Court Opinion

ID: 201029
Source: CourtListenerOpinion
Date Created: 2011-02-07 05:06:08+00
Date Added: 2024-06-11T17:27:13.805001
License: Public Domain

Not For Publication in West's Federal Reporter
               Citation Limited Pursuant to 1st Cir. Loc. R. 32.3

          United States Court of Appeals
                        For the First Circuit

No. 03-2430

              JAMES G. BOYLE and TUCK'S TRUCKS, INC.,

                       Plaintiffs, Appellants,

                                      v.

          DOUGLAS DYNAMICS, LLC, FISHER PLOWS DIVISION,

                         Defendant, Appellee.

          APPEAL FROM THE UNITED STATES DISTRICT COURT

                FOR THE DISTRICT OF MASSACHUSETTS

         [Hon. Richard G. Stearns, U.S. District Judge]

                                   Before

                         Lynch, Circuit Judge,

                     Cyr, Senior Circuit Judge,

                     and Howard, Circuit Judge.

     John J. Kuzinevich for appellants.
     Jeffrey M. White with whom William D. Hewitt and Pierce Atwood
were on brief, for appellee.

                               May 25, 2004
            Per    Curiam.       This   business   dispute   centers   on   the

decision of Douglas Dynamics' Fisher Plows Division (Fisher), a

manufacturer of snow plow equipment, to promote J.C. Madigan

(Madigan), a truck upfitter located in Ayer, Massachusetts, to be

a full distributor of its products.             Tuck's Trucks, Inc. (TTI),

another Fisher distributor located in Hudson, Massachusetts, claims

that Fisher's promotion of Madigan violated its agreement with

Fisher that Fisher would only appoint additional distributors after

providing notice to existing distributors and for valid business

reasons.

            TTI sued Fisher in Massachusetts state court, alleging

breach     of   contract,    intentional      interference   with   contract,

intentional       interference    with    advantageous   relations,    fraud,

violation of the Massachusetts Trade Practices Act, Mass. Gen. L.

ch. 93A, and violation of the Massachusetts Anti-Trust Act, Mass.

Gen. L. ch. 93 § 6.           Invoking diversity jurisdiction, Fisher

removed the case to the United States District Court for the

District of Massachusetts.              After discovery, Fisher moved for

summary judgment on all counts.            The district court referred the

motion to a magistrate judge who recommended granting it.                   The

district court agreed and entered final judgment in Fisher's favor.

TTI appealed, pursuing only the contract, intentional interference

with advantageous relations, fraud, and ch. 93A claims.

                                        -2-
              Our de novo review of the record and the parties' briefs,

see Rathbun v. Autozone, Inc., 361 F.3d 62, 66 (1st Cir. 2004),

convinces us that the magistrate judge's thorough opinion correctly

analyzes the challenged counts, and we affirm essentially for the

reasons stated therein. See Boyle v. Douglas Dynamics, LLC, 292 F.

Supp. 2d 198 (D. Mass. 2003).                We write mostly to amplify the

magistrate judge's rulings, mindful that "[w]here . . . a trial

judge astutely takes the measure of a case and hands down a

convincing,     well-reasoned        decision,     an   appellate    court   should

refrain from writing at length to no other end than to hear its own

words resonate."         Corrade Betances v. Sea-Land Serv., Inc., 248

F.3d 40, 43 (1st Cir. 2001) (internal citations and quotations

omitted).

              We sketch only the factual highlights, construing the

record in favor of TTI.         See Carmona v. Toledo, 215 F.3d 124, 131

(1st   Cir.     2000).    In   the    fall    of    1996,    James   Boyle   began

negotiations     with    Thomas      Walsh   for   Boyle's    company,   TTI,    to

purchase Walsh's company, TTSales. TTSales, a General Motors truck

dealer, had also sold Fisher plow equipment since the early 1970's.

TTSales's distributorship agreement with Fisher, contained in a

combination of oral promises and documents, did not limit Fisher's

prerogative to appoint other distributors.

              In or around 1996, Fisher began discussions with Madigan

about becoming a full distributor.            When TTSales heard about these

                                        -3-
discussions, it told Fisher that it vehemently opposed Madigan's

appointment. To placate TTSales, Fisher decided to appoint Madigan

only as a "pool distributor."             This designation did not give

Madigan full authority to sell Fisher products and forced Madigan

to purchase some of its Fisher equipment from TTSales or another

distributor, Chapdelaine Truck Center.

           Before TTI agreed to purchase TTSales in April of 1997,

it did not discuss the pending deal with Fisher.          TTI understood,

however, that it would need to negotiate directly with Fisher to

obtain a distributorship because TTSales could not assign its

distributorship.        Around this time, TTI began discussions with

Fisher about becoming a distributor.         Fisher stated that it would

not begin formal distributorship talks until General Motors had

approved TTI as a distributor of its trucks.         In the interim, TTI

and Fisher had several conversations about the distributorship

process.       During   these   conversations,   Fisher   representatives

stated:

           •     "It's a trust situation. You do the
                 right thing and you continue to do
                 what [TTSales] does, you will have no
                 problems."

           •     "[TTSales] has done an outstanding
                 job.   You continue to do that stuff
                 and you will have no problems."

           •     "Do what [TTSales] did, and we'll get
                 along just fine because [it] obviously
                 did it right."

                                    -4-
           •     "Don't let us down and we won't let
                 you down and it makes good sense for
                 everyone."

           •     The transition "would be seamless. .
                 . Once the credit was approved, it was
                 seamless. There were no issues."

           General Motors approved TTI as a distributor in September

1997.    TTI then began the Fisher application process.        About that

time, TTI learned that TTSales did not have a written agreement with

Fisher    that   restricted   Fisher's    ability   to    appoint      other

distributors. Apparently concerned about Fisher's power to appoint

other distributors,      TTI demanded that TTSales sign an "offset

agreement" to compensate it if Fisher appointed another distributor

in certain designated towns.          Despite TTI's concern, it never

discussed the distributor network or Madigan's status with Fisher.

           In October 1997, Fisher and TTI met.          At this meeting,

Fisher's representative stated that it "has had a long and strong

relationship with [TTSales] and had no plans to change anything."

According to TTI, it already was a distributor by the time of this

meeting, Madigan's status was not discussed at this meeting, and it

only learned of Madigan's appointment in the summer of 1998.              At

this meeting, TTI signed Fisher's "Authorized Distributor Code of

Ethics    and    Responsibilities."       The   Code     of   Ethics     and

Responsibilities did not restrict Fisher's ability to appoint other

distributors.

                                  -5-
          TTI's first claim is for breach of contract.             TTI asserts

that Fisher's "statements to the effect that things [would] remain

the same was the factual basis for [the] agreement that Fisher would

not change its distributor system without notice and then only for

business reasons." The magistrate judge rejected this claim because

Fisher's oral statements did not establish an agreement limiting its

ability to appoint additional distributors.

          The parties agree that, absent a contrary agreement, a

manufacturer may choose distributors at will. See Jobbers Warehouse

Serv., Inc. v. Maremount Corp., 453 F. Supp. 840, 842 (D. Mass.

1978).    Nothing    in    the     discussions      highlighted   by   TTI   is

sufficiently definite to displace this principle.                 See Held v.

Zamparelli, 431 N.E.2d 961, 962 (Mass. App. Ct. 1982) (stating that

oral contract cannot be based on indefinite statements).                     The

discussions   between     Fisher    and       TTI   concerned   only   Fisher's

inclination   to   appoint   TTI    as    a    distributor.     Neither   party

mentioned the distributor network or Madigan's status.             In light of

this context, no reasonable fact finder could conclude that Fisher

intended its reassuring comments to TTI to limit its ability to

appoint other distributors. Moreover, TTI's subsequent demand from

TTSales for an "offset agreement" to protect it from losses if

Fisher appointed other distributors indicates that TTI understood

that Fisher retained the unfettered right to appoint additional

distributors. TTI's breach of contract claim is thus supported only

                                     -6-
by placing certain of Fisher's statements out of context and then

applying a meaning to them that the parties did not intend.1

          TTI also asserts that Fisher's appointment of Madigan

violated the implied covenant of good faith and fair dealing.   This

covenant is an implied contractual term that prevents the parties

from taking any action to injure the rights of another party to reap

the benefits of its contract.   See Anthony's Pier Four, Inc. v. HBC

Assocs., 583 N.E.2d 806, 820 (Mass. 1991).   The "covenant may not,

however, be invoked to create rights and duties not otherwise

provided for in the existing contractual relationship, as the

purpose of the covenant is to guarantee that the parties remain

faithful to the intended and agreed expectations of the parties in

their performance."   See Uno Restaurants v. Boston Kenmore Realty

Corp., 805 N.E.2d 957, 964 (Mass. 2004).     TTI claims that Fisher

violated the covenant by failing to provide adequate notice before

appointing Madigan as a distributor.      But, as discussed above,

Fisher made no express promise to this effect.    See supra at 6.

          Citing Cherick Distribs., Inc. v. Polar Corp., 669 N.E.2d

218 (Mass. App. Ct. 1996),   TTI argues that Fisher's obligation to

supply reasonable notice was an implied term of the distributorship

agreement.   In Cherick, the Massachusetts Appeals Court held that

     1
       TTI also argues that the "course of dealing" between it and
Fisher established an agreement limiting Fisher's ability to
appoint distributors. As the magistrate judge correctly concluded,
this argument fails because "TTI had no prior relationship with
Fisher at all." Boyle, 292 F. Supp. 2d at 209.

                                 -7-
a jury could find that a manufacturer breached the implied covenant

of good faith and fair dealing by terminating a distributorship

agreement on only four-days notice.            Id. at 220.    The court ruled

that   the    termination   of   an    at-will     distributorship   agreement

requires reasonable notice and that four-days notice could be deemed

unreasonable.     Id.   The instant case does not implicate Fisher's

obligations vis-á-vis TTI's distributorship. Cherick does not hold

that a manufacturer must provide notice to its current distributors

before appointing a new distributor.           Seemingly, in the absence of

a statutory command, importing such a notice requirement into

distributorship agreements is unwarranted because the harm to an

existing distributor caused by the appointment of an additional

distributor, if any, typically is not of the same magnitude as the

harm caused by the termination of the agreement.             In any event, TTI

has not provided a reason or cited authority for such a rule.              See

Piantes v. Pepperidge Farm, Inc., 875 F. Supp. 929, 938 (D. Mass.

1995) (citing cases in which similar implied covenant of good faith

and    fair      dealing    claims          have    been     rejected).

             TTI's tort claims fare no better. TTI asserts that Fisher

wrongfully     interfered   with      its   advantageous   relationship   with

Madigan. To prevail on this claim, TTI must show that Fisher acted

with an improper motive or by improper means.                See United Truck

Leasing Corp. v. Geltman, 551 N.E.2d 20, 23-24 (Mass. 1990). TTI

argues that Fisher acted with an improper motive by waiting to

                                       -8-
appoint Madigan until TTSales was no longer a distributor, so as not

to upset Fisher's longstanding relationship with TTSales.        TTI has

not set forth any facts showing that Fisher's purpose in promoting

Madigan was to harm TTI.   Taken in the light most favorable to TTI,

the facts show that Fisher had an interest in promoting Madigan when

it believed that it could do so without harming its established

relationship with TTSales.     This was a legitimate business purpose

for Fisher.   See Smith & Croyle, LLC v. Ridgewood Power Corp.,       111

F. Supp. 2d 77, 85 n.18 (D. Mass. 2000) (stating that improper

motive cannot be established where defendant acts in pursuit of

"legitimate corporate purpose"). That Fisher's action may have also

interfered with TTI's future plans for selling products to Madigan

does not establish a claim.       See Hunneman Real Estate Corp. v.

Norwood Realty, Inc., 765 N.E.2d 800, 808 (Mass. App. Ct. 2002)

(stating   that   "something   more"    than   mere   interference   with

relationship is required to prove tort).

           TTI also claims that Fisher committed fraud by making

assurances that "things would remain the same."        We agree with the

magistrate judge that TTI cannot rest a fraud claim on Fisher's

statements because "they are too general to justify reliance."

Hinchey v. Nynex Corp., 979 F. Supp. 40, 44 (D. Mass. 1997).           As

discussed above, the conversations during which Fisher made the

representations did not concern Madigan or even the distribution

network generally.   See supra at 6-7.    While TTI may, in hindsight,

                                  -9-
wish that it had discussed Fisher's plans to appoint additional

distributors, it did not do so.

           TTI's final claim asserts a violation of Mass. Gen. L. ch.

93A.   The magistrate judge rejected this claim because there was no

evidence that Fisher engaged in deceit or other unfair practices in

its dealings with TTI. TTI has not put forward a developed argument

challenging this ruling.    We therefore affirm the ruling for the

reasons stated in the magistrate judge's opinion.     See Boyle, 292

F. Supp. 2d at 218-220.

           Having considered all of TTI's arguments and finding them

to be without merit, we affirm the judgment of the district court.

                                -10-