United Musical Instruments USA, Inc. v. Gordon Music, Inc.

Not for Publication in West's Federal Reporter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. 05-1728
UNITED MUSICAL INSTRUMENTS USA, INC.,
Plaintiff, Appellee,
v.
GORDON MUSIC, INC. d/b/a GORDON LASALLE MUSIC,
Defendant, Appellant.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Charles B. Swartwood, III, U.S. Magistrate Judge]
Before
Howard, Circuit Judge,
Coffin and Campbell, Senior Circuit Judges.
Stephen Gordon, for appellant.
Michael R. Byrne, with whom Melick Porter & Shea, LLP was on
brief, for appellee.
April 11, 2006
Per Curiam. Defendant-appellant Gordon Music, Inc.
("Gordon") appeals from a judgment entered after a bench trial in
favor of plaintiff-appellee United Musical Instruments USA, Inc.
("United"). We affirm.
Only the briefest summary of the facts is warranted. In
1998, United, a manufacturer and distributor of musical
instruments, entered into a written agreement with Gordon, a seller
and lessor of musical instruments, by which Gordon agreed to be a
retail dealer of United's merchandise. All went well until 2000,
when United began experiencing difficulty collecting amounts due
from Gordon. Late charges accumulated, the possibility of
returning merchandise for credit was unsuccessfully explored, sales
to Gordon ceased, and the Gordon account was placed in collection.
In 2002, United filed a diversity action alleging breach
of contract (Count 1), violation of the Massachusetts Commercial
Code (Count 2), and violation of the Massachusetts Consumer
Protection Act, Mass. Gen. Laws ch. 93A (Count 3). Gordon raised
a chapter 93A counterclaim, which alleged that United's practice of
giving larger discounts than Gordon received to a competing retail
dealer constituted an unfair and deceptive trade practice. At a
bench trial, United's comptroller (Thomas Lawdenski), United's
regional sales representative (Joseph Saravo), and Gordon's
president (Mark Gordon) testified. United also presented an
extensive record of invoices (paid, unpaid, and partially paid),
-2-
shipping confirmations, credit memorandums, and payment records.
The presentation was rather one-sided; Mark Gordon admitted that
Gordon's relevant computer records had been automatically "purged"
and testified that other relevant records (including such basic
items as cancelled checks) had been lost or discarded. Gordon's
basic defenses were that the parties' contract did not satisfy the
Statute of Frauds (no quantity of merchandise specified) and that
Gordon did not order or receive the disputed merchandise. The
court found in favor of United on counts one and two and awarded
judgment in the amount of $259,148.16 (consisting of the amount of
the unpaid invoices, finance charges, and prejudgment interest).
The court rejected both sides' chapter 93A claims.
On appeal, Gordon claims that the district court made
three errors: (1) holding that recovery was not barred by the
Statute of Frauds; (2) finding that the disputed goods and invoices
were actually sent by United and received by Gordon; and (3)
dismissing Gordon's chapter 93A counterclaim. In assessing the
results of a bench trial, we review the district court's findings
of fact for clear error and its legal conclusions de novo. See
Rational Software Corp. v. Sterling Corp., 393 F.3d 276, 276 (1st
Cir. 2005).
We begin with the Statute of Frauds. The district court
concluded that the dealer agreement, confidential dealer
information memorandum, and the invoices collectively satisfied the
-3-
writing requirement. Gordon did not challenge this legal
conclusion, even tangentially, until its reply brief.1 This is too
late. See In re Gosselin, 276 F.3d 70, 72 (1st Cir.
2002)(arguments not raised in primary brief are waived). Thus,
Gordon's only surviving challenge to this holding is a factual one
-- whether the invoices were actually sent and received -- which
duplicates Gordon's second issue on appeal, which we address next.
Lawdenski and Saravo testified about how orders were
processed, goods shipped, and invoices generated and sent. Saravo,
who had serviced the Gordon account, also testified that Gordon had
not complained about being billed for merchandise it had not
ordered or received. As noted above, United also presented
abundant documentary evidence. Significantly, the invoices that
Gordon had paid had been processed and documented in an identical
manner to the invoices Gordon did not pay. Against this evidence,
Gordon offered little. The district court expressed doubt about
Mark Gordon's credibility and specifically noted Gordon's "sloppy
and poor business practices." Mark Gordon also repeatedly conceded
that he could not tell if the disputed invoices were valid or not,
and he undermined Gordon's contention that merchandise had not been
1
Gordon's arguments were primarily directed to the court's
alternative holdings on the Statute of Frauds issue (e.g., whether
the dealer agreement could be considered a requirements contract
and the effect of course of dealing). In light of the failure to
contest the court's primary holding, Gordon's presentation on the
alternative holdings is irrelevant. Cf. In re Miles, 436 F.3d 291,
294 (1st Cir. 2006).
-4-
delivered with his testimony that he had sought to return a
significant quantity of United's merchandise for credit. On this
record, the district court's finding that the invoices and
merchandise were sent by United and received by Gordon is not
clearly erroneous. Cf. Narragansett Indian Tribe v. Warwick Sewer
Auth., 334 F.3d 161, 168 (1st Cir. 2003)(testimony that documents
were properly mailed with return addresses and not returned gives
rise to presumption that documents were received).
Gordon's chapter 93A claim also merits little discussion.
In presenting this claim, Gordon focused on whether United had
engaged in an unfair or deceptive practice in granting a competing
dealer a larger discount. But, in addition to showing an unfair or
deceptive act, Gordon also had the burden of showing that it
sustained a loss of tangible property or money as a result of the
act. See Arthur D. Little, Inc. v. Dooyang Corp., 147 F.3d 47, 56
(1st Cir. 1998)(construing chapter 93A). Since Gordon does not
challenge the district court's conclusion that it had failed to
prove damages,2 Gordon could not prevail on this claim. Cf. Eureka
Broadband Corp. v. Wentworth Leasing Corp., 400 F.3d 62, 71 (1st
Cir. 2005)(failure to show damages defeats conversion claim).
Affirmed.
2
Nor could Gordon make such a challenge, as the only evidence on
this point in the record is Mark Gordon's concession on the witness
stand that he could not prove any loss of any sort due to United's
alleged wrongful conduct.
-5-