Trent Partners and Associates v. Digital Equip.

• Decision Date: 22 December 1999
• Docket Number: No. CIV. A. 97-10048-DPW.,No. CIV. A. 97-10673-DPW.,CIV. A. 97-10048-DPW.,CIV. A. 97-10673-DPW.
• Citation: 120 F.Supp.2d 84
• Court: U.S. District Court — District of Massachusetts
• Parties: TRENT PARTNERS AND ASSOCIATES, INC., Plaintiff, v. DIGITAL EQUIPMENT CORP., Defendant. AB & T Sales Corp., Plaintiff, v. Digital Equipment Corp., Defendant.

120 F.Supp.2d 84

TRENT PARTNERS AND ASSOCIATES, INC., Plaintiff, v. DIGITAL EQUIPMENT CORP., Defendant.

AB & T Sales Corp., Plaintiff, v. Digital Equipment Corp., Defendant.

No. CIV. A. 97-10048-DPW.

No. CIV. A. 97-10673-DPW.

United States District Court, D. Massachusetts.

December 22, 1999.

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Richard K. Green, Peter A. Greenburg, Greenburg & Green, Rockville, MD, for plaintiffs.

Shepard M. Remis, John B. Daukas, Tammie C. Garner, Goodwin, Procter & Hoar, Boston, MA, for defendant.

MEMORANDUM AND ORDER

WOODLOCK, District Judge.

Before me are cross motions for summary judgment in two related cases that I have consolidated under the lead docket of Trent Partners and Assoc., Inc. v. Digital Equipment Corp., 97-10048-DPW. The plaintiffs, Trent Partners and Associates, Inc. ("Trent") and AB & T Sales Corporation ("AB & T"), have filed for partial summary judgment as to their breach of contract claims and claims related to violations of Mass. Gen. Laws ch. 93A, § 11. The defendant, Digital Equipment Corporation ("Digital"), has filed for summary judgment as to all claims against it. For the reasons set forth more fully below, the plaintiffs' motion will be denied and the defendant's motion will be granted in part.

I. BACKGROUND

These disputes arise out of identical Sales Representative Agreements ("the Agreements") entered into by Digital and nine¹ separate sales representatives, two of which are plaintiffs here, as a part of Digital's strategy to enter the personal computer market. In order to analyze the claims asserted by the plaintiffs here it is necessary to explore in some detail the circumstances leading up to the consummation of the Agreements.²

In the fall of 1994, Digital first decided to enter the retail personal home computer market with a line of computers called "Starion". (Def.'s AB & T SOF ¶ 1.) Initially, it sold these computers exclusively through two retail outlet stores, Sam's Club and CompUSA. (Id.) In November 1994, Digital hired Rodney Keller to help it increase sales of the Starion line and under his direction Digital initiated a program of employing independent sales representatives ("representatives") to aid marketing of the product line. (Def.'s AB & T SOF ¶ 4.)

By hiring such representatives Digital was essentially contracting out much of the marketing activity for the new product line to independent agents in several different geographic locations. (Deposition of Richard Tydings at 16, 24, Pl. Ex. 2.) Generally, such representatives present the line to the retail buyers, coordinate displays and training regarding the new product, and secure purchase orders from retail buyers. (Id. at 24.) Success in the latter duty of securing purchase orders is often determinative of the amount that a representative will be paid—its compensation being measured as a percentage of sales procured. (Decl. of Deaver Brown ¶ 10(a), Pl.'s Ex. 1.) Frequently, after some period of time, a manufacturer will decide to "go direct" with its product line, which entails substituting its own "in-house" marketing and sales force for the representatives. (Tydings Dep. at 66-67.)

I now turn to the specific circumstances surrounding the formation of each plaintiff's agreement with Digital.

A. AB & T Negotiations³

In November 1994, Keller began investigating potential representatives for the task of marketing the Starion line. Richard Tydings, President of AB & T, learned of the opportunity to represent Digital and aggressively began to court Keller by the end of November. (Def.'s AB & T SOF ¶ 7.) Tydings' negotiations with Keller consisted of approximately three telephone conversations during which the general outline of the deal were discussed.

In the second conversation, Tydings told Keller that AB & T would be an attractive option for Digital because of AB & T's previous dealings with retail computer sales companies that Digital would undoubtedly wish to target. (Def.'s AB & T SOF ¶¶ 8-10.) According to Tydings, of particular interest to Keller was an account with Circuit City. Tydings claims that Keller indicated "it was critical ... [to] get a rep firm that knows Circuit City inside and out better than anybody else."⁴ (Tydings Dep. at 158.) Tydings also contends that

[Keller] told me that his number-one concern and his number-one criteria for the mid-Atlantic territory was my relationship —or whoever, but in particular AB & T's relationship with Circuit City.... The number one account in the territory and the number one account in the nation was Circuit City and that's it.

(Id. at 164-65.) Keller made it clear during these negotiations that he had already initiated a dialogue with Circuit City, but nothing positive had come from those preliminary talks. (Id. at 168-172.) At the end of the second conversation, Keller stated that he would have to get back to Tydings after checking with Circuit City about AB & T's relationship with them. (Id. at 149-50.)

Tydings asserts that in addition to the discussions regarding Circuit City, during their second conversation Keller stated "we're making a three-year commitment to the reps....if you know anything about me and you know any of the Compaq reps, this whole thing will be a minimum of three years, somewhere between three and five years." (Tydings Dep. at 149.) Tydings then asked Keller if the three year commitment would be in the contract, to which Keller replied "I can't get anything like that past the attorneys at [Digital], but if you know me and you work with me, as long as I'm here, we'll be using reps and you can bet on a three to a five-year run with this." (Id. at 150.)

A few days later, during the first week of February 1995, Keller called again, this time to offer Tydings the account. (Tydings Dep. at 173.) According to Tydings, Keller told him that he had spoken to Circuit City and "not only had he gotten a very favorable review and recommendation on us, but he got the most favorable review and recommendation he'd received of any rep anywhere and that he wanted us to come on board." (Id. at 173.)

At that point, Keller allegedly stated that "he needed to get a program in front of Circuit City immediately and could we start working with him right away." (Id. at 173-74.) Tydings then began work on a Circuit City proposal for Digital, while he awaited a late February 1995 meeting in Massachusetts to finalize the deal. (Id. at 180-81.)

B. Trent Negotiations

Trent, a New York company, began representing Digital in the New York area in the middle of 1994 as a representative for the defendant's line of printers. (Def.'s Trent SOF ¶ 7.) Stephen Trentacoste, the President and sole owner of Trent, discovered that Digital was soliciting the services of representatives for its new line of home computers. (Id. ¶ 8.)

Through the use of his printer contacts at Digital, Trentacoste was able to set up a meeting with Keller on January 8, 1995 in order to express his desire to represent Digital's Starion line. (Id. ¶ 10.) At that meeting, Trentacoste and Keller discussed several retail accounts that Digital was interested in pursuing in the New York area, particularly Nobody Beats the Wiz and J & R. (Deposition of Stephen Trentacoste at 99-100, Def.'s Trent SOF, Ex. G.) After the January meeting, Trentacoste was very eager to close the deal with Digital, saying that he would have signed on with Digital immediately. (Id. at 102.)

On February 1, 1995 Keller called Trentacoste and offered him the position as a representative of the New York metropolitan area. (Def.'s Trent SOF ¶ 16.) Trentacoste expressed his enthusiasm and indicated he was willing to accept. (Trentacoste Dep. at 109-10.) No specific terms or conditions of the marketing relationship, including the length of the contract, were discussed at that time. (Id. at 111.) Instead, Keller invited Trentacoste to a meeting of the new representatives in Massachusetts later in February. (Id. at 109.) While awaiting the February meeting, Trentacoste and his colleagues at Trent initiated negotiations with Nobody Beats the Wiz, on behalf of Digital. (Id. at 114-16.)

C. The Westford Meeting

On February 22-23, 1995, Digital held a meeting in Westford, Massachusetts with all of the new representatives including Trent and AB & T. At this meeting, Keller and others from Digital made presentations to the representatives concerning the Starion line and Digital's goals. (Def.'s Trent SOF ¶¶ 18-19.) Both Tydings and Trentacoste claim that Keller expressed Digital's commitment to a three year deal at this meeting. (Trentacoste Dep. at 126-27; Tydings Dep. at 212, 246-248.)

At the Westford meeting, Digital presented the representatives with individual written contracts to be signed by each of them and Digital. The Agreements were identical, consisting of seven pages and two attached exhibits which described the territory of the individual representative and the method of calculating commissions. (See Trent Sales Representative Agreement, Def.'s Trent SOF, Ex. J; AB & T Sales Representative Agreement, Def.'s AB & T SOF, Ex. I.) Paragraph 7 details the representative's right to commissions, stating that the

[r]epresentative shall be entitled to a commission for sales of Products to customers {within the Territory and Market} pursuant to accepted purchase orders submitted by Representative during the term of this Agreement ("Qualified Sales").

(Id. ¶ 7.) The "term" of the Agreement was defined as commencing on the date of the contract and terminating on the "Termination Date." (See id. ¶ 8.) In ¶ 9 of the Agreement the termination of the contract was defined as follows:

Termination: This Agreement may be terminated at any time by either DIGITAL or Representative upon thirty (30) days advance written notice to the other. The date specified in such a notice as the termination date or, if no date is specified, that...