Opinion ID: 993747
Heading Depth: 2
Heading Rank: 3

Heading: Black and White Documentation

Text: As to black and white documentation, Zenith presented no formal proposal, but did submit three separate documentation samples and essentially asked the Air Force to choose the one it preferred. According to Dr. Lipkin, ZDS did this as informally as possible. JA at 658. Zenith, in presenting the proposal to the Air Force, passed it on to the test director rather than the branch's contracting officer. JA at 658. EDS urges that the grant of summary judgment on this claim was precipitous. EDS argues that whether Zenith's proposal to the Air _________________________________________________________________ 5 Consideration, of course, is an essential element of a binding contract whether in the form of a benefit paid to the promisor or a detriment incurred by the promisee. See, e.g., Coulter v. Gillio, 184 S.E. 201 (Va. 1936); Sager v. Basham, 401 S.E.2d 676 (Va. 1991). 19 Force was made in good faith and was commercially reasonable under Va. Code § 8.1-203 is a question of fact that ought not be resolved on a motion for summary judgment, given Dr. Lipkin's concessions that Zenith made the proposal to the Air Force as informally as possible and failed to address the proposal to the highest contracting official. EDS maintains that whether a merchant has acted in a commercially reasonable manner consistent with its good faith obligations is a matter of fact requiring evidence of trade custom and industry standards.6 The district court, however, determined that Zenith proposed the black and white documentation to the government in good faith and did so not by looking to the commercial standards of the contracting industry, but rather by examining Zenith's own conduct. See, RW Power Partners, L.P. v. Virginia Elec. and Power Co. , 899 F.Supp. 1490, 1498 (E.D.Va. 1995) (holding in declaratory judgment action that utility company, by its own behavior, did not act in bad faith so as to breach implied duties of good faith and fair dealing under Va. Code §§ 8.1-203 and 8.1-103). Such an examination here reveals that the documentation which the Air Force ultimately accepted for shipping on the Desktop IV contract, while not EDS's black and white documentation which the Air Force had rejected, was based on the documentation samples submitted by Zenith, in good faith pursuant to the Settlement Agreement. Therefore, as to the good faith and fair dealing count (COUNT II) of the counterclaim relating to both the computer disks and the black and white documentation, we affirm the district court's grant of summary judgment to Zenith. EDS presents no genuine issue of material fact as to whether Zenith met the good faith obligations it had under the Settlement Agreement. _________________________________________________________________ 6 EDS's Brief at 37-38 cites a number of cases from other jurisdictions which, necessarily, did not have occasion to interpret Va. Code § 8.1- 203. Specifically, EDS cites authority in support of its argument from the Sixth, Ninth and D.C. Circuits. In the case of Nanakuli Paving and Rock Co. v. Shell Oil Co., Inc., 664 F.2d 772, 779 (9th Cir. 1981), however, the court held only that the district court did not abuse its discretion in looking to the applicable trade to ascertain trade usages defining good faith and fair dealing rather than looking to the purchase and sale at issue alone. 20 V. CONCLUSION For the reasons stated herein, this court hereby affirms the judgment of the district court in its entirety as to both the breach of contract claim and the breach of good faith and fair dealing counterclaim. It is so ordered. AFFIRMED 21