G. R. Toghiyany v. Amerigas Propane

United States Court of Appeals
FOR THE EIGHTH CIRCUIT
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No. 02-1283
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G. R. Toghiyany, doing business as *
First Class Refurbishing, *
*
Appellant, * Appeal from the United States
* District Court for the
v. * Eastern District of Missouri.
*
Amerigas Propane, Inc., doing *
business as Amerigas Partners LP; *
John Iannarelli; Amerigas Propane, L.P.,*
*
Appellees. *
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Submitted: September 12, 2002
Filed: October 25, 2002
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Before WOLLMAN and MORRIS SHEPPARD ARNOLD, Circuit Judges, and
BOGUE,1 District Judge.
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WOLLMAN, Circuit Judge.
1
The Honorable Andrew W. Bogue, United States District Judge for the District
of South Dakota, sitting by designation.
G. R. Toghiyany appeals a decision of the district court2 granting summary
judgment in favor of AmeriGas Propane, Inc. (AmeriGas) on Toghiyany’s claims for
breach of contract and common law fraud, and denying his first and second motions
to compel discovery. We affirm.
I.
In January 1998, AmeriGas and Toghiyany entered into an agreement pursuant
to which Toghiyany would refurbish propane cylinders that AmeriGas would market
for use with residential barbecue grills. The agreement was never reduced to writing.
Prior to this agreement, Toghiyany had been in the auto body and car repair business.
Toghiyany had painted trucks, cylinders, and propane tanks for AmeriGas.
Toghiyany and AmeriGas agreed that Toghiyany would refurbish propane
cylinders for AmeriGas’s Missouri and southern Illinois markets. In February 1998,
after the parties’ initial agreement, Toghiyany submitted another bid to AmeriGas to
refurbish cylinders for markets in Indiana and Ohio. This bid established the terms
of his prospective agreement with AmeriGas and did not include a durational term.
In March 1998, Toghiyany began to refurbish the propane cylinders at a facility he
leased from AmeriGas. No lease agreement was signed for the premises, which were
located at AmeriGas’s Flint Hill property in Missouri.
Less than one year after Toghiyany had started refurbishing cylinders,
AmeriGas noted a marked decline in the quality of Toghiyany’s services. Some of
the valves on refurbished cylinders had leaked and the cylinders had not been
wrapped sufficiently. Shortly thereafter, AmeriGas representatives met with
Toghiyany to discuss their quality and safety concerns. Although Toghiyany took
2
The Honorable Catherine D. Perry, United States District Judge for the Eastern
District of Missouri.
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responsibility for the declining quality of the refurbished cylinders, there was no
improvement following the meeting. In October 1999, AmeriGas again informed
Toghiyany of safety concerns. Less than one month later, a leaking cylinder ignited
a significant fire at Toghiyany’s refurbishing facility. AmeriGas officially terminated
its agreement with Toghiyany in March 2000 by terminating his tenancy of the Flint
Hill facility.
II.
We review a district court’s grant of summary judgment de novo. Iowa Coal
Mining Co. v. Monroe County, 257 F.3d 846, 852 (8th Cir. 2001). We will affirm the
grant of summary judgment if “the evidence, when viewed in the light most favorable
to the nonmoving party, indicates that no genuine issue of any material fact exists and
that the moving party is entitled to judgment as a matter of law.” Fisher v. Pharmacia
& Upjohn, 225 F.3d 915, 919 (8th Cir. 2000); Fed. R. Civ. P. 56(c).
A.
Toghiyany contends that his agreement with AmeriGas is enforceable and that
AmeriGas breached the agreement by terminating Toghiyany’s services after two
years. The district court held that the oral agreement for services between AmeriGas
and Toghiyany, which Toghiyany contends was to be performed over a five-year
period, was unenforceable because it violated the Missouri statute of frauds. Under
Missouri law, which governs this diversity action, “[n]o action shall be brought . . .
upon any agreement that is not to be performed within one year from the making
thereof, unless the agreement upon which the action shall be brought, or some
memorandum or note thereof, shall be in writing and signed by the party to be
charged therewith . . . .” Mo. Rev. Stat § 432.010 (statute of frauds governing
contracts for sale of services). Toghiyany contends that although the agreement
between the parties was not reduced to a single writing signed by AmeriGas, both
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parties intended the contract to run for five years. He asserts further that a contract
embodying such an agreement can be inferred from the cumulative writings supplied
by the parties.
To be enforceable, an agreement need not be reduced to a single written
contract. Vess Beverages, Inc. v. Paddington Corp., 941 F.2d 651, 654 (8th Cir.
1991) (citations omitted). Under Missouri law, however, a contract can be inferred
from several different writings only if the writings “in combination supply the
essential terms” of the agreement. Id. In the context of contracts for services, the
term specifying the duration of the contract is an essential element and “must be set
out in the contract in order for the contract to comply with the statute of frauds.”
Kansas City Power & Light Co. v. Burlington N. R.R. Co., 707 F.2d 1002, 1004 (8th
Cir. 1993) (citation omitted) (holding that although a “series of letters between the
parties . . . constitute[s] a contract . . . the contract does not comply with [Missouri’s]
statute of frauds because it fails to set out the duration of the agreement”).
Furthermore, the documents constituting the contract must be signed, or, in the
alternative, one document must be signed, so long as the others are significantly
related to it. Vess Beverages, 941 F.2d at 654. An enforceable contract cannot be
inferred from the writings supplied by the parties in this case because the writings--
various e-mails and draft agreements--neither contain the essential durational element
nor are signed. Id.; see also Kansas City Power & Light Co. at 1003-4. Accordingly,
the agreement for services between Toghiyany and AmeriGas is unenforceable.
In the alternative, Toghiyany contends that the absence of a written agreement
containing a term of years does not preclude enforcement of the agreement because
it is an enforceable requirements contract not barred by the statute of frauds. A
“‘requirements contract’ is ‘one in which one party promises to supply all the specific
goods or services which the other party may need during a certain period at an agreed
price, and the other party promises that he will obtain his required goods or services
from the first party exclusively.’” Essco Geometric v. Harvard Indus., 46 F.3d 718,
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728 (8th Cir. 1995) (citation omitted) (emphasis added). Notably, a term defining the
period during which Toghiyany will supply services to AmeriGas is absent and in
dispute. Toghiyany does not cite and we have not found any Missouri law exempting
requirements contracts from the general formal requirements of the statute of frauds.
Because no durational term is present in the documents composing the agreement,
Toghiyany’s argument fails.
B.
Toghiyany next argues that AmeriGas committed fraud and engaged in
fraudulent misrepresentation by inducing him to enter into a business relationship
with AmeriGas under the misapprehension that a written contract providing for a
five-year commitment would govern the relationship. Toghiyany alleges that from
the outset of their business dealings, AmeriGas did not intend to fulfill this
commitment.
To withstand AmeriGas’s motion for summary judgment, Toghiyany must
produce evidence sufficient to satisfy each of the following elements of a claim for
fraud: “(1) a representation, (2) its falsity, (3) its materiality, (4) the speaker’s
knowledge of its falsity or ignorance of its truth, (5) the speaker’s intent that the
representation should be acted upon by the hearer and in the manner reasonably
contemplated, (6) the hearer’s ignorance of the falsity of the representation, (7) the
hearer’s reliance on the representation being true, (8) the hearer’s right to rely
thereon, (9) and the hearer’s consequent and proximate injury.” Midwest Printing,
Inc. v. AM Int’l, 108 F.3d 168, 170 (8th Cir. 1997); Washburn v. Kansas City Life
Ins. Co., 831 F.2d 1404, 1411 (8th Cir. 1987). Fraud “may not be presumed, and a
party’s case will fail if he can show only facts and circumstances which are equally
consistent with honesty and good faith.” Washburn, 831 F.2d at 1411 (citation
omitted).
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“The critical element in a fraud case based on a statement of present intent is
proof that the speaker, at the time of the utterance, actually did not intend to perform
consistently with his words.” Paul v. Farmland Industries, Inc., 37 F.3d 1274, 1277
(8th Cir. 1994) (citation omitted). Toghiyany contends that despite AmeriGas’
representations to the contrary, it never intended the relationship to continue for five
years. Toghiyany, however, presented neither facts nor circumstances that could
support a jury finding that AmeriGas “knew its representations, if made, were false
when made” and that Toghiyany relied on those representations. Id. First, AmeriGas
and Toghiyany entered into an oral agreement in January 1998, pursuant to which
Toghiyany refurbished propane canisters from March 1998 until March 2000, on
premises leased from AmeriGas at its Flint Hill’s property. This arrangement
continued until AmeriGas terminated its relationship with Toghiyany because of the
declining quality of his refurbishing services. Although the agreement was never
reduced to writing, a draft agreement between AmeriGas and a Colorado supplier,
which AmeriGas provided to Toghiyany’s bank to secure his financing, contained a
three-year term of duration. The evidence presented suggests that both parties
intended the relationship to be long term, though the precise duration of the
agreement was unspecified.
Second, Toghiyany has not presented evidence demonstrating that he relied on
AmeriGas’s representation of a long-term business relationship to his detriment. In
February 1998, just prior to beginning operations on the Flint Hill premises,
Toghiyany submitted a second bid to AmeriGas. He sought to refurbish cylinders for
the Ohio and Indiana markets. This bid was unsigned and did not contain a term of
years. If the presence of a term of years was in fact the factor upon which Toghiyany
had relied in entering into the January 1998 agreement with AmeriGas, one would not
expect that such a term would have been absent from a document prepared and signed
by Toghiyany. See Tietjens v. General Motors Corp., 418 S.W.2d 75, 81 (Mo. 1967)
(“It has indeed been laid down as a broad proposition of law that if the means of
knowledge be at hand, and equally available to both parties, and the subject of the
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transaction be open to the inspection of both alike, the injured party must avail
himself of such means, if he would be heard to say that he was deceived by the
representations of the other party . . . .”); see also Cook v. Little Caesar Enterprises,
Inc., 210 F.3d 653, 658 (6th Cir. 2000) (“Reliance upon oral representations or prior
documents, even if false, is unreasonable if the party enters into a subsequent
agreement.”). Thus, the evidence presented neither indicates fraud, nor Toghiyany’s
reliance thereon, but rather a change in circumstance that was to Toghiyany’s
disadvantage. Paul, 37 F.3d at 1277. After reviewing the evidence in the light most
favorable to Toghiyany, we conclude that there exists no genuine issue of material
fact with respect to this claim.
III.
Toghiyany’s final claim on appeal is that the district court erred in denying his
first and second motions to compel discovery. Toghiyany contends that it would not
have been unduly burdensome for AmeriGas to have complied with his request and
that its compliance would have supplied both parties with needed evidence. We
review the district court’s denial of a motion to compel discovery for gross abuse of
discretion. Duffy v. Wolfe, 123 F.3d 1026, 1040 (8th Cir. 1997) (citation omitted).
Our review of the record satisfies us that Toghiyany has not shown that such abuse
occurred in the circumstances of this case.
The judgment is affirmed.
A true copy.
Attest:
CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.
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