Packgen v. BP Exploration & Production, Inc. , 754 F.3d 61 ( 2014 )

United States Court of Appeals
For the First Circuit
No. 13-2035
PACKGEN,
Plaintiff, Appellant,
v.
BP EXPLORATION & PRODUCTION, INC., and
BP AMERICA PRODUCTION COMPANY,
Defendants, Appellees.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MAINE
[Hon. John A. Woodcock, Jr., U.S. District Judge]
Before
Thompson, Circuit Judge,
Souter,* Associate Justice,
and Stahl, Circuit Judge.
Michael R. Bosse, with whom Travis M. Brennan, George F.
Burns, and Bernstein Shur were on brief, for Appellant.
Christina Briesacher, with whom David J. Volkin, Amy Cashore
Mariani, Kirkland & Ellis LLP, and Fitzhugh & Mariani LLP were on
brief, for Appellees.
June 11, 2014
*
Hon. David H. Souter, Associate Justice (Ret.) of the
Supreme Court of the United States, sitting by designation.
STAHL, Circuit Judge. In the aftermath of the Deepwater
Horizon oil spill of 2010, Appellant Packgen, a manufacturer of
packaging products, sought to sell oil containment boom to
Appellees BP Exploration & Production, Inc. and BP America
Production Company (collectively, "BP"). Despite months of
negotiations, BP ultimately decided not to purchase any boom from
Packgen. Packgen subsequently filed a five-count complaint in the
federal district court in Maine, invoking diversity jurisdiction
and alleging various state-law tort claims. The district court
granted summary judgment in favor of BP. For the following
reasons, we affirm.
I. BACKGROUND
The district court's summary judgment order sets forth
the facts of this case in meticulous detail. Packgen v. BP
Exploration & Prod., Inc., 957 F. Supp. 2d 58, 63–82 (D. Me. 2013).
We reiterate them here as necessary to provide context for the
issues on appeal, but we note that many of the facts are based
solely on Packgen's own testimony. While the district court
accepted these facts as true for the purposes of the summary
judgment motion, see Tolan v. Cotton, 134 S. Ct. 1861, 1863 (2014)
(per curiam) ("[O]n a motion for summary judgment, the evidence of
the nonmovant is to be believed, and all justifiable inferences are
to be drawn in his favor.") (internal quotation marks and
alternation omitted), in many instances BP disputed Packgen's
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version of events. The district court's order thoroughly documents
the points of dispute, and clarifies that it accepted Packgen's
version of the facts in every instance. Packgen, 957 F. Supp. 2d
at 64–83 nn.1–81.
On April 20, 2010, an oil drilling rig owned by BP named
Deepwater Horizon caught fire and sank off the Gulf Coast of
Louisiana, causing a massive oil spill. Part of BP's response
involved the deployment of oil containment boom. It had an
immediate need for millions of feet of boom, but it encountered
problems with availability, production, and interconnectivity.
Packgen is a small business in Maine that designs and
manufactures composite packaging materials and containers used in
the chemical, oil, and food-processing industries. Prior to the
Deepwater Horizon spill, Packgen had never manufactured oil
containment boom. Nevertheless, it saw an opportunity to make boom
part of its business in the wake of the spill, and it began
constructing boom manufacturing equipment no later than April 28,
2010, prior to any discussions with BP.
By early May 2010, Dan Forte, a marketing consultant for
Packgen, spoke to Mario Araya, who was procuring boom for BP. Araya
made an oral commitment to Forte to purchase all of Packgen's
present and future production of boom for $21.75 per square foot,
subject to a visit by BP personnel to inspect Packgen's facility
and boom capacity. On May 11, 2010, Max Lyoen, a Supplier Quality
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Control Specialist for BP, inspected Packgen's facility and met
with several Packgen representatives, including Forte, John
Lapoint, and Don Roberts. Lyoen was impressed by Packgen's
production capacity, and he stated that the end connectors used by
Packgen would meet BP's requirements.
At that time, the American Society for Testing and
Materials (ASTM) standards were the only specifications that BP had
for boom. Lyoen told Packgen's representatives that BP would
purchase Packgen's full production capacity once an independent
third party tested Packgen's boom for compliance with the ASTM
standards. After that meeting, Lapoint wrote an email to a
colleague stating that "[we] should have a response by tomorrow
morning on how much [BP] will commit. . . . [W]e are just waiting
on BP to make their decision. . . ."
On May 12, 2010, Forte and Araya spoke by phone, and
Araya stated "I'm placing an order. We'll take it all." The next
day, Araya negotiated the price down to $18.75 per square foot and
told Forte that BP would not pay up front. In response, Forte sent
Araya an email thanking him for "discussing the details of a
possible transaction." He stated that the companies "may be able
to address the issues concerning payment terms and pricing. What
remains is the issue concerning the acceptability [of] our design
and the requirements you have stated. . . . All that we require is
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a letter from Max Lyoen stating that the design meets your
requirements."
On May 13, 2010, Packgen informed BP that it was "moving
forward" with the sale and delivery. At that point, it began
gearing up its operations to produce 40,000 linear feet of boom per
day. On May 18, 2010, Forte sent an email to Matt Pavlas, BP's
boom sourcing lead, stating that Packgen was "attempting sales to
BP and Oil Cleanup companies." He informed Pavlas that Lyoen had
visited Packgen's facilities and written a report for BP; he asked
Pavlas to "provide indications if this report meets BP
requirements." Pavlas provided Packgen with a copy of Lyoen's
report, which described Packgen's product as "experimental."
Packgen hired Dr. Ian Durham to conduct third-party
testing. On May 20, 2010, Dr. Durham reported that Packgen's boom
met ASTM standards. Packgen provided Lyoen and two BP procurement
managers with the test results. On May 22, 2010, Don Roberts of
Packgen sent Pavlas an email expressing his "hope [that] the
information from the third party review helps in the decision
making process." Pavlas contacted Roberts by phone and stated that
BP intended to purchase Packgen's entire stock of boom. Roberts
followed up in an email on May 24, 2010, asking Pavlas for a
conference call "to discuss [our] possible working relationship."
Pavlas responded that "first I would like to receive the
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information requested yesterday such as [quantity] in inventory,
etc."
On May 26, 2010, Deenan Arcot of BP emailed Roberts
requesting the specifications for Packgen's boom, which he said BP
would have to approve prior to placing an order. After receiving
the specifications, Arcot expressed reservations about the
construction of the boom in an email to Roberts, observing that it
was "[v]ery different . . . from others being used." In a follow-
up email, Arcot wrote "I want to check the possibility that you can
modify these booms to our standard requirement." Roberts later
testified that this was the first time BP ever expressed having any
standard requirement for boom other than the ASTM standards.
On May 26, 2010, BP noted potential problems with the
connector plates and end connectors on Packgen's boom and informed
Packgen that it could not use the product at that time. Lapoint
and Roberts spoke to BP's Charles Bigi about the connector issue,
and Bigi promised that BP would approve and buy Packgen's boom if
Packgen obtained new universal connectors. On May 29, Bigi sent
two colleagues at BP an email summarizing his discussions with
Packgen and including the statement "I do not understand why we
keep placing orders with suppliers like this[.]"
In late May or early June, Packgen secured universal
slide connectors. On June 11, 2010, BP sent Luis Suarez, a
Supplier Quality Control Specialist, to conduct an assessment of
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Packgen's manufacturing process. Following his visit, Suarez told
Lapoint and Roberts that BP would purchase Packgen's full capacity.
On June 15, 2010, Suarez requested that Packgen send 500-600 feet
of boom for evaluation by BP. He issued a report the following day
in which he proposed three new modifications that he had not
previously discussed with Packgen.
Meanwhile, BP's demand for boom continued to increase.
It began to institute a new approval process for boom manufacturers
and hired technical authorities on boom. As of June 18, 2010, BP
had completed a written specification for 18" boom. Thereafter, it
began requesting that boom manufacturers complete a deviation form
if their boom differed from the specification. Packgen's boom
design was so different from BP's specification that Packgen agreed
to submit a drawing of its boom instead of the deviation form.
Between June 16 to June 25, 2010, BP requested numerous changes
from Packgen, none of which were required by the ASTM standards.
Packgen worked at BP's direction to make the necessary changes.
On June 21, 2010, Suarez reiterated his request for a
sample of boom to conduct field tests. BP conducted its first
field test on June 30, 2010, at a BP site near Mobile, Alabama.
Packgen's boom did not perform well. At that time, BP raised two
new concerns about Packgen's boom — first, it was constructed with
material that filled with water as it was towed, and second, it
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failed to meet certain decontamination standards. Packgen worked
to address the two new concerns.
While they were in Alabama, Bigi informed Roberts that BP
needed 24" boom and suggested that Packgen could be BP's supplier
for that product if it could adapt its manufacturing process. On
July 7, 2010, Suarez forwarded the latest specification for 24"
boom to Packgen. BP's John McFadden asked Packgen to "work on
getting the material to make 24" boom." At BP's direction, Packgen
completed a field test of the new boom on July 12, 2010, and
forwarded a video tape of the test to BP.
BP capped the Deepwater Horizon well on July 15, 2010,
and shortly thereafter began winding down its boom purchases.
Nevertheless, it conducted another field test of Packgen's boom on
July 21, 2010. BP's summary of the results show that the boom
performed well. Following the field test, McFadden gave verbal
approval to Packgen's boom. Suarez informed Packgen that it was
one of just three approved suppliers for 24" boom and that BP would
need boom to continue cleanup efforts through the end of 2010.
At no point did BP tell Packgen to stop producing boom,
and it never paid for any of the boom Packgen produced. On August
18, 2010, Roberts emailed BP expressing the understanding that
"there is not a need right now for [b]oom" but seeking a place on
BP's approved vendor list. BP responded that Packgen had been
added to the approved vendor list for boom.
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Packgen was left with 60,000 feet of completed boom in
its warehouse, which it sold in September 2010 to the only
purchaser it could find for two dollars a square foot. Although
Packgen was unable to sell or return many of the materials that it
purchased to manufacture boom, it managed to sell some at a loss
and incorporate some into its other products. Since the resolution
of the Gulf Coast spill, Packgen has not manufactured boom.
II. ANALYSIS
"We review orders for summary judgment de novo, assessing
the record in the light most favorable to the nonmovant and
resolving all reasonable inferences in that party's favor."
Barclays Bank PLC v. Poynter, 710 F.3d 16, 19 (1st Cir. 2013)
(internal quotation marks omitted). Summary judgment is
appropriate when "there is no genuine dispute as to any material
fact and the movant is entitled to judgment as a matter of law."
Fed. R. Civ. P. 56(a).
A. Misrepresentation (Counts I & II)
In Counts I and II, Packgen alleged negligent and
intentional misrepresentation. While negligent and intentional
misrepresentation are distinct claims, both require the plaintiff
to show that the defendant made a "false representation of present
fact." Kearney v. J.P. King Auction Co., 265 F.3d 27, 33 n.8 (1st
Cir. 2001); see also Guiggey v. Bombardier, 615 A.2d 1169, 1173
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(Me. 1992) ("A common, essential element of both claims is the
requirement of a false representation.").
As the district court observed, Packgen bases these two
claims on three groups or categories of misrepresentations: "(1)
what, at a particular point in time in the oil spill saga, BP
required for its specification, (2) its intention to purchase
Packgen's boom, and (3) how much boom it needed at any particular
time." Packgen, 957 F. Supp. 2d at 86. The district court
concluded that both claims fail as a matter of law because there is
no evidence in the record that any of the alleged
misrepresentations were false at the time they were made.1 Id. at
86–88. We agree. See Jordan-Milton Mach., Inc. v. F/V Teresa
Marie, II, 978 F.2d 32, 36 (1st Cir. 1992) (affirming a directed
verdict in favor of the defendant on a negligent misrepresentation
claim where "there was a total lack of evidence to prove that [the
defendant's] statements were false at the time they were made").
Packgen argues on appeal that the district court
improperly weighed the evidence in BP's favor while overlooking
reasonable inferences that the jury could have drawn in Packgen's
1
The district court also discussed the possible application
of the so-called Shine exception, which allows statements of
opinion to be actionable as misrepresentations under certain
circumstances. Packgen, 957 F. Supp. 2d at 85–86; Shine v. Dodge,
157 A. 318, 319 (Me. 1931). Because we conclude, along with the
district court, that the evidence does not show the alleged
misrepresentations to be false, we do not need to delve into the
Shine exception.
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favor. None of the possible inferences raised by Packgen
controvert the fundamental deficiency identified by the district
court, however, because Packgen still does not identify specific
evidence in the record showing that any of BP's statements were
false at the time they were made. A party cannot survive summary
judgment simply by articulating conclusions the jury might
imaginably reach; it must point to evidence that would support
those conclusions. See Miss. Pub. Emps.' Ret. Sys. v. Bos.
Scientific Corp., 649 F.3d 5, 28 (1st Cir. 2011) ("With respect to
each issue on which [a] plaintiff has the burden of proof at trial,
it must present definite, competent evidence to rebut the
motion . . . .") (internal quotation marks omitted).
For example, Packgen posits that "a jury could reasonably
conclude that BP kept making changes to its specification during
the spill so that manufacturers would continue to work for BP,
acceding to different requests made by BP at different times,
without BP actually having to pay for the boom." [Appellant Br. at
42–43.] If a jury reached that conclusion, it would be pure
speculation. The evidence shows that BP's boom specifications
changed repeatedly during its course of dealing with Packgen, but
nothing in the record indicates that these changes reflect the bad
intentions that Packgen describes. Similarly, nothing in the
record indicates that BP expressed an intention to purchase boom
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when it actually had no such intention, or that it ever claimed to
need more boom than it really needed.
Thus, the district court did not impermissibly weigh
evidence or ignore reasonable inferences. Rather, it pointed out
the absence of evidence supporting Packgen's position. Its
reasoning and conclusions were correct, and we affirm its judgment
as to Counts I and II.
B. Breach of Contract (Count III)
Under the Maine Statute of Frauds, a contract for the
sale of goods for five hundred dollars or more is unenforceable
"unless there is some writing sufficient to indicate that a
contract for sale has been made between the parties and signed by
the party against whom enforcement is sought or by his authorized
agent." Me. Rev. Stat. tit. 11, § 2-201(1). Packgen does not
claim that there is any written agreement in this case that would
satisfy the Statute of Frauds. Instead, it argues for the
application of two statutory exceptions: the "specially
manufactured goods" exception and the "judicial admission"
exception. The district court held that neither applies, and we
agree.
1. Specially Manufactured Goods Exception
The Maine statute creates an exception to the requirement
of a written agreement "[i]f the goods are to be specially
manufactured for the buyer and are not suitable for sale to others
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in the ordinary course of the seller's business." § 2-201(3)(a).
The applicability of the exception depends on whether the goods
themselves have unique qualities that render them unfit for sale
without major alterations to anyone other than the intended buyer.
The term 'specially manufactured' . . . refers to the
nature of the particular goods in question and not to
whether the goods were made in an unusual, as opposed to
the regular, business operation or manufacturing process
of the seller. . . . The crucial inquiry is whether the
manufacturer could sell the goods in the ordinary course
of his business to someone other than the original buyer.
If with slight alterations the goods could be so sold,
then they are not specially manufactured; if, however,
essential changes are necessary to render the goods
marketable by the seller to others, then the exception
does apply.
9 Williston on Contracts § 26.19 (4th ed.) (quoting Impossible
Elec. Techniques, Inc. v. Wackenhut Protective Sys., Inc., 669 F.2d
1026, 1037 (Former 5th Cir. 1982)) (internal quotation marks
omitted).
Here, as the district court observed, after BP declined
to buy its boom, Packgen was able to sell it to another buyer
without any alterations. It is true the Packgen received a greatly
reduced price than what BP appeared prepared to pay, but the
undisputed facts show that the price reduction was caused by an
overabundance of boom in the market following the capping of the
leak. Under these circumstances, the exception does not apply.
Packgen's arguments on appeal do not persuade us
otherwise. Rather than pointing to any unique qualities of its
product, Packgen argues that the circumstances surrounding its
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production and sale of boom indicate that its product was specially
manufactured for BP. It points to the fact that BP was purchasing
ninety percent of domestic boom production in the aftermath of the
spill, and that Packgen only decided to enter the boom market in
response to the disaster. These arguments are beside the point. It
is the nature of the goods themselves that matters, not the
circumstances under which Packgen tried to do business with BP.
Packgen also argues that it did not sell boom in its
ordinary course of business, because it never sold boom before the
spill and it has not sold boom since. This argument ignores the
fact that Packgen independently entered the market for boom and
attempted to sell its product to BP; it did not make that decision
at BP's request. As BP accurately points out, "under Packgen's
analysis, any company [that] attempts to break into any business
could claim a contract for specially manufactured goods when its
attempt fails and it liquidates its inventory." [Appellee's Br.
18] This exception does not exist as a safety net for failed
business ventures. Instead, it protects sellers who might be stuck
with "goods that are difficult or impossible to sell to others"
because of their unique nature. 9 Williston on Contracts § 26.19.
That is not Packgen's position in this case. Thus, the district
court correctly declined to apply the "specially made goods"
exception.
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2. Judicial Admission Exception
The Statute also creates an exception "[i]f the party
against whom enforcement is sought admits in his pleading,
testimony or otherwise in court that a contract for sale was made."
§ 2-201(3)(b). The admission "need not expressly acknowledge the
existence of a contract," but it must "describe conduct or
circumstances from which the trier of fact can infer a contract."
Gruen Indus., Inc. v. Biller, 608 F.2d 274, 278 (7th Cir. 1979).
Packgen offers two bases for the application of this exception.
First, Packgen points to deposition testimony in which Charles Bigi
authenticated an email that he sent to colleagues at BP, supposedly
referring to an order BP placed with Packgen. Second, it points
out that BP failed to provide record citations when it denied
certain statements in Packgen's statement of material facts.
Packgen argues that under Federal Rule of Civil Procedure 56, the
failure to provide record citations constitutes admissions that
satisfy the exception.
a. Charles Bigi's Email
In the email that Packgen puts forth as an admission,
Charles Bigi wrote to his colleague, "I do not understand why we
keep placing orders with suppliers like this[.]" The district
court concluded that "viewing the statement in the context of the
rest of the undisputed evidence, and viewing the entire record in
the light most favorable to Packgen, Mr. Bigi's email does not
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support" an inference that a contract existed between BP and
Packgen. Packgen, 957 F. Supp. 2d at 93. Packgen argues that the
district court "invaded the jury's province by impermissibly
weigh[ing] conflicting evidence" when it reviewed the record to
assess the significance of Bigi's email. [Appellant's Br. 25] We
disagree. In order to accurately determine whether a jury might
infer a contract from Bigi's email, the district court had to look
at the statement in the context of the ongoing communications
between BP and Packgen.
In Gruen, the Seventh Circuit engaged in a similar
analysis. In that case, the plaintiff argued that an agent of the
defendant made statements in a deposition describing conduct from
which a jury could infer the existence of a contract. 608 F.2d at278–80. The court concluded that a "reading of the transcript of
these statements, however, shows nothing more than ongoing
negotiations, because the conduct was accompanied by statements
making it clear that there was no agreement until the negotiations
were complete." Id. at 279–80 (footnote omitted).
Here, the district court reviewed the communications
between Packgen and BP that led up to Bigi's email and concluded
that the evidence did not support an inference that a binding
agreement existed at that time. We do not need to walk through the
district court's review of the record step by step, but we
highlight one key point. On May 24, 2010, just a few days before
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Bigi's email, Packgen requested a conference call with BP to
"discuss [our] possible working relationship." That statement is
an unambiguous indication that Packgen itself did not believe it
had a binding agreement with BP as of that date. Nothing in the
record indicates that a deal occurred between May 24 and 29; to the
contrary, on May 26, BP stated that it would have to approve
Packgen's specifications before placing an order.
Thus, it was appropriate for the district court to wonder
"to what order does [Bigi's] email supposedly refer?" Packgen, 957
F. Supp. 2d at 93. The record of Packgen's own statements prior to
Bigi's email consistently points to ongoing negotiations between
the parties rather than a binding agreement. Moreover, Bigi
testified in his deposition that he had no knowledge of any orders
that Packgen had from BP, and that he would not have "been part of
any contracts or commercial agreements." [App. 967–69] In light
of the record as a whole, we agree with the district court's
conclusion that Bigi's email is not an admission for the purposes
of the Statute of Frauds.
b. Denials Unsupported By Record Citations
Packgen also argues that the district court should have
deemed certain portions of its statement of material facts
admitted, because BP failed to properly controvert them with
citations to the record in violation of Federal Rule of Civil
Procedure 56. Packgen, 957 F. Supp. 2d at 94–95 & n.84. According
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to Packgen, if the district court had admitted its statements as
uncontroverted, they would satisfy the judicial admission exception
to the Statute of Frauds.
Packgen's argument proceeds as though the admission of
uncontroverted statements of fact is an iron-clad rule. That
position does not comport with our case law. In Cabán Hernández v.
Philip Morris USA, Inc., we explained that "in the event that a
party opposing summary judgment fails to act in accordance with the
rigors that such a rule imposes, a district court is free, in the
exercise of its sound discretion, to accept the moving party's
facts as stated." 486 F.3d 1, 7 (1st Cir. 2007). In other words,
a party's failure to comply with the formal requirements of Rule 56
does not trigger a mechanical response from the district court.
Instead, the district court acts within its discretion to respond
in a manner appropriate to the circumstances of the case. This
approach is consistent with the language in the District of Maine
Local Rule 56(f), which provides that the court "may disregard any
statement of fact not supported by a specific citation to record
material properly considered on summary judgment." D. Me. Loc. R.
56(f) (emphasis added).
Here, the district court did not abuse its discretion.
It observed that BP "has consistently denied that it entered into
an oral agreement, and has supported its denial with the sworn
statements of [its] employees." Packgen, 957 F. Supp. 2d at 95.
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Further, it noted that Packgen had not managed in the course of
discovery "to establish a BP admission that would qualify under the
judicial admission exception. Instead, it posited assertions of
its own employees as statements of material fact and attempted to
place the onus on BP not only to deny them, but also to proffer
evidence justifying the denial." Id. It concluded that "[i]n
these unusual circumstances, the Court holds Packgen to what
Packgen itself found during discovery." Id. We find these reasons
more than adequate to justify the district court's decision not to
deem Packgen's statements admitted for the purpose of the
exception.
In sum, the district court did not err in deciding that
neither exception to the Statute of Frauds applies. We affirm its
entry of judgment in favor of BP on Count III.
C. Equitable Relief (Count IV)
In Count IV, Packgen sought equitable relief under
theories of unjust enrichment and quantum meruit.2 The district
court, relying on Paffhausen v. Balano, 708 A.2d 269 (Me. 1998),
distinguished the two theories: "Quantum meruit . . . involves
2
The caption to Count IV also includes "Restitution," but
restitution in this context is a type of remedy, not a cause of
action separate and distinct from unjust enrichment. See
Restatement (Third) of Restitution & Unjust Enrichment § 1 (2011)
("A person who is unjustly enriched at the expense of another is
subject to liability in restitution."); Goodwin v. C.N.J., Inc.,
436 F.3d 44, 50 (1st Cir. 2006) ("Restitution is a remedy
associated with the concept of unjust enrichment."). Therefore the
district court correctly declined to analyze it separately.
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recovery for services or materials provided under an implied
contract. Unjust enrichment describes recovery for the value of
the benefit retained when there is no contractual relationship."
Packgen, 957 F. Supp. 2d at 96 (quoting Paffhausen, 708 A.2d at
271). To prevail on an unjust enrichment claim under Maine law, a
plaintiff must show that "(1) it conferred a benefit on the other
party; (2) the other party had appreciation or knowledge of the
benefit; and (3) the acceptance or retention of the benefit was
under such circumstances as to make it inequitable for it to retain
the benefit without payment of its value." Id. (quoting Platz
Assocs. v. Finley, 973 A.2d 743, 750 (Me. 2009)) (internal
quotation mark omitted). A quantum meruit claim requires proof
"that (1) services were rendered to the defendant by the plaintiff;
(2) with the knowledge and consent of the defendant; and (3) under
circumstances that make it reasonable for the plaintiff to expect
payment." Id. (quoting Paffhausen, 708 A.2d at 271) (internal
quotation mark omitted). The district court correctly concluded
that Packgen cannot prevail under either theory.
1. Unjust Enrichment
Packgen argued before the district court that it provided
technical information that BP used to develop its boom
specification. It urged the district court to follow APG, Inc. v.
MCI Telecommunications Corp., 436 F.3d 294 (1st Cir. 2006), in
which this court allowed an unjust enrichment claim to survive
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summary judgment where the plaintiff acted as a middleman in the
sale of prepaid telephone cards between the defendant and a third
party. The defendant in APG ultimately dealt directly with the
third party, cutting the plaintiff out of the deal. The court held
that there was sufficient evidence to raise a question of fact
regarding whether the time and effort expended by the plaintiff to
secure the deal constituted a benefit for the defendant. Id. at
305–06.
The district court decided that this case is less
analogous to APG than to Forrest Associates v. Passamaquoddy Tribe,
760 A.2d 1041 (Me. 2000). In Forrest Associates, the plaintiff was
a management consulting firm that provided the defendant with a
market assessment and proposal related to a bingo operation. The
Supreme Judicial Court of Maine vacated a judgment in the
plaintiff's favor on its unjust enrichment claim. It held that
"the evidence in the record fails to establish that Forrest
conferred a benefit on the Tribe. Although Forrest created the
comprehensive plan and presented it to the Tribe, there is no
evidence that the Tribe benefitted from either the presentation or
the information contained in the plan." Forrest Assocs., 760 A.2d
at 1046. We agree with the district court that the same conclusion
applies here.
On appeal, Packgen repeats its argument that BP used
information provided by Packgen "to develop a general specification
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for boom and to realize cost savings." It fails, however, to cite
any evidence in the record supporting that statement, and our own
review of the record has not uncovered any. The record shows that
Packgen provided information about its boom design to BP, but
nothing indicates that BP used the information in any way for its
own benefit. Therefore, we affirm the district court's judgment in
favor of BP on the unjust enrichment claim.
2. Quantum Meruit
Packgen fares no better under a theory of quantum meruit.
In Paffausen, the Supreme Judicial Court of Maine explained that a
successful quantum meruit claim requires "proof that services were
rendered under circumstances consistent with contract relations.
It must appear that the one who rendered the services expected
compensation and that the one who received or benefitted from the
services so understood, and by her words or conduct justified the
expectation." 708 A.2d at 272 (citation and internal quotation
marks omitted).
In this case, it is not apparent what "services" Packgen
provided that might be the basis for a quantum meruit claim. It
took steps to test and modify its product and provide BP with
information in an effort to complete a sale. We do not think that
type of activity is a "service" in the ordinary sense of the word.
But even setting that point aside, there is nothing in the record
that suggests either party expected BP to compensate Packgen for
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anything other than the product itself. In other words, the
negotiations between the parties here were for a sale of goods, not
the provision of services. In the absence of any expectation of
payment for services rendered, the quantum meruit claim must fail.
D. Promissory Estoppel (Count V)
Packgen's final claim is for equitable relief under a
theory of promissory estoppel. Maine courts have adopted the
definition of promissory estoppel in the Restatement (Second) of
Contracts, which states that "[a] promise which the promisor should
reasonably expect to induce action or forbearance on the part of
the promisee or a third person and which does induce such action or
forbearance is binding if injustice can be avoided only by
enforcement of the promise." Restatement (Second) of Contracts
§ 90(1); see Harvey v. Dow, 962 A.2d 322, 325 (Me. 2008). The
parties dispute whether under Maine law the doctrine applies to a
promise that is otherwise unenforceable under the Statute of
Frauds.
Maine courts have not definitively settled this question.
In some cases, they have relied on Section 139 of the Restatement,
which provides that promissory estoppel may apply "notwithstanding
the Statute of Frauds if injustice can be avoided only by
enforcement of the promise." Restatement (Second) of Contracts
§ 139(1). Thus, in Chapman v. Bomann, the Supreme Judicial Court
of Maine allowed a promissory estoppel claim to go forward seeking
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enforcement of an oral promise to sign a contract for the sale of
real estate, despite the fact that the unsigned contract was itself
unenforceable under the Statute of Frauds. 381 A.2d 1123, 1129
(Me. 1978). But in the context of employment contracts, Maine
courts have categorically rejected the application of promissory
estoppel to promises otherwise unenforceable under the Statute.
See Stearns v. Emery-Waterhouse Co., 596 A.2d 72, 74–75 (Me. 1991)
("Although section 139 of the Restatement may promote justice in
other situations, in the employment context it contravenes the
policy of the Statute to prevent fraud.").
We have not found a Maine case addressing this question
in the specific context of this case, a sale of goods over five
hundred dollars. Nevertheless, we think the court's discussion in
Chapman is sufficiently thorough for us to anticipate how the state
court would proceed. See Noonan v. Staples, 556 F.3d 20, 30 (1st
Cir. 2009) ("Although we recognize that in exercising our diversity
jurisdiction we must tread lightly in offering interpretations of
state law where controlling precedent is scarce, we are also
obliged to provide our 'best guess' as to open questions of state
law when necessary.") (citation omitted).
In Chapman, the court invoked the "general equitable
principle that since it is the purpose of the Statute of Frauds to
prevent fraud, that Statute cannot be permitted to be itself an
instrument of fraud." 381 A.2d at 1128. It also expressly adopted
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Comment f to Section 178 of the Restatement, which explains that
promissory estoppel may apply to a promise that is unenforceable
under the Statute "if the statute would otherwise operate to
defraud." Id. at 1129 (internal quotation mark omitted). The
court clarified that its adoption of the standard in Comment f does
not require that the promisor "made the promise with an actual
subjective intention to relinquish the right to assert the Statute
of Frauds or with an actual intention otherwise to deceive." Id.Rather, the criterion is "whether all the particular circumstances
. . . show, objectively, that a fraud, or a substantial injustice
tantamount to a fraud, would be perpetrated upon the promisee were
the promisor allowed to assert the Statute of Frauds as a bar."
Id.Although the facts of Chapman are not analogous to this
case,3 the court spoke in terms of general principle. It appears
3
In Chapman, the defendants (a husband and wife) invoked the
Statute of Frauds as a defense against the enforcement of a
contract for a sale of real estate that they had not signed. 381
A.2d at 1128. The wife, however, had made a "separate ancillary
promise . . . that she and her husband would sign, and return, the
document." Id. at 1126. The issue facing the court was whether the
separate promise to sign the document was enforceable under
promissory estoppel. The court noted that the promise to sign was
"not itself within the textual language of the Statute of Frauds,"
but is nevertheless "deemed to be within the penumbra of the
Statute's policy and thus becomes unenforceable like the underlying
agreement to which it relates." Id. at 1128. Thus, the court drew
a distinction between the "penumbral policy" and the "actual terms"
of the Statute, id. at 1129, and there is a strong argument that it
would prohibit the use of promissory estoppel outright when, as in
the case before us, the actual terms of the Statute apply. See
Stearns, 596 A.2d at 74 (explaining that "although we invoked the
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to seek a middle course between an outright bar on the use of
promissory estoppel on one hand and the wholesale use of the
doctrine to evade the Statute on the other. Thus, it adopts a
useful limiting principle, consistent with the purpose of the
Statute, that allows courts to apply promissory estoppel when "it
would be grossly unjust and, therefore, tantamount to a fraud on
the plaintiffs to allow [a] defendant to assert the Statute of
Frauds." Id. at 1129.
Of course, it is entirely possible that the Maine courts
would bar the use of promissory estoppel claims entirely for the
sale of goods, just as they did in the employment context in
Stearns. See supra n.4. But whether we follow Stearns or Chapman,
Packgen's claim fails. Under Stearns, the claim would be
categorically barred, and there is no evidence from which a jury
could find that Packgen has met the standard set forth in Chapman.
There is nothing in the record, such as evidence of deliberate
deception or bad faith, revealing "a substantial injustice
tantamount to a fraud." See Chapman, 381 A.2d at 1129. Thus, the
rubric of promissory estoppel, our decision in Chapman actually
applied an equitable estoppel and extended it only to an ancillary
promise to make a writing") (emphasis added); Jolovitz v. City of
Waterville, No. Civ.A. AP-01-82, 2003 WL 22100663, at *2 (Super.
Ct. Me. Aug. 26, 2003) ("The agreement [in Chapman] was not the
sales contract itself, which would bump more squarely into the
Statute of Frauds considerations."). As we explain, Packgen's
claim fails whether we follow the standard set forth in Chapman or
bar the claim outright as the court did in the employment context
in Stearns. Therefore, we can leave that question for the Maine
courts to settle.
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district court correctly concluded that the promissory estoppel
claim fails as a matter of law.
III. CONCLUSION
For the foregoing reasons, we AFFIRM the district court's
ruling.
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