Opinion ID: 1970127
Heading Depth: 1
Heading Rank: 8

Heading: Institution of Legal Action

Text: On April 4, 1990, Sons of Thunder filed its first complaint against Borden to recover for Borden's alleged breaches of contract. Initially, Sons of Thunder sought damages for: (1) Borden's failure to buy the contractual amount of quahogs and failure to pay the contractual price prior to the purported termination of the contract; (2) Borden's failure to buy quahogs after the purported termination; and (3) the decrease in value of the Sons of Thunder due to Borden's breaches. On March 11, 1991, Borden filed a motion for partial summary judgment on the claim for damages for the period after August 8, 1987, on the theory that the contract with Sons of Thunder unambiguously gave Borden the right to terminate with ninety days notice. In response, Sons of Thunder submitted the affidavits of Booker and DeMusz, who negotiated the contract for the two parties. Essentially, both affidavits stated that the intention of the parties was that either party could terminate the contract at the end of the first year with ninety days notice, and if the contract was not terminated, the parties were locked in for five years. Booker's affidavit stated that Borden agreed to a five-year term because its reason for entering the contract was to secure a reliable source of clams over the long-term. Booker noted that a Borden accountant had calculated the number of bushels that Borden was obligated to buy each week. That number was based on Borden's need and on the amount of income necessary for DeMusz to fund the debt on a new boat. Booker explained that the contract allowed Borden to terminate at the end of one year, with ninety days notice, in case the boat became a non-performer. Booker stated: As long as DeMusz was ready, willing and able to supply the contractual number of clams, then I viewed Borden as committed to buying the contractual amount of clams over a five[-]year period. Borden wanted a steady supply of clams, and a long-term contract was the price we knew we were paying. Booker said that they intended the contract period to begin when the Sons of Thunder was ready to harvest clams. Booker also stated that Southwell approved the contract. Booker stated that he met with Sons of Thunder's banker, Dodson, at least twice: Dodson wanted Borden to commit to a term in the contract that was co-existent with the payout period for the proposed loan, that is, seven or eight years. I had already secured approval for the five-year term we had put in the agreement, and I wanted to convince Dodson that given DeMusz' excellent working relationship with Borden, a five[-]year term for the contract should be a long enough basis for him to make the loan. I also told Dodson that although the contract could be terminated at the end of the first year for non-performance, we did not anticipate any performance problems, given DeMusz's excellent record. DeMusz expressed the same understanding of the terms of the contract in his affidavit. The trial court denied Borden's motion, finding that genuine issues of material fact existed as to what the intent of the contract was and about whether the written contract reflected the full and complete agreement and understanding between the parties. The court further found that Borden's affidavits raised an issue of fair dealing. Subsequently, Sons of Thunder amended its complaint to add a cause of action against Borden for breaching its covenant of good faith and fair dealing. Borden made a motion in limine, requesting that Sons of Thunder be precluded from introducing testimony at trial concerning the contract's termination provisions, from seeking damages for the period after August 8, 1987, and from introducing evidence relating to the relationship between Borden and Sea Work or kickbacks paid to Nicholson. Borden argued that the Court should enforce the contract as written and not admit parol evidence because the terms of the contract are clear and unambiguous. Borden contended that the terms of the contract preclude damages for the period after August 8, 1987. The trial court denied Borden's motion. Ultimately, it found that the contract was not integrated, was ambiguous as a matter of law, and that its meaning was a question for the jury. The Appellate Division denied leave for an interlocutory appeal. The trial court also struck Borden's defense of fraud in the inducement; i.e., that Borden would not have signed the contract if it knew that Dempsey was a part owner of Sons of Thunder. The Appellate Division denied leave to appeal that motion.