper moved for attorneys' fees and costs under the 

NJFPA and for prejudgment interest on its breach of contract and 

NJFPA recoveries. The district court rejected all of Amana's 

post-trial arguments, App. 5702-25, and awarded Cooper attorneys' 

fees and costs, App. 5726-36, and prejudgment interest on the 

breach of contract claim. However, the district court denied 

Cooper's request for prejudgment interest on the NJFPA claim. 

App. 5737-41. Amana appealed, challenging the denial of its 

post-trial motions. Cooper cross-appealed, seeking additional 

prejudgment interest. We turn first to the NJFPA issues. 
11 

II. NEW JERSEY FRANCHISE PRACTICES ACT 

 Prompted in large part by the practices of automobile 

manufacturers and major oil companies, New Jersey enacted the 

NJFPA in 1971. See Instructional Systems, Inc. v. Computer 

Curriculum Corp., 614 A.2d 124, 132 (N.J. 1992) (hereinafter 

"ISI"). The Act protects franchisees against indiscriminate 

termination by providing that "it shall be a violation of this 

act for a franchisor to terminate, cancel, or fail to renew a 

franchise without good cause." N.J.S.A. § 56:10-5. A franchise 

exists under the NJFPA if: (1) there is a "community of interest" 

between the franchisor and the franchisee; (2) the franchisor 

granted a "license" to the franchisee; and (3) the parties 

contemplated that the franchisee would maintain a "place of 

business" in New Jersey. N.J.S.A. §§ 56:10-3a,-4. Contending 

that it was not properly held liable under the NJFPA, Amana 

argues, first, that as a matter of law Cooper was not a 

"franchisee" under the Act0 and second, that the district court 

gave the jury prejudicially erroneous instructions on the NJFPA 

claim. We will discuss each of these arguments in turn. 

 A. Franchisee as a matter of law.

 

0

Amana does not argue that the termination of its business 

relationship with Cooper was for "good cause," a concept that is 

"limited to failure by the franchisee to substantially comply 

with those requirements imposed upon him by the franchise." 

N.J.S.A. § 56:10-5; see also Westfield Centre Services, Inc. v. 

Cities Service Oil Co., 432 A.2d 48, 55 (N.J. 1981) (holding that 

a franchisor who in good faith and for bona fide reasons 

terminates a franchise for any reason other than substantial 

nonperformance has violated the Act). 
12 

 In reviewing a district court order denying a posttrial motion for a Rule 50(b) judgment as a matter of law, we 

"determine whether the evidence and justifiable inferences most 

favorable to the prevailing party afford any rational basis for 

the verdict." Intermilo, Inc. v. I.P. Enterprises, Inc., 19 F.3d 

890, 892 (3d Cir. 1994) (quoting Bhaya v. Westinghouse Elec. 

Corp., 832 F.2d 258, 259 (3d Cir. 1987), cert. denied, 488 U.S. 

1004 (1989)); see also Cassidy Podell Lynch, Inc. v. 

SnyderGeneral Corp., 944 F.2d 1131, 1137 (3d Cir. 1991). We will 

apply this standard to each of the three franchise requirements. 

 1. Community of interest. 

 The NJFPA requires a franchisee to show that it has a 

"community of interest" with a franchisor. N.J.S.A. § 56:10-3a. 

The New Jersey Supreme Court has explained: 

Community of interest exists when the terms 

of the agreement between the parties or the 

nature of the franchise business requires the 

licensee, in the interest of the licensed 

business's success, to make a substantial 

investment in goods or skills that will be of 

minimal utility outside the franchise. 

ISI, 614 A.2d at 1 (quoting Cassidy, 944 F.2d at 1143). The 

court continued: 

The Act's concern is that once a business has 

made substantial franchise-specific 

investments [which are of minimal utility 

outside the franchise,] it loses virtually 

all of its bargaining power. . . . 

Specifically, the franchisee cannot do 

anything that would risk termination, because 

that would result in a loss of much or all of 

the value of its franchise-specific 

investments. Thus, the franchisee has no 

choice but to accede to the demands of the 
13 

franchisor, no matter how unreasonable these 

demands may be. 

ISI, 614 A.2d at 141; see also Neptune T.V. & Appliance Service, 

Inc. v. Litton Microwave Cooking Products Div., 462 A.2d 595, 601 

(N.J. Super. Ct. App. Div. 1983) (looking to the "vulnerability 

of the alleged franchisee"). 

 Thus, in order to find a "community of interest," two 

requirements must be met: (1) the distributor's investments must 

have been "substantially franchise-specific", ISI, 614 A.2d at 

141, and (2) the distributor must have been required to make 

these investments by the parties' agreement or the nature of the 

business. N.J.S.A. § 56:10-3a. New Jersey American, Inc. v. The 

Allied Corporation, 875 F.2d 58, 64 (3d Cir. 1989); see also Colt 

Industries, Inc. v. Fidelco Pump & Compressor Corp., 844 F.2d 

117, 120-121 (3d Cir. 1988) (affirming district court's finding 

of a lack of community of interest because the franchise-specific 

investments were "suggested, not required"). In this appeal, 

Amana has not addressed the second of these requirements,0 but 

 

0

Because Amana's briefs do not raise or address the question 

whether Cooper was required to make any franchise-specific 

investments that were made, we do not believe that that question 

is properly before us. In any event, however, we believe that 

there was sufficient evidence to satisfy this requirement. The 

nature of the business required Cooper to acquire Amana-specific 

knowledge since, without such knowledge, it would have been 

unable to educate the retail dealers about Amana's unique 

products. Amana conceded that such dealer training was "vital" 

to the successful marketing of Amana products. App. 834, 2012. 

In addition, the nature of the home appliance industry mandated 

that Cooper make certain goodwill investments, like purchasing 

advertising, that benefitted Amana. App. 1566. Also, Cooper was 

required to implement marketing strategies that were dictated by 

Amana and were designed to create goodwill. App. 834-35. 

Finally, although Cooper was not required to limit its 
14 

Amana has strenuously argued that Cooper failed to meet the first 

of these requirements, i.e., that it failed to show that its 

investments were substantially franchise-specific. 

 The question of substantial franchise-specificity 

depends on whether Cooper's investments were "useful beyond the 

relation the contract in question create[d]." Cassidy, 944 F.2d 

at 1144. Amana argues that Cooper's investments -- specifically 

(1) Cooper's knowledge of home appliances, (2) its goodwill, and 

(3) its tangible assets -- were "tremendously useful" outside the 

context of its relationship with Amana, New Jersey American, 875 

F.2d at 64, and therefore were not substantially franchisespecific.0

 Although we do not find Cooper's evidence on this 

point to be overwhelming, we conclude that a reasonable jury 

could have found that Cooper's assets were substantially 

franchise-specific. 

 First, we note that Cooper made a significant 

investment in the acquisition of knowledge about Amana products. 

In Cassidy, we held that a franchise-specific investment could 

take the form of the "years of effort required to gain 

specialized skills or knowledge valuable to market the licensed 

product efficiently, but of little use beyond that." Cassidy, 

 

distributing solely to Amana products, App. 959, Amana imposed 

various competitive restraints. App. 961-62, 171-172. Thus, a 

reasonable jury could have concluded that Cooper was required to 

make its franchise-specific investments. 

0

As an example of a franchise-specific investment, the New Jersey 

Supreme Court noted that "McDonald's franchisees were required 

for many years to purchase and install `Golden Arches,' which 

[would be] of little value if the franchise were lost." ISI, 614 

A.2d at 141. 
15 

944 F.2d at 1144. Here, Cooper introduced evidence that its 

employees invested much time over the years in acquiring 

knowledge about Amana products and that this knowledge was not 

transferable outside the Amana-franchise context. Robert Nathan, 

a Cooper sales manager, testified that he spent 200 hours a year 

(10% of his time) learning about Amana products, App. 2013, and 

that much of what he and his sales force learned during this time 

related to Amana products that contained "exclusive or unique 

features not generally found in comparable products performing 

the same purpose in the marketplace." App. 2014; see also App. 

2015-17; 1964-70 (identifying unique Amana features). He added 

that this knowledge would be "of no value," App. 2027, and 

"useless," App. 1968-69, outside the realm of Amana sales.0 

 Second, and perhaps most important, a reasonable jury 

could find that one of Cooper's most important assets was 

franchise-specific goodwill. It is clear that goodwill can 

constitute a franchise-specific asset. See New Jersey American, 

875 F.2d at 62; ISI, 614 A.2d at 144; Neptune, 462 A.2d at 599. 

To qualify, however, the goodwill in question must be useful for 

 

0

Amana contends that since its products change yearly, Cooper's 

knowledge of Amana's products would become obsolete in time. 

Therefore, Amana maintains, the termination did not cause Cooper 

to lose the value of its franchise-specific knowledge. This 

argument, however, merely shows that Cooper's Amana-specific 

knowledge, like virtually any other asset, was subject to 

depreciation. Thus, this argument does not show that Cooper's 

Amana-specific knowledge was valueless. On the contrary, we 

believe that a reasonable jury could conclude that, as of the 

date of termination, Cooper's Amana-specific knowledge still 

retained substantial value. See, e.g., App. 2012-19 (sales 

manager Nathan discussing how his vast product knowledge would be 

rendered useless by termination). 
16 

the alleged franchisee only in the context of its relationship 

with the alleged franchisor. Moreover, if a distributor sells 

the products of many manufacturers and creates some goodwill for 

all or many of these manufacturers, that kind of goodwill "cannot 

be enough to create a `community of interest.'" ISI, 614 A.2d at 

141.0 

 In this case, it is undisputed that Cooper's 

investments created goodwill. See App. 1023 (promotional items 

bearing the Amana name); App. 1021-22 (yellow page and newspaper 

advertising of Amana products); App. 1025 (in-store 

demonstrations of Amana products). Further, there is evidence in 

the record that goodwill accounted for nearly half the value of 

the Cooper franchise. App. 1813-16, 4605 (Cooper valuation 

expert, Melvin Konner, determining the value of the franchise and 

the portion of the value attributable to goodwill). 

 In addition, Cooper provided substantial evidence that 

much of this goodwill was not transferable. For example, sales 

 

0

As the ISI court elaborated: 

To develop goodwill generally for a product 

cannot be enough to create a community of 

interest. Otherwise, any licensee 

distributing a brand-name product could claim 

it has a community of interest with its 

supplier. For example, a department store 

selling Sony name products could claim a 

community of interest with the manufacturer 

despite the fact that the department store's 

goodwill investments are not intimately tied 

to the manufacturer and therefore lack the 

economic character of genuine franchise 

investments. 

614 A.2d at 141. 
17 

manager Nathan explained that it was not possible for Cooper's 

salespeople, after representing for many years that Amana's 

products were superior, to claim, after the termination, that 

another product was even better. App. 3238 ("I've been telling 

everybody Amana's the greatest thing since love the last 12 

years, and now I got to go out and say wait a second, we have 

this other line called Friederich, it's the greatest thing since 

love. Who's going to believe that."). Even Michael Napoletano, 

a retail dealer who testified for Amana, admitted that Cooper 

would have a credibility problem if it took such an approach. 

App. 2806-07. 

 This point is supported by the New Jersey Supreme 

Court's decision in ISI. There, the court held that Computer 

Curriculum Corp. ("CCC"), a producer of computer learning 

systems, had a community of interest with Instructional Systems, 

Inc. ("ISI"), a regional distributor of CCC's products. Part of 

the reason that the court found the existence of a community of 

interest was that ISI's previous efforts at creating goodwill for 

CCC's products gave rise to a credibility problem for ISI outside 

the CCC context. The court explained: 

For close to twenty years, ISI has persuaded 

its customers to choose the CCC's system. The 

goodwill . . . would vanish in the event of a 

termination. 

ISI, 614 A.2d at 144; see also id. ("ISI's competitors, including 

CCC, would denigrate ISI with references to its prior endorsement 

of the CCC product line."). 
18 

 It is also noteworthy that Cooper's customers, the 

retail dealers, viewed Cooper and Amana as "one and the same." 

App. 2796-97; see also id. at 1748 ("Amana was Cooper, Cooper was 

Amana"). This fact lends support to the conclusion that Cooper's 

investments in goodwill were not transferable. See ISI, 614 A.2d 

at 145 (relying on the fact that "the evidence revealed that 

ISI's customers considered ISI and CCC as synonymous"). 

 Finally, we consider Cooper's investments in tangible 

assets. The NJFPA protects franchise-specific "tangible capital 

investments, such as `a building designed to meet the style of 

the franchise, special equipment useful only to produce the 

franchise product, and franchise signs.'" ISI, 614 A.2d at 141 

(quoting New Jersey American, 875 F.2d at 62). In this case, 

Cooper introduced evidence showing that it had invested in some 

tangible items that were of no value outside the Amana-franchise 

context -- for example, the display housing for Cooper's 

showroom bearing the Amana logo, App. 1034, Amana product 

literature, App. 1032, and Amana demonstration models. 

 We do not mean to imply that all of Cooper's 

investments were Amana-specific. On the contrary, the record 

shows that Cooper possessed assets that would clearly be useful 

outside the Amana context. See, e.g., App. 1041 (electronic mail 

system), App. 1032-22 (computer system), App. 1036-37 (repair 

tools).0 However, the jury was not required to find that 

 

0

The parties dispute whether Cooper's investment in Amana 

inventory, App. 3343-45, and whether its investment in the 

showroom, the parts display area, and the service office, App. 

1034-38, were franchise-specific. Because we believe that 
19 

Cooper's investments were entirely franchise-specific but merely 

that they were "substantial[ly] franchise-specific." ISI, 614 

A.2d at 141 (emphasis added). Looking at all of the evidence of 

Cooper's investments in the light most favorable to Cooper, we 

hold that a jury reasonably could conclude that Cooper's assets 

were substantially franchise-specific. 

 This holding is supported further by the fact that, as 

of the termination, 85% of Cooper's revenues were derived from 

Amana products. App. 664, 679-80, 987-88.0 While we have held 

that dependence on a single supplier cannot automatically qualify 

a distributor for protection under the Act (or else "all 

exclusive distributors could unilaterally decide to convert their 

distributorships into franchises," Cassidy, 944 F.2d at 1141), 

the New Jersey Supreme Court has characterized economic 

dependence as perhaps the "most important" factor in determining 

whether a community of interest exists. ISI, 614 A.2d at 145. 

 

 2. License. 

 Before a party may be deemed a "franchisee" subject to 

the Act's protections, it must show that it has been granted "a 

license to use a trade name, trade mark, service mark, or related 

 

Cooper's investments were substantially franchise-specific even 

if these particular investments were not, we need not decide 

these disputes. 

0

The Act states that a distributor cannot be a franchisee if it 

derives 20% or less of its gross sales from its franchisor, see

N.J.S.A. § 56:10-4, implying "that a firm may be a franchise even 

if only 21% of its gross sales are derived from the franchisor." 

New Jersey American, 875 F.2d at 63. 
20 

characteristic[]." N.J.S.A. § 56:10-3a. The New Jersey Supreme 

Court has explained that "the Act's `license to use' requirement 

does not encompass a definition of license in the word's broadest 

sense, that is: permission to do something [that] without the 

license would not be allowable." ISI, 614 A.2d at 138. 

Accordingly, the mere fact that Cooper was permitted to use the 

Amana insignia, an act that would normally "not be allowable" due 

to trademark laws, did not in itself create a license. Otherwise, 

"any business selling a name brand product would, under New 

Jersey law, necessarily be considered as holding a license." 

ISI, 614 A.2d at 138 (quoting Colt Industries, Inc. v. Fidelco 

Pump & Compressor Corp., 844 F.2d 117, 120 (1988)). Instead, the 

term "license" is more narrowly defined. It means "to use as if 

it is one's own. It implies a proprietary interest . . . ." 

Finlay & Assoc., Inc. v. Borg-Warner Corp., 369 A.2d 541, 546 

(N.J. Super. Ct. Law Div. 1976), aff'd on other grounds, 382 A.2d 

933 (N.J. Super. Ct. App. Div.), certif. denied, 391 A.2d 483 

(N.J. 1978). The New Jersey Supreme Court has further explained: 

At a minimum, the term "license" means that 

the alleged franchisee must use the name of 

the franchisor "in such a manner as to create 

a reasonable belief on the part of the 

consuming public that there is a connection 

between the . . . licensor and the licensee 

by which the licensor vouches, as it were, 

for the activity of license." Neptune, 402 

A.2d at 599. 

ISI, 614 A.2d at 138; see also Neptune, 462 A.2d at 599 (noting 

that the hallmark of a license is that the franchisor gives its 
21 

approval to the franchisee's business enterprise with regard to 

the franchisor's product such that the public is induced "to 

expect from [the franchisee] a uniformly acceptable and quality 

controlled service endorsed by [the franchisor] itself"). 

 Amana maintains that it did not vouch for Cooper's 

activities in relation to the Amana name. We hold, however, that 

a reasonable jury could have inferred the existence of a 

"license" based on various aspects of the lengthy Amana-Cooper 

relationship. We note that Cooper's showroom displayed the Amana 

sign, App. 723-24, and Cooper's servicemen wore Amana uniforms. 

App. 1963, 4077. In these respects, this case resembles Cassidy, 

where the distributor "maintained signs bearing [the 

manufacturer's] name" at its facility and employed "servicemen 

[who] wore uniforms bearing the [manufacturer's] tradename." 

Cassidy, 944 F.2d at 135. 

 There was also evidence that Cooper's employees, like 

those of the plaintiff in ISI, were "integrally related" to the 

proper functioning of Amana products, ISI, 614 A.2d at 139, and 

this relationship could reasonably be viewed as likely to 

strengthen the public perception that Amana vouched for Cooper's 

use of its name. The Agreement required Cooper to give 

"warranty" service on the Amana product line. App. 3801, 794. 

Cooper advertised as a "servicer" of Amana products, App. 4016-

17, and on occasion made in-home visits to consumers with product 

problems. App. 1743-44. Cooper was responsible for fixing 

certain defective Amana products, App. 809-810, was an 

"authorized [Amana] parts distributor," App. 4011-4014, and could 
22 

give "factory authorized service." App. 4016-17. Amana itself 

also emphasized that Cooper's customer service was important so 

that customers would distinguish Amana from other manufacturers, 

App. 808, and Amana stressed that it was "vital" for Cooper to 

train its dealers in the "unique" features of Amana products. 

App. 834. See also App. 17, 2012.0

 It is likewise noteworthy that Cooper was the exclusive 

Amana distributor to local dealers in Cooper's four-state 

territory for 30 years, App. 988, 2504-06, and that Amana allowed 

Cooper to maintain advertisements in the yellow pages and 

newspapers stating that it was an authorized distributor and 

servicer of Amana products. App. 4011-21. In ISI, the New 

Jersey Supreme Court found these factors to be highly important. 

See ISI, 614 A.2d at 139-140.0

 

0

Amana argues that ISI is distinguishable since the court there 

noted that the franchisee "educate[d] and train[ed] users" of the 

franchisor's product, ISI, 614 A.2d at 139 (emphasis added), 

while Cooper only trained dealers. We can see no significance in 

this distinction for present purposes. Under the Agreement, 

Cooper sold to dealers, not consumers. App. 3979. It therefore 

follows that the public, for the purposes of determining whether 

a perception existed that Amana vouched for Cooper, must be the 

dealers, not the consumers. This is buttressed by the fact that 

the Act expressly applies to wholesalers, who do not typically 

sell to consumers. See N.J.S.A. § 56:10-3(a) (noting that Act 

applies to "the marketing of goods or services at wholesale, 

retail, . . . or otherwise") (emphasis added). 

0

Amana claims that ISI is distinguishable in this regard because 

ISI was required to hold itself out as a CCC distributor, see ISI

614 A.2d at 139, whereas Cooper was merely allowed to hold itself 

out as an Amana distributor. We find this distinction to be 

without merit because in Neptune, a case upon which the ISI court 

relied heavily, the court found a license despite the fact that 

the plaintiff was merely allowed to hold itself out as an 

authorized service center for the defendant. See Neptune, 462 

A.2d at 599. 
23 

 It is also significant that Cooper was required under 

the Agreement to use its best efforts to promote Amana sales. 

App. 3979. In ISI, the New Jersey Supreme Court found it 

significant that the franchisee was required to use its best 

efforts to promote the franchisor's name. 614 A.2d at 139.0

Amana tries to distinguish ISI by pointing to the difference 

between promoting the sale of a company's products and promoting 

its name. See Liberty Sales Assoc., Inc. v. Dow Corning Corp., 

816 F. Supp. 1004, 1011 (D.N.J. 1993). However, at least in the 

context of this case -- where Cooper sold Amana's entire product 

line and was Amana's sole distributor to dealers within the 

relevant region for 30 years -- this distinction is ephemeral. 

 Finally, there was additional testimony by Cooper's 

dealers and by Amana witnesses that strongly suggested that a 

"license" was present. Retail dealer Michael Napoletano, who 

testified for Amana, admitted that "Amana vouches for Cooper by 

standing behind the quality of what it sells." App. 2792. 

Moreover, the dealers perceived a "special relationship" between 

Amana and Cooper. ISI, 614 A.2d at 140 (quoting Finlay, 369 A.2d 

at 546). Dealers would address letters to Cooper as "Cooper 

Distributors, c/o Amana," App. 4101, and many dealers regarded 

Amana and Cooper as being "one and the same." App. 1748; see 

 

0

Cf. Cassidy, 944 F.2d at 1138 (distributor required to "use its 

best efforts to diligently promote the sale of [the 

manufacturer's products"); Neptune, 462 A.2d at 599 

(distinguishing other cases where the plaintiff did not use its 

best efforts to promote sales). 
24 

also App. 1914 (testimony of a retail dealer that the dealers 

"always felt that Amana was sold through Cooper"). 

 We recognize that Amana provided important evidence 

suggesting that it did not grant Cooper a license. Nevertheless, 

taking all the evidence together, we hold that a reasonable jury 

could have inferred that there was a public perception that Amana 

vouched for Cooper's activities in relation to the Amana name.0 

 3. New Jersey place of business. 

 The NJFPA applies only to an agreement "the performance 

of which contemplates or requires the franchisee to establish or 

maintain a place of business within the State of New Jersey." 

N.J.S.A. § 56:10-4. In order to satisfy this third requirement, 

Cooper was required to show that the Agreement contemplated (1) 

that Cooper would operate a place of business ("POB") within the 

meaning of the NJFPA and (2) that this POB would be located in 

New Jersey. 

 

0

The fact that Cooper did not operate under Amana's trade name 

does not mandate a contrary result. The New Jersey Supreme Court 

has expressly held that independently-named franchisees may still 

have a license from the franchisor. As that court explained: 

[T]he inclusion of independently-named 

businesses is implicit in the Act's 

definition of franchise by the Act's 

limitation to a franchise "where more than 

20% of the franchisee's gross sales are 

intended to be or are derived from such 

franchise." N.J.S.A. 56:10-4(3). 

ISI, 614 A.2d at 140. "Therefore," the Court concluded, "if only 

a `mirror-image' relationship could constitute a franchise, the 

legislature would have added a superfluous requirement . . . that 

the franchise sales constitute twenty percent of the entire 

business." Id.
25 

 The NJFPA defines "place of business" as: 

a fixed geographical location at which the 

franchisee displays for sale and sells the 

franchisor's goods or offers for sale and 

sells the franchisor's services. Place of 

business shall not mean an office, warehouse, 

a place of storage, a residence or a vehicle. 

N.J.S.A. § 56:10-3(f). 

 Cooper maintains that its showroom/marketing center in 

Englewood Cliffs, New Jersey, constituted a POB. There is ample 

evidence in the record that Cooper regularly used this facility 

for activities that were an integral part of the sales process. 

For example, the record shows that this facility was often used 

for product demonstrations, App. 2007-08 (sales manager Nathan 

met once a week with customers in showroom); App. 2005 (Nathan's 

three salesmen each used showroom two to four times a week for 

demonstrations), for dealer training, App. 2006-09, and dealer 

open houses. App. 690. Amana argues, however, that this 

facility was not a POB because Cooper did not actually consummate 

sales there. See App. 1346-1404, App. 692, App. 1231, App. 1351-

52. Relying on the statutory definition of a POB as a fixed 

location where "the franchisee displays for sale and sells the 

franchisor's goods," N.J.S.A. § 56:10-3(f) (emphasis added), 

Amana argues that the statute requires both activity leading up 

to the sale ("displays for sale") and the sale itself ("sells"). 

See Greco Steam Cleaning, Inc. v. Associated Dry Goods Corp., 608 

A.2d 1010, 1013 (N.J. Super. Law Div. 1992). Consequently, Amana 

argues, Cooper's showroom did not constitute a POB within the 

meaning of the Act. 
26 

 We are constrained to disagree. As a federal court 

sitting in diversity, "we are not free to impose our own view of 

what state law should be; we are to apply state law as 

interpreted by the state's highest court." McKenna v. Pacific 

Rail Service, 32 F.3d 820, 825 (3d Cir. 1994). Where a state's 

highest court has not squarely addressed an issue, we "must be 

governed by a prediction of how the state's highest court would 

decide were it confronted with the problem." McKenna v. Ortho 

Pharmaceutical Corp., 622 F.2d 657, 661 (3d Cir.), cert. denied, 

449 U.S. 976 (1980). Relying on ISI, we predict that the New 

Jersey Supreme Court would hold that Cooper's activities at its 

showroom/marketing center were sufficient to constitute "sales" 

for purposes of the NJFPA. 

 In ISI, the New Jersey Supreme Court, in finding that 

ISI's Hackensack facility was a POB, noted that ISI "ha[d] been 

giving more than one hundred demonstrations a year" at that 

facility, ISI, 614 F.2d at 138, and that ISI had used the 

facility to acquaint prospective purchasers with the functioning 

of its product. See id. The court made no mention of any actual 

sales at the facility but instead relied exclusively on the 

demonstrations and inspections -- the very same types of 

activities that took place at Cooper's Englewood Cliffs facility. 

The New Jersey Supreme Court summarized its holding as follows: 

In short, the record sustains the trial 

court's finding that ISI set up a marketing 

facility in Hackensack where its customers, 

education professionals, can inspect the CCC 

computer system and receive a sales 

demonstration on the operation of its 

computer product. ISI's Hackensack facility 
27 

thus could be found to constitute a "place of 

business" under the Act. 

ISI, 614 A.2d at 138. Based on ISI, we feel compelled to predict 

that the New Jersey Supreme Court, if confronted with this case, 

would hold that Cooper's showroom/marketing center was a POB.0

 Apart from requiring Cooper to establish that the 

showroom was a POB, the statute also obligated Cooper to show 

that the parties contemplated or required that the POB be located 

in New Jersey. See N.J.S.A. § 56:10-4; see also Finlay, 369 A.2d 

at 545. The ISI court explained that "a franchise would be 

governed by the Act whether the contract required a place of 

business in New Jersey or whether the parties reasonably 

anticipated that the franchisee would establish a New Jersey 

place of business." ISI, 614 A.2d at 136. 

 We hold that a reasonable jury could have found that 

the parties "reasonably anticipated" that Cooper would establish 

a New Jersey POB. Throughout its 31-year relationship with 

Amana, Cooper had its showrooms in New Jersey, first in Newark 

and then in Englewood Cliffs. App. 683-701. When Amana expanded 

Cooper's New York sales territory in 1982, Cooper declined to 

purchase Amana's Long Island facility, telling Amana that it was 

a New Jersey-based firm and would not "split [the] operation." 

App. 683. Even Amana conceded that it "knew that Cooper's 

business was located in New Jersey." Appellant's Brief at 32. 

 

0

Cooper argues that a reasonable jury could have found that 

actual order taking occurred at the showroom. Since we hold that 

a POB exists even without order taking, we need not discuss this 

question. 
28 

Consequently, when the parties entered into the 1990 Agreement, 

these facts were more than enough to create a reasonable 

anticipation that Cooper would continue to have a POB in New 

Jersey during the life of the new Agreement. See ISI, 614 A.2d 

at 136-37 (finding that a 1984 agreement contemplated a New 

Jersey POB because, in part, ISI had operated a marketing 

facility in New Jersey since 1977); Liberty, 806 F. Supp. at 1008 

(New Jersey location when first contracting with supplier is 

enough to give rise to inference of anticipation of New Jersey 

location).0 

 In sum, we hold that a reasonable jury could have 

concluded (1) that Cooper and Amana had a "community of 

interest," (2) that Amana granted Cooper a "license," and (3) 

that Cooper established a New Jersey POB. Therefore, a 

reasonable jury could have found that Cooper had a franchise 

within the meaning of the Act. Accordingly, we affirm the 

district court's denial of Amana's motion for judgment as a 

matter of law on Cooper's NJFPA claim. 

 B. Jury Instructions

 

0

Amana also argues that the ISI court, by suggesting that ISI 

could not sell its product without its facility, see ISI, 614 

A.2d at 138, implicitly held that a facility cannot constitute a 

POB unless the facility is necessary for the plaintiff's 

business. A reasonable jury could have concluded, however, that 

Cooper's showroom was necessary to its business since there was 

evidence that the showroom was used for "important" 

demonstrations, App. 1231, and for "vital" sales training. App. 

834. 
29 

 Amana contends that, even if it was not entitled to 

judgment as a matter of law on Cooper's NJFPA claim, it was at 

least entitled to a new trial due to the district court's 

allegedly erroneous jury instructions. We review the district 

court's instructions to determine "whether the charge, taken as a 

whole and viewed in light of the evidence, fairly and adequately 

submit[ted] the issues in the case to the jury." Limbach Co. v. 

Sheet Metal Workers Intern. Ass'n, 949 F.2d 1241, 1259 n.15 (3d 

Cir. 1991) (quoting Link v. Mercedes-Benz of North America, Inc., 

788 F.2d 918, 922 (3d Cir. 1986)). We grant a new trial "only if 

the instruction was capable of confusing and thereby misleading 

the jury." Link, 788 F.2d at 922. When reviewing instructions, 

we consider "the totality of the instructions and not a 

particular sentence or paragraph in isolation." In re Braen, 900 

F.2d 621, 626 (3d Cir. 1990), cert. denied, 498 U.S. 1066 (1991). 

Amana contends that the court gave improper instructions on each 

of the three franchise requirements. 

 1. Community of interest. 

 The district court denied Amana's request for several 

jury instructions regarding community of interest. First, it 

refused to give the following instruction: 

The fact that other brands or lines . . . may 

or may not presently be available for 

distribution by Cooper Distributing is not 

relevant to the issue of whether or not a 

community of interest existed between Amana 

and Cooper Distributing in the marketing of 

Amana products. 
30 

App. 351. Amana contends that Cooper was unable to find another 

product line to distribute due to market changes and that these 

changes could not convert Cooper's assets into franchise-specific 

assets. Amana argues that the above instruction should have been 

given to ensure that the jury understood this point. 

 Without deciding whether Amana's argument regarding the 

effect of market changes under the NJFPA is correct, we hold that 

the district court's detailed and accurate community-of-interest 

charge (see App. 3901-05) taken as a whole was not capable of 

confusing the jury. Not only did this instruction provide a 

clear and correct general description of this concept and the 

concept of franchise-specific assets, but the three specific 

types of investments that the instruction mentioned -- goodwill, 

product-specific knowledge, and inventory -- are not types of 

investments that could easily become non-transferable due to 

market changes. The court told the jury that franchise-specific 

assets in this case might include: 

[B]usiness goodwill developed by Cooper with 

its customers associated with using Amana's 

name or built up by significant advertising, 

marketing, or promotional efforts with 

respect to Amana home appliances and not able 

to be transferred or utilized by Cooper 

outside of the relationship with Amana; . . . 

and any skill or knowledge Cooper gained in 

the marketing of Amana's home appliances 

which could not be used in selling other 

brands of home appliances, even if lines of 

appliances other than Amana were available to 

Cooper.

App. 3905 (emphasis added). Thus, looking at the instructions as 

a whole, we do not think that they were capable of leading the 
31 

jury into believing that assets rendered non-transferable merely 

by market changes could contribute to a finding of franchisespecificity. 

 Second, the district court denied Amana's request for 

an instruction asking the jury to "consider whether the written 

contracts between Amana and Cooper Distributing required Cooper 

Distributing to direct all of its energy and resources to 

developing demand for Amana products." App. 369 (emphasis 

added). The district court did not err in refusing to give this 

instruction because Cooper, in order to prove a community of 

interest, was not required to show that it directed all of its 

energy and resources to promoting the sale of Amana products. See

N.J.S.A. § 56:10-4 (minimum of 20% of gross sales must be from 

franchisor); New Jersey American, 875 F.2d at 63 (noting that "a 

firm may be considered a franchisee even if only 21% of its gross 

sales are derived from the franchisor").0

 2. License. 

 Amana argues that the district court erred in denying 

three requested jury instructions on the subject of whether Amana 

created a license. First, Amana contends that the court should 

have given a charge stating that, in determining whether Cooper 

had a "license" at the time of termination, the jury should not 

 

0

The court also denied Amana's request for an instruction asking 

the jury to consider whether "the dealers to whom Cooper 

Distributing sold Amana products sold not only Amana but also 

other brands of appliances." App. 376. We do not think that 

this instruction had a bearing on whether Amana and Cooper had a 

community of interests and we consequently hold that the district 

court's failure to give this instruction was not erroneous. 
32 

consider certain practices that Cooper had already by this time 

abandoned, such as its previous practices (see App. 749-50) of 

performing in-home repair service on Amana appliances while 

displaying the Amana logo on its truck. See App. 318. We 

disagree. As previously noted, the New Jersey Supreme Court has 

explained that "the term `license' means that the alleged 

franchisee must use the name of the franchisor `in such a manner 

as to create a reasonable belief on the part of the consuming 

public that there is a connection between the . . . licensor and 

licensee by which the licensor vouches, as it were, for the 

activity of the licensee.'" ISI, 614 A.2d at 139 (citation 

omitted). Cooper's past practices could be regarded as 

contributing to the public's perception of the relationship 

between Cooper and Amana. We therefore hold the district court's 

denial of Amana's requested instruction was not erroneous. 

 Second, Amana contends that the district court erred in 

refusing to give an instruction asking the jury to consider 

whether Amana's products were "`off-the-shelf' type products that 

[could] be purchased at regular business outlets (such as 

appliance stores)." App. 322. We hold, however, that the 

district court's "license" charge as a whole was not capable of 

confusing the jury. This instruction was based squarely on ISI. 

See App. 3899. Under the NJFPA, the distinction between "offthe-shelf" products and others is not of such critical 

significance that a specific instruction on this point was 

essential. 
33 

 Third, Amana argues that the district court erred in 

denying its request for an instruction asking the jury to 

consider whether the Agreement required Cooper to use its best 

efforts to promote Amana's name, as opposed to Amana's products. 

App. 329-330. As previously noted, however, we view the 

distinction between the promotion of the Amana name and the 

promotion of Amana products to be of little substance in the 

context of this case. See supra page 22. 

 3. Place of Business. 

 The district court gave the following POB instruction: 

A place of business is defined as "a fixed 

geographical location at which the franchisee 

displays for sale and sells the franchisor's 

services." 

 . . . 

To meet the place of business requirement, . 

. . it is not necessary that the sale of 

goods include only order taking at the 

location. Using the location for display and 

demonstration of the franchisor's goods to 

prospective customers is sufficient. 

App. 3899. Amana contends that this charge was inaccurate, but 

we find Amana's argument to be without merit. As noted, we 

predict that the New Jersey Supreme Court would hold that the 

actual taking of orders is not necessary and that demonstrations 

are sufficient in order to find a POB. See supra pages 24-26. 

 In summary, we hold that the trial court did not err in 

denying Amana's motion for judgment as a matter of law or its 

motion for a new trial on Cooper's NJFPA claim. We thus turn to 

the question of damages. 
34 

 C. NJFPA Damages 

 The jury awarded Cooper $4.375 million in damages under 

the NJFPA. App. 4794. Amana requests a new trial on damages, 

arguing that the district court erred in upholding the verdict. 

Amana claims that the verdict was against the great weight of the 

evidence because the jury based its damages award on the false 

assumption that Cooper had a contractual right in the four-state 

territory to be Amana's exclusive distributor to retail dealers. 

App. 4954. Because we agree that Cooper had no such right and 

because we additionally hold that the franchise was valued as of 

the wrong date, we remand for a new trial on damages. 

 We are mindful that our scope of review of a damages 

award is "exceedingly narrow." Williams v. Martin Marietta 

Alumina, Inc., 817 F.2d 1030, 1038 (3d Cir. 1987) (quoting 

Walters v. Mintec/International, 758 F.2d 73, 80 (3d Cir. 1985). 

The district court's refusal to grant a new trial is reviewed for 

abuse of discretion. See Frank Arnold Contractors, Inc. v. 

Vilsmeier Auction Co., Inc., 806 F.2d 462, 465 (3d Cir. 1986). We 

will reverse, however, when "the verdict is contrary to the great 

weight of the evidence, thus making a new trial necessary to 

prevent a miscarriage of justice." Roebuck v. Drexel, 852 F.2d 

715, 736 (3d Cir. 1988). 

 In the current case, Cooper's valuation expert, Melvin 

Konner, in calculating the value of the Cooper franchise, assumed 

that Cooper had an exclusive right to sell to the retail dealers 

in its four-state territory and "that Amana had no right to sell 
35 

[to the dealers] direct[ly.]" App. 1841. Furthermore, Konner 

explained that his calculation of the value of the Cooper 

franchise would have been "considerably less" if "Amana did have 

the right to sell directly" to the dealers. App. 18. The jury's 

award appears to have been based on Konner's estimate. As will 

be discussed below, however, see infra p. 36-42, Amana did not 

grant Cooper the exclusive right to sell to the retail dealers, 

and therefore Konner's assumption was incorrect. Consequently, 

we hold that the jury's verdict was against the great weight of 

the evidence, and we therefore remand for a new trial on NJFPA 

damages. 

 We also find that the Cooper franchise was valued as of 

the wrong date. The district court instructed the jury to value 

the franchise as of November 5, 1991, the date that Amana 

attempted to terminate the franchise, App. 2917, and Konner 

likewise calculated Cooper's value as that date. App. 1780. 

However, as a result of the preliminary injunction entered by the 

district court, Cooper continued to operate its franchise until 

the date of judgment, March 8, 1994, which was also the date on 

which the district court dissolved the preliminary injunction. 

App. 5000-02. Although Amana unquestionably attempted to 

terminate the Cooper franchise on November 5, 1991, the franchise 

was not effectively terminated until the dissolution of the 

preliminary injunction on March 8, 1994, since Cooper continued 

to operate and receive profits from the franchise until that 

latter date. We therefore hold that the franchise should have 
36 

been valued as of that date, when Cooper actually stopped running 

the franchise. 

 Valuing the franchise as of the earlier date would 

bestow a double recovery on Cooper. When franchises are valued, 

the "price should be approximately equal to the present value of 

all income that can be derived far into the future from the 

business." Johnson v. Oroweat, 785 F.2d 503, 507 (4th Cir. 

1986). This incorporation of future earnings into the current 

value of a business explains "why courts allow a plaintiff to 

recover either the present value of lost future earnings or the 

present market value of the lost business, but not both." Id. at 

508; see also Arnott v. American Oil Co., 609 F.2d 873, 886 (8th 

Cir. 1979) ("[I]t is improper to permit a plaintiff . . . to 

recover both the value of the business as a going concern . . . 

and future profits of that business . . . . Future profit 

potential is taken into consideration in valuing the business as 

a going concern."), cert. denied, 446 U.S. 981 (1980). 

Consequently, valuing the Cooper franchise as of November 5, 

1991, would give rise to a double recovery because Cooper would 

receive both (1) the value of the franchise as of the earlier 

date -- (which would include the present value of the future 

earnings from that date to the date of judgment)0 and (2) the 

actual profits derived from the franchise between the date of the 

attempted termination and the date of judgment. To avoid this 

 

0

See App. 1799 (valuation expert Konner predicting "how [the] 

business [was] going to do" after 1991). 
37 

double recovery, we conclude that the proper date of valuation in 

this case is March 8, 1994.0

 

III. CONTRACT CLAIM 

 We now turn to Cooper's breach of contract claim. In 

the early summer of 1991, a few months before the attempted 

termination, Amana began selling products directly to P.C. 

Richard, Cooper's largest dealer, App. 2309-13,0 and other local 

dealers. Cooper asserted that the Agreement prohibited Amana 

from selling directly to such dealers in Cooper's territory and 

that therefore Amana was in breach. The district court, after 

concluding that the Agreement was ambiguous as to Amana's right 

to make direct sales in Cooper's territory, App. 170-71, 

submitted the contract interpretation issue to the jury. The 

court instructed the jury to consider course of dealing and 

course of performance evidence in determining whether Amana had 

the right to make such sales. App. 3909-10. Apparently relying 

 

0

The New Jersey Supreme Court's decision in Westfield Centre 

Services, Inc. v. Cities Service Oil Co., 432 A.2d 48 (N.J. 

1981), does not mandate a contrary result. In its opinion in 

that case, the court observed that where a franchisor violates 

the NJFPA but is motivated by good faith business reasons, the 

franchisee's damages "should be measured . . . in terms of the 

actual or reasonable value of the franchisee's business when the 

franchisor cuts off the franchise." 432 A.2d at 55. In the 

current case, Cooper's franchise should be viewed as having been 

effectively "cut[] off" when the preliminary injunction was 

vacated. 

0

P.C. Richard, a local dealer, was an annual purchaser of $6 

million of Amana products, representing one-third of Cooper's 

total Amana business and 60% of Cooper's New York Amana sales. 

App. 910, 1014-16, 3955. 
38 

on such evidence,0 the jury concluded that Amana did not reserve 

the right to sell to dealers in Cooper's region and awarded 

Cooper $2 million for Amana's breach. Amana maintains that the 

district court committed reversible error in concluding that the 

contract was ambiguous and in submitting the question of contract 

interpretation to the jury. We agree. 

 The Agreement provides that any disputes under the 

Agreement are "subject to [the] laws of the State of Iowa." App. 

3982. Under Iowa law, the test for ambiguity is an objective 

one: "whether the language is fairly susceptible to two or more 

different meanings." PMX Industries, Inc. v. LEP Profit Intern., 

31 F.3d 701, 703 (8th Cir. 1994) (citing Iowa Fuel & Minerals, 

Inc. v. Iowa State Bd. of Regents, 471 N.W.2d 859, 862-63 (Iowa 

1991)); see also Taylor v. Continental, 933 F.2d 1227, 1232 (3d 

Cir. 1991) ("A term is ambiguous if it is susceptible to 

reasonable interpretations."). Furthermore, where a "written 

contract is unambiguous, Iowa law does not allow consideration of 

extrinsic evidence." PMX Industries, Inc. v. LEP Profit 

International, 31 F.3d 701, 703 (8th Cir. 1994); see also Iowa 

Fuel, 471 F.2d at 862 (parties' intent determined by the words of 

the contract); Anderson v. Aspelmeier, Fisch, Power, Warner, & 

Engberg, 461 N.W.2d 598, 600 (Iowa 1990) (extrinsic evidence may 

 

0

See, e.g., App. 988 (testimony from Cooper's president and 

general manager, William Cooper, that, except for Amana's sales 

to the national accounts, Cooper had been the exclusive dealer 

for 30 years); App. 994 (announcement from Amana to the retail 

dealers in Cooper's area that Cooper was "the exclusive 

distributor of Amana's domestic appliances" in that region); App. 

3379-80 (testimony that Amana repeatedly told Cooper that Cooper 

had an exclusive sales territory). 
39 

not be used to modify, enlarge, or curtail the contract terms).0

While extrinsic evidence, such as the course of performance 

evidence submitted to the jury in this case, may be admissible to 

"supplement[] or explain[]" the terms of the agreement, it cannot 

be used to contradict unambiguous terms. Ralph's Distributing 

Co. v. AMF, Inc., 667 F.2d 670, 673 (8th Cir. 1981). The 

decision whether a contract is ambiguous is one for the court to 

decide as a matter of law, see Boge v. State of Iowa, 309 N.W.2d 

8, 430 (Iowa 1981), and therefore our review is plenary. 

 We hold that the language of the Agreement between 

Amana and Cooper unambiguously provided for a non-exclusive 

distributorship arrangement and therefore that the district court 

erred in submitting to the jury the question of whether Amana 

reserved the right to sell directly to dealers in Cooper's 

territory. One provision of the Agreement states: 

 

0

The Iowa Supreme Court has not addressed the question whether 

the Uniform Commercial Code (UCC) applies to distributorship 

agreements under Iowa law. However, In Corenswet, Inc. v. Amana 

Refrigeration, Inc., 594 F.2d 129 (5th Cir.), cert. denied, 444 

U.S. 938 (1979), the Fifth Circuit applied the UCC to a 

distributorship under Iowa law, explaining: 

Although most distributorship agreements . . 

. are more than sales contracts, the courts 

have not hesitated to apply the Uniform 

Commercial Code to cases involving such 

agreements. 

Id. at 132 (citations omitted); see also Ralph's Distributing Co. 

v. AMF, Inc., 667 F.2d 670, 673 n.6 (8th Cir. 1981) (following 

Corenswet). 

 Assuming that the Iowa courts would apply the Iowa version of 

the UCC in this case, the result would not be affected. Under 

Iowa Code § 554.2202, the express terms of the Agreement could 

not be contradicted by contrary course-of-dealing evidence. 
40 

[T]he Distributor [Cooper] shall have the 

non-exclusive right to purchase from Amana 

for resale . . . . 

App. 3979 (emphasis added). 

 Another even more specific provision states: 

Amana reserves the right to make sales 

directly or through other channels of 

distribution including, but not limited to, 

sales: (a) to any national, state or local 

government, or any agency or subdivision 

thereof; (b) for export; (c) to another 

manufacturer, (d) under trademarks other than 

Amana such as products manufactured under 

private label, (e) for commercial use; (f) to 

national accounts; (g) to general 

contractors, sub-contractors, builder 

distributor/dealers or developers of business 

or home building projects; (h) to leasing 

and/or rental accounts. Any sales under this 

provision may be made by Amana without 

notice, compensation or other obligation of 

any kind to Distributor. 

App. 3981 (emphasis added). 

 In arguing that this provision is ambiguous, Cooper 

relies on the fact that sales by Amana to local retailers, such 

as P.C. Richard, are not specifically mentioned in the list 

contained in the provision. But since this list is prefaced by 

the phrase "including but not limited to," this argument is 

unconvincing. The list merely gives examples of entities with 

whom Amana reserved "the right to make sales directly." By using 

the phrase "including, but not limited to," the parties 

unambiguously stated that the list was not exhaustive. See

Foods, Inc. v. Iowa Civil Rights Comm'n, 318 N.W.2d 162, 171 

(Iowa 1982) (noting that the "including, but not limited to" 

language created a considerably discretionary standard); In re 
41 

Forfeiture of $5,264, 439 N.W.2d 246, 251 n.7 (Mich. 1989) 

(inferring a broad construction from use of the "including, but 

not limited to" language); Jackson v. O'Leary, 689 F. Supp. 846, 

849 (N.D. Ill. 1988) (noting that the phrase "including, but not 

limited to" is "the classic language of totally unrestricted (and 

hence totally discretionary) standards"). 

 Cooper's contention that our interpretation of the 

contract noted above should be governed by the rule of ejusdem 

generis is unpersuasive. Under this rule of construction, 

general words near a specific list are "not to be construed to 

their widest extent, but are to be held as applying only to . . . 

things of the same general kind . . . as those specifically 

[listed]." Black's Law Dictionary, 464 (5th ed. 1979); see also

In re Syverson's Estate, 32 N.W.2d 799, 804 (Iowa 1948); Attorney 

General v. Blue Cross & Blue Shield of Michigan, 4 N.W.2d 54, 58 

(Mich. Ct. App. 1988). Assuming that sales to retail dealers are 

not of the same general kind as the other transactions listed in 

the Agreement, Cooper contends that we should infer that Amana 

cannot make such direct sales. But the rule of ejusdem generis

applies only if the provision in question does not express a 

contrary intent. See In re Syverson's Estate, 32 N.W.2d at 804; 

Blue Cross, 4 N.W.2d at 58. Thus, since the phrase "including, 

but not limited to" plainly expresses a contrary intent, the 

doctrine of ejusdem generis is inapplicable. See In re 

Forfeiture of $5,264, 439 N.W.2d at 251 n.7 (noting that the rule 

of ejusdem generis did not apply because the proviso contained 

the "including, but not limited to" language); Ramirez, Leal & 
42 

Co. v. City Demonstration Agency, 549 F.2d 87, 104 (9th Cir. 

1976) (explaining that "including, but not limited to" language 

is "often used to mitigate" the rule of ejusdem generis); Blue 

Cross, 4 N.W.2d at 58. 

 In an effort to support its argument, Cooper cites 

other cases involving contractual language which, according to 

Cooper, withheld exclusive distributorship rights in language 

that was even clearer than that in the Agreement at issue here. 

This argument, however, misses the mark. The question is not 

whether the Agreement could have been even more emphatic, but 

rather whether the language of the Agreement is susceptible to 

more than one reasonable interpretation. Since we hold that the 

language is unambiguous, it is irrelevant whether even more 

forceful language might have been possible. See PMX, 31 F.3d at 

703. Accordingly, we hold that the Agreement unambiguously 

permitted Amana to make any direct sales it wished and that the 

introduction of contradictory extrinsic evidence in this regard 

was impermissible.0 We therefore reverse the judgment entered in 

 

0

Ralph's Distributing Co. v. AMF, Inc., 667 F.2d 670 (8th Cir. 

1981), is not to the contrary. There, Ralph's Distributing 

Company, a wholesale distributor of snowmobiles, sued AMF, a 

snowmobile manufacturer that had entered into a franchise 

agreement with Ralph's. Pursuant to the agreement, Ralph's was 

to buy the snowmobiles directly from AMF and then resell them to 

retail dealers in its designated territory. When AMF began to 

sell directly to the retail dealers in Ralph's territory, Ralph's 

sued for breach of contract, alleging that AMF's direct sales in 

Ralph's territory violated Ralph's contractual right to be the 

exclusive distributor. Interpreting Iowa law, the Eighth Circuit 

considered extrinsic evidence in interpreting the contract. 

Ralph's is distinguishable from the current case, however, 

because "the contracts designating Ralph's sales area [were] 

silent as to whether or not it would be the exclusive [AMF 
43 

favor of Cooper on its breach of contract claim and remand for 

the entry of judgment in favor of Amana on this claim.0

IV. TORTIOUS INTERFERENCE WITH PROSPECTIVE 

BUSINESS ADVANTAGE 

 The jury found for Cooper on its claim for tortious 

interference with prospective business advantage, App. 4795-96, 

but the jury did not award any actual damages on this claim. Id. 

The jury did, however, award $3 million in punitive damages. Id.

As the district court explained to the jury, Cooper's tortious 

interference claim was the only claim on which punitive damages 

were available. App. 3921. 

 Under New Jersey law, the elements of a claim for 

tortious interference with prospective business advantage are as 

follows: 1) a prospective economic relationship from which the 

plaintiff has a reasonable expectation of gain; 2) intentional 

and unjustifiable interference with that expectation, and 3) a 

causative relationship between the interference and the loss of 

the prospective gain. See Printing Mart-Morristown v. Sharp 

Electronics Corp., 563 A.2d 31, 37 (N.J. 1989). 

 

snowmobile] distributor in that territory." Ralph's, 667 F.2d at 

673. 

0

Amana argued that the judgment in favor of Cooper on the breach 

of contract claim should be reversed in whole or in part, for two 

additional reasons: (1) because the district court allegedly 

gave incorrect jury instructions and (2) because Cooper's 

contract damages were duplicative of its recovery under the 

NJFPA. Because we hold, for the reasons explained above, that 

Amana is entitled to judgment on Cooper's breach of contract 

claim, we need not reach either of these arguments. 
44 

 Cooper based its tortious interference claim on two 

independent sets of alleged facts: (1) Amana's sale of products 

directly to P.C. Richard and (2) other conduct in which Amana 

engaged after the district court preliminarily enjoined Amana 

from terminating the Cooper franchise.0 App. 3912-13. The jury 

returned a verdict for Cooper on both bases,0 App. 4795-96, and 

the district court entered judgment in accordance with the 

verdict. App. 5703-11. 

 Assuming arguendo that there was legally sufficient 

evidence to support the jury's finding of tortious interference, 

Amana contends that the award of $3 million in punitive damages 

must be reversed because the jury, by awarding $0 in actual 

damages, found that Cooper suffered no injury. We agree with 

Amana's argument. 

 Under New Jersey law, a plaintiff must suffer some 

injury in order to recover punitive damages. See Nappe v. 

Anschelewitz, Barr, Ansell & Bonello, 477 A.2d 1224, 1232 (N.J. 

1984) ("[P]unitive damages may be assessed . . . where some 

injury, loss, or detriment to the plaintiff has occurred.") 

(emphasis in original); Lightning Lube, Inc. v. Witco Corp., 4 

F.3d 1153, 1195 (3d Cir. 1993). Despite the jury's finding of $0 

 

0

For example, Cooper offered evidence that was intended to prove 

that, after the preliminary injunction, Amana intentionally 

delayed approval of an air conditioner sales program between 

Cooper and one of its largest dealers, Trader Horn. App. 1047-

61; see also App. 1067-73 (evidence that Amana dropped Cooper 

from its mailing list and thus left Cooper unaware of discounts 

and model changes). 

0

In light of our prior discussion concerning Cooper's breach of 

contract claim, the punitive damage claim could not be sustained 

based on the first theory set out above. 
45 

in actual damages, Cooper makes two arguments that it did suffer 

injury and that punitive damages were therefore permitted. First, 

Cooper claims that the finding of harm necessary to an award of 

punitive damages need not be monetarily measurable but can be 

intangible or unquantifiable. Second, it claims that the jury 

"molded" the breach of contract verdict with the tortious 

interference verdict and that we should infer that the jury did 

award some actual damages for Amana's tortious interference. 

 As for Cooper's argument that it suffered intangible 

injury and was therefore entitled to a punitive award, the New 

Jersey Supreme Court has explained that a plaintiff need not show 

injury which gives rise to compensatory damages in order to 

receive punitive damages. See Nappe, 477 A.2d at 1231-32. The 

question we must answer is whether Cooper may recover punitive 

damages in the absence of an award of even nominal damages. 

 In Lightning Lube, we considered whether Lightning 

Lube, a lube oil dealer, could recover punitive damages from 

Witco, an oil equipment supplier, on Lightning Lube's fraud and 

misrepresentation claim where the jury found that the plaintiff 

had sustained no damages. We held that in light of the jury's 

refusal to award nominal damages to the plaintiff, we could infer 

that the plaintiff did not suffer sufficient injury to warrant an 

award of punitive damages. We explained: 

Inasmuch as the jury did not find sufficient 

injury to award nominal damages on this 

claim, the . . . fraud cannot sustain an 

award of punitive damages. 
46 

Lightning Lube, 4 F.3d at 1195. Relying on Lightning Lube, Amana 

contends that because the jury did not find sufficient injury to 

award even nominal damages to Cooper, the tortious interference 

claim cannot sustain a punitive award. 

 The district court rejected Amana's argument by seeking 

to distinguish Lightning Lube. App. 5708. Whereas neither party 

in the current case requested a nominal damages instruction, the 

jury charge in Lightning Lube contained the following 

instruction: 

If you find that the defendant has violated 

the legal rights of the plaintiff in 

accordance with the law upon which I have 

instructed you, and if you find that the 

plaintiff has proven it has sustained damages 

but they are not computable, you may enter an 

award of nominal damages. 

App. 5708 (district court citing Lightning Lube jury 

instructions). Based upon this instruction, it was clear that 

"the jury knew to award nominal damages expressly if it desired 

to do so," Lightning Lube, 4 F.3d at 1195, and therefore the 

jury's failure to award nominal damages in that case implied that 

the jury did not find any injury. In the current case, the 

district court noted, no instructions on nominal damages were 

sought or given, and the district court therefore opined that the 

jury's finding of $0 in damages on Cooper's tortious interference 

claim could "not be read to imply a finding that Cooper had 

suffered no damages as result of Amana's tortious interference." 

App. 5710. In addition, the district court stated that it could 

be inferred that the jury found that Cooper suffered actual harm 
47 

because the jury awarded punitive damages after being instructed 

that such damages could not be awarded unless "some harm to the 

plaintiff has occurred, even if intangible or unquantifiable." 

App. 3922. Therefore, the district court held that the jury 

found that Cooper did suffer sufficient injury to warrant 

punitive damages. 

 We find the district court's reasoning unconvincing. 

Much like the jury in this case, the Lightning Lube jury was 

instructed that it could award punitive damages only if the 

"defendant ha[d] committed fraud or misrepresentation which had 

caused plaintiff damage." App. 5721 (emphasis added). Yet 

despite this instruction, we held that the jury's punitive 

damages award was improper because the jury there, as here, 

awarded $0 in actual damages. Thus, the mere fact that the 

punitive damages instructions in this case required a finding of 

actual harm is insufficient to sustain the punitive damages 

award. 

 Moreover, we do not think that the fact that "the 

Lightning Lube jury was specifically made aware of the 

availability of nominal damages," App. 5708, can justify a 

contrary result. We decline to accept Cooper's invitation to 

place the burden on the defendant to request a nominal damages 

instruction. Cooper was the party seeking a finding of actual 

injury and, as such, bore the responsibility of requesting a 

nominal damages instruction if it wanted the jury to consider 

that option. Of course, Cooper may well have decided for 

tactical reasons that it did not want the jury to consider that 
48 

option. But whether Cooper failed to request an instruction on 

nominal damages by choice or inadvertence, it should bear the 

consequences. Because Cooper did not request such an 

instruction, it cannot now contend that we should infer a finding 

of nominal damages. See Walker v. Anderson Electrical 

Connectors, 944 F.2d 841, 844-45 (11th Cir. 1991) (holding that 

plaintiff was not entitled to a presumption of nominal damages 

when she had failed to request them), cert. denied, 113 S. Ct. 

1043 (1993);0 Sims v. Mulcahy, 902 F.2d 524, 535 (7th Cir.), 

cert. denied, 498 U.S. 897 (1990).0

 We next address Cooper's contention that the jury 

"molded" the $0 tortious interference verdict with the $2 million 

breach of contract verdict and in fact awarded substantial 

compensatory damages on the tortious interference claim. Cooper 

maintains that because there was evidence in the record that 

Cooper lost $1,959,000 as a result of Amana's direct sales to 

 

0

The Eleventh Circuit in Walker suggested that the reason that it 

placed the burden of such a request on the plaintiff was because 

she had something to gain by its absence. The court, quoting the 

defendant's brief, noted that: 

[i]f there had been an instruction . . . on 

nominal damages, the jury might have given 

it, and that was a risk to be avoided by the 

plaintiff since she was after substantial 

money. 

Walker, 944 F.2d at 845 n.7. 

0

Cooper's reliance on Singer Shop-Rite, Inc. v. Rangel, 416 A.2d 

965, 968 (N.J. Super. Ct. App. Div.), certif. denied, 425 A.2d 

299 (N.J. 1980), is misplaced since Rangel explained that 

punitive damages will be upheld "where actual damage has been 

shown to accrue from the tortious act." 

 
49 

P.C. Richard, App. 4607, and because there was evidence in the 

record that Cooper lost $41,000 as a result of Amana's allegedly 

tortious post-injunction conduct, App. 4611, we should infer that 

the jury's $2 million breach of contract award was really a 

"molding" of its breach of contract verdict and its tortious 

interference verdict. 

 In support of its argument, Cooper relies on Universal 

Computers (Systems) Ltd. v. Datamedia Corp., 653 F. Supp. 518 

(D.N.J.), aff'd, 838 F.2d 1208 (3d Cir. 1988) (no published 

opinion). In Datamedia, the jury found for the plaintiff on 

several theories, one of which, fraud, could have supported an 

award of punitive damages. The jury, however, did not fill in 

the damages line on its special verdict form for any of the 

theories except the first one and instead left the line next to 

all the remaining theories, including fraud, blank. See id. at 

532-34. Concluding that the jury had misunderstood the verdict 

form and had aggregated all the damages on a single line, the 

district court held that in actuality the jury had awarded actual 

damages for fraud and that the award of punitive damages could be 

upheld. See id. at 530. Of course, Datamedia is not binding on 

us and, even if it were, it would be inapplicable here. In this 

case, the jury did not leave a blank next to the line for 

tortious interference; instead the jury wrote "$0." App. 4795-

96. In the face of such an express finding of $0 damages, we 

refuse to infer that the jury "molded" its verdict and in fact 

awarded actual damages for tortious interference. 
50 

 This result is buttressed by the fact that the sum 

total of Cooper's alleged losses from its contract claim combined 

with Cooper's alleged losses from its tortious interference claim 

do not really equal $2 million, as Cooper erroneously suggests. 

Although there was evidence in the record that Cooper lost 

$1,959,000 as a result of Amana's direct sales to just P.C. 

Richard, App. 4607, there was also evidence in the record that 

Cooper lost $2,001,000 as a result of Amana's direct sales to all 

of Cooper's local retail dealers (i.e., P.C. Richard plus the 

other local retailers). App. 4606. Since the breach of contract 

verdict question on the special verdict form asked the jury to 

consider Amana's direct sales "to P.C. Richard and other 

dealers," App. 4794 (emphasis added), the facts do not support 

Cooper's inventive theory that the jury aggregated Cooper's 

claimed breach of contract damages with Cooper's claimed tortious 

interference damages. Accordingly, we hold that, pursuant to the 

jury's verdict, Cooper suffered no actual harm as a result of the 

tortious interference claim, and we therefore reverse the 

district court's entry of the $3 million judgment for punitive 

damages in favor of Cooper and remand for the entry of a judgment 

of $0.0

V. PREJUDGMENT INTEREST 

 

0

Consequently, we need not address Amana's two alternative 

arguments (1) that the punitive damages did not bear a reasonable 

relationship to the actual damages and (2) that Cooper failed to 

prove that Amana acted with the malice necessary to warrant 

punitive damages. 
51 

 Last, we turn to Cooper's cross-appeal and its 

contention that it was entitled to prejudgment interest on its 

NJFPA award. Applying New Jersey law, the district court denied 

prejudgment interest because "the injunction barring Amana from 

terminating Cooper precludes Cooper from convincingly arguing 

that it was denied the use of the value of its own business." 

App. 5739 n.2. We agree with this holding,0 and we therefore 

affirm. 

 On appeal, Cooper argues that it is entitled to 

prejudgment interest on its NJFPA claim no matter whether that 

claim sounds in contract or tort. In our view, however, Cooper 

is not entitled to prejudgment interest in either event. If the 

NJFPA claim is analogized to a contract claim under New Jersey 

law, the award of prejudgment interest for claims arising in 

contract is subject to the discretion of the trial court. See

Meshinsky v. Nichols Yacht Sales, Inc., 541 A.2d 1063, 1070 (N.J. 

1988). Traditionally, prejudgment interest was awarded in 

contract cases only on liquidated damages. See George H. Swatek, 

Inc. v. North Star Graphics, Inc., 587 A.2d 629, 632 (N.J. Super. 

Ct. App. Div. 1991) (noting that historically, prejudgment 

interest was not awarded "where a . . . substantial controversy 

 

0

Cooper contends on appeal that, pursuant to the Agreement, Iowa 

law should govern. However, since Cooper argued to the district 

court that "New Jersey's approach to prejudgment interest governs 

the franchise claim," App. 5193, we hold that Cooper failed to 

raise the argument that Iowa law should govern the prejudgment 

interest claim to the district court and that Cooper therefore 

cannot raise the argument for the first time on appeal. See

Harris v. City of Philadelphia, 35 F.3d 840, 845 (3d Cir. 1994) 

(declining to address a claim raised for the first time on 

appeal). 
52 

exist[ed] as to the amount due under a contract"). The rationale 

was that "the person who is liable for the debt does not know the 

sum he owes and cannot be in default until the amount he owes is 

determined by judgment." Preston v. Claridge Hotel & Casino 

Ltd., 555 A.2d 12, 16 (N.J. Super. Ct. App. Div. 1989). 

However, "the rule that limited prejudgment interest awards to 

cases where damages were liquidated or clearly ascertainable in 

advance has been significantly eroded." Meshinsky v. Nichols 

Yacht Sales, Inc., 541 A.2d 1063, 1070 (N.J. 1988); see also

Swatek, 587 A.2d at 633 (prejudgment interest can be awarded 

"whether either liquidated or unliquidated damages are 

recovered"). Today, the purpose of an award of prejudgment 

interest is "to indemnify the claimant for the loss of what the 

moneys due him would presumably have earned if the payment had 

not been delayed." Ellmex Construction Co., Inc. v. Republic 

Insurance Co., 494 A.2d 339, 349 (N.J. Super. Ct. App. Div. 

1985), certif. denied, 511 A.2d 639 (N.J. 1986). As the New 

Jersey Supreme Court explained, "[t]he basic consideration is 

that the defendant has had the use, and the plaintiff has not, of 

the amount in question." Rova Farms Resort, Inc. v. Investors 

Insurance Co. of America, 323 A.2d 495, 512 (N.J. 1974). 

 In the current case, at no time prior to the judgment 

did Amana have the use of Cooper's property. We explained above 

that, due to the operation of the preliminary injunction, 

Cooper's franchise was not effectively terminated until the date 

of the court's dissolution of the preliminary injunction when the 

judgment was entered, see supra p. 35, and that, for practical 
53 

purposes, Cooper had the use of its franchise until that date. 

Consequently, at no time prior to judgment did Amana have the use 

of something of value owned by Cooper, and we therefore hold that 

the district court acted within its discretion by rejecting 

Cooper's request for NJFPA prejudgment interest predicated on a 

contract-based theory. 

 Cooper makes the alternative argument that its NJFPA 

claim should be considered to be in tort and, as such, should 

give rise to prejudgment interest pursuant to New Jersey Court 

Rule 4:-11(b), which provides for prejudgment interest on tort 

claims. We hold that the fact that Cooper was not denied the use 

of its property until judgment precludes Cooper from receiving 

prejudgment interest even if Cooper's NJFPA claim is viewed as 

sounding in tort. Since Cooper's franchise existed until the 

date of judgment, we affirm the district court's holding that 

Cooper was not entitled to prejudgment interest.0

VI. CONCLUSION 

 For the reasons explained above, we affirm the district 

court's denial of Amana's motion for a judgment as a matter of 

law and its motion for a new trial on the NJFPA claim. We 

reverse the district court's denial of a new trial on NJFPA 

 

0

Alternatively, Cooper claims that the district court erred by 

failing to award Cooper prejudgment interest in light of Amana's 

alleged aggravated misconduct. See W.A. Wright, Inc. v. KDI 

Sylvan Pools, Inc., 746 F.2d 215, 219 (3d Cir. 1984) (egregious 

conduct warranted prejudgment interest). Again, however, we 

decline to award prejudgment interest where the plaintiff was not 

deprived of the use of his property until judgment. 
54 

damages and remand for a new trial on that issue consistent with 

this opinion. We reverse the judgment in favor of Cooper on its 

breach of contract claim and remand for the entry of judgment for 

Amana on that claim. We reverse the award of $3 million in 

punitive damages to Cooper on its tortious interference claim and 

remand for the entry of a judgment for $0. We affirm the 

district court's denial of Cooper's motion for prejudgment 

interest. Each side will bear its own costs.0

 

0

While a sharing of costs often follows a decision in which each 

side has prevailed on one or more issues, in this case we take 

the occasion to note that even if Cooper had prevailed, we might 

not have awarded it costs because of the excessiveness of the 

footnotes in its otherwise helpful and persuasive brief. This 

court's local rules explicitly state that "excessive footnotes in 

briefs are discouraged." See LAR 32.2(a). The effect was not 

only to make the brief more difficult to read, but it meant that 

many pages contained more than the 27 lines of double-space text 

permissible under LAR 32.1(c). 
55 
56 

Cooper Distributing Company v. Amana Refrigeration, Inc. 

Nos. 94-5569 and 94-5570 

SLOVITER, Chief Judge, concurring and dissenting. 

 I am happy to join the majority's careful and persuasive opinion in all r

except one: although I believe it is a close question, I cannot agree that the 

Distributor Agreement unambiguously permitted Amana to sell directly to all dealers 

Cooper's territory. I believe that the district court did not err in determining t

distributorship agreement between Amana and Cooper was ambiguous and in submitting 

issue to the jury. Moreover, I believe that once the issue was properly before the 

there was adequate evidence from which the jury could have found that Amana's decis

sell directly to P.C. Richard & Son, Cooper's largest account, and to other local d

was a breach of contract. 

The majority bases its decision that the agreement unambiguously reserved 

Amana the right to sell to retail dealers such as P.C. Richard on (1) the designati

Cooper's "right to purchase from Amana for resale" as "non-exclusive" and (2) the p

of Amana's reservation of "the right to make sales directly or through other channe

distribution" to listed categories with the words "including, but not limited to, s

to those categories. Admittedly, the contract reflects an understanding that Coope

right to sell was not exclusive, even within its territory, and that the listing of 

certain categories to which Amana could sell was not exhaustive, but it does not 
57 

necessarily follow that Amana unambiguously reserved the right to sell directly to 

customer in Cooper's territory. 

 The first provision on which the majority relies states that the "Distrib

shall have the non-exclusive right to purchase from Amana for resale." App. 3979 

(emphasis added). Patently, this does not apply to Amana itself. The "purchase for 

resale" presumably applies to companies such as Cooper, which sell to retailers, an

provision's applicability to P.C. Richard, which sells only to consumers, is unclea

Thus, there is some ambiguity whether or why this provision has any application to 

right to sell directly to a local retailer. 

 The other provision on which the majority relies is the reservation claus

Here Amana did indeed reserve the right to make sales "directly or through other ch

of distribution" and prefaced the list of the other "channels of distribution" 

with the words "including, but not limited to." App. 3981. I find this more ambig

than does the majority because none of the enumerated categories resembles a local 

account, such as P.C. Richard, and Cooper was unlikely to be in a position to sell 

effectively to any of the enumerated accounts. The point is not that we could say 

certainty that Amana did not reserve the right to make direct sales to retailers, b

merely that the issue is not clear as a matter of law. This is markedly different 

the contract that was at issue in Manchester Equipment Co. v. Panasonic Indus. Co., 

N.Y.S.2d 532, 533 (N.Y. Sup. Ct. App. Div.), appeal dismissed, 531 N.E.2d 299 (N.Y.

appeal denied, 534 N.E.2d 329 (N.Y. 1988), where Panasonic had expressly reserved "

unrestricted right to solicit and make direct sales of the Products to anyone, anyw

(emphasis added). 
58 

Moreover, under Iowa law, the language reserving sales to Amana should no

read in isolation. The ambiguity vel non of contractual language must be determine

looking at the contract as a whole. As the Iowa Supreme Court said in Freese v. To

Alburnett, 125 N.W.2d 790, 792 (Iowa 1964), "[A]mbiguity appears when a genuine dou

appears as to the meaning of a contract, and the instrument must be construed as an 

entirety." Moreover, "a contract will not be interpreted giving discretion to one p

a manner which would put one party at the mercy of another, unless the contract cle

requires such an interpretation." Iowa Fuel & Minerals, Inc. v. Iowa State Bd. of 

Regents, 471 N.W.2d 859, 863 (Iowa 1991). 

 In Freese, the issue was whether a contractor who had drilled a well for 

under a contract requiring him to "[f]urnish and install all equipment for test pum

for a "[l]ump sum [of] $500.00" had an obligation to conduct a second test pumping 

the well caved in. 125 N.W.2d at 792. The town contended that the contract unambi

required the contractor "to test pump [the] well as many times as was necessary to 

the Town's engineer, for the sum of $500.00, in order to complete his basic contrac

Id. The trial court, after considering evidence presented, refused to accept this 

contention and found the contract ambiguous, a somewhat different approach to ambig

than followed by those courts which look only to the contract. The Supreme Court o

stated: 

Considering the evidence that this is a time-consuming and costly 

operation and that the contractor was required to follow implicitly 

the directions of the engineer, the trial court found considerable 

doubt as to the meaning of this contract provision. We must agree. 
59 

Id. The Court then stated, "It would be most unfair and inequitable to hold [the 

contract] required the contractor to perform this expensive task as often as requir

the engineer." Id. at 793. 

Thus, we must look in the first instance at the entire contract to ascert

whether it is consistent with all of its provisions to construe the provisions reli

by Amana as unambiguously giving it the right to sell directly to Cooper's largest 

customer, one who accounted for one-third of its total Amana sales, and 60% of its 

York Amana sales. In making this inquiry, I do not suggest that a court should int

terms into the contract that it deems fair and equitable but merely that the court 

decide from an objective standard whether the provision on which the party relies i

unambiguous when read in context of the entire contract. 

 In this case, we should look at whether the obligations that the Distribu

Agreement imposes on Cooper are consistent with a reservation to Amana of the right 

sell directly to retailers in Cooper's territory. Like the Iowa Supreme Court in F

I have "considerable doubt" whether they are, especially considering that 78% to 10

Cooper's business was derived from the sale of Amana products. For example, Cooper 

required to use its best efforts to promote sales and "[t]o accept a minimum quota 

determined by Amana based on sales potential in the territory." App. 3979. Such a 

quota would be meaningless if Amana could undersell Cooper at will by selling direc

Cooper's customers. In addition, the Agreement obliged Cooper to "purchase and mai

an appropriate inventory of all Products in accordance with Amana's written program

policies." Id. Such a provision had the potential of stranding Cooper with useles

inventory if Amana could sell directly to the retailers. 
60 

 Reading the contract as a whole, I believe it is ambiguous as to whether 

had the right to sell directly to retail dealers in Cooper's territory, and that th

district court did not err in submitting the question of contract interpretation to 

jury. Therefore, I respectfully dissent in that respect.