Masda Corp. v. Empire Comfort Systems, Inc.

Opinions of the United
2003 Decisions States Court of Appeals
for the Third Circuit
6-24-2003
Masda Corp v. Empire Comfort Sys
Precedential or Non-Precedential: Non-Precedential
Docket No. 02-3062
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"Masda Corp v. Empire Comfort Sys" (2003). 2003 Decisions. Paper 436.
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NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 02-3062
MASDA CORPORATION,
Appellant
v.
EMPIRE COMFORT SYSTEMS, INC.
ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR
THE DISTRICT OF NEW JERSEY
(Dist. Court No. 99-cv-01445)
District Court Judge: Hon. William H. Walls
Submitted Under Third Circuit LAR 34.1(a)
June 16, 2003
Before: ALITO, ROTH, and HALL,* Circuit Judges.
(Opinion Filed: June 24, 2003)
OPINION OF THE COURT
ALITO, Circuit Judge:
*
The Hon. Cynthia H. Hall, Circuit Judge for the United States Court of Appeals for
the Ninth Circuit, sitting by designation.
Masda Corp. appeals an order of the District Court granting summary judgment to
Empire Comfort Systems, Inc. in a diversity action for breach of contract and related
claims. Applying Illinois law, the District Court held that the alleged oral agreement
between the parties was unenforceable because it was indefinite and no meeting of the
minds occurred; that no requirements contract existed; that Illinois law does not recognize
an independent cause of action for the breach of an implied covenant of good faith and fair
dealing; and that the doctrines of promissory estoppel and equitable estoppel were
inapplicable. Our review is de novo, Ideal Dairy Farms, Inc. v. John Labatt, Ltd., 90 F.3d
737, 743 (3d Cir. 1996), and we affirm.
Masda argues that summary judgment was inappropriate because the question
whether a contract existed “involv[es] a[] [factual] inquiry into the state of mind of . . .
contracting parties.” WRIGHT & MILLER, FEDERAL P RACTICE AND P ROCEDURE, § 2730.1
at 44. Masda cites decisions of this Court holding that contractual terms “‘susceptible of
more than one meaning’” warrant consideration by a jury. Emerson Radio Corp. v. Orion
Sales, Inc., 253 F.3d 159, 163 (3d Cir. 2001) (quoting Sumitomo Mach. Corp. of Am., Inc.
v. Allied Signal, Inc., 81 F.3d 328, 332 (3d Cir. 1996)). Whether a contract is susceptible
of more than one meaning in a sense material to the legal dispute at bar, however, is a
question of law.
The District Court acknowledged that the statement of Joseph Brueggemann was
“vague” and interpreted it in the light most favorable to Masda, as dictated by the summary-
judgment standard. See, e.g., Wahl v. Rexnord, Inc., 624 F.2d 1169, 1181 (3d Cir. 1980).
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The Court applied Illinois law holding that the terms of an oral contract must be “definite
and certain” to be enforceable, Vandevier v. Mulay Plastics, Inc., 482 N.E.2d 377, 380 (Ill.
App. Ct. 1985), and that the requisite meeting of the minds cannot occur unless manifested
“by the parties’ objective conduct rather than by their subjective beliefs.” Paxton-Buckley-
Loda Educ. Ass’n v. Illinois Educ./Labor Bd., 710 N.E.2d 538, 544 (Ill. App. Ct. 1999).
Accepting arguendo Masda’s contention that Brueggemann’s statement referred to
duration, the Court held (1) that “there is no genuine, material dispute as to the definiteness
of the duration term,” because the statement, on its face, refers only to past contracts, and
only to some past contracts, and (2) that Masda’s objective conduct evinced no meeting of
the minds because Masda never asked to clarify the vagueness and did not attempt to
confirm its interpretation of the term until after a dispute arose. The factual disputes cited
by Masda are not material to these conclusions because they do not bear on the
definiteness of Brueggemann’s statement or on the parties’ objective conduct.
The District Court also held that no requirements contract was made, basing this
determination on its finding “that there is no other evidence of the parties’ intent of a
requirements contract save the self-serving certification of Joseph Darche.” Masda’s legal
argument that a requirements contract must be inferred on the basis of a mutual exclusive-
dealing arrangement is unavailing because Masda’s objective conduct is not consistent with
a mutual exclusive-dealing arrangement. The District Court properly declined to infer a
reciprocal duty on Masda’s behalf to purchase exclusively from Empire, see In re Modern
Dairy of Champaign, Inc., 171 F.3d 1106, 1108 (7th Cir. 1999) (applying Illinois law),
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given Masda’s continued distribution of a competing manufacturer’s product line. This
holding accords with Modern Dairy because here, as in that case, the evidence purporting to
establish a requirements contract does so neither explicitly nor by implication and
therefore could present no genuine, material issue to a factfinder. See also Brooklyn Bagel
Boys, Inc. v. Earthgrains Refrigerated Dough Prods., 212 F.3d 373, 378–81 (7th Cir. 2000)
(applying Illinois law) (citing Modern Dairy, 171 F.3d at 1109).
We see no grounds for reversal in Masda’s remaining arguments. Because alleged
contractual terms “so indefinite as to be unenforceable” cannot invoke promissory
estoppel, the District Court’s disposition of the duration issue forecloses relief on that
ground. Demos v. Nat’l Bank of Greece, 567 N.E.2d 1083, 1088 (Ill. App. Ct. 2001).
Similarly, statements as vague and indefinite as those at issue in this case cannot establish
the “reasonabl[e] induce[ment]” necessary to support an equitable estoppel claim.
Industrial Specialty Chems. v. Cummins Engine Co., 902 F. Supp. 805, 813 (N.D. Ill.
1995). Had Empire committed “actual intentional deceit,” it would be “in no position to
contend that the party acting upon [its] deception was negligent in doing so,” Vaughn v.
Speaker, 533 N.E.2d 885, 890 (Ill. 1988), but Masda has not produced the requisite “clear,
precise[,] and unequivocal” evidence of such deception. Jennings v. Bituminous Casualty
Corp., 197 N.E.2d 513, 517 (Ill. App. Ct. 1964). Finally, because Illinois law does not
cognize an independent cause of action for breach of an implied duty of good faith and fair
dealing, see Voyles v. Sandia Mortgage Corp., 751 N.E.2d 1126 (Ill. 2001), such a claim
could only derive from the breach-of-contract claim already dismissed by the District
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Court. Inasmuch as Masda concedes this connection and states that the former claim rests
on the same factual disputes that the District Court held to be immaterial to the latter, this
issue should require no further exposition. We affirm the judgment of the District Court in
full.