Grandoe Corp. v. Gander Mountain Co.

• Decision Date: 01 August 2014
• Docket Number: No. 13–2706.,13–2706.
• Citation: 761 F.3d 876
• Parties: The GRANDOE CORPORATION, Plaintiff–Appellee v. GANDER MOUNTAIN COMPANY, Defendant–Appellant.
• Court: U.S. Court of Appeals — Eighth Circuit

761 F.3d 876

The GRANDOE CORPORATION, Plaintiff–Appellee

v.GANDER MOUNTAIN COMPANY, Defendant–Appellant.

No. 13–2706.

United States Court of Appeals, Eighth Circuit.

Submitted: May 15, 2014.

Filed: Aug. 1, 2014.

Dudley W. Von Holt, argued, Saint Louis, MO (Bruce David Ryder, Saint Louis, MO, on the brief), for Defendant–Appellant.

Lisa Lamm Bachman, argued, Minneapolis, MN, for Plaintiff–Appellee.

Before WOLLMAN, BYE, and BENTON, Circuit Judges.

WOLLMAN, Circuit Judge.

Gander Mountain Company (Gander Mountain) reneged on its oral commitment to purchase $3.05 million worth of winter gloves from the Grandoe Corporation (Grandoe). Grandoe sued Gander Mountain, and a jury awarded Grandoe $1,557,284.40. After the verdict, Gander Mountain moved for judgment as a matter of law or for a new trial, asserting that two written documents rendered the oral agreement void. Grandoe filed an unopposed motion for prejudgment interest. The district court ¹ denied Gander Mountain's motion and granted Grandoe's motion. Gander Mountain appeals both rulings, and we affirm.

I.

Grandoe is a family-owned manufacturer of gloves and other apparel located in Gloversville, New York.² In the early 2000s, Grandoe began selling winter gloves to Gander Mountain, a national retailer of outdoor sporting goods headquartered in St. Paul, Minnesota. At that time, it was customary in the glove-making industry for the manufacturer to rely on a retailer's oral commitment for the purchase of gloves. For the first few years of their relationship, Gander Mountain and Grandoe abided by this custom; Gander Mountain would orally agree to purchase a quantity of gloves, Grandoe would manufacture the gloves, and Gander Mountain would periodically issue written purchase orders for smaller shipments of gloves as the need for them arose, the sum of which was consistent with Gander Mountain's oral commitment.

In 2007, Gander Mountain attempted to change this practice by posting a document called the Vendor Buying Agreement (VBA) on its website. The VBA stated:

Any communications from Gander Mountain in the form of forecasts, commitments, projections or other estimates provided to Vendor are for planning purposes only, do not constitute an Order and shall not be binding upon Gander Mountain unless, until and only to the extent that Gander Mountain expressly agrees in writing.

The VBA also stated that it “represent[ed] the entire and integrated Agreement between Gander Mountain and Vendor, superseding all prior negotiations, representations or agreements, written or oral” and that “by accepting [a purchase order], Vendor acknowledges and agrees to be bound by the Vendor Buying Agreement.”

After posting the VBA on its website, Gander Mountain e-mailed Grandoe's vice president, asking him to “[p]lease read the attached document that explains our [purchase order] policy changes that will be effective in June.” The attached memorandum explained that Gander Mountain was “updating terms and conditions” and that any manufacturer that did business with Gander Mountain would henceforth be bound by the VBA. Grandoe's vice president did not respond to the e-mail or acknowledge in any way that he had read the memorandum or the VBA.

Subsequently, over a series of meetings in 2008, representatives from the two companies negotiated a deal whereby Grandoe would manufacture $3.05 million worth of gloves for Gander Mountain. At one of these meetings, Grandoe's president and vice president presented Gander Mountain's representative with spreadsheets detailing the quantities of gloves Grandoe would produce in each style. Gander Mountain's representative orally approved these spreadsheets. At another meeting, the parties signed a Resource Allowance Contract (RAC), which set forth certain percentage discounts and other ancillary terms that would apply to Gander Mountain's purchase of gloves from Grandoe. The parties also agreed that, consistent with their past practice, some of the logistical aspects of the deal—such as when the gloves would be shipped and how many gloves would be shipped at a time—would be specified in purchase orders that Gander Mountain would send to Grandoe.

On April 16, 2009, after Grandoe had manufactured most of the gloves, Gander Mountain informed Grandoe that it would not purchase all of the gloves that it had orally committed to purchase. Gander Mountain sent Grandoe purchase orders for approximately $940,000 worth of gloves, which Grandoe filled. Gander Mountain then ceased ordering gloves from Grandoe. Grandoe was able to resell some of the gloves it had manufactured for Gander Mountain, but a large number of the gloves—some $1.5 million worth—had been embroidered with Gander Mountain's logo and were largely worthless to anyone else.

Grandoe sued Gander Mountain for breaching its oral commitment. Gander Mountain asserted at trial that the VBA and RAC voided any oral agreement the parties had allegedly reached. It asked the court to exclude evidence of the oral agreement and grant summary judgment to Gander Mountain. The court denied Gander Mountain's requests and submitted evidence of the oral agreement to the jury along with the VBA and RAC, instructing the jury to consider the evidence of all three putative agreements in determining whether Gander Mountain had agreed to purchase $3.05 million in gloves from Grandoe. The jury found that the parties had entered into a valid oral contract and awarded Grandoe $1,557,284.40 in damages.³ Then, on Grandoe's unopposed motion, the court awarded Grandoe $572,389.20 in prejudgment interest under Minnesota common law, for a total of $2,129,673.60.

II.

Gander Mountain raises three issues on appeal. First, Gander Mountain asserts that the district court erred in permitting the jury to decide whether Gander Mountain had orally agreed to purchase $3.05 million worth of gloves from Grandoe; according to Gander Mountain, the VBA and RAC render any such oral commitment void as a matter of law, and the district court should have enforced the parties' written contracts instead of letting the jury decide whether the parties had reached an oral agreement. Second, Gander Mountain asserts that, even if the court properly submitted evidence of the oral agreement to the jury, the jury erred in concluding based on that evidence that the parties had entered into a valid oral agreement. Third, Gander Mountain argues that the district court erred in awarding Grandoe prejudgment interest.

A.

We begin with Gander Mountain's assertion that the VBA and RAC render the putative oral agreement between Gander Mountain and Grandoe legally void, such that the district court erred in submitting evidence of the oral agreement to the jury. Gander Mountain raises three arguments in support of this assertion, two based on the VBA and one based on the RAC. First, Gander Mountain asserts that the VBA's express disclaimer renders any oral commitment it made to Grandoe legally ineffective. Second, Gander Mountain asserts that the VBA is a “final expression of [the parties'] agreement” subject to the protections of Minnesota's parol evidence rule and that “evidence of any prior agreement or of a contemporaneous oral agreement” is inadmissible to contradict this final expression.⁴SeeMinn.Stat. § 336.2–202. Third, Gander Mountain argues that, in the alternative, the RAC is a “final expressionof [the parties'] agreement” and that evidence of the parties' oral agreement is inadmissible to contradict the RAC. For all of these reasons, according to Gander Mountain, the district court erred in permitting the jury to decide whether the parties had in fact agreed to the exchange of $3.05 million worth of gloves. Instead, Gander Mountain asserts, the district court should have enforced the plain terms of the VBA and RAC, held the oral agreement void as a matter of law, and granted summary judgment to Gander Mountain.

As we explain below, however, neither the VBA nor the RAC voids the oral agreement or prevents evidence of the oral agreement from reaching the jury. First, although it is undisputed that the VBA expressly disclaims oral agreements and purports to be a “final expression of [the parties'] agreement,” there is scant evidence that Grandoe ever assented to the terms of the VBA. Without such evidence, the terms of the VBA cannot bind Grandoe. Second, although it is undisputed that the parties agreed to the RAC, the RAC itself is not a “final expression of their agreement” with respect to the purchase of gloves, and thus it does not trigger the parol evidence rule.

1.

Gander Mountain first asserts that the VBA invalidates the parties' putative oral agreement, both because the VBA states so explicitly and because the VBA is a “final expression of [the parties'] agreement” subject to the parol evidence rule. Gander Mountain further asserts that the district court abdicated its responsibility by submitting the question of the VBA's legal effect to the jury, because the meaning of unambiguous contractual language and operation of the parol evidence rule are both questions of law that may be resolved only by the court. See Shaw Hofstra & Assocs. v. Ladco Dev., Inc., 673 F.3d 819, 825 (8th Cir.2012); Bib Audio–Video Prods. v. Herold Mktg. Assoc., Inc., 517 N.W.2d 68, 71 (Minn.App.1994).⁵

The relevance of these legal questions, however, depends on the resolution of an underlying factual question: whether or not Grandoe ever assented to the VBA. See Minn. Supply Co. v. Raymond Corp., 472 F.3d 524, 532 (8th Cir.2006) (“Under Minnesota law, the existence of a contract is a question of fact ordinarily decided by the jury.”). If Grandoe did accept the VBA, then the express language of the VBA and the parol evidence rule both render the putative oral agreement void and preclude evidence of that agreement from reaching the jury. If it did not, then the VBA is of no legal effect, and evidence of the oral agreement is relevant and admissible. This question...