Stelwagon Mfg. Co. v. Tarmac Roofing Systems, Inc.

• Decision Date: 12 September 1994
• Docket Number: Civ. A. No. 92-1073.
• Citation: 862 F. Supp. 1361
• Parties: STELWAGON MANUFACTURING COMPANY, Plaintiff, v. TARMAC ROOFING SYSTEMS, INC., Defendant.
• Court: U.S. District Court — Eastern District of Pennsylvania

862 F. Supp. 1361

STELWAGON MANUFACTURING COMPANY, Plaintiff, v. TARMAC ROOFING SYSTEMS, INC., Defendant.

Civ. A. No. 92-1073.

United States District Court, E.D. Pennsylvania.

September 12, 1994.

COPYRIGHT MATERIAL OMITTED

David A. Gradwohl and Patrick J. Doran, Pelino & Lentz, Philadelphia, PA, for plaintiff.

Scott R. Shepherd, Dilworth, Paxson, Kalish & Kauffman, Philadelphia, PA, for defendant.

MEMORANDUM

EDUARDO C. ROBRENO, District Judge.

This antitrust and breach of contract action was tried to a jury, which rendered a verdict in plaintiff's favor. Post-trial motions were subsequently filed, with defendant claiming various points of legal and trial error. For the reasons herein stated, the defendant's motion for judgment as a matter of law and for a new trial will be denied, but its motion for remittitur will be granted.¹

I. BACKGROUND

Stelwagon Manufacturing Company ("Stelwagon") is a wholesale distributor of roofing and related materials.² In early 1988, Stelwagon entered into an oral, semi-exclusive distributorship agreement with Tarmac Roofing Systems, Inc. ("Tarmac"), for the distribution of Tarmac's modified asphalt products ("MAPs") in the Philadelphia area. MAPs are rolled roofing products used to cover flat roofs, and are sold to roofing contractors. See Tr. of 12/14/93, at 56-57 (Keenan). Stelwagon sold Tarmac-brand MAPs in 1988 and 1989 without incident in the relationship and with steadily improving results. In early 1989, Stelwagon became aware of sales made to its competitors in violation of the agreement. Some of these sales were also made at preferential prices. Stelwagon complained to Tarmac, and eventually brought the instant action, alleging breach of contract as well as price discrimination in violation of federal antitrust law. See 15 U.S.C. §§ 13(a), 15.

Defendant moved at the close of plaintiff's case, and again at the close of all the evidence, for judgment as a matter of law pursuant to Federal Rule of Civil Procedure 50(a)(1)³ on all counts of plaintiff's complaint. Both of these motions were denied and the case was submitted to the jury, which rendered a verdict in plaintiff's favor on the breach of contract and price discrimination claims, awarding plaintiff $1,500,000 and $772,000 respectively. The Court trebled the antitrust damages, see 15 U.S.C. § 15, and entered judgment in plaintiff's favor in the amount of $3,816,000. Defendant now renews its motion, and, in the alternative, requests a new trial or remittitur. See Fed. R.Civ.P. 50(b), 59(a).⁴

II. DISCUSSION

A. Legal Standards

The discarding of a jury verdict and entry of judgment as a matter of law in favor of the party who failed to prevail at trial is not lightly done. The evidence in the case must be viewed in the light most favorable to the successful party, and every reasonable inference therefrom must be drawn in that party's favor. See Fineman v. Armstrong World Indus., Inc., 980 F.2d 171, 190 (3d Cir.1992), cert. denied, ___ U.S. ___, 113 S.Ct. 1285, 122 L.Ed.2d 677 (1993); Fireman's Fund Ins. Co. v. Videfreeze Corp., 540 F.2d 1171, 1178 (3d Cir.1976) ("The trial judge, in his review of the evidence, ... must expose the evidence to the strongest light favorable to the party against whom the motion is made and give him the advantage of every fair and reasonable inference."), cert. denied, 429 U.S. 1053, 97 S.Ct. 767, 50 L.Ed.2d 770 (1977). It is impermissible to question the credibility of witnesses, or to weigh conflicting evidence as would a factfinder. See Parkway Garage, Inc. v. City of Philadelphia, 5 F.3d 685, 691 (3d Cir.1993). Applying these precepts, a jury verdict can be displaced by judgment as a matter of law only if "the record is `critically deficient of that minimum quantum of evidence from which the jury might reasonably afford relief.'" Dawson v. Chrysler Corp., 630 F.2d 950, 959 (3d Cir.1980) (quoting Denneny v. Siegel, 407 F.2d 433, 439 (3d Cir.1969)), cert. denied, 450 U.S. 959, 101 S.Ct. 1418, 67 L.Ed.2d 383 (1981).

Similar concerns restrict the Court's discretion in ordering a new trial pursuant to Federal Rule of Civil Procedure 59. "Such an action effects a denigration of the jury system and to the extent that new trials are granted the judge takes over, if he does not usurp, the prime function of the jury as the trier of the facts." Lind v. Schenley Indus., Inc., 278 F.2d 79, 90 (3d Cir.) (in banc), cert. denied, 364 U.S. 835, 81 S.Ct. 58, 5 L.Ed.2d 60 (1960). A new trial on the basis that the verdict is against the weight of the evidence can be granted "only where a miscarriage of justice would result if the verdict were to stand." Klein v. Hollings, 992 F.2d 1285, 1290 (3d Cir.1993). Where the proffered basis is trial error, "the court's inquiry ... is twofold. It must first determine whether an error was made in the course of the trial, and then must determine whether that error was so prejudicial that refusal to grant a new trial would be inconsistent with substantial justice." Farra v. Stanley-Bostitch, Inc., 838 F.Supp. 1021, 1026 (E.D.Pa.1993) (quotation marks omitted), aff'd without op., 31 F.3d 1171 (3d Cir.1994); see Fed.R.Civ.P. 61. An error in jury instructions must be so substantial that, viewed in light of the evidence in the case and the charge as a whole, "`the instruction was capable of confusing and thereby misleading the jury.'" Link v. Mercedes-Benz of N. Am., Inc., 788 F.2d 918, 922 (3d Cir.1986) (quoting United States v. Fischbach & Moore, Inc., 750 F.2d 1183, 1195 (3d Cir.1984)).

B. Breach of Contract Claim

1. Failure to establish the terms of the contract by clear and precise evidence

The parties agree that, under Pennsylvania law,⁵ the terms of an oral contract must be established by clear and precise evidence in order to be enforceable.⁶Richardson v. John F. Kennedy Memorial Hosp., 838 F.Supp. 979, 987-88 (E.D.Pa. 1993); Gorwara v. AEL Indus., Inc., 784 F.Supp. 239, 242 (E.D.Pa.1992). The clear and precise standard, however, does not require that there be undisputed evidence in the record. Rather, "once it is determined that the parties intended to form a binding agreement, certainty of terms is important only as a `basis for determining the existence of a breach and for giving an appropriate remedy.'" Browne v. Maxfield, 663 F.Supp. 1193, 1198 (E.D.Pa.1987) (quoting Restatement (Second) of Contracts § 33). "Exact precision" is not required. Richardson, 838 F.Supp. at 988. The jury is to determine the terms and the parties' understanding thereof, viewed in light of all the surrounding circumstances. See Lucacher v. Kerson, 355 Pa. 79, 48 A.2d 857, 857-58 (1946); McCormack v. Jermyn, 351 Pa. 161, 40 A.2d 477, 479-80 (1945); Kirk v. Brentwood Manor Homes, Inc., 191 Pa.Super. 488, 159 A.2d 48, 51 (1960). At trial, testimony concerning the distributorship agreement was offered by numerous witnesses, including John Keenan, plaintiff's vice-president and general manager, and Gordon Amhaus, former vice-president of sales and marketing at Tarmac.⁷ That there were conflicts or contradictions in the testimony is of no moment, since resolution of such inconsistencies is peculiarly the province of the jury. The testimony offered supports Stelwagon's version of the contract between the parties: an exclusive distributorship within Philadelphia, with the exception of Roofer's Mart, a pre-existing distributor. There is no basis for entry of judgment as a matter of law in favor of defendant.

2. Failure to establish damages

Tarmac argues that Stelwagon also failed to introduce evidence of damages resulting from the breach of contract. Stelwagon argues that it introduced sufficient evidence to allow the jury to calculate its lost profits due to the breach of the distributorship agreement. Stelwagon may recover lost profits "if there is (1) evidence to establish the damages with reasonable certainty; (2) they were the proximate consequence of the wrong; and (3) they were reasonably foreseeable." Advent Sys. Ltd. v. Unisys Corp., 925 F.2d 670, 680 (3d Cir.1991) (citing Delahanty v. First Pennsylvania Bank, N.A., 318 Pa.Super. 90, 464 A.2d 1243, 1258 (1983)). Stelwagon offered at trial the expert testimony of Dr. Martin Perry, who opined on Tarmac's sales of MAPs to one of Stelwagon's competitors, Allied Roofing, as well as on Stelwagon's average profit margin. See Tr. of 12/16/93, at 77-79 (testimony of Dr. Martin Perry). Sales within Philadelphia in violation of the distributorship agreement represented lost volume to Stelwagon. This was sufficient evidence from which the jury could conclude that, to the extent Allied sold Tarmac-brand MAPs in Philadelphia, Stelwagon suffered a loss of profits.⁸

3. Contract was barred by the Statute of Frauds

Neither party contests the applicability of Article Two of the Uniform Commercial Code, governing the sale of goods, to the distributorship agreement. See 13 Pa.Cons. Stat.Ann. §§ 2101-2725 (1984 & Supp.1994); Weilersbacher v. Pittsburgh Brewing Co., 421 Pa. 118, 218 A.2d 806, 807-08 (1966). Tarmac argues that the distributorship agreement alleged by Stelwagon violates the statute of frauds because there is no writing and the contract does not come within any of the statute's exceptions. See 13 Pa.Cons.Stat. Ann. § 2201. Specifically, Tarmac argues that judgment as a matter of law must be entered because waiver of the statute cannot be established by custom in the industry, there was no evidence of a prior course of dealing between the parties, and there was insufficient evidence of part performance. These contentions are without merit. As the Pennsylvania Superior Court held in H.B. Alexander & Son, Inc. v. Miracle Recreation Equipment Co., 314 Pa.Super. 1, 460 A.2d 343 (1983), custom and usage of trade can indicate that there has been a waiver of the statute of frauds' protection, see id. 460 A.2d at 345. See also Atlantic Paper Box Co. v. Whitman's Chocolates, 844 F.Supp. 1038, 1044-45 (E.D.Pa.1994). That there was...