Resource Technology Corp. v. Fisher Scientific Co.

• Decision Date: 04 October 1996
• Docket Number: No. 96-38,96-38
• Citation: 924 P.2d 972
• Parties: RESOURCE TECHNOLOGY CORPORATION, a Wyoming Corporation; Robert Rucinski; and Joseph Morotti, Appellants (Plaintiffs), v. FISHER SCIENTIFIC COMPANY, a Delaware Corporation, Appellee (Defendant).
• Court: Wyoming Supreme Court

Page 972

924 P.2d 972

RESOURCE TECHNOLOGY CORPORATION, a Wyoming Corporation; Robert Rucinski; and Joseph Morotti, Appellants (Plaintiffs), v. FISHER SCIENTIFIC COMPANY, a Delaware Corporation, Appellee (Defendant).

No. 96-38.

Supreme Court of Wyoming.

Oct. 4, 1996.

C.M. Aron and K. Karla Tull of Aron and Hennig, Laramie, for Appellants (Plaintiffs).

Ford T. Bussart and B. Joan Dodd of Bussart, West, Rossetti, Piaia & Tyler, P.C., Rock Springs, for Appellee (Defendant).

Before TAYLOR, C.J., and THOMAS, MACY, GOLDEN ^* and LEHMAN, JJ.

MACY, Justice.

Appellants Resource Technology Corporation, Robert Rucinski, and Joseph Morotti appeal from the judgment which was entered in favor of Appellee Fisher Scientific Company.

We affirm.

ISSUES

The appellants present the following issues on appeal:

1. Where FISHER SCIENTIFIC COMPANY induced Mr. Morotti and Mr. Rucinski to take part in a joint, four-year business project, then FISHER abandoned the project after one year, and after ordering production of less than half the quantity of goods originally intended: Did the trial court err in holding that the doctrine of promissory estoppel did not apply?

2. Where FISHER SCIENTIFIC COMPANY induced RT CORPORATION to build a new facility for future production, then FISHER ordered no further production: Did the trial court err in holding that the doctrine of promissory estoppel did not apply?

3. Did the business relationship between FISHER SCIENTIFIC COMPANY and RT CORPORATION--whether or not it was technically a joint venture--impose on FISHER a legal obligation of good faith?

FACTS

Fisher Scientific, a Delaware corporation whose headquarters were located in Pennsylvania, was in the business of supplying and marketing scientific equipment and chemical materials. In June 1988, Fisher Scientific and Western Research Institute, an affiliate corporation of the University of Wyoming located in Laramie, began discussing the potential development and marketing of a line of products known as "Solid Waste Reference Standards" (the products). Rucinski Western Research Institute subsequently decided not to continue its involvement in the project. Morotti and Rucinski, whose employment had been terminated with Western Research Institute, negotiated with Fisher Scientific to take over Western Research Institute's role in the project. In order to facilitate that arrangement, Morotti and Rucinski formed Resource Technology, a Wyoming corporation.

and Morotti were employed by Western Research Institute at that time and were involved in the development of the project and in the discussions with Fisher Scientific.

On September 7, 1988, while the parties were negotiating the particulars of the arrangement, Fisher Scientific faxed a worksheet to Rucinski which outlined the "expected case scenario" for the production and marketing of the products over a five-year period. Resource Technology and Fisher Scientific executed a distribution agreement which was dated September 13, 1988. Under this agreement, Resource Technology was generally obligated to collect solid waste materials in bulk and homogenize, package, and inventory the materials at its place of business in Laramie. Fisher Scientific's general duties under the distribution agreement were to review the product lot specifications which Resource Technology submitted, to certify those lots which Fisher Scientific accepted, and to market the products. The distribution agreement did not include the quantity projections which had been outlined in the September 7, 1988, facsimile; however, it included provisions which set forth the process for determining which product lots would be produced and marketed. The distribution agreement also stated that the agreement would be in effect for four years from January 1, 1989, and included provisions for extending the term of the agreement under certain circumstances.

In 1991, Resource Technology's lease expired on the building where it produced the products. Resource Technology purchased land and constructed a new building to house its production facility. During the term of the distribution agreement, Fisher Scientific accepted and certified fifteen product lots, and it advanced $388,196 to Resource Technology for inventories.

Unfortunately, the product sales were disappointing. The potential customers were reluctant to purchase the products because using the products added an element of expense to their analytical processes which they were not required or willing to incur. The parties believed, however, that a viable market would eventually exist because they thought that the United States Environmental Protection Agency was going to promulgate a mandate which would encourage customers to use the products. Resource Technology and Fisher Scientific took numerous steps to encourage the adoption of the mandate and also executed a cooperative research and development agreement with the Environmental Protection Agency to promote the use of the products. The Environmental Protection Agency notified Resource Technology and Fisher Scientific in August 1992 that, despite their efforts, the mandate was not going to become law.

In light of the Environmental Protection Agency's notification, Fisher Scientific decided not to renew the distribution agreement which was slated to expire on December 31, 1992. Fisher Scientific notified Resource Technology that, effective October 1, 1992, it would release Resource Technology from its obligation under the distribution agreement to deal exclusively with Fisher Scientific with regard to the products. Fisher Scientific forfeited all the money which it had advanced to Resource Technology and all its claims to any proceeds from future sales of the products.

On July 9, 1993, the appellants filed a complaint in the district court against Fisher Scientific, asserting claims for promissory estoppel and breach of the implied covenant of good faith and fair dealing. After holding a bench trial, the trial court entered a judgment in favor of Fisher Scientific. The appellants subsequently perfected their appeal to this Court.

DISCUSSION

A. Standard of Review

The trial court made express findings of fact and conclusions of law under In accordance with W.R.C.P. 52(a), this Court will not set aside a district court's findings of fact unless the findings are clearly erroneous. Hopper v. All Pet Animal Clinic, Inc., 861 P.2d 531, 538 (Wyo.1993). " 'A finding is "clearly erroneous" when[,] although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed.' " Id. (quoting United States v. United States Gypsum Co., 333 U.S. 364, 395, 68 S.Ct. 525, 542, 92 L.Ed. 746 (1948)). Stated alternatively: "[A] determination that a finding is against the great weight of the evidence means a finding will be set aside even if supported by substantial evidence." Id. See also Samuel v. Zwerin, 868 P.2d 265, 267 (Wyo.1994). We review a district court's conclusions of law de novo on appeal. Hopper, 861 P.2d at 538.

W.R.C.P. 52(a). We, therefore, apply the standard of review which was recently stated in Garaman, Inc. v. Williams, 912 P.2d 1121, 1125 (Wyo.1996):

McNeiley v. Ayres Jewelry Co., 886 P.2d 595, 597 (Wyo.1994).

B. Choice of Law

As an initial matter, we must determine which state's laws govern. Wyoming is, of course, the forum state; however, the distribution agreement included a choice of law provision which stated: "This Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania." The RESTATEMENT (SECOND) OF CONFLICT OF LAWS sets forth the following rule for applying choice of law agreements:

(1) The law of the state chosen by the parties to govern their contractual rights and duties will be applied if the particular issue is one which the parties could have resolved by an explicit provision in their agreement directed to that issue.

(2) The law of the state chosen by the parties to govern their contractual rights and duties will be applied, even if the particular issue is one which the parties could not have resolved by an explicit provision in their agreement directed to that issue, unless either

(a) the chosen state has no substantial relationship to the parties or the transaction and there is no other reasonable basis for the parties' choice, or

(b) application of the law of the chosen state would be contrary to a fundamental policy of a state which has a materially greater interest than the chosen state in the determination of the particular issue....

RESTATEMENT (SECOND) OF CONFLICT OF LAWS § 187 (1971 & Supp.1989). This Court stated in Smithco Engineering, Inc. v. International Fabricators, Inc., 775 P.2d 1011, 1018 (Wyo.1989), that we will not apply foreign law when it is contrary to the law, public policy, or the general interests of Wyoming's citizens.

Fisher Scientific's headquarters were located in Pennsylvania, and that state, therefore, had a reasonable relationship to the matters at issue in this case. Additionally, the application of Pennsylvania law in this case will not be contrary to the law, public policy, or the general interests of our citizens because Pennsylvania's laws and Wyoming's laws are very similar on the matters at issue in this case. We will, therefore, recognize the parties' agreement and apply Pennsylvania law to determine the matters of substantive law which are in dispute in this case. RESTATEMENT, supra, at §§ 186, 187; see also Smithco Engineering, Inc., 775 P.2d at 1018; J.W. Denio Milling Company v. Malin, 25 Wyo. 143, 155-56, 165 P. 1113 (1917).

C. Distribution Agreement

The trial court found that the distribution agreement was not ambiguous and that it was fully integrated. The trial court ruled, therefore, that parol evidence was not admissible to contravene the written contract. Although the appellants do not raise an issue...