64 F.3d 1202 (8th Cir. 1995), 94-3910, Rolscreen Co. v. Pella Products of St. Louis, Inc.

Docket Nº94-3910.
Citation64 F.3d 1202
Party NameROLSCREEN COMPANY, an Iowa Corporation, Appellee, v. PELLA PRODUCTS OF ST. LOUIS, INCORPORATED, a Missouri Corporation, Appellant.
Case DateSeptember 05, 1995
CourtUnited States Courts of Appeals, Court of Appeals for the Eighth Circuit

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64 F.3d 1202 (8th Cir. 1995)

ROLSCREEN COMPANY, an Iowa Corporation, Appellee,



Corporation, Appellant.

No. 94-3910.

United States Court of Appeals, Eighth Circuit

September 5, 1995

Submitted June 14, 1995.

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James Robert Keller, St. Louis, MO, argued (Robert G. Allbee, Des Moines, IA, on the brief) for appellant.

Alan H. Silberman, Chicago, IL, argued (Catherine A. Van Horn, Chicago, IL and Kim Walker, Des Moines, IA, on the brief), for appellee.

Before BEAM and MURPHY, Circuit Judges, and VAN SICKLE, [*] Senior District Judge.

DIANA E. MURPHY, Circuit Judge.

After a jury returned its verdict for Rolscreen Company (Rolscreen) during the first

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phase of a bifurcated trial, the district court 1 dismissed the remaining counterclaims brought by Pella Products of St. Louis, Inc. (Products), one of Rolscreen's distributors, and entered judgment for Rolscreen. Products appeals from that judgment. We affirm.


Rolscreen, which manufactures windows, doors, and skylights, has its headquarters in Pella, Iowa. Products, a Missouri corporation located in St. Louis, became an independent distributor for Rolscreen in 1968. For the next fifteen years, Rolscreen and Products did business without a written agreement. In 1983, Rolscreen executed a distribution agreement with each of its distributors around the country, including Products. This case grows out of the end of the parties' relationship in 1992.

Products was a successful distributor for many years and sold Rolscreen products both in eastern Missouri and southwestern Illinois, but its market share declined in the late 1980s. Claiming to be unhappy with the declining sales performance, Rolscreen sent a letter to Products on March 8, 1991, outlining the market share and profit goals it expected the distributor to reach. The letter indicated that Products' distribution agreement would be terminated on December 1, 1991 if it could not meet those objectives.

Walter Blaine, the owner of Products since 1968, believed the goals set by Rolscreen were unrealistic and began looking for someone to buy his company. Meanwhile, Rolscreen wrote Products on November 15 to note that the termination date was only two weeks away, but wrote again on November 26 to extend that date until March 1, 1992. The November 26 letter explicitly stated that the existing distribution agreement would continue to apply until the termination and that the extension would permit Rolscreen to gather all data on the distributor's performance through November 30 and would give Walter Blaine more time to sell his business.

Shortly after granting the extension, Rolscreen filed this case in the Southern District of Iowa seeking a declaratory judgment that its conditional termination of Products would be proper under the distribution agreement. Two months later in February 1992, Products in turn filed a complaint in the Eastern District of Missouri seeking damages and a preliminary injunction. Products also moved to dismiss the case filed by Rolscreen or to have it transferred to Missouri; these motions were denied.

As the March 1 termination date approached, Products was continuing negotiations with a potential buyer, and Rolscreen granted another extension with an indefinite termination date. On April 23 when no sale had been consummated, Rolscreen wrote again, setting a termination date of April 30, 1992. 2 In order to obtain more time to complete the sale, Products planned to seek a temporary restraining order to prevent Rolscreen from terminating the agreement. In response, Rolscreen agreed to extend the termination date to May 7, 1992, and also committed to fill Products' orders until the sale closed if a sale agreement were signed by May 7. Products and its purchasers signed a sale agreement on May 2, 1992. The sale closed on July 28, and the purchasers became the new distributor for Rolscreen.

The litigation became consolidated in the Southern District of Iowa. Products' case in Missouri was dismissed in October 1992, on the grounds that Rolscreen's was filed first.

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One month later, Products filed counterclaims in this case for recoupment, breach of contract, tortious interference, promissory estoppel, prima facie tort, and violation of the Illinois Franchise Disclosure Act.

In September 1993, the district court dismissed Rolscreen's complaint and Products' counterclaims for promissory estoppel and tortious interference. Since there was no longer any relationship between the parties, the complaint for a declaratory judgment was moot. The district court then decided in June 1994 to bifurcate the trial on the remaining counterclaims. The first phase would focus on whether Rolscreen had terminated the distribution agreement with Products and whether Products was a franchisee under the Illinois Franchise Disclosure Act.

After several days of testimony in August 1994, a jury decided that Rolscreen had not terminated the agreement and that Products was not a franchisee. Rolscreen then moved to dismiss the remaining counterclaims. After Products made an oral proffer of the evidence it would present in the second phase, the court concluded that its showing was insufficient and granted Rolscreen's motion to dismiss. Judgment was entered in Rolscreen's favor, and Products' motion for judgment as a matter of law or a new trial was denied.

Although the background facts are largely undisputed, the parties interpret them differently. Products believes that Rolscreen wrongfully terminated the agreement in April 1992. It believes that its performance was not unsatisfactory so that Rolscreen was not entitled to use the agreement's conditional termination provision. Products also asserts that Rolscreen had improper motives for terminating the agreement, including a desire to award the St. Louis distributorship to a former Rolscreen vice president and a dislike for Kenneth Blaine, Walter Blaine's choice as his successor at Products. Rolscreen contends that the relationship between the parties was not terminated within the meaning of the contract, but rather ended when the sale of Products was concluded in July 1992. It believes that the issuance of the conditional notice of termination was proper under the agreement and was based on legitimate business concerns.


Products first challenges several decisions of the district court made before trial. Products argues that the court erred when it granted summary judgment to Rolscreen on the tortious interference and promissory estoppel counterclaims and when it denied its motions to transfer the case to Missouri.

Products' counterclaims for tortious interference and promissory estoppel are based on the assertion that Rolscreen had approved Products' succession plan. Products says it prepared a written plan in 1982 to provide that Kenneth Blaine would become its president upon Walter Blaine's retirement or death. The plan was sent to Rolscreen it maintains, but neither party could locate the document. In his deposition Walter Blaine testified that a Rolscreen officer orally approved the plan, saying it was the best he had seen. Products asserts that this approval amounted to a promise by Rolscreen that the distributorship would continue indefinitely, barring some completely unforeseen problem. 3 Products claims it based the expansion of its business on the understanding that Kenneth Blaine would succeed his father.

Both sides view Missouri law as controlling. Under it the elements of a tortious interference claim are:

(1) a contract or valid business expectancy; (2) defendant's knowledge of the contract or relationship; (3) a breach induced or caused by defendant's intentional interference; (4) absence of justification; and (5) damages.

Nazeri v. Missouri Valley College, 860 S.W.2d 303 (Mo.1993). A.L. Huber & Son, Inc./Clevenger Homes, Inc. v. Jim Robertson Plumbing, Inc., 760 S.W.2d 496, 499 (Mo.Ct.App.1988). The elements of a promissory estoppel claim are:

(1) a promise; (2) detrimental reliance on the promise; (3) injustice can be avoided

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only by enforcement of the promise; and (4) the promisor should have or did in fact clearly foresee the precise action which the promisee took in reliance.

A.L. Huber & Son, Inc./Clevenger Homes, Inc. v. Jim Robertson Plumbing, Inc., 760 S.W.2d 496, 498 (Mo.Ct.App.1988); see also In re Jamison's Estate, 202 S.W.2d 879, 886 (Mo.1947).

The district court concluded that Products could not prevail on either claim because it could not prove the existence of a valid business relationship or expectancy for the tortious interference cause of action and did not have sufficient evidence of a binding promise for the promissory estoppel claim.

We review a grant of summary judgment de novo; like the district court, we must construe the evidence in the light most favorable to Products, the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S.Ct. 2505, 2513-14, 91 L.Ed.2d 202 (1986). Summary judgment is appropriate where there is no genuine issue of material fact for trial and the moving party is entitled to judgment as a matter of law. Id. at 247-48, 250, 106 S.Ct. at 2509-10, 2511. The nonmoving party must show that there is some genuine issue requiring trial. Id. at 250, 106 S.Ct. at 2511.

The parties entered into a formal distribution agreement in 1983. That agreement required Rolscreen's written consent before a sale or transfer of any distributorship and set out explicit procedures for termination of a distributorship. In 1985, Rolscreen distributed a policy statement on succession, which was integrated into the distribution agreement. Under that policy Rolscreen encouraged its distributors to develop succession plans, but reserved final approval of any...

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