Boyle v. Douglas Dynamics, LLC

Not For Publication in West's Federal Reporter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.
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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
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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."
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• "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.
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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
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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.
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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
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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,
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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.
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