Precision Components, Inc. v. C.W. Bearing USA, Inc. , 286 F. App'x 91 ( 2008 )

UNPUBLISHED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Affirmed by unpublished per curiam opinion.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Unpublished opinions are not binding precedent in this circuit.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.
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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)
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(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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