Migerobe, Inc. v. Certina USA, Inc.

• Decision Date: 01 March 1991
• Docket Number: No. 89-7105,89-7105
• Citation: 924 F.2d 1330
• Parties: 14 UCC Rep.Serv.2d 59 MIGEROBE, INC., Plaintiff-Appellee, v. CERTINA USA, INC., Defendant-Appellant.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 1330

924 F.2d 1330

14 UCC Rep.Serv.2d 59

MIGEROBE, INC., Plaintiff-Appellee, v. CERTINA USA, INC., Defendant-Appellant.

No. 89-7105.

United States Court of Appeals,

Fifth Circuit.

March 1, 1991.

Roy D. Powell, Jackson, Miss., Jon W. Tryon, Kirk L. Wolgemuth, Tryon, Friedman & Espenshade, Lancaster, Pa., for defendant-appellant.

Alex A. Alston, Jr., Darren J. LaMarca, Jackson, Miss., for plaintiff-appellee.

Appeal from the United States District Court for the Southern District of Mississippi.

Before THORNBERRY, JOHNSON and DAVIS, Circuit Judges.

THORNBERRY, Circuit Judge:

A watch manufacturer appeals a jury verdict which held that it had breached an oral contract to deliver an order of watches to a retail operator. The jury held that the manufacturer was liable to the retailer for $157,133.00 in damages as a result of the breach. Finding that the retail operator presented sufficient evidence to support a finding of breach and sufficient evidence to justify the damage award, we AFFIRM.

FACTS AND PROCEDURAL HISTORY

Appellant, Certina USA, is a watch manufacturer located in Lancaster, Pennsylvania. Appellee, Migerobe Inc., is a Mississippi corporation that owns and operates jewelry counters in McRae's department stores, which are located throughout the Southeast. This suit is based on the breach of an alleged oral contract that the two companies entered into in October 1987.

Certina sells its watches through the efforts of traveling salesmen, who are either salaried employees of Certina or independent representatives paid on a commission basis. Gerald Murff was one such representative, and his sales territory included Mississippi. Migerobe had purchased watches through Murff before, and, during the summer of 1987, Migerobe contacted Murff to notify him that Migerobe would be interested in buying Certina watches if the company decided to sell a large portion of its inventory at reduced prices. Migerobe suspected that Certina might make such an offer because another retailer recently had decided to stop carrying the Certina line of watches, and Migerobe believed that this would create a backlog of inventory for the manufacturer. In fact, Certina had decided to institute a special promotion to eliminate its inventory as a result of a corporate decision to withdraw its watches from the United States market.

Migerobe was hoping to acquire the Certina watches so that they could be used as "door-busters" for an After-Thanksgiving sales promotion. Doorbusters or "loss leaders" are items offered at a low price, which are designed to increase the traffic flow through a store and, thereby, increase corollary sales (the sale of non-advertised items). Murff later became aware that Migerobe was planning to use the watches in this special After-Thanksgiving promotion.

In a letter dated September 14, 1987, Murff responded to Migerobe's request, saying that he was "pursuing a special price on the Certina inventories on [Migerobe's] behalf" and that he would keep the company informed of his progress. Migerobe Record Excerpts at 5 (Plaintiff's Exhibit 64). At the time, Murff was attempting to negotiate a special discounted price with Certina's vice president of retail sales, William Wolfe. On October 21, 1987, Wolfe provided Murff with a list of watches from Certina's inventory that Murff could offer Murff kept his October 29 appointment with Migerobe. During the course of the day, Murff made several phone calls to Certina's home office in Lancaster, Pennsylvania to verify the number of watches in Certina's inventory, and to secure specific payment terms. After a full day of negotiating for particular quantities and styles as well as payment terms and a shipping date, Migerobe agreed to purchase over 2,000 Certina watches at a price of forty-five dollars each. Murff phoned Certina's Lancaster office one final time to report the sale, and Wolfe's administrative assistant recorded it onto a Certina order form.

to Migerobe at a price of forty-five dollars each. Murff scheduled an October 29 meeting with Migerobe to present the offer. Prior to this meeting, Murff requested and received an additional list of watches from Wolfe, which were to be included in the offer to Migerobe.

On November 4, 1987, Certina's national accounts manager, Don Olivett, called Migerobe to say that Certina would not ship the watches that had been ordered on October 29. The president of Certina, John Gelson, later explained that the order was being rejected because the offered price was lower than that offered to other customers, and he feared that the offer might constitute a violation of the Robinson-Patman Act. Migerobe brought suit in district court for repudiation of the contract and, after a five-day trial, a jury awarded it $157,133.

After the district court denied its motion for judgment notwithstanding the verdict and for a new trial or remittitur, Certina filed a timely appeal. Certina urges us to reverse the district court based on several alleged errors. First, it argues that Migerobe failed to submit writings sufficient to satisfy the statute of frauds. Second, it argues that the district court misled the jury by failing to include one of Certina's suggested jury instructions as part of the charge to the jury. Third, it argues that Migerobe presented insufficient evidence to establish that Certina's salesman acted with actual, implied, or apparent authority in contracting for the sale of watches. Finally, Certina argues that Migerobe presented insufficient evidence to establish that Certina's failure to deliver the requested watches caused Migerobe to suffer a loss in corollary sales.

DISCUSSION

I. Statute of Frauds.

A writing must meet three requirements to satisfy the statute of frauds:

1) the writing must be "sufficient to indicate that a contract for sale has been made between the parties,"

2) the writing must be "signed by the party against whom enforcement is sought," and

3) the writing must specify a quantity.

Miss.Code Ann. Sec. 75-2-201 (1972); Perdue Farms, Inc. v. Motts, Inc., 459 F.Supp. 7, 13 (N.D.Miss.1978); Derden v. Morris, 247 So.2d 838, 839 (Miss.1971). The statute of frauds can be met through the integration of several documents, each of which alone might not be sufficient to meet these three requirements.

A "writing" for the purposes of the statute of frauds may consist of separate writings, connected together by express reference to each other or internal evidence of their unity, connection, or relation; by so connecting the writings, otherwise separate documents may incorporate by reference the terms of each document.

Hunt Oil Co. v. FERC, 853 F.2d 1226, 1248 (5th Cir.1988) (citing Affiliated Investments, Inc. v. Turner, 337 So.2d 1263 (Miss.1976) and Ludke Electric Co. v. Vicksburg Towing Co., 240 Miss. 495, 127 So.2d 851 (1961)). The signed writing need not refer explicitly to the unsigned writing; a Mississippi court would consider them to be integrated if the signed writing "makes[s] at least an implied reference to the other writing." Ludke, 127 So.2d at 854.

In the case before us, the integration of two signed documents and one unsigned document tends to show that the parties had made a contract for sale. The two signed writings include an internal Of the two signed writings, the memorandum from Wolfe to Oliver, dated October 29, 1987, is the most enlightening. In relevant part, the memo states that "Jerry Murff has been authorized to sell" Certina watches to Migerobe at a special forty-five dollar price. (emphasis added). Wolfe goes on to explain that "Murff's commission on this sale has been set at 3% so that our net selling price is $43.65." (emphasis added). Certina claims that the purpose of this memorandum was to solicit authorization from Oliver so that Wolfe could go ahead with the Migerobe offer. But Gelson, the president of the company, ultimately determined that the sale should be rejected, not Oliver. Moreover, the language used in the memorandum does not support Certina's interpretation that the memorandum was simply a request for authorization. On the contrary, the only mention of authorization occurs in the past tense, indicating that Murff had already been authorized to make the sale.

memorandum from Wolfe to Certina's chief financial officer, R.B. Oliver, see Record, vol. 2 at 305, and an internal memorandum from Charles Westhaeffer, a clerical employee in charge of inventory control, to several other employees, see Record, vol. 2 at 309. The unsigned writing includes a Certina order form, see Record, vol. 2 at 307.

The second signed writing is a memorandum to several Certina employees from Charles Westhaeffer, the person in charge of inventory control. The handwritten note announces that a new "promotion code has been set up to cover a special order from Migerobe." The note serves as further confirmation that a transaction had taken place between Certina and Migerobe. Additionally, the note contains the same promotion code, "03," that is found on the Certina order form that was completed by Wolfe's administrative assistant in Lancaster.

The pertinent unsigned writing, the Certina order form, lists, among other things, the quantity, styles, and prices of watches ordered. The form includes other information which tends to connect it with the Wolfe and Westhaeffer memos as well, such as the customer name, "Migerobe," the promotion code, "03," the name of the salesman, "Murff," and the initials of Charles Westhaeffer, dated "10/30," the same date on which he sent out the signed memo described above. The connection among these three documents was sufficiently strong to justify their integration into a writing that would satisfy the statute of frauds under Mississippi case law.

In its brief to this court, Certina alternatively argues that section 75-2-201(2) of the Mississippi Uniform Commercial Code allowed it to reject the Migerobe offer within ten days after it...