S&H Farm Supply, Inc. v. Bad Boy, Inc.

• Decision Date: 31 January 2022
• Docket Number: 21-1121
• Court: U.S. Court of Appeals — Eighth Circuit
• Parties: S&H Farm Supply, Inc. Plaintiff - Appellee v. Bad Boy, Inc. Defendant-Appellant

S&H Farm Supply, Inc. Plaintiff - Appellee
v.
Bad Boy, Inc. Defendant-Appellant

No. 21-1121

United States Court of Appeals, Eighth Circuit

January 31, 2022

Submitted: September 22, 2021

Appeal from United States District Court for the Western District of Missouri - Springfield

Before SMITH, Chief Judge, GRUENDER and STRAS, Circuit Judges.

GRUENDER, CIRCUIT JUDGE

S&H Farm Supply, an operator of farm-equipment dealerships, sued Bad Boy, a manufacturer of zero-turn lawn mowers, alleging that Bad Boy's termination of its dealership agreement was an unlawful breach of contract and a violation of Missouri's outdoor power equipment statute, Missouri Revised Statutes Section

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407.898. The district court^[1] entered judgment on the jury verdict in favor of S&H. Bad Boy appeals the denial of its motion for judgment as a matter of law and its motion for a new trial, as well as the award of attorney's fees, expenses, and bill of costs. We affirm.

I.

S&H operates farm-equipment dealerships in Joplin, Lockwood, Mountain Grove, and Rogersville, Missouri. In 2012, Eric Schnelle acquired his father Wayne Schnelle's ownership interest in S&H and took over as president and owner of the company. Bad Boy manufactures zero-turn lawn mowers and contracts with independent dealerships to sell its mowers to consumers.

S&H became an authorized dealer of Bad Boy mowers when the two companies entered an oral agreement in March of 2008. The agreement created protected sales territories around each S&H store ("protected territory") in which S&H had exclusive rights to sell Bad Boy mowers. However, the parties dispute the size of this protected territory, which S&H claims (but Bad Boy denies) was 30-to-35 miles measured "as the crow flies" around each S&H store. The parties also dispute whether their oral agreement included a growth requirement for sales.

Between 2016 and 2018, S&H's sales of Bad Boy mowers declined significantly. Compared to 2015, S&H sold 91 fewer mowers in 2016, 234 fewer mowers in 2017, and 342 fewer mowers in 2018. Gross revenue dropped to a low of $2 million in 2018 as compared to $3.8 million in 2015. During this time, S&H began to sell a competing brand of mowers called Spartan, and Bad Boy allowed ten new dealerships within a thirty-five-mile radius of S&H stores to sell Bad Boy mowers.

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In September 2018, Bad Boy terminated the agreement with S&H because of the decline in sales, which it argued was due to S&H's sales of Spartan mowers. S&H sued Bad Boy two months later, pleading two causes of action. First, S&H alleged that Bad Boy breached the oral agreement by allowing other dealerships within the protected territory to sell Bad Boy mowers and by terminating the agreement in retaliation for S&H selling Spartan mowers. Second, S&H alleged that Bad Boy violated the outdoor power equipment statute, Missouri Revised Statutes Section 407.898, by terminating the agreement without good cause.

The case was tried to a jury in late 2020. S&H called as witnesses the president and owner of S&H, Eric Schnelle; the general manager of the Joplin location of S&H, Phillip Oeltjen; the general manager of the Rogersville store, Caleb Wehrman; and its expert Wayne Brown, whose testimony the district court admitted over Bad Boy's objection. Brown concluded that S&H lost past profits of $642, 000 and future profits of $5, 237, 000 because of the termination. Bad Boy cross-examined Brown and called its own expert witness to dispute his conclusions.

At the close of evidence, Bad Boy moved for judgment as a matter of law on both claims. The district court denied the motion. The jury found in favor of S&H and awarded $642, 000 in damages for the breach-of-contract claim and $5, 237, 000 for the statutory claim. Bad Boy then filed a renewed motion for judgment as a matter of law and, in the alternative, a motion for a new trial. The district court denied both motions. The district court also granted in part S&H's motion for attorney's fees, expenses, and bill of costs.

Bad Boy appeals the district court's denial of its motion for judgment as a matter of law; the admission of Brown's testimony; the jury instructions; and the award of attorney's fees, expenses, and bill of costs.

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II.

Bad Boy argues that the district court erred in denying its motion for judgment as a matter of law. "We review the denial of a motion for judgment as a matter of law de novo, viewing the evidence in the light most favorable to the jury verdict." Borchardt v. State Farm Fire & Cas. Co., 931 F.3d 781, 784 (8th Cir. 2019). We will "reverse the jury's verdict only if no reasonable juror could have returned a verdict for the non-moving party." Procknow v. Curry, 826 F.3d 1009, 1013 (8th Cir. 2016) (internal quotation marks omitted).

A.

We begin with the breach-of-contract claim. In this diversity case, Missouri substantive law applies. See Erie R.R. v. Tompkins, 304 U.S. 64, 78 (1938). To prevail on a breach-of-contract claim under Missouri law, the plaintiff must prove "(1) the existence of a valid contract; (2) the rights and obligations of each party; (3) a breach; and (4) damages." Kieffer v. Icaza, 376 S.W.3d 653, 657 (Mo. 2012). The damages must have been caused by the breach. Curators of Univ. of Mo. v. Suppes, 583 S.W.3d 49, 61 (Mo.Ct.App. 2019). Missouri recognizes oral contracts as "valid and enforceable." See Piazza v. Combs, 226 S.W.3d 211, 222 (Mo.Ct.App. 2007). A valid contract requires "a mutuality of assent by the parties to the terms of the contract, i.e., a meeting of the minds." Women's Care Specialists, LLC v. Troupin, 408 S.W.3d 310, 315-16 (Mo.Ct.App. 2013). We "look to the objective manifestations of the parties" in determining whether a meeting of minds occurred. Grant v. Sears, 379 S.W.3d 905, 916 (Mo.Ct.App. 2012) (bracket omitted).

Bad Boy argues that the district court erred in denying its motion for judgment as a matter of law on the breach-of-contract claim because S&H failed to present sufficient evidence to prove two required elements of the claim: the existence of a valid contract and that the alleged damages were caused by the breach.

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1.

First, Bad Boy argues that S&H failed to prove the existence of a valid contract because there was no evidence of mutual assent for the scope of the protected territory. According to Bad Boy, S&H did not prove a meeting of the minds as to a 30-to-35-mile radius, and even if it had, it did not prove a meeting of the minds as to whether this radius was to be measured as the crow flies or by driving distance.

We disagree. Bad Boy argues that Schnelle's testimony regarding the size of the protected territory was equivocal, emphasizing that he recalled "talk[ing with Bad Boy] about space in general" and only "kind of lock[ing] down on . . . 30 to 35 miles as a reasonable area." Furthermore, Schnelle admitted on cross-examination that he settled on that number only after being "grilled . . . to pick mileage" during a deposition. But Schnelle reiterated the 30-to-35-mile figure more definitively at other points during his testimony. It was within the province of the jury to assess Schnelle's credibility and resolve conflicting testimony, see Taylor v. Otter Tail Corp., 484 F.3d 1016, 1020 (8th Cir. 2007), and a reasonable jury could rely on Schnelle's testimony supporting S&H's position that the protected territory was 30-to-35 miles to do so.

The jury also had the Eubanks email to rely upon when evaluating the question of how the distance was to be measured. In that letter, Eubanks observed that the nearest distance between his proposed store and an S&H dealership would be "between 35.4 to 41.7 miles" by car. Relying on that point, Eubanks stated that "[i]t was [his]...