Opinion ID: 198733
Heading Depth: 2
Heading Rank: 2

Heading: Plaintiff's State Law Causes of Action

Text: 36 Following the district court's dismissal of the antitrust claims, the parties commenced discovery on plaintiff's remaining state law claims. The complaint alleged (1) breach of contract; (2) interference with advantageous business relations; (3) breach of the implied covenant of good faith and fair dealing; and (4) violation of the Massachusetts Consumer Protection Act, M.G.L.A. c. 93A. At the conclusion of the scheduled discovery period, defendants moved for summary judgment on these remaining counts, and the district court granted the motion on January 12, 1999.
37 Anaco informed Serpa of its intent to terminate Serpa as its exclusive sales representative by letter dated November 19, 1996. The letter indicated that Serpa's termination was effective immediately, but stated that Anaco would pay Serpa a duplicate commission for all orders received and invoiced for one month, rather than have Serpa serve as a lame duck sales representative for that time. 38 Under Massachusetts law, a contract without a durational term is terminable at will by either party upon reasonable notice. See Teitelbaum v. Hallmark Cards Inc., 520 N.E.2d 1333, 1336 (Mass. App. Ct. 1988). Plaintiff argues that whether Anaco provided reasonable notice of termination is a question of fact, and therefore summary judgment was inappropriate. We disagree. 39 In Teitelbaum, the court determined that a breach of contract claim for inadequate notice of termination may be disposed of by motion for summary judgment. See id. at 1336. In reaching this conclusion, the court stated that reasonableness of notice is measured in terms of the ability of the party affected by the termination to obtain a substitute arrangement. Id. 40 If that party is able to obtain another supplier before the performance of the party effecting termination becomes due, then it necessarily follows that the terminating party has furnished reasonable notice and will not be responsible for damages. Put another way, the adequacy of the notice is generally coextensive with the amount of harm that can be proved by the party who has incurred the loss of a supplier. 41 Id. Here, there is no evidence in the record that Serpa's injuries resulted from inadequate notice of termination. Serpa merely states that following its termination by Anaco it was deprived of its commissions on Anaco products. This is an inevitable loss and does not arise from the manner in which the contract was terminated. 42 Plaintiff's reliance on Cherick Distributors, Inc. v. Polar Corporation, 669 N.E.2d 218 (Mass. App. Ct. 1996), is misplaced. In Cherick, the plaintiff's exclusive distributorship agreement was terminated by defendant on four days notice in retaliation for a letter plaintiff sent to other distributors urging the distributors to collectively negotiate with the defendant. The court determined that [w]hether the four-day termination notice constituted reasonable notice under commercial standards of good faith and fair dealing was a question properly put to the jury in this case. Id. at 220. The court reasoned: 43 The evidence indicated that the four-day notice left Cherick with no time to secure another supplier, make adjustments in its equipment and warehouse, and maintain its staff. Accordingly, there was adequate support for the jury's finding that four days' notice was unreasonable and that it constituted a breach of the covenant of good faith and fair dealing. 44 Id. Here, in contrast, plaintiff did not present any evidence that a month was insufficient time to secure another supplier, to make adjustments to its operations, or that it provided Serpa with an inadequate opportunity to maintain its staff. Accordingly, Cherick does not require reversal of the district court's ruling. 45
46 Plaintiff argues that its abrupt termination constitutes a breach of the implied covenant of good faith and fair dealing that is implicit in every contract. See Anthony's Pier Four, Inc. v. HBC Assocs., 583 N.E.2d 806, 820 (Mass. 1991) (Every contract implies good faith and fair dealing between the parties to it.). Plaintiff's argument is unavailing. The notice of termination was reasonable and there is nothing per se unreasonable about terminating an exclusive distributorship contract. 47 Plaintiff's reliance on Cherick is once again misplaced. The Cherick plaintiff was terminated by defendant on four days notice, in retaliation for its suggestion to similarly situated distributors that they band together and collectively bargain with the defendant manufacturer. In this case, there is no evidence that Anaco's termination of Serpa had a retaliatory motive, was undertaken in bad faith, or otherwise violated public policy. Additionally, Serpa was paid commissions for a period of thirty days following its termination. Under these circumstances, we find that Serpa cannot show a breach of the implied covenant of good faith and fair dealing. 48
49 Under Massachusetts law, to state a cause of action for intentional interference with an advantageous business relationship, plaintiff must plead and prove that the defendants (1) engaged in intentional and willful acts (2) calculated to cause damage to the plaintiffs' lawful business (3) with an unlawful purpose and without right or justification, (4) thereby causing actual damage or loss. Doyle v. Hasbro, Inc., 884 F. Supp. 35, 40 (D. Mass. 1995); Chemawa Country Golf, Inc. v. Wnuk, 402 N.E.2d 1069, 1072 (Mass. App. Ct. 1980). 50 In this case, Serpa argues that defendants acted in stealthy haste to terminate Serpa's contract to prevent it from acquiring competing product lines to sell to its former Anaco customers. As with its other contractual claims, Serpa relies on Cherick in support of its argument. Again, however, we find that Cherick is inapposite. In Cherick, the court held [t]he jury could have found that the abrupt termination of Cherick's distributorship agreement, coinciding as it did with the planned meeting of Polar distributors, was calculated to put Cherick out of business and thereby discourage other distributors from meeting. 669 N.E.2d at 220. Here, in contrast, defendants made a legitimate business decision based on obvious efficiency concerns to eliminate one of two overlapping distributors. There is no evidence in the record of an unlawful or improper motive, and nothing in the record indicates that defendants' conduct was calculated to injure Serpa. Further, there is no evidence that a month is insufficient notice of termination. Accordingly, we find that summary judgment on this claim was proper. 51
52 For conduct to violate Chapter 93(A) it must (1) fall within the penumbra of some common-law, statutory, or other established concept of unfairness; (2) be immoral, unethical, oppressive, or unscrupulous; and (3) cause[] substantial injury to [other businessman]. Linkage Corp. v. Trustees of Boston Univ., 679 N.E.2d 191, 209 (Mass. 1997) (quoting PMP Assocs., Inc. v. Globe Newspaper Co., 321 N.E.2d 915, 917 (Mass. 1975)). Here, Serpa relies on the same facts underlying its federal antitrust claims to support its Massachusetts statutory claim.Having carefully reviewed the record, we conclude there is no evidence of immoral, unethical, oppressive, or unscrupulous conduct sufficient to state a Chapter 93A claim. See Bradley v. Dean Witter Realty, Inc., 967 F. Supp. 19, 29 (D. Mass. 1997). As a matter of law, a refusal to deal, without a showing of monopolistic purpose or concerted effort to hinder free trade, is not an unfair trade practice under G.L.C. 93A, and is therefore not actionable. PMP Assocs., 321 N.E.2d at 919. Accordingly, summary judgment on this claim was proper.