Budget Marketing, Inc., Appellant, v. Centronics Corporation, Appellee., 979

Budget Marketing, Inc., Appellant, v. Centronics Corporation, Appellee., 979 F.2d 1333 (8th Cir. 1992)
Federal Circuits

Docket Number: 92-1110

Linked as: Text


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Mark E. Schantz, Des Moines, Iowa, argued (John R. Mackaman, Mark E. Schantz and Gayla R. Harrison, on the brief), for appellant.

Wade R. Hauser III, Des Moines, Iowa, argued (H. Richard Smith and Wade R. Hauser III, on the brief), for appellee.

Before RICHARD S. ARNOLD, Chief Judge, LAY, Senior Circuit Judge, and LOKEN, Circuit Judge.

RICHARD S. ARNOLD, Chief Judge.

This action arises out of the breakdown in negotiations for the purchase of Budget Marketing, Inc., by Centronics Corporation. Budget Marketing's complaint included claims of breach of implied duty to negotiate in good faith, promissory estoppel, and negligent misrepresentation. Initially, the District Court1 granted Centronics' motion for summary judgment and dismissed the complaint. On appeal, we affirmed as to the duty-to-negotiate and negligent-misrepresentation claims but held that triable issues, sufficient to survive a summary-judgment motion, remained with respect to Budget Marketing's promissory-estoppel claim. Budget Marketing, Inc. v. Centronics Corp., 927 F.2d 421 (8th Cir.1991).

On remand, the case was submitted to a jury, which returned answers to special interrogatories. The jury found, among other things, that Centronics had made a definite assurance to Budget Marketing that the merger would take place, and that this assurance was in the form of a handshake occurring in February of 1987. App. 69. The jury further found that Budget Marketing had relied upon this assurance to its detriment. Damages in the amount of $131,450, representing the sum of various elements of reliance damages, were awarded. After trial, however, the District Court entered judgment for the defendant Centronics. The Court held, among other things, that Centronics was entitled to judgment notwithstanding the answers of the jury because, as a matter of law, all of the expenditures allegedly incurred in reliance on Centronics' assurance took place at a time when such reliance was unreasonable, because by that time the informal assurance had been superseded by a written letter of intent specifically stating that it created no legal obligation to consummate the merger.

We affirm. The parties urge a number of interesting contentions, including some under the Seventh Amendment, about the relationship of the jury's findings to the later action by the District Court. We assume for present purposes, as Budget Marketing argues, that it was not proper for the Court, after receiving the jury's answers, to make additional findings of fact, and that the answers of the jury, to the extent that they were supported by the evidence, were binding on the Court and the parties. We agree with the District Court, nonetheless, that under the circumstances of this case the jury's answers cannot support a judgment for Budget Marketing.

As we explained on the previous appeal, Budget Marketing could recover by showing substantial expenditures in reasonable reliance on oral assurances by Centronics that the deal would be consummated. We specifically listed five such assurances that Budget Marketing was claiming, all of them occurring in or after June of 1987, and, thus, after the May 26, 1987, execution of the letter of intent disclaiming the creation of a legal obligation to consummate the merger. See Budget Marketing, Inc. v. Centronics Corp., supra, 927 F.2d at 426-27 n. 5. If the jury had found such assurances, they could reasonably be taken to supersede the disclaimer provisions of the letter of intent, and expenditures incurred in reliance on them would be reasonable. Here, however, the only agreement or assurance found by the jury was described in its own answer as a "Feb. handshake," the reference being to February 1987. (We put to one side as irrelevant the fact that there was no evidence of a handshake in February: the only handshake occurred in April, right before the letter of intent was drafted.)

Assuming that there was such a definite agreement or assurance in February, or even in April, expenses incurred in reliance on it would be recoverable on a promissory-estoppel theory, but only if no event intervened making such expenditures unreasonable. Here, such an event did intervene: the signing of a letter of intent specifically disclaiming enforceability of the merger agreement. Moreover, none of the expenditures claimed as elements of damage took place before execution of the letter of intent. If they had done so, Budget Marketing would have a viable theory. But all of the expenditures took place after the letter of intent was signed, at which point it could not have been reasonable for Budget Marketing still to be relying on an informal assurance or agreement that predated the letter of intent. Budget Marketing's reply brief, pp. 8-9, observes that the answer "Feb. handshake" came in reply to a last-minute addition by the trial court to the special verdict form. This is irrelevant. Budget Marketing did not object to this addition. We are faced with a clear specification by the jury that the agreement or assurance found by it took place in February of 1987.

There was evidence from which the jury could have found later assurances or agreements, occurring after the execution of the letter of intent, but the jury made no such finding, and the record is not sufficiently clear to enable us to say that such a finding was compelled. Budget Marketing insists that at trial it made clear that it was relying upon post-letter-of-intent assurances and claiming damages incurred for the period after those assurances. The argument is unavailing. No such assurances were found by the jury. The only assurance it did find was superseded by the letter of intent before any of the expenditures claimed as elements of damages were incurred.

Accordingly, we agree with the District Court that Centronics was entitled to judgment as a matter of law. There is no inconsistency between this conclusion and the statement in our prior opinion that, on the basis of papers submitted in connection with the motion for summary judgment, Budget Marketing had shown a triable issue of promissory estoppel. That statement necessarily assumed that the jury would believe Budget Marketing's contentions of post-letter-of-intent assurances, followed by expenditures in reliance on them. This did not happen.

Affirmed.





Read more: http://vlex.com/vid/budget-marketing-centronics-corporation-37488884#ixzz14pzi5Vq6

Pavel Enterprises, Inc. v. A. S. Johnson Company, Inc.

Pavel Enterprises, Inc. v. A. S. Johnson Company, Inc.
Author: Richard

P/S: Plaintiff appealed following a verdict from the Circuit Court, which found in favor of the defendant for a claim of breach of contract by detrimental reliance.

F: P wished to bid on a construction project for the renovation of building, which including heating, ventilation, and air conditioning work (HVAC). P solicited sub-bids from several subcontractors, including D. D responded with an estimate, and with this information, P submitted bid for the project. P won the contract, but D cancelled their offer, stating that it was too low, and was made in error. D neglected to correct the error because it did not expect to receive the contract. P had to use a different subcontractor that cost them $32K more. P filed an action for breach of contract; Trial court found no relationship had been formed, and ruled for D; affirmed on appeal.

I: Whether a relationship existed between the two parties, and if so then PEI can recover the $32K in damages; if not contract, whether P’s detrimental reliance served to bind D to its sub-bid.

H: There was not a traditional contract binding the two parties, and there was no meeting of the minds. Further, there was sufficient evident in the record to support the trial judge’s conclusion that P had not proven its case for detrimental reliance. AFFIRMED, WITH COSTS, FOR D.

Rule: In determining a question of detrimental reliance, there must be a clear and definite promise where the promisor has a reasonable expectation that the offer will induce action or forbearance on the part of the promisee which does induce actual and reasonable action or forbearance by the promisee and causes a detriment which can only be avoided by the enforcement of the promise

Reasoning:

Maryland courts are to apply the test of the Restatement (Second) of Contracts § 90 (1) (1979), which we have recast as a four-part test:

1. A clear and definite promise;
2. Where the promisor has a reasonable expectation that the offer will induce action or forbearance on the part of the promisee;
3. Which does induce actual and reasonable action or forbearance by the promisee; and
4. Causes a detriment which can only be avoided by the enforcement of the promise.

(1) sub-bid was sufficiently clear and definite to constitute an offer, (2) Johnson's reasonable expectation had dissipated in the span of a month (3) PEI did not rely on Johnson's bid (4) case did not merit an equitable remedy

section 1391 venue

§ 1391. Venue generally
How Current is This?
(a) A civil action wherein jurisdiction is founded only on diversity of citizenship may, except as otherwise provided by law, be brought only in
(1) a judicial district where any defendant resides, if all defendants reside in the same State,
(2) a judicial district in which a substantial part of the events or omissions giving rise to the claim occurred, or a substantial part of property that is the subject of the action is situated, or
(3) a judicial district in which any defendant is subject to personal jurisdiction at the time the action is commenced, if there is no district in which the action may otherwise be brought.
(b) A civil action wherein jurisdiction is not founded solely on diversity of citizenship may, except as otherwise provided by law, be brought only in
(1) a judicial district where any defendant resides, if all defendants reside in the same State,
(2) a judicial district in which a substantial part of the events or omissions giving rise to the claim occurred, or a substantial part of property that is the subject of the action is situated, or
(3) a judicial district in which any defendant may be found, if there is no district in which the action may otherwise be brought.
(c) For purposes of venue under this chapter, a defendant that is a corporation shall be deemed to reside in any judicial district in which it is subject to personal jurisdiction at the time the action is commenced. In a State which has more than one judicial district and in which a defendant that is a corporation is subject to personal jurisdiction at the time an action is commenced, such corporation shall be deemed to reside in any district in that State within which its contacts would be sufficient to subject it to personal jurisdiction if that district were a separate State, and, if there is no such district, the corporation shall be deemed to reside in the district within which it has the most significant contacts.
(d) An alien may be sued in any district.
(e) A civil action in which a defendant is an officer or employee of the United States or any agency thereof acting in his official capacity or under color of legal authority, or an agency of the United States, or the United States, may, except as otherwise provided by law, be brought in any judicial district in which
(1) a defendant in the action resides,
(2) a substantial part of the events or omissions giving rise to the claim occurred, or a substantial part of property that is the subject of the action is situated, or
(3) the plaintiff resides if no real property is involved in the action. Additional persons may be joined as parties to any such action in accordance with the Federal Rules of Civil Procedure and with such other venue requirements as would be applicable if the United States or one of its officers, employees, or agencies were not a party.
The summons and complaint in such an action shall be served as provided by the Federal Rules of Civil Procedure except that the delivery of the summons and complaint to the officer or agency as required by the rules may be made by certified mail beyond the territorial limits of the district in which the action is brought.
(f) A civil action against a foreign state as defined in section 1603 (a) of this title may be brought—
(1) in any judicial district in which a substantial part of the events or omissions giving rise to the claim occurred, or a substantial part of property that is the subject of the action is situated;
(2) in any judicial district in which the vessel or cargo of a foreign state is situated, if the claim is asserted under section 1605 (b) of this title;
(3) in any judicial district in which the agency or instrumentality is licensed to do business or is doing business, if the action is brought against an agency or instrumentality of a foreign state as defined in section 1603 (b) of this title; or
(4) in the United States District Court for the District of Columbia if the action is brought against a foreign state or political subdivision thereof.
(g) A civil action in which jurisdiction of the district court is based upon section 1369 of this title may be brought in any district in which any defendant resides or in which a substantial part of the accident giving rise to the action took place.

Carol Grenall et al., as Administrators, etc., v. United of Omaha Life Insurance Company

Carol Grenall et al., as Administrators, etc., v. United of Omaha Life Insurance Company
25 July 2008; In the Court of Appeal of the State of California
A118823 (Marin County Super. Ct. No. CV050180)

Erroneous Belief Cannot Rescind Life Annuity Contract
Inherent risk of death is assumed, decedent bore the risk of mistake


Jean M. Simes purchased an annuity that will provide for monthly benefit payments as long as she lives, from the United of Omaha Life Insurance Company. She submitted her application and paid the single premium.

United issued a policy, the copy of which was received by Simes six weeks after her application. The policy contains the following provisions, among others: “If you are not satisfied with your policy, return it to us or our agent within 30 days after you receive it. We will refund the single premium and cancel the policy as of its date of issue.”

After the third benefit payment, Simes was diagnosed with ovarian cancer. Nearly a week later, she died. United stopped making payments.

Sime’s Estate filed suit against United alleging two causes of action:
1. breach of contract
2. declaratory relief

On the breach of contract, the Estate argues that United had refused payments under the terms of the annuity “until the sum of the benefit payments equals the single premium.”

The declaratory relief seeks resolution of the dispute between the parties as to their respective rights under the annuity policy.

United moved for summary judgment; answers, the terms of the contract provided for a life annuity and did not require a refund of the premium to the Estate.

The motion for summary judgment on the breach of contract was granted by the trial court saying that the undisputed facts showed that United had not breached the payment option to which the parties agreed, as the contract required monthly benefit payments only during Sime’s lifetime.

The motion for summary judgment on declaratory relief was also granted but only after United renewed its motion saying that there was no evidence of a mistake by Simes or of what was in her mind when she purchased the annuity.

The lone issue presented by the Sime’s Estate upon appeal is whether the facts provide a legal basis for rescission of the life annuity contract based on a mistake of fact.

The Court of Appeal holds that as a matter of law, the facts do not provide a legal basis for rescission.

To prevail at the trial, the Court said that the Estate would have been required to prove the following:
1. Simes was mistaken regarding a basic assumption upon which she made the contract
2. the mistakes materially affected the agreed exchange of performance in a way that was adverse to Simes
3. Simes did not bear the risk of the mistake
4. the effect of the mistake was such that enforcement of the contract would be unconscionable.

The Court of Appeal concluded that the Estate cannot establish the third of these elements. As a matter of law, Simes bore the risk of the mistake. A contracting party bears the risk of mistake when the agreement so provides or when the party is aware of having only limited knowledge of the facts relating to the mistake but treats this limited knowledge as sufficient.

Although the contract in this case does not expressly assign the risk of the alleged mistake, the parties who contract for “life contingent” benefits necessarily do so based on limited knowledge of the very facts about which Simes was mistaken.

Citing several jurisprudences, the Court of Appeal said California courts have rejected challenges to such contracts on the ground that death came unexpectedly early and holds that based on authorities, Simes bore the risk of the alleged mistake regarding her health and life expectancy at the time of the annuity contract.

As the Estate cannot establish an essential element of its rescission claim, summary judgment is deemed proper by the Court. Thus, it affirmed the decision of the trial court.

Summary of Wood v. Lucy, Lady Duff-Gordon

Summary of Wood v. Lucy, Lady Duff-Gordon, 222 N.Y. 88, 118 N.E. 214 (1917).

Facts
Lady Duff-Gordon (D) contracted to give Wood (P) an exclusive right to market and license all of her designs and to endorse designs with her name. The exclusive contract required that they split all profits from Wood’s sales evenly but there was no express clause that stated that he would perform. Lucy placed endorsements on clothes without Wood’s knowledge and in violation of the contract and Wood sued.

The trial court denied Lady Duff-Gordon’s motion for a judgment on the pleadings. The intermediate appellate court reversed on the grounds that the contract lacked mutuality because Wood never promised to do anything. Wood appealed the dismissal of the complaint.

Issues
1) May a promise to use reasonable efforts be implied from the entire circumstances of a contract? 2) Can an implied promise to use best efforts be considered valuable consideration? 3) Can the duty of good faith compensate for vagueness in an agreement to avoid invalidation of a contract clearly intended by the parties?

Holding and Rule (Cardozo)
1) Yes. A promise to use reasonable efforts may be implied from the entire circumstances of a contract. 2) Yes. An implied promise to use best efforts in contract performance can be considered valuable consideration. 3) The duty of good faith can compensate for vagueness in an agreement to avoid invalidation of a contract clearly intended by the parties.

A contract may lack an explicit promise to further its goals. The acceptance of the exclusive agency meant that Wood had accepted the duties of that agency. Because Lady Duff-Gordon’s sole compensation was a split of the profits, there would be no efficacy to the transaction unless there was an implied promise to use best efforts.

The court held that it was clear from the terms and recitals and duties under the contract that both parties intended to do what was reasonably necessary to make it a success so that would be profits to divide. Wood’s promise to pay Lady Duff-Gordon one-half of the profits and revenues resulting from the exclusive agency and to render accounts monthly demonstrated that he had some obligations under the contract, and there was a promise to use reasonable efforts to bring profits and revenues into existence.

Disposition
Reversed.

Notes
This case is an example of the court imposing a duty of good faith on a party to perform an implied promise. Cardozo dispensed with formalism to enforce a promise that was implied when viewed in the context of numerous aspects of the agreement. An implied promise is sufficient to constitute consideration.

Gibbons v. Brown

Gibbons v. Brown

716 So.2d 868 (Fl. Dist. Ct. App. 1998)

Yeazell, pp. 192-193



Facts: Brown and her husband got into an accident with Gibbons. Brown’s husband was driving, and Gibbons allegedly gave him bad directions, causing the accident. Gibbons, a Texas resident, sued Mr. Brown in Florida. Two years later, Mrs. Brown sues Gibbons in Florida, alleging that Gibbons is subject to jurisdiction in Florida because of the suit she filed there earlier on the same subject matter.



Issue: Does the Florida “Long-Arm” statute give the state jurisdiction over Gibbons?



Rule: Florida shall have jurisdiction over a defendant who is “engaged in substantial and not isolated activity” in Florida. This is construed to be a higher standard than the federal constitutional one.



Analysis: The court assumes that the first lawsuit is over, and thus finds that Gibbons is not currently engaged in any activities in Florida. The court says that brining a lawsuit in Florida shouldn’t hang over your head for the rest of your life.



Conclusion: The court dismisses Mrs. Brown’s lawsuit.



Notes and Problems



1. The court doesn’t address the constitutional test, but rather just the Florida statutory test which has a higher threshold for jurisdiction.

a. Ms. Gibbons’s activity doesn’t satisfy the Florida statute because she is not currently engaged in any activities in Florida.

a. Assuming that purposeful availment doesn’t have a time limit, Florida would have jurisdiction if it had a statute like that of California. You could employ the five factor test from World-Wide and say that though the contacts may be small, fair play is satisfied. Hanson gives us the “purposeful availment” test mentioned above.

b. Gibbons is distinguishable from this case based on the Florida statute involved. If California had the same statute back then as it does now, there would be no problem of state law to overcome in order for California to get the maximum possible jurisdiction allowed by the Constitution.

2.

a. In order to make the statute the same as the due process clause, you would get rid of the words “tortious act”, because presumably you can get jurisdiction over a contract breaker as well. You would get rid of “injury” and “within the state”, as well as “regularly” and “in the state”…well, basically, you would have to change the whole thing.

b. If you interpret the words “person or property within the state” to include persons domiciled in the state of New York but who are out of the state, for example, to see a doctor, then there’s jurisdiction. But it seems that the court interpreted the statute as meaning the person must have been physically in the state of New York when the injury occurred.

3.

a. The state test is always a threshold test that you do before you even look at the Constitution.

b. It could be good for business for a state to restrict its jurisdiction. Companies might like doing business there better if they know they are less likely to have to defend themselves in that forum.

c. Even if the statute is written one way, it may be interpreted more broadly.

4. The Florida long-arm statute would apply in a federal district court in Florida, but not in a federal court in Texas.

5.

a. Since notice is a necessary but not sufficient condition for personal jurisdiction, there’s no problem constitutionally, unless I misunderstand and Steve Y. is telling me that notice has been construed to be sufficient for personal jurisdiction. In either case, federal courts might sometimes serve notice but subsequently find that there is no personal jurisdiction.

b. The problem here is that there’s a lack of notice to the defendant that he could be subject to personal jurisdiction on a state claim, contrary to the clear language of the statute. It is the right result as far as efficiency goes, I suppose

Summary of Mullane v. Central Hanover Bank & Trust Co.

Summary of Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306, 70 S. Ct. 652, 94 L. Ed. 865 (1950).

Facts
Central Hanover Bank (P) was the trustee of a common trust fund formed by pooling the assets of a number of smaller trusts. Central Hanover Bank petitioned to the New York Surrogate’s Court for a judicial settlement of the trust. The only notice provided to beneficiaries was via publication in a newspaper. Mullane (D) was appointed attorney and special guardian for a number of beneficiaries who either were unknown or did not appear.

Procedural History
Mullane objected to the statutory provision for notice by publication, arguing that it was unconstitutional for lack of due process under the Fourteenth Amendment. The Surrogate’s Court overruled Mullane’s objection and the ruling was affirmed on appeal to the New York Supreme Court Appellate Division and the New York Court of Appeals. The United States Supreme Court granted cert.

Issue
Is notice given to out of state parties by publication in a newspaper, when the parties’ addresses were known, constitutional in light of the Due Process Clause of the Fourteenth Amendment?
Holding and Rule
No. Notice given to out of state parties by publication in a newspaper, when the parties’ addresses were known, is unconstitutional in light of the Due Process Clause of the Fourteenth Amendment.
Notice must be reasonably calculated to inform known parties affected by the proceedings. However, constructive notice by publication was acceptable with regard to missing or unknown parties or for those whose whereabouts could not be ascertained by due diligence or for whom future interests were too conjectural to be known with certainty.

Disposition
Judgment reversed.

See Pennoyer v. Neff for a law school civil procedure case brief in which publication of notice in a newspaper was ineffective to establish personal jurisdiction over the defendant.