Garshman Co., Ltd. v. General Electric Co.
| Citation | 176 F.3d 1 |
| Decision Date | 04 March 1999 |
| Docket Number | 98-1682,Nos. 98-1681,s. 98-1681 |
| Parties | The GARSHMAN COMPANY, LTD., Plaintiff, Appellee, v. GENERAL ELECTRIC COMPANY, Defendant, Appellant. The Garshman Company Ltd, Plaintiff, Appellant, v. General Electric Company, Defendant, Appellee. . Heard |
| Court | United States Courts of Appeals. United States Court of Appeals (1st Circuit) |
Barbara Friedman Yaksic, with whom Benesch, Friedlander, Coplan & Aronoff, was on brief, for General Electric Company.
Louis M. Ciavarra, with whom Kimberly A. Stone, O'Brien and Bowditch & Dewey, LLP were on brief, for The Garshman Company, Ltd.
Before BOUDIN, Circuit Judge, MAGILL, * Senior Circuit Judge, and
This appeal centers around a contract dispute between The Garshman Company, Limited ("Garshman") and the General Electric Company ("GE"). Garshman brought claims against GE in the district court for breach of contract, estoppel, quantum meruit, breach of the implied covenant of good faith and fair dealing, and a violation of Mass. Gen. Laws ch. 93A (). The jury found for Garshman on all claims before it. Judge Gorton found for GE on the Mass. Gen. Laws ch. 93A claim.
On appeal, GE challenges the district court's refusal to instruct the jury on the application of the Nevada Exclusive Listing Statute. Garshman challenges both the court's denial of its claim under Mass. Gen. Laws ch. 93A and the court's denial of its post-trial Motion to Amend or Alter Judgment. We affirm the district court in all respects.
GE owned the Springer Mine located in Pershing County, Nevada (the "Mine"). The Mine was formerly used to mine tungsten, a substance used in light bulbs, but the Mine had not been operational for many years. Garshman is a company that sells the assets of its clients for a fee.
In 1993, GE decided to sell-off the Mine's assets. After negotiations between Garshman and GE, a written contract was signed by which Garshman and a company called "GE Capital" (also known as "Second Source") would become the exclusive agents for the sale of the Mine's assets (the "Auction Agreement"). The Auction Agreement provided that Garshman would receive a 12% commission upon the sale of the assets. The Auction Agreement also provided for liquidated damages in the event that GE violated the terms of the Auction Agreement. Acting under the Auction Agreement, Garshman scheduled an "absolute auction" for June 24, 1994.
Soon after the Auction Agreement was signed, Sky Scientific, Inc. ("Sky") approached Garshman about buying the Mine's assets and some of the surrounding land before the scheduled auction. Garshman relayed the offer to GE. GE and Garshman (as the jury found) then orally agreed that GE would pay Garshman the commission on the Sky transaction when Sky paid a non-refundable deposit and signed a Letter of Intent.
As a result of continuing negotiations, Sky eventually signed a Letter of Intent and made a non-refundable deposit of $75,000. Thereafter, GE directed Garshman to withdraw the assets from the scheduled auction so they could be included in the sale to Sky.
Ultimately, the transaction between GE and Sky fell through. No auction or sale of either the Mine or its assets ever occurred. When Garshman and GE Capital requested payment by GE, GE denied its obligation to pay the commission. This lawsuit ensued.
After a four day trial, the jury made the following findings:
(1) GE withdrew the Mine's assets from the auction without a waiver by Garshman;
(2) It was unreasonable for GE to terminate the Auction Agreement;
(3) Under the terms of the oral contract, the minimum required to trigger GE's obligation to pay Garshman its commission was for Garshman to procure a buyer who paid a non-refundable deposit and signed a Letter of Intent;
(4) The events described in (3) as the minimum required to trigger GE's obligation did occur, and the jury finding of amount of damages to Garshman attributable to these events was $372,000;
(5) GE was estopped from denying its obligation to pay Garshman a commission, and the value of Garshman's detrimental reliance was $10,000;
(6) Garshman was entitled to recover under quantum meruit in the amount of $40,000;
(7) GE committed a breach of its duty to act in good faith and to deal fairly in its conduct toward Garshman; and
(8) GE's breach of the implied covenant of good faith and fair dealing caused damages to Garshman in the amount of $100,000.
See GE's Appendix at A-161.
In a Memorandum and Order dated November 18, 1997, Judge Gorton evaluated Garshman's claim under Mass. Gen. Laws ch. 93A. See A-188. Judge Gorton held that "[b]ecause all of GE's conduct and much of Garshman's conduct occurred outside Massachusetts, ... GE has met its burden of proving that its conduct did not occur primarily and substantially in Massachusetts and thus, Garshman has no claim under Chapter 93A." See A-190-92.
On November 26, 1997, the Clerk at Judge Gorton's direction entered judgment for the plaintiff in the amount of $504,754.86 ($404,754.86 of liquidated damages and $100,000 for the breach of the implied covenant of good faith and fair dealing) plus pre-judgment interest in the amount of $135,039.21, for a total of $639,794.07. See A-194. The judgment was to bear post-judgment interest at the rate of 5.42% per annum. See id.
Garshman filed a post-trial motion to amend or alter the judgment to reflect the fact that the jury found breaches of two contracts. See A-216. Garshman argued that it was owed both the liquidated damages for breach of the Auction Agreement and an additional $372,000 for breach of the oral contract. Garshman further argued that the amount of damages awarded for estoppel and quantum meruit should have been added to, rather than subsumed in, the liquidated damages. See A-216-17. The district court denied the motion, stating that a plaintiff cannot recover twice for the same loss. See A-217.
Both parties then filed motions for partial summary judgment on the implied covenant claim. Garshman also filed a motion to clarify the previous order. On April 29, 1998, Judge Gorton declared moot both motions for partial summary judgment and amended the judgment to reflect the fact that the jury awarded Garshman $100,000 for GE's breach of the implied covenant of good faith and fair dealing but, to avoid duplicative recovery, further amended the judgment to preclude Garshman from collecting on that claim beyond the amount of damages awarded for breach of the Auction Agreement.
Three issues are before us on appeal: whether the trial court properly refused to charge the jury on the Nevada Exclusive Listing Statute; whether the trial court properly refused to allow Garshman to recover damages for both the breach of the Auction Agreement and the breach of the oral contract; and whether the trial court improperly denied Garshman's claim under Mass. Gen. Laws ch. 93A.
The sole issue raised by GE on appeal is whether the trial court erred in refusing to allow the jury to determine whether Nevada's Exclusive Listing Statute (the "Statute") applied to the disputed transactions. The Statute provides that:
Every brokerage agreement which includes a provision for an exclusive listing must:
1. Be in writing.
2. Have set forth in its terms a definite, specified and complete termination.
3. Contain no provision which requires the client who signs the brokerage agreement to notify the real estate broker of his intention to cancel the exclusive features of that listing after termination of the listing.
4. Be signed by both the client or his authorized representative and the listing agent or his authorized representative in order to be enforceable.
A brokerage agreement is an "exclusive listing" within the meaning of 645.320 if it is (1) an agreement between an owner and a broker, (2) for the sale of real property, (3) that excludes other brokers. See Morrow v. Barger, 103 Nev. 247, 737 P.2d 1153, 1155, n. 2 (Nev.1987).
It is clear to this court, and GE agrees, that the Auction Agreement concerned the Mine's assets only, and not any real estate. The Statute, then, does not apply to the Auction Agreement. Although the oral agreement did involve the sale of some real estate, the Statute does not apply to that transaction either.
GE's position is that because the Auction Agreement contained a provision for exclusivity, the oral agreement between GE, Garshman and Sky must also be interpreted as containing that same provision. In support of this position, GE contends that the oral agreement was, in essence, an oral modification of the Auction Agreement and, thus, the exclusive listing provision in the Auction Agreement must apply in full force to the Sky transaction. We reject this contention.
The Statute is not a declaration about oral brokerage agreements generally. It applies only to those oral brokerage agreements that "include a provision for an exclusive listing." The Statute does not say anything at all about an oral brokerage agreement like the one in this case.
The events of this case do not represent an ordinary transaction. No exclusive listing provision was included in the oral agreement. Also, the evidence does not support a determination that the terms of the Auction Agreement were incorporated into the oral agreement. The Statute is, therefore, irrelevant to this case. For this reason, GE's complaint on appeal that the trial court failed to instruct the jury on the Exclusive Listing Statute is without merit, quite apart from grounds of procedural preclusion raised by Garshman. The trial court has no duty to instruct the jury on matters of law that are irrelevant to the special questions they are directed to answer in a verdict answering special questions only.
Garshman argues that the trial court erred in entering judgment...
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