Vigano v. Wylain, Inc., s. 80-1016

• Decision Date: 31 October 1980
• Docket Number: Nos. 80-1016,80-1024,s. 80-1016
• Citation: 633 F.2d 522
• Parties: 7 Fed. R. Evid. Serv. 1429 Robert VIGANO, Robert Hines, Greers Ferry Builders, Inc., Plaintiffs-Appellees/Cross Appellants, v. WYLAIN, INC., Defendant-Appellant/Cross Appellee.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 522

633 F.2d 522

7 Fed. R. Evid. Serv. 1429

Robert VIGANO, Robert Hines, Greers Ferry Builders, Inc. Plaintiffs-Appellees/Cross Appellants, v. WYLAIN, INC., Defendant-Appellant/Cross Appellee.

Nos. 80-1016, 80-1024.

United States Court of Appeals Eighth Circuit.

Submitted June 9, 1980.

Decided Oct. 31, 1980.

David R. Evans, Clayton, Mo., argued, for plaintiffs-appellees/cross appellants.

Jim J. Shoemake, Guilfoil, Symington, Petzall & Shoemake, St. Louis, Mo., for Wylain, Inc.

Before HEANEY and ARNOLD, Circuit Judges, and OVERTON, ^* District Judge.

OVERTON, District Judge.

This case is an action for breach of contract with federal jurisdiction based on diversity of citizenship under 28 U.S.C. § 1332. The three plaintiffs, Robert Vigano, Greers Ferry Builders, Inc., and Robert J. Hines allege they were distributors of modular homes produced by the Continental Homes Division of defendant Wylain, Inc., and that Wylain's wrongful termination of their distributorship agreements caused each of them serious financial loss. After a four day trial, the District Court ¹ jury awarded plaintiffs damages totaling $82,500.

Defendant Wylain has appealed, claiming the trial court erred in submitting the case to the jury given the state of the pleadings and proof, and setting forth several grounds for reversal. Each plaintiff has filed a cross-appeal based on the trial court's exclusion of certain proffered evidence of damages. For reasons set out, we affirm the trial court's decision and deny both the appeal and the cross-appeal.

For a number of years, the Continental Homes Division of Wylain, Inc., manufactured modular homes at its Malden, Missouri, plant which were sold to customers in the five state area surrounding the plant. The facility was closed in April of 1978 for unspecified "economic" reasons.

Plaintiffs' First Amended Complaint alleged in three counts that each of them had acted as a distributor of Wylain's Continental Homes in various parts of Missouri (Vigano), Arkansas (Greers Ferry) and Illinois (Hines). Attached to the Amended Complaint was an unexecuted copy of a document styled "Independent Distributorship Agreement", which forms the basis of this suit. The document, which was prepared by Wylain, is printed in the form of a contract and appears in all aspects to be intended by the preparer to serve as a contract. The agreement purports to establish terms of dealing between Wylain's Continental Homes Division and those who would distribute its products to dealers and the general public.

There was testimony at trial by plaintiff Robert Vigano that he signed a copy of the Independent Distributorship Agreement during a meeting with Mr. Harvey Davidson, Wylain's Regional Sales Manager, and that Davidson retained a copy of the contract with the understanding that Mr. Mason of Wylain would sign for Wylain and return the agreement to Vigano. Vigano never received a copy of the agreement executed by an officer of Wylain. Tr. 209. This agreement was to set Vigano up as Wylain's exclusive distributor in a territory including parts of southwest Missouri and northwest Arkansas. Vigano had previously purchased the sole-proprietorship known as Lake Homes from a Mr. Ralph Tucker who continued to be employed by Wylain in another capacity.

Mr. William Davidson, President of Greers Ferry Builders, Inc., testified that he signed a version of the Independent Distributorship Agreement after discussions with Mr. Harvey Davidson, who is William's brother. The version signed by Greers Ferry in the spring of 1975 was identical to that attached to plaintiffs' First Amended Complaint, except that it was typewritten rather than printed. This contract was signed by a Mr. Cooper of Wylain and returned to Greers Ferry. In 1976, a newly printed but otherwise identical version of the contract was signed by William Davidson of Greers Ferry and given to Harvey Davidson for execution by Wylain. This agreement was also signed by Cooper for Wylain and returned to Greers Ferry in May of 1976.

At trial, neither Vigano nor Greers Ferry was able to produce a copy of the Independent Distributorship Agreement executed by an officer of Wylain. Vigano testified that he never received such a document from Wylain. Greers Ferry was unable, despite a diligent search of their records, to produce their copy of the document. These circumstances differ from those of plaintiff Robert J. Hines, who did not testify to signing such an agreement. In essence, however, the claims of Vigano and Hines are the same since neither could or did allege a completed written contract. Rather, they alleged an oral agreement pursuant to the terms of the Independent Distributorship Agreement. Greers Ferry, on the other hand, alleged a written contract which was lost or misplaced.

Robert Vigano purchased his Lake Homes distributorship January 1, 1978. Between that date and April 19, 1978, when the Continental plant closed, Vigano sold five homes for Wylain. The fifth such order was never submitted to Wylain on the advice of Wylain's regional sales manager, who informed Vigano that neither this nor any of the four previous orders would be honored. This was despite the fact that down payment checks had been accepted and deposited by Wylain as to the first four. The jury awarded Vigano $29,000 for his lost profits on these five home sales. ²

Greers Ferry had been a distributor for Wylain since 1975, as noted earlier, and had received checks from the appellant during 1976 and 1977 in payment of the 5% volume discount. Two orders for modular homes had been submitted by Greer's Ferry at the time of the plant closing which were never filled. The jury awarded Greer's Ferry $15,000 in damages.

Plaintiff Robert Hines testified that he reached an agreement in November, 1977, with Wylain's regional sales manager for him to become Wylain's distributor for a territory in northern Illinois. Hines submitted thirteen orders for Continental Homes prior to the announcement by Wylain on April 19, 1978 that its plant would close. The jury returned a verdict for Hines in the amount of $38,500 based on his testimony as to his losses on these thirteen homes.

The parties apparently agree that Missouri law is applicable, and since the case was submitted on instructions based on Missouri law, we conclude for purposes of this appeal that any question as to applicability of Illinois or Arkansas contract law has been waived.

I.

Wylain contends as a matter of law that plaintiffs' claims are barred by the Statute of Frauds provision in Article 2 of the Uniform Commercial Code, § 400.2-102 RSMo. (1969). The statute provides in pertinent part:

Except as otherwise provided in this section a contract for the sale of goods for the price of five hundred dollars or more is not enforceable by way of action or defense unless there is some writing sufficient to indicate that a contract for sale has been made between the parties and signed by the party against whom enforcement is sought ...

The clearest indication of Missouri law on this question, however, is to the effect that distributorship agreements are not covered by Article 2, Tile-Craft Products Co. v. Exxon Corp., 581 S.W.2d 886, 889 (Mo.App.1979). ³ The case is, therefore, covered by the more ancient Missouri Statute of Frauds, § 432.010 RS Mo. 1959, if at all.

Even a cursory reading of the cases interpreting the traditional Statute of Frauds in Missouri reveals clearly that the contracts alleged by Vigano and Hines are not within the statute. The statute, by its terms, applies only to contracts which cannot be performed in one year. In Koman v. Morrissey, 517 S.W.2d 929 (Mo.1975), it was held that an employment contract incapable of performance in one year was, nonetheless, not within the statute because of a clause which allowed either party to terminate the agreement at will. Thus, it was possible that the contract might be performed in a year. See also, Murphy v. Buschman-Jennings, Inc., 382 S.W.2d 29 (Mo.App.1964); Want v. Century Supply, 508 S.W.2d 515 (Mo.App.1974). Similarly, the terms of the agreement alleged by Vigano and Hines allowed the agreement to continue from month to month or to be terminated by either party on thirty days written notice. Hence, it is possible that the contract could have been performed in a year and it is thus not within the Statute of Frauds. ⁴ Koman v. Morrissey, supra.

II.

Wylain secondly contends as a matter of law that the agreement was void for lack of mutuality or for indefiniteness. This argument stems from that clause of the Independent Distributorship Agreement which states:

6. Continental agrees to sell and deliver to Distributor at their current sales prices, and upon such terms as may be agreed between the parties, any of such products which Distributor orders from Continental from time to time. Title to such products shall pass from Continental to Distributor upon delivery to whatever site or location is agreed upon between the parties.

The Court has no difficulty in concluding that the above clause does not create insuperable problems of mutuality or of indefiniteness. The clause is in the nature of an agreement to agree.

It has ... been widely recognized of late that agreements to agree serve a valuable mercial need, especially in long term supply contracts where the parties wish to assume themselves respectively of a source of supply and an outlet for production but are unable to foresee in a potentially fluctuating market what a reasonable price will be. In consequence, the Uniform Commercial Code and the new Restatement adopt the modern view that an agreement to agree as to a material term does not necessarily result in fatal indefiniteness.

Calamari & Perillo, The Law of Contracts, (2d Ed. 1977) at 51. See Restatement of Contracts (2d), § 32, illus. 8.

Moreover, under the circumstances of this agreement, it is only natural that the parties would leave open the price...