Barkley, Inc. v. Gabriel Brothers, Inc.
829 F.3d 1030
| 8th Cir. | 2016Background
- Gabriel Brothers (discount retailer) and Barkley (marketing agency) entered a Master Services Agreement (Oct 2012) that required project-specific Statements of Work (SOWs) in writing and included a 90-day termination clause and an attorney-fees provision for suits to construe or enforce the Agreement.
- Barkley performed work under a 2012 SOW and negotiated a 2013 SOW (multiple draft versions Feb–Mar 2013) but no finalized written SOW with the Agreement’s incorporation clause was executed before Gabriel Brothers terminated Barkley in March 2013.
- After termination, Barkley and Gabriel Brothers negotiated a separation arrangement; on April 5, 2013 the parties’ principals allegedly agreed Gabriel Brothers would pay Barkley’s “actual costs.” Barkley submitted voluminous invoices totaling $418,996.76; Gabriel Brothers paid vendors directly and paid Barkley $228,677.13, withholding $138,223.52.
- Barkley sued for breach of the Master Agreement, and alternatively for breach of the April 5 actual-costs agreement and unjust enrichment. Gabriel Brothers counterclaimed for breach and unjust enrichment and asserted accord-and-satisfaction.
- The district court granted summary judgment to Gabriel Brothers dismissing Barkley’s breach-of-the-Agreement claim (no written SOW with incorporation clause). The court allowed the case to proceed on the April 5 actual-costs claim (treating formation as resolved), limited trial evidence accordingly, and a jury awarded Barkley $138,223.52. Post-trial prejudgment-interest and fee motions were denied.
- On appeal the Eighth Circuit affirmed most rulings but reversed the denial of prejudgment interest and remanded for entry of interest.
Issues
| Issue | Plaintiff's Argument (Barkley) | Defendant's Argument (Gabriel Brothers) | Held |
|---|---|---|---|
| Whether a 2013 Statement of Work formed under the Master Agreement (Feb 21) | SOW formed via negotiations and agreement on Feb 21; writing not required to effectuate SOW | Master Agreement required a written SOW containing the incorporation clause; no signed SOW existed | No — summary judgment for Gabriel Brothers affirmed: written SOW with incorporation clause required |
| Whether parties formed an April 5, 2013 contract to pay Barkley’s “actual costs” | April 5 agreement was made between principals to pay actual costs; invoices and contemporaneous emails support formation | No meeting of minds; disputed essential terms and evidentiary gaps | Yes — jury reasonably could find an actual-costs contract formed on April 5; verdict stands |
| Whether prejudgment interest was recoverable on the jury award | Invoices were fixed, damages ascertainable by simple computation (hours × rate); demand made — interest allowable under Mo. Rev. Stat. § 408.020 | Amount was genuinely disputed and thus unliquidated, precluding prejudgment interest | Reversed: damages were liquidated/ascertainable and prejudgment interest must be awarded |
| Whether Gabriel Brothers is entitled to contractual attorney’s fees under the Master Agreement | Gabriel Brothers prevailed on breach-of-Agreement claim by summary judgment and thus is entitled to fees | Both parties prevailed on different Agreement claims; no single prevailing party on main dispute | Affirmed denial of fees: neither party was the prevailing party for fee award |
Key Cases Cited
- Beverly Hills Foodland, Inc. v. United Food & Commercial Workers Union, Local 655, 39 F.3d 191 (8th Cir. 1994) (summary-judgment standard and viewing evidence for nonmovant)
- FutureFuel Chem. Co. v. Lonza, Inc., 756 F.3d 641 (8th Cir. 2014) (Erie doctrine: state substantive law applies in diversity cases)
- Erie R.R. Co. v. Tompkins, 304 U.S. 64 (U.S. 1938) (federal courts apply state substantive law in diversity cases)
- TAP Pharm. Prods. Inc. v. State Bd. of Pharmacy, 238 S.W.3d 140 (Mo. 2007) (contract interpretation focuses on parties’ intent and plain language)
- Travelers Prop. Cas. Ins. Co. of Am. v. Nat’l Union Ins. Co. of Pittsburgh, Pa., 735 F.3d 993 (8th Cir. 2013) (prejudgment interest discussion; compensatory purpose of interest)