Glenn Distributors v. Carlisle Plastics
| Decision Date | 24 July 2002 |
| Docket Number | No. 00-2790.,No. 00-2710.,00-2710.,00-2790. |
| Citation | 297 F.3d 294 |
| Parties | GLENN DISTRIBUTORS CORPORATION, Appellant, v. CARLISLE PLASTICS, INCORPORATED, Appellant. |
| Court | U.S. Court of Appeals — Third Circuit |
James T. Smith (Argued), Rebecca D. Ward, Blank, Rome, Comisky & McCauley, Philadelphia, Pennsylvania, for appellant.
David B. Snyder (Argued), Mindee J. Reuben, Fox, Rothschild, O'Brien & Frankel, Philadelphia, Pennsylvania, for appellee.
Before: SLOVITER and McKEE, Circuit Judges, and DEBEVOISE, District Judge.*
This appeal arises out of a lawsuit Glenn Distributors Corp. filed against Carlisle Plastics, Inc. for breach of a contract in which Glenn had agreed to purchase certain merchandise from Carlisle. At trial, the jury agreed that Carlisle had breached the contract and it awarded Glenn actual damages as well as lost profits. However, the district court thereafter granted Carlisle's motion for judgment as a matter of law as to the award of lost profits. The court held that, although Glenn proved the amount of its lost profits, Glenn's failure to establish that it made reasonable efforts to "cover" precluded recovery of those consequential damages.
Glenn appeals the court's order vacating the award of lost profits, and Carlisle has filed a cross-appeal in which it argues that the district court erred in failing to hold as a matter of law that it did not breach the contract with Glenn.1 For the reasons that follow, we will affirm the district court's ruling as to Carlisle's liability, but reverse the order vacating the jury award for lost profits.
Glenn is a purchaser and reseller of various types of close-out merchandise. Carlisle manufactures plastic goods, particularly trash bags, and sells them to wholesale and retail customers, including close-out purchasers such as Glenn. Glenn and Carlisle have had a business relationship since at least 1995. On June 5, 1997, Carlisle faxed Glenn a list of close-out merchandise that Carlisle had available for sale. That list specified several types and quantities of trash bags.
The phrase, "[a]ll quantities subject to change," or "[q]uantities subject to change[]" appeared at the bottom of each of the five pages comprising the June 5 list. J.A. at 41-46. Glenn Segal, the president of Glenn Distributors, responded to the fax on June 12, 1997 by sending Purchase Order No. 10354 ("the Purchase Order") to Sandy Johnson at Carlisle. The Purchase Order was for all of the close-out goods on the June 5 list. The Purchase Order specifically referenced that list stating: "QUANTITIES ARE PER FAXED LIST FROM CARLISLE ON JUNE 5, 1997[.]" Id. at 47 (capitals in original). The Purchase Order contained columns labeled: "Quantity," "Prod. #," "Description," "Pack," "Price," and "Amount." Several quantities were listed in the "quantity" column, and descriptions and prices were entered under the corresponding columns in rows reflecting the quantities that were listed for given items and prices. Id. The Purchase Order also contained a handwritten entry asking Johnson to "PLEASE SIGN AND FAX BACK AND CALL FOR DELIVERY APPTS." Id. (capitals in original).
On June 13, 1997, Johnson responded to the Purchase Order by sending Segal a letter thanking him for the order he had placed for "all of our close-outs." The letter also informed Segal that Johnson "had to enter the orders with a per case price so that if the quantities change we have a way to bill you for only what you have received." The June 13 letter also offered an additional 2,184 cases of merchandise for sale. Sometime thereafter, Segal faxed the letter back to Johnson accepting the additional cases Johnson had offered. Glenn offered to pay Carlisle a total amount of approximately $990,000.
Between June and September 1997, Glenn sent Carlisle a total of $750,000 in eight separate payments, beginning with a $100,000 payment on June 12, 1997. Carlisle began shipping goods shortly after June 12, and continued shipping through August 1997. During that period, Carlisle shipped approximately $736,000 worth of trash bags to Glenn. However, some of the goods that Glenn ordered from the June 5 list were never delivered because Carlisle sold them to other customers.
On May 1, 1998, Glenn sued Carlisle alleging, inter alia, that Carlisle's failure to deliver all of the trash bags listed in the June 5 fax constituted a breach of contract. Glenn claimed damages in the amount of $14,000 for payments it had made to Carlisle for goods that Carlisle never shipped, and lost profits in the amount of approximately $230,000. The latter sum represented the profit Glenn claimed it would have realized from the resale of the trash bags that Carlisle never shipped. Glenn and Carlisle eventually filed cross motions for summary judgment. Carlisle claimed that the undisputed facts established as a matter of law that it was not under any binding obligation to sell any given quantity of goods. Glenn claimed the reverse. Glenn claimed it was entitled to summary judgment as to Carlisle's liability as a matter of law inasmuch as there was no dispute that Carlisle did not ship all of the items ordered by Glenn that were listed in the original fax.
The district court, however, initially agreed with Carlisle and granted Carlisle summary judgment based upon the court's conclusion that the "subject to change" language in the June 5 fax clearly and unambiguously established that the quantities of goods Carlisle would sell could change at any time and for any reason. Accordingly, the court entered an order awarding Glenn only the $14,000 it had paid for merchandise it never received, and dismissing the remainder of Glenn's claim. However, on January 13, 2000, the court subsequently granted Glenn's motion for reconsideration and vacated the entry of summary judgment. All issues of liability and damages were then submitted to a jury at the ensuing trial.
During that trial, Glenn Segal offered the following testimony about efforts he made to replace the merchandise that was ordered from the June 5 fax but never shipped:
On cross-examination, Carlisle's counsel questioned Segal about his earlier deposition testimony. At his deposition, Segal had testified that he did not know who else made supermarket brand trash bags and he did not know how to discover who did. He stated, "[t]he only ones I knew had them were Carlisle and I tried to get them to do it[.]" Id. at 308. He added that he would have to "go to the supermarket and buy up trash bags retail" to replace the ones Carlisle didn't ship. Id. Segal had also testified in his deposition that despite twenty years in the business and numerous area contacts, he could not think of any way to replace the private label bags other than buying from Carlisle or purchasing bags at retail prices. See id. at 309-10
As noted earlier, the jury returned a verdict in favor of Glenn, and awarded a total of $244,003.00 in damages, including $230,003.00 for the lost profit Glenn claimed resulted from not being able to resell the merchandise it expected to receive from Carlisle. Following trial, the district court denied Carlisle's Rule 50 motion for judgment as a matter of law as to liability, but granted it as to the award of lost profits. The court reasoned that Glenn failed to establish that it could not reasonably have avoided losing those profits by attempting to "cover" and entered judgment in favor of Glenn for $14,000 plus interest. This appeal and cross-appeal followed.2
As noted earlier, Carlisle is cross-appealing the district court's order of January 13, 2000 by which the court vacated the order of September 7, 1999 granting partial summary judgment in favor of Carlisle. Inasmuch as our discussion of Glenn's appeal of the court's grant of Carlisle's motion for judgment as a matter of law overlaps the issues raised in Carlisle's cross-appeal, we need not address the court's summary judgment ruling separately.
Our review of the district court's grant of Carlisle's Rule 50 motion is plenary. See Rhone Poulenc Rorer Pharmaceuticals, Inc. v. Newman Glass Works, 112 F.3d 695, 696 (3d Cir.1997). In reviewing the grant of a judgment as a matter of law under Fed.R.Civ.P. 50 following a jury verdict, we must view the evidence in the light most favorable to the nonmoving party, and determine whether the record contains the "minimum quantum of evidence from which a jury might reasonably afford relief." Mosley v. Wilson, 102 F.3d 85, 89 (3d Cir.1996), quoting Parkway Garage, Inc. v. City of Philadelphia, 5 F.3d 685, 691 (3d Cir.1993).
The standard for granting summary judgment under Rule 56 "mirrors the standard for a directed verdict under Fed.R.Civ.P. 50(a)[.]" Anderson v. Liberty...
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