Plasma Ctrs. of Am., LLC v. Talecris Plasma Res., Inc.

• Decision Date: 07 August 2012
• Docket Number: No. COA11–1266.,COA11–1266.
• Citation: 731 S.E.2d 837
• Parties: PLASMA CENTERS OF AMERICA, LLC Plaintiff, v. TALECRIS PLASMA RESOURCES, INC., Defendant.
• Court: North Carolina Court of Appeals

731 S.E.2d 837

PLASMA CENTERS OF AMERICA, LLC Plaintiff,

v.TALECRIS PLASMA RESOURCES, INC., Defendant.

No. COA11–1266.

Court of Appeals of North Carolina.

Aug. 7, 2012.

Appeal by defendant from judgment entered 30 December 2010 and order entered 2 March 2011 by Judge Paul C. Ridgeway in Wake County Superior Court. Heard in the Court of Appeals 25 April 2012.

Smith, Anderson, Blount, Dorsett, Mitchell & Jernigan, L.L.P., Raleigh, by Michael W. Mitchell and Clifton L. Brinson, for plaintiff-appellee.

Kilpatrick Townsend & Stockton LLP, Winston–Salem, by Adam H. Charnes and Richard D. Dietz, and Graebe Hanna & Welborn, PLLC, by Christopher T. Graebe, Raleigh, and Mark R. Sigmon for defendant-appellant.

STEELMAN, Judge.

Arguments not raised by defendant in its motion for a directed verdict will not be considered by this Court when reviewing the denial of the motion for judgment notwithstanding the verdict. The trial court correctly concluded that the contract did not fall under the statute of frauds. Plaintiff's damages were proven with reasonable certainty, and defendant's motion for a new trial was properly denied.

I. Factual and Procedural Background

This appeal arises out of a contract dispute between Plasma Centers of America, LLC (“PCA”) and Talecris Plasma Resources, Inc. (“Talecris”). Talecris Biotherapeutics, Inc. (“TBI”), the parent company of Talecris, is a biotechnology company that sells medical therapies. These therapies require human plasma, which is collected from donors at plasma centers. Medical professionals, including physicians, staff these centers. In October 2006, TBI contracted with Bio–Medics, Inc. (“Bio–Medics”), the parent company of PCA. Under this agreement (the “2006 Agreement”), Bio–Medics agreed to supply plasma to TBI and to provide TBI with the right to purchase plasma centers that were to be constructed by Bio–Medics.

Several months after entering into the 2006 Agreement, the parties began negotiating a more detailed and expansive contract. During this time, TBI formed Talecris and Bio-medics formed PCA. Talecris and PCA negotiated a new contract (the “2007 Agreement”), which differed from the 2006 Agreement in several respects. First, PCA was required to supply specific annual amounts of plasma. Second, PCA was required to open three plasma centers in 2007 and five in 2008 by deadlines contained in Schedule 4 of the agreement. Third, a “Conditional Purchase Obligation” required Talecris to purchase plasma centers that met certain specifications within eighteen months of the center's opening date. Finally, there was a “Termination for Cause” provision. The termination provision allowed Talecris to terminate the contract if PCA failed to meet any of the individual supply requirements or opening deadlines.

Pursuant to the 2007 Agreement, the representatives of the parties held weekly meetings, typically by telephone. Before those meetings, each party submitted PowerPoint slides that Talecris assembled for use at the meeting. The first PowerPoint slide submitted by PCA indicated that PCA would miss its first deadline—opening the San Bernardino, California center by 31 October 2007. Instead, the slide had an opening date of 12 November 2007. The language “To be reviewed and agreed upon today” was contained on the slide.

In early October 2007, PCA began submitting slides stating that it would miss the opening deadline for another center. The “[t]o be reviewed and agreed upon today” language did not appear on these or future slides. PCA continued to submit slides at each of the 45 weekly meetings indicating that it would miss upcoming deadlines.

By the end of 2007, PCA had failed to meet the three 2007 opening deadlines listed in Schedule 4. In February 2008, Talecris hired a construction management company, Equis, to oversee the progress of the construction of four of the centers. In April 2008, Talecris loaned PCA $2.3 million. After nearly six months of negotiations, the parties executed a new agreement on 6 June 2008 (the “2008 Agreement”). The 2008 Agreement was a “blackline” document. It contained a copy of the 2007 Agreement, striking through certain contractual provisions and underlining new or changed ones. The completion deadlines were extended for the centers that were originally due to be completed in 2008. But the deadlines for centers that were due to be completed in 2007 were not changed, even though these deadlines had already passed.

Less than a month after the parties executed the 2008 Agreement, PCA missed the 30 June 2008 deadline listed in Schedule 4 to open a center in Stockton, California. The parties continued to hold weekly status update meetings. The slides presented at these meetings projected start dates beyond those contained on Schedule 4. On 12 August 2008, Talecris's parent company announced that it had agreed to be acquired by a foreign competitor, CSL Ltd. As part of the acquisition, Talecris entered into a plasma supply agreement with ZLB Plasma, a subsidiary of CSL.

The day after the merger, Jim Moose, a Talecris Senior Vice President, contacted PCA President Gary Crandall and stated, “[E]verything's going to be the same. We are still going to be working with you.” The parties held a status update meeting on 21 August 2008. An internal analysis by Talecris showed that the agreement with ZLB Plasma would provide plasma that would exceed its manufacturing capacity. The analysis showed that Talecris could avoid the expense of acquiring the centers from PCA. On 25 August 2008, Moose contacted Crandall and informed him Talecris was terminating the contract, stating, “[W]e don't need you guys anymore. We don't need the plasma and we are terminating the contract.”

Based on the missed Stockton center deadline, Talecris sent a notice of default and thirty-day right to cure on 26 August 2008. PCA failed to cure the default. PCA sued Talecris for breach of contract based on two theories: (1) Talecris waived its right to terminate based on the Stockton center opening date and (2) the parties agreed to modify the Schedule 4 deadlines at the weekly status meetings to conform to the slides. Before the case was submitted to the jury, Talecris moved for directed verdict. That motion was denied. The jury ruled for PCA on both theories, specifically finding that the parties modified their agreements, both orally and in writing, and that Talecris waived rights and remedies under the agreement. The jury awarded PCA $37 million in damages. The trial court denied Talecris's motions for Judgment Notwithstanding the Verdict (Rule 50(b)) (“JNOV”) and for a new trial (Rule 59).

Talecris appeals.

II. Judgment Notwithstanding the Verdict

In its first argument, Talecris contends that the trial court erred in denying its motion for JNOV on the issues of (1) whether the parties modified the completion dates contained in Schedule 4 and (2) whether Talecris waived its right to enforce PCA's failure to meet those deadlines. We disagree.

A. Standard of Review

The standard of review for the denial of a motion for JNOV requires us to

determine whether, upon examination of all the evidence in the light most favorable to the non-moving party, and that party being given the benefit of every reasonable inference drawn therefrom and resolving all conflicts of any evidence in favor of the non-movant, the evidence is sufficient to be submitted to the jury. A motion for either a directed verdict or JNOV should be denied if there is more than a scintilla of evidence supporting each element of the non-movant's claim.

Shelton v. Steelcase, Inc., 197 N.C.App. 404, 410, 677 S.E.2d 485, 491 (2009) (citations omitted) (internal quotation marks omitted). We review questions of law de novo. Powell v. City of Newton, 200 N.C.App. 342, 344, 684 S.E.2d 55, 58 (2009).

B. Analysis

PCA litigated this case based on several theories. One theory was that at each weekly status update meeting, the parties orally agreed to modify Schedule 4 of the 2008 agreement. More specifically, each time representatives of the parties met telephonically, they agreed to change the completion deadlines to those contained on the slides that they reviewed. Under this theory, the completion deadlines contained on the slides that were presented at the last status update meeting would control. Talecris counters that its representatives did not agree to modify the completion deadlines and that mutual assent, an essential element of a contract, was missing. See Creech v. Melnik, 347 N.C. 520, 527, 495 S.E.2d 907, 912 (1998) (discussing elements of a contract). Talecris also contends that, even if there was mutual assent to modify Schedule 4, oral modifications were barred by the statute of frauds. See infra Section II.B.2 (discussing the statute of frauds). Talecris further argues that PCA cannot recover because it was not willing and able to perform under the 2008 Agreement.

PCA contends that Talecris has not preserved its mutual assent and “willing and able” arguments for appellate review. Therefore, PCA argues, if the contract is not governed by the statute of frauds, this Court must assume that there was sufficient evidence of mutual assent and that PCA was willing and able to perform its contract obligations to submit those issues to the jury.

1. Preservation Issues

Talecris argues that the trial court erred in denying its motion for JNOV because (1) there was no evidence of mutual assent to the alleged modifications of the completion dates and (2) there was no evidence that PCA was “willing and able” to perform its obligations under the contract. We do not address the substance of these arguments because Talecris did not preserve these issues for appellate review.

“To have standing after the verdict to move for JNOV, a party must have made a directed verdict motion at trial on the specific issue which is the basis of the JNOV.” Lassiter v. English, 126 N.C.App. 489, 492–93, 485 S.E.2d 840, 842 (1997)overruled on...