Integrated Micro Systems, Inc. v. NEC Home Electronics (USA), Inc.

• Decision Date: 12 March 1985
• Docket Number: No. 69405,69405
• Citation: 329 S.E.2d 554,174 Ga.App. 197
• Parties: , 41 UCC Rep.Serv. 765 INTEGRATED MICRO SYSTEMS, INC. v. NEC HOME ELECTRONICS (USA), INC. et al.
• Court: Georgia Court of Appeals

Page 554

329 S.E.2d 554

174 Ga.App. 197, 41 UCC Rep.Serv. 765

INTEGRATED MICRO SYSTEMS, INC. v. NEC HOME ELECTRONICS (USA), INC. et al.

No. 69405.

Court of Appeals of Georgia.

March 12, 1985.

Rehearing Denied March 27, 1985.

Certiorari Denied April 24, 1985.

John H. Ridley, Jr., Atlanta, for appellant.

Sidney Parks, Peyton S. Hawes, Jr., Randolph A. Rogers, Atlanta, Gerald L. Morel, Stephen M. Proctor, James R. Mitchell, Chicago, Ill., for appellees.

POPE, Judge.

Plaintiff/appellant Integrated Micro Systems, Inc. (IMS) brought this action against defendant/appellees NEC Home Electronics (USA), Inc.; Bio-Lab, Inc.; and several individual representatives of both corporations. IMS based its complaint on claims of tortious interference with contractual relations, breach of contract and tortious interference with business relations. Following extensive discovery, appellees moved for summary judgment. IMS brings this appeal from the trial court's grant of appellees' motions. ¹

IMS sells and services personal computers and related computer equipment. NEC distributes personal computers and other related computer equipment manufactured by its parent company, NEC Corporation. In April 1982 IMS entered into a dealer agreement with NEC and became an authorized NEC dealer. Bio-Lab, Inc. is in the business of selling swimming pool chemicals and supplies to retail pool supply dealers nationwide who, in turn, resell to the consuming public. Bio-Lab also resells personal computers to its dealers. These computers are used by the dealers to analyze the chemical composition of a customer's swimming pool water and to make recommendations about chemicals which should be added to the pool water.

Prior to June 1982 Bio-Lab began to seek a new supplier of personal computers suitable for its dealers. Bio-Lab contacted another computer manufacturer which in turn contacted IMS. After preliminary meetings between IMS and Bio-Lab, Bio-Lab selected the NEC personal computer model PC 8000 for resale to its dealers. Bio-Lab was willing to consider purchasing the NEC computers from IMS but wanted IMS to provide written assurances from NEC that NEC would "support" any sales made by IMS to Bio-Lab and the resale of the computers by Bio-Lab to its dealers. That is, Bio-Lab needed to be assured that NEC, with its national system of service centers, would service Bio-Lab's nationwide network of pool supply dealers, and also would continue supplying Bio-Lab with computers if "something happened to IMS." Bio-Lab was concerned about IMS's ability, as a dealer, to perform service functions which in the past had been performed by manufacturers. In September 1982 Bio-Lab and IMS entered into a "Contract Agreement for Sales." This agreement was prepared by IMS. At the same time, however, Bio-Lab sent IMS a letter reaffirming that IMS would have to obtain a letter of total support from NEC before Bio-Lab would make any purchases. Bio-Lab never received such a letter. Ultimately, NEC sold PC 8000s directly to Bio-Lab as a "value added" dealer, i.e., a dealer that buys a computer, adds hardware or software to it, and then resells the "value added" computer to an end user.

1. IMS first assigns error to the trial court's conclusion that the IMS/Bio-Lab agreement was not a requirements contract and therefore could not be the subject of an action for tortious interference with contractual relations and also could not be the subject of an action for breach of contract. The trial court found "that there is no requirement resting on Bio-Lab to make any purchases from IMS. Indeed, the purported agreement between the parties never ostensibly or implicitly specified or alluded to any quantity of computers to be purchased by Bio-Lab. As such, the purported sales contract between IMS and Bio-Lab is too indefinite to be classed as an enforceable contract." We concur in this finding.

"A requirements contract obligates the buyer [here, Bio-Lab] to purchase all the goods that the buyer will need for a particular use contemplated by the parties. For example, a contract to purchase all the coal the buyer will need to operate the furnaces in his factory is a requirements contract.... There can be no true requirements contract unless the buyer is under an obligation to purchase all of its requirements from the seller. In the absence of such an obligation, there is no requirements contract and 'the promise of the seller becomes merely an invitation for orders and a contract is not consummated until an order for a specific amount is made by the buyer.' " 2 Anderson, Uniform Commercial Code § 2-306:9 at 513, 514 (3rd ed. 1982). See also OCGA § 11-2-306. IMS argues that its agreement with Bio-Lab provided for an annual "unit quota" of 200 units (computers). It is clear from the context of the agreement, however, that the "unit quota" did not represent an obligation on the part of Bio-Lab to purchase 200 computers. Rather, it was simply one component of the pricing structure set forth in the agreement. Our review of the subject agreement discloses nothing which contractually obligated Bio-Lab to purchase any computers from IMS. The agreement itself merely delineated a schedule of prices and set forth the terms and conditions of sale which would apply if orders were made.

IMS attempts to bolster the patent deficiency of the agreement itself by citing to certain deposition testimony and other documents of record as evidence of a course of dealings between the parties. For example, at the time of the execution of this agreement Bio-Lab's twelve-month marketing goal was to purchase 200 NEC computers from IMS for purposes of resale to their pool supply dealers. Also at this time, Bio-Lab intended to purchase all needed NEC computers through IMS. After execution of this agreement, Bio-Lab ordered two units pursuant to the agreement and issued checks at the discount level designated in the agreement for purchases of 200 units or more. (The record also shows that Bio-Lab reimbursed IMS for the amount of the discount on these units when Bio-Lab decided to discontinue ordering NEC computers through IMS.) Finally, IMS cites a letter written to it from Bio-Lab on the same day the agreement was executed. The letter, however, only purports to recapitulate several items previously discussed between the parties and to request assistance on a couple of new items.

None of the foregoing evidence, even construed most favorably to IMS, is sufficient to transform the subject agreement from a mere "invitation for orders" into a binding requirements contract. In any event, the agreement itself provided "that this agreement is the complete and exclusive statement of the mutual understanding of the parties...." Compare O.N. Jonas Co. v. Badische Corp., 706 F.2d 1161 (11th Cir.1983), wherein the existence of a requirements contract was established by a written memorandum, sufficient to meet the statute of frauds requirement of OCGA § 11-2-201, taken in the context of business dealings between the parties. We conclude, therefore, that the trial court properly entered summary judgment in favor of Bio-Lab on IMS's breach of contract claim. Accord Waco Fire etc. Ins. Co. v. Plant, 150 Ga.App. 888(1), 259 S.E.2d 95 (1979), and cits. It follows that, absent an enforceable contract between the parties, IMS could not recover against NEC for tortious interference with IMS's contractual relations with Bio-Lab. See Wedgewood Carpet Mills v. Color-Set, Inc., 149 Ga.App. 417(3), 254 S.E.2d 421 (1979). Accord Charles v. Simmons, 215 Ga. 794(3), 113 S.E.2d 604 (1960); Nestle' Co. v. J.H. Ewing & Sons, 153 Ga.App. 328(2), 265 S.E.2d 61 (1980).

2. IMS next assigns error to the trial court's findings as a matter of law that the dealer agreement executed by NEC and IMS could not be the subject of an action for tortious interference with contractual relations and could not be the subject of an action for breach of contract. The essence of this argument is that IMS's dealer agreement with NEC was breached by NEC and interfered with by Bio-Lab when those two parties began to deal directly with one another. As the result of this direct dealing, Bio-Lab became a value added dealer for NEC.

The dealer agreement provides: "DEALER'S [IMS] appointment as an authorized NEC dealer shall be on non-exclusive basis. Such appointment does not constitute a grant of any specific territory or geographical area. NEC reserves the absolute right for any...