Opinion ID: 720636
Heading Depth: 2
Heading Rank: 2

Heading: Valley Action

Text: 20 Valley alleges that Evian breached the Agreement by selling water to other New England distributors during the period in which Valley was to have had exclusive rights in the area, and by shipping defective product. The district court directed a verdict against Valley on the breach of contract claim on the grounds that the claim was barred under Paragraph 19 of the distribution agreement by reason of Valley's failure to give notice in a timely fashion. Paragraph 19 states: 21 NOTICE OF CLAIMS AND ADJUSTMENTS AFTER TERMINATION OF AGREEMENT: If during the term of this Agreement Distributor shall have reason to believe it has any claim against Company in respect of any transaction growing out of this Agreement, it shall in writing notify Company within thirty (30) days after Distributor knows or has reason to know the basis of any such claim. Failure to give such notice shall relieve Company from any and all liability on any claim in respect of any transaction growing out of this Agreement, notice and full details of which are not given to Company in writing within thirty (30) days after such termination. 22 The trial court read this paragraph to mean that Valley waived any breach of contract claim under the Agreement unless it gave written notice of the claim within thirty days. Valley never gave written notice prior to filing its complaint. The district court therefore concluded that Valley had waived the breach of contract claim. 23 Valley argues on appeal that this reading misinterprets the contract. We agree. The heading of p 19 specifies that its provisions apply to NOTICE OF CLAIMS AND ADJUSTMENTS AFTER TERMINATION OF [THE] AGREEMENT. The word termination is, in the context of this contract, a term of art. Paragraph 3, headed TERMINATION OF AGREEMENT, specifies that prior to the expiration of [the] Agreement, Evian may terminate this Agreement and the Distributor's rights hereunder under certain conditions. (emphasis added). Hence, termination of the Agreement--the contingency to which p 19 speaks--is something distinct from expiration. In a p 3 termination, Evian ends the Agreement before the completion of the renewable one year term specified in p 2. Evian never sought to terminate the Agreement under p 3. Quite to the contrary, Evian insists in its separate action that the Agreement lapsed on its own terms (in other words, that it expired), when the one-year term and the one-year renewal period ended. Valley thus has a strong argument that the provisions of p 19 are inapplicable here, since that portion of the Agreement only requires Valley to provide Notice of Claims ... After Termination  of the Agreement, and the Agreement was never terminated. (emphasis altered). 24 The language of p 19 provides still further support for this conclusion. Evian calls our attention to the first sentence of the paragraph, which requires that Valley give notice of any claim it intends to pursue under the contract within thirty days of the time at which it knows or has reason to know the basis of the claim. However, that sentence is followed by another, which sets forth the penalties for failure to give timely notice of claims. This sentence plainly states that a [f]ailure to give such notice ... relieve[s] [Evian] from any and all liability on any claim ..., notice and full details of which are not given to [Evian] in writing within days after such termination. (emphasis added). This sentence seems to provide that Evian's exoneration by reason of failure to give notice occurs only in cases of termination, and only where Valley fails to give notice within 30 days of the termination. Paragraph 19 does not address the possibility of claims--like those at issue here--brought after expiration of the Agreement. As there was no termination, the failure to give notice is without effect under the contract. 5 25 We therefore vacate the district court's directed verdict against Valley on its breach of contract claim, and remand for further proceedings. 6
26 Valley also claimed in quantum meruit, arguing that Evian was unjustly enriched because Valley provided Evian's sole warehouse without compensation during a crucial early stage in the marketing of its product; gave Evian a marketing plan that allowed its product to become successful; and purchased large quantities of water in December 1989 at the low point of the season on the understanding that the contract would be renewed through 1990. The district court granted a directed verdict against Valley on this claim, finding that the existence of a valid contract covering the subject matter of the dispute barred the assertion of such a claim. We agree. 27 Under New York law, [t]he existence of a valid and enforceable written contract governing a particular subject matter ordinarily precludes recovery in quasi contract for events arising out of the same subject matter. Clark-Fitzpatrick, Inc. v. Long Island R.R. Co., 516 N.E.2d 190, 193, 70 N.Y.2d 382, 388, 521 N.Y.S.2d 653, 656 (1987). That principle applies here. Valley's alleged decisions to provide a warehouse for use with Evian products and to give Evian a marketing plan were pre-contractual expenditures made in an effort to secure the bargain. By signing the distribution agreement, Valley agreed that the benefits accruing to it under that contract were sufficient compensation for these expenditures. Paragraph 23 of the Agreement specifies that [t]his Agreement constitutes the entire Agreement between the Company and Distributor. There are no oral agreements or other agreements or understandings between the Company and the Distributor affecting this Agreement. This Agreement supersedes any and all previous agreements and/or understandings between the parties. Valley cannot now bring a suit seeking quasi-contractual recovery for events arising out of the same subject matter, id., as the underlying contract. 28 Valley's argument that it has stated a quantum meruit claim for its December 1989 purchase of Evian water is also unavailing. Valley alleges only that the purchase was made with the understanding that the contract was renewed through 1990.... As explained in greater detail below, 7 this was an incorrect assumption. That Valley may have wrongly thought its contract had been renewed at the time it made the December 1989 purchase does not mean that it can sustain a claim for unjust enrichment. Valley purchased water under the Agreement, and received the goods at the contractually specified price. The purchase fell within the scope of its valid written agreement. Clark-Fitzpatrick, 516 N.E.2d at 193, 521 N.Y.S.2d at 656. We therefore affirm the district court's grant of directed verdict in favor of Evian on Valley's claim for quantum meruit.
29 Valley argues in the third count of its complaint, that Evian tortiously interfered with advantageous business relationships between Valley and those to whom it had supplied Evian products, by stripping away Valley's territory under the Agreement, selling directly to some of Valley's former customers, and giving the rest of the business to other distributors. 30 We note as an initial matter that the choice of law clause, which states only that the Agreement is to be governed by the laws of ... New York, does not purport to govern a claim in tort. For reasons already explained, we would therefore ordinarily undertake to apply Massachusetts choice of law principles to determine the applicable substantive law. But we need not consider the matter further. The district court addressed this claim assuming that Massachusetts law applied; Valley and Evian do not directly dispute the district court's application of Massachusetts law, and cite only Massachusetts authority on this issue in their briefs. 31 In order to prevail on this claim, Valley must demonstrate: (1) a business relationship ... of economic benefit; (2) the defendant's knowledge of such relationship ...; (3) the defendant's intentional and [improper] 8 interference with it; [and] (4) the plaintiff's loss of advantage directly resulting from the defendant's conduct. ELM Medical Lab., Inc. v. RKO Gen., Inc., 532 N.E.2d 675, 681, 403 Mass. 779, 787 (1989) (quoting Comey v. Hill, 438 N.E.2d 811, 387 Mass. 11, 19 (1982)). With respect to the showing of improper[ness] required under the third prong, Valley must demonstrate the interference [was] improper in motive or means. Dulgarian, 652 N.E.2d at 609. 9 32 The district court directed a verdict in favor of Evian on this claim, ruling that Valley had failed to put forward evidence sufficient to support its argument that Evian had acted with either improper motive, or improper means. Valley argues that this determination was in error. 33 Valley claims principally that because Evian allegedly breached its distribution agreement with Valley in order to interfere with Valley's business relationships with its suppliers, Evian used an improper means to facilitate the interference. 10 Cf. WFB Telecommunications, Inc. v. NYNEX Corp., 188 A.D.2d 257, 258, 590 N.Y.S.2d 460, 462 (1st Dep't 1992) (holding that refusal of regular purchaser to do business with independent manufacturer's representative resulting in representative's loss of contracts with manufacturers did not tortiously interfere with these contracts since purchaser's decision was not improper, while noting no showing of ... the existence of a contract ... between purchaser and representative). Because the trial judge found no breach of the Agreement, he never reached the question whether such a breach could make the alleged interference improper. As we have remanded the question of breach of the distribution agreement, we leave this matter to the district court on remand, expressing no view as to the validity of Valley's theory.
34 Valley also brings a claim under MUTPA. See Mass.Gen.L. ch. 93A, § 1 et seq. The district court directed a verdict against Valley on this claim, following the authority of Northeast Data Sys., Inc. v. McDonnell Douglas Computer Sys. Co., 986 F.2d 607 (1st Cir.1993), and Worldwide Commodities, Inc. v. J. Amicone Co., 630 N.E.2d 615, 36 Mass.App.Ct. 304 (1994). In Northeast Data, the court reasoned that, with respect to MUTPA claims that are in essence reframed contract claims, a contractual choice of law clause specifying that the rights and obligations of the parties ... shall be governed by and construed in accordance with the laws of California, would apply to MUTPA claims as well as ordinary contract claims. Northeast Data, 986 F.2d at 609. Since California had no statute that paralleled MUTPA, the Northeast Data court affirmed dismissal of the claims. Id. at 611. The district court ruled that this was a parallel case, and directed verdict against Valley--finding that since the valid written agreement provides that New York law shall apply, a claim based on Massachusetts law is barred.... 35 A decision of the Supreme Judicial Court of Massachusetts that was announced subsequent to the district court's ruling on the MUTPA claim, however, distinguished Northeast Data, and requires a different result in our case. In Jacobson v. Mailboxes Etc. U.S.A., Inc., 646 N.E.2d 741, 746 n. 9, 419 Mass. 572, 580 n. 9 (1995), the Supreme Judicial Court ruled that an agreement which does not state that the rights of the parties are to be governed by [non-Massachusetts] law but only that the agreement is to be governed and construed by [non-Massachusetts] law .... does not purport to bar the application of [MUTPA] to the parties' dealings in Massachusetts. Unlike the choice of law clause in Northeast Data, which referred to the parties' rights and obligations under the contract, the contract at issue here--like that in Jacobson--states only that the Agreement is to be governed by the laws of the State of New York. As explained earlier, we are bound in our consideration of the Valley action by Massachusetts choice of law principles. Massachusetts would not interpret the choice of law clause in the Agreement to bar Valley's MUTPA claim by requiring that it proceed under New York law. See id. We therefore remand the MUTPA claim for further consideration by the district court.