Slidell v. Millennium Inorganic Chemicals, Inc., 05-3434.

• Decision Date: 23 August 2006
• Docket Number: No. 05-3434.,05-3434.
• Parties: SLIDELL, INC., Appellant, v. MILLENNIUM INORGANIC CHEMICALS, INC., Appellee.
• Court: U.S. Court of Appeals — Eighth Circuit

460 F.3d 1047

SLIDELL, INC., Appellant, v. MILLENNIUM INORGANIC CHEMICALS, INC., Appellee.

No. 05-3434.

United States Court of Appeals, Eighth Circuit.

Submitted: April 19, 2006.

Filed: August 23, 2006.

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Laurie Jean Miller, argued, Minneapolis, MN (Thomas Fraser and Jeffrey W. Post, on the brief), for appellant.

Scott A. Smith, argued, Minneapolis, MN (Michael T. Nilan, Matthew E. Johnson, Amanda M. Cialkowski, and Nicole J. Druckrey, on the brief), for appellee.

Before WOLLMAN, HANSEN, and BENTON, Circuit Judges.

WOLLMAN, Circuit Judge.

Slidell, Inc. (Slidell) appeals from the judgment entered by the district court¹ on the jury verdict in its breach of contract claim against Millennium Inorganic Chemicals, Inc. (Millennium). Additionally, Slidell appeals from the district court's denial of its motion for judgment as a matter of law and for new trial and for an order to determine liability for wrongful injunction. We affirm.

I.

Slidell manufactures automated packaging equipment used in the titanium dioxide industry. Millennium, which produces titanium dioxide, decided to purchase from Slidell seven fully automated packaging machines to be installed in its facilities in Ohio, England, and France. After months of negotiation, Slidell and Millennium entered into a contract providing that Slidell would manufacture the seven machines for a total contract price of $10,350,465,² which included up to a twelve percent discount that Millennium would receive only if the fundamental aspects of all seven machines were identical. The contract further provided that:

Waivers shall not be binding unless set forth in writing and signed by the party allowing the waiver. No waiver of a breach of any provision of this Contract shall constitute a waiver of any other breach of the provision or any breach of any other provisions of this Contract.

Appellant's App. at 371. Additionally, the contract provided that any changes to the final scope of the project were to be made in accordance with a written order to Slidell and agreed to by the parties. The contract did not set a delivery date for the equipment but instead required Millennium to make milestone progress payments to Slidell throughout the course of performance. Testimony at trial indicated that the parties understood that the seven machines would be completed within approximately sixteen months. Additionally, the contract required that Slidell submit biweekly status reports and updated Gantt schedules to Millennium. The contract specified that the agreement should be interpreted in accordance with Minnesota law.

In October 2000, friction developed between Slidell and Millennium over the equipment's computerized supervisory system. Millennium decided to upgrade the supervisory system specified in the contract and executed two change order development requests that authorized Slidell to start designing the system. In March 2001, Slidell informed Millennium that completing the supervisory system to Millennium's new specifications would add another $1.6 million to the contract price. Millennium was dissatisfied with this price and requested that Slidell remove the supervisory system from the scope of its work.

In May 2001, Millennium confirmed that it was removing the supervisory system from the scope of the contract with Slidell. There is evidence that around May 11, sensitive information regarding Slidell's design of the machines was provided to the RoviSys Company (RoviSys) without Slidell's consent. Throughout the rest of May, Millennium had meetings with Rovi-Sys regarding its manufacture of the new supervisory system. Testimony at trial indicated that Slidell was never informed of these meetings. Around this same period of time, Slidell met with Millennium to discuss the removal of the supervisory system from their contract.

On June 21, 2001, Millennium asked Slidell for permission to share Slidell's technical information with RoviSys for the purpose of providing RoviSys with background information on the packaging machines so that it could design the new supervisory system. Slidell replied that this would require a separate nondisclosure agreement with RoviSys. Slidell prepared the agreement, RoviSys signed it, and Millennium sent it to Slidell for its signature. Without so informing Millennium, Slidell did not sign the agreement. Millennium then shared Slidell's design documents with RoviSys.

In August 2001, Slidell prepared Change Order No. 5, which, in accordance with Millennium's request, removed the supervisory system from the scope of Slidell's work without any change in the contract price. Slidell sent the change order to Millennium for its signature, representing to Millennium that it would sign Change Order No. 5 once Millennium signed it. Notwithstanding this representation, Slidell never signed the order, nor did it inform Millennium that it had not done so. There is evidence that in August and September of 2001, Slidell threatened to sue Millennium if it failed to perform on the contract or failed to accept a change order to remove the 12 percent discount.

On January 17, 2002, Slidell sued Millennium for breach of contract, promissory estoppel, quantum meruit, equitable estoppel, and violations of the Minnesota Uniform Trade Secrets Act, M.S.A. §§ 325C.01-.08. Millennium counterclaimed for breach of contract, specific performance, replevin, unjust enrichment, an equitable lien, and a constructive trust. At the time Slidell commenced this action, Millennium had paid Slidell $8.82 million in progress payments under the contract. This was $500,000 more than the amount to which Slidell was entitled under the milestone progress payment schedule set forth in the contract. Slidell's damages expert testified that at the time Slidell stopped work on the machines, Slidell had realized a net profit on the job of nearly $1.5 million. Millennium's damages expert determined this net profit to be about $4.6 million.

In February 2002, Slidell informed Millennium that it intended to disassemble the partially completed machines and sell and return the parts and components for value. On March 7, 2002, Millennium moved for a preliminary injunction prohibiting Slidell from selling, returning, or transferring any of the equipment or components to third persons for value pending the outcome of the trial on the merits. The district court granted the motion, entered the injunction, and required Millennium to post a $2 million injunction bond to pay any costs or damages incurred by Slidell in the event that it was found that Slidell had been wrongfully enjoined.

In October and November of 2003, Slidell and Millennium filed cross-motions for summary judgment. On June 28, 2004, the district court granted Slidell's motion to dismiss Millennium's equitable claims for a constructive trust, an equitable lien, and unjust enrichment. The district court also granted Millennium's motion to dismiss Slidell's claim for equitable estoppel but denied summary judgment as to all remaining claims.

On October 4, 2004, both parties filed their own statements of the case. Millennium's statement related that Slidell's work under the contract proceeded slowly and that there were disputes about wire colors for the machines. Among other things, Millennium also asserted that Slidell was deficient in providing the appropriate level of management for the project. Slidell's statement focused on Millennium's alleged misappropriation of trade secrets, breach of contract, quantum meruit, and promissory estoppel regarding long-term European field support.

Prior to trial, both parties submitted proposed jury instructions. Slidell's proposed instruction on waiver stated that to establish waiver, "Millennium must prove the heightened standard that (a) Slidell's actions were so clear and unequivocal that no other reasonable explanation of the conduct is possible, and (b) Millennium must relied [sic] upon the conduct to its detriment." Appellant's App. at 287. It also required the jury to find that Slidell intentionally relinquished the contract provision providing that all waivers be in writing before it could find waiver. Finally, the proposed instruction stated that if Slidell had clearly communicated to Millennium that it reserved its rights under the contract, it did not waive these rights. Slidell's proposed instruction on equitable estoppel provided that the jury must find that Slidell's representations must be enforced to avoid injustice before it could find equitable estoppel and that the jury could not find equitable estoppel if Millennium had engaged "in any misleading tactics, concealments, misrepresentations and/or defaults that exacerbated the situation." Appellant's App. at 288. Slidell's proposed instruction on prior breach provided that if the jury found "that Slidell's decision to stop performance of the contract and initiate this lawsuit occurred before Millennium's breach, then Millennium's breach is excused." Appellant's App. at 287.

The trial occupied some twenty-three days during January and February 2005. Both Millennium and Slidell offered testimony relating the events that had occurred between the parties and testimony that the project had been delayed for numerous reasons. Millennium also offered testimony that Slidell's initial project manager lacked experience and that she had failed to provide the biweekly status reports and updated Gantt schedules to Millennium as required by the contract. At the close of the evidence, Slidell moved for judgment as a matter of law on Millennium's remaining equitable claims for specific performance and replevin, as well as its affirmative defense of equitable estoppel. Millennium responded by voluntarily dismissing its specific performance and replevin claims. The district court denied Slidell's motion to dismiss Millennium's equitable estoppel defense and submitted the remaining...