Court Opinion

ID: 3013011
Source: CourtListenerOpinion
Date Created: 2015-10-13 21:53:25.49939+00
Date Added: 2024-06-11T09:38:12.878841
License: Public Domain

Opinions of the United
2003 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit

6-24-2003

Masda Corp v. Empire Comfort Sys
Precedential or Non-Precedential: Non-Precedential

Docket No. 02-3062

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Recommended Citation
"Masda Corp v. Empire Comfort Sys" (2003). 2003 Decisions. Paper 436.
http://digitalcommons.law.villanova.edu/thirdcircuit_2003/436

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                                                                  NOT PRECEDENTIAL

                         UNITED STATES COURT OF APPEALS
                              FOR THE THIRD CIRCUIT

                                       No. 02-3062

                                MASDA CORPORATION,

                                        Appellant

                                            v.

                           EMPIRE COMFORT SYSTEMS, INC.

           ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR
                        THE DISTRICT OF NEW JERSEY

                               (Dist. Court No. 99-cv-01445)
                        District Court Judge: Hon. William H. Walls

                        Submitted Under Third Circuit LAR 34.1(a)
                                     June 16, 2003

                    Before: ALITO, ROTH, and HALL,* Circuit Judges.

                              (Opinion Filed: June 24, 2003)

                                OPINION OF THE COURT

ALITO, Circuit Judge:

       *
        The Hon. Cynthia H. Hall, Circuit Judge for the United States Court of Appeals for
the Ninth Circuit, sitting by designation.
       Masda Corp. appeals an order of the District Court granting summary judgment to

Empire Comfort Systems, Inc. in a diversity action for breach of contract and related

claims. Applying Illinois law, the District Court held that the alleged oral agreement

between the parties was unenforceable because it was indefinite and no meeting of the

minds occurred; that no requirements contract existed; that Illinois law does not recognize

an independent cause of action for the breach of an implied covenant of good faith and fair

dealing; and that the doctrines of promissory estoppel and equitable estoppel were

inapplicable. Our review is de novo, Ideal Dairy Farms, Inc. v. John Labatt, Ltd., 90 F.3d

737, 743 (3d Cir. 1996), and we affirm.

       Masda argues that summary judgment was inappropriate because the question

whether a contract existed “involv[es] a[] [factual] inquiry into the state of mind of . . .

contracting parties.” WRIGHT & MILLER, FEDERAL P RACTICE AND P ROCEDURE, § 2730.1

at 44. Masda cites decisions of this Court holding that contractual terms “‘susceptible of

more than one meaning’” warrant consideration by a jury. Emerson Radio Corp. v. Orion

Sales, Inc., 253 F.3d 159, 163 (3d Cir. 2001) (quoting Sumitomo Mach. Corp. of Am., Inc.

v. Allied Signal, Inc., 81 F.3d 328, 332 (3d Cir. 1996)). Whether a contract is susceptible

of more than one meaning in a sense material to the legal dispute at bar, however, is a

question of law.

       The District Court acknowledged that the statement of Joseph Brueggemann was

“vague” and interpreted it in the light most favorable to Masda, as dictated by the summary-

judgment standard. See, e.g., Wahl v. Rexnord, Inc., 624 F.2d 1169, 1181 (3d Cir. 1980).

                                               -2-
The Court applied Illinois law holding that the terms of an oral contract must be “definite

and certain” to be enforceable, Vandevier v. Mulay Plastics, Inc., 482 N.E.2d 377, 380 (Ill.

App. Ct. 1985), and that the requisite meeting of the minds cannot occur unless manifested

“by the parties’ objective conduct rather than by their subjective beliefs.” Paxton-Buckley-

Loda Educ. Ass’n v. Illinois Educ./Labor Bd., 710 N.E.2d 538, 544 (Ill. App. Ct. 1999).

Accepting arguendo Masda’s contention that Brueggemann’s statement referred to

duration, the Court held (1) that “there is no genuine, material dispute as to the definiteness

of the duration term,” because the statement, on its face, refers only to past contracts, and

only to some past contracts, and (2) that Masda’s objective conduct evinced no meeting of

the minds because Masda never asked to clarify the vagueness and did not attempt to

confirm its interpretation of the term until after a dispute arose. The factual disputes cited

by Masda are not material to these conclusions because they do not bear on the

definiteness of Brueggemann’s statement or on the parties’ objective conduct.

       The District Court also held that no requirements contract was made, basing this

determination on its finding “that there is no other evidence of the parties’ intent of a

requirements contract save the self-serving certification of Joseph Darche.” Masda’s legal

argument that a requirements contract must be inferred on the basis of a mutual exclusive-

dealing arrangement is unavailing because Masda’s objective conduct is not consistent with

a mutual exclusive-dealing arrangement. The District Court properly declined to infer a

reciprocal duty on Masda’s behalf to purchase exclusively from Empire, see In re Modern

Dairy of Champaign, Inc., 171 F.3d 1106, 1108 (7th Cir. 1999) (applying Illinois law),

                                              -3-
given Masda’s continued distribution of a competing manufacturer’s product line. This

holding accords with Modern Dairy because here, as in that case, the evidence purporting to

establish a requirements contract does so neither explicitly nor by implication and

therefore could present no genuine, material issue to a factfinder. See also Brooklyn Bagel

Boys, Inc. v. Earthgrains Refrigerated Dough Prods., 212 F.3d 373, 378–81 (7th Cir. 2000)

(applying Illinois law) (citing Modern Dairy, 171 F.3d at 1109).

       We see no grounds for reversal in Masda’s remaining arguments. Because alleged

contractual terms “so indefinite as to be unenforceable” cannot invoke promissory

estoppel, the District Court’s disposition of the duration issue forecloses relief on that

ground. Demos v. Nat’l Bank of Greece, 567 N.E.2d 1083, 1088 (Ill. App. Ct. 2001).

Similarly, statements as vague and indefinite as those at issue in this case cannot establish

the “reasonabl[e] induce[ment]” necessary to support an equitable estoppel claim.

Industrial Specialty Chems. v. Cummins Engine Co., 902 F. Supp. 805, 813 (N.D. Ill.

1995). Had Empire committed “actual intentional deceit,” it would be “in no position to

contend that the party acting upon [its] deception was negligent in doing so,” Vaughn v.

Speaker, 533 N.E.2d 885, 890 (Ill. 1988), but Masda has not produced the requisite “clear,

precise[,] and unequivocal” evidence of such deception. Jennings v. Bituminous Casualty

Corp., 197 N.E.2d 513, 517 (Ill. App. Ct. 1964). Finally, because Illinois law does not

cognize an independent cause of action for breach of an implied duty of good faith and fair

dealing, see Voyles v. Sandia Mortgage Corp., 751 N.E.2d 1126 (Ill. 2001), such a claim

could only derive from the breach-of-contract claim already dismissed by the District

                                              -4-
Court. Inasmuch as Masda concedes this connection and states that the former claim rests

on the same factual disputes that the District Court held to be immaterial to the latter, this

issue should require no further exposition. We affirm the judgment of the District Court in

full.