Court Opinion

ID: 1026154
Source: CourtListenerOpinion
Date Created: 2013-07-05 07:01:40.116035+00
Date Added: 2024-06-11T15:42:03.122860
License: Public Domain

UNPUBLISHED

                  UNITED STATES COURT OF APPEALS
                      FOR THE FOURTH CIRCUIT

                            No. 07-1638

PRECISION COMPONENTS, INCORPORATED,

                Plaintiff - Appellant,

          v.

C.W. BEARING USA, INCORPORATED,

                Defendant - Appellee.

Appeal from the United States District Court for the Western
District of North Carolina, at Charlotte. Graham C. Mullen, Senior
District Judge. (3:05-cv-00389-GCM)

Submitted:   June 6, 2008                     Decided:   July 9, 2008

Before MOTZ, KING, and GREGORY, Circuit Judges.

Affirmed by unpublished per curiam opinion.

Donald M. Brown, Jr., J. Scott Hampton, BROWN & ASSOCIATES, PLCC,
Charlotte, North Carolina, for Appellant. Jackson N. Steele,
Mark R. Kutny, HAMILTON MOON STEPHENS STEELE & MARTIN, PLLC,
Charlotte, North Carolina, for Appellee.

Unpublished opinions are not binding precedent in this circuit.
PER CURIAM:

            Following      a     jury   trial,     Precision     Components,       Inc.,

appeals the district court’s order granting the motion in limine of

C.W. Bearing USA, Inc., to exclude evidence regarding Precision

Components’ quantum meruit cause of action related to its sales of

C.W.    Bearing’s    products         in     Mexico,    Michigan,    Missouri,       and

Arkansas. Finding no error, we affirm the judgment of the district

court.

            The parties arranged for Precision Components to act as

a sales agent for C.W. Bearing, a ball bearings manufacturer.                        The

parties    entered      into     a    “Memorandum      of   Understanding,”        which

provided for commission for product sales only in North Carolina,

South Carolina, Virginia, Maryland, Delaware, Tennessee, Georgia,

Florida,     Alabama,      and       Minnesota,    unless    the    parties    agreed

otherwise.          The    agreement          specifically       excluded     “bearing

manufacturers, brokers and any bearings which a customer takes

possession of outside the US including China, Mexico etc.”                         (J.A.

181). The memorandum further provided that if it was terminated by

either    party   for     cause,      C.W.    Bearing    would    continue    to    “pay

commissions on shipments made on open orders for 90 days.”                         (J.A.

181).     If the agreement was terminated without cause, a longer

commission period applied.

            Relations between the parties deteriorated, and C.W.

Bearing ultimately terminated the agreement.                 Precision Components

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filed suit against C.W. Bearing for breach of contract, among other

claims.   It additionally alleged alternate grounds for relief,

stating, “In the event that the court finds that the memorandum of

understanding does not technically constitute a contract between

the parties, the plaintiff is entitled to recover based upon

quantum meruit for services rendered by the plaintiff under the

memorandum of understanding.”   (J.A. 25).

          C.W. Bearing agreed the parties had a contract, as

evidenced by the memorandum of understanding.   C.W. Bearing moved

in limine to exclude all evidence not related to the memorandum of

understanding, including evidence related to the quantum meruit

claim. At the pretrial hearing on the motion, Precision Components

argued that the sales to entities in Mexico, Michigan, Missouri,

and Arkansas were not covered by the memorandum of understanding,

and thus it should not be limited to the memorandum’s provision for

C.W. Bearing to pay commissions for only ninety days after a “for

cause” termination. For this argument, Precision Components relied

on the explicit language of the agreement limiting it to certain

territories.   C.W. Bearing responded that the parties modified the

agreement by their course of dealing and all of the commissions,

regardless of origin, were limited by the terms of the memorandum.

          The district court granted the motion in limine, ruling

that the memorandum of understanding encompassed the territories at

issue even though they were not explicitly enumerated in the

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written memorandum. Thus, the court limited evidence regarding all

sales to the time frame following termination of the agreement

specified in the memorandum.

            The jury concluded that C.W. Bearing terminated the

memorandum of understanding for cause.          The parties stipulated to

the amount of damages, and the district court entered judgment

accordingly.     Precision Components timely appealed, challenging

only the ruling on the motion in limine.

            In   holding    that    the     memorandum    of    understanding

encompassed the territories at issue even though they were not

enumerated in the written agreement, the district court implicitly

found the parties’ conduct modified the contract to include those

geographic areas.    “A modification [of] a contract occurs if there

is mutual assent to the terms of the modification and consideration

for the contract.”    Lewis v. Edwards, 554 S.E.2d 17, 23 (N.C. App.

2001).*     A written contract may be modified by the parties’

subsequent course of conduct.             Son-Shine Grading, Inc. v. ADC

Constr. Co., 315 S.E.2d 346, 349 (N.C. App. 1984).

            Precision Components performed services for C.W. Bearing

in   four   territories    not   originally    listed    in    the   agreement:

      *
      A federal court sitting with diversity jurisdiction applies
the choice of law rules from the forum state.       Klaxon Co. v.
Stentor Elec. Mfg. Co., 313 U.S. 487, 496 (1941).        In North
Carolina, the forum state, the construction of a contract is
determined by the law of the place where the contract was formed.
Davis v. Davis, 152 S.E.2d 306, 310 (N.C. 1967). The parties agree
that North Carolina law applies to the case.

                                    - 4 -
Arkansas, Michigan, Missouri, and Mexico.                   C.W. Bearing paid

Precision Components commissions for that work.                  The commission

statements       C.W.   Bearing      issued   detailing    the   payment    checks

included accounts both in and out of those territories.                         The

parties’ conduct thus demonstrated their mutual assent to modify

the terms of the agreement to include additional geographic areas.

C.W.     Bearing      provided    consideration      for   the   sales     in   the

territories at issue by paying Precision Components commissions for

the additional services provided.                Therefore, the district court

did not err in finding that the parties modified the written

agreement, and that the limitations in the memorandum as to the

length     of    time    for     which   Precision     Components   could       earn

commissions following the termination of the contract were the same

for all territories, including those not enumerated in the written

agreement.

            As for Precision Components’ argument that North Carolina

law allows a plaintiff to recover damages for both breach of

contract and quantum meruit, the district court did not hold

otherwise.       Rather, the district court held the parties’ contract

specified       the   method   for    calculating    commissions    following     a

termination, thus rendering Precision Components’ request for an

alternative award based upon the reasonable value of those services

moot.     See Keith v. Day, 343 S.E.2d 562, 570 (N.C. App. 1986)

                                         - 5 -
(holding the plaintiff could not recover in quantum meruit for

services provided pursuant to the parties’ express contract).

           Accordingly, we affirm the judgment of the district

court.   We dispense with oral argument because the facts and legal

contentions are adequately presented in the materials before the

court and argument would not aid the decisional process.

                                                           AFFIRMED

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