90 A.3d 885
Vt.2013Background
- Foti sold most of his fuels business to Kurrle in 2004 via an asset-purchase, a stock-purchase, and a post-closing agreement; Foti retained a wholesale distributorship and agreed to sell gasoline to Kurrle for five years and gave a five-year noncompete for separate consideration.
- Parties later executed a more specific standalone noncompetition agreement clarifying scope and delaying the first installment payment by one year.
- After Exxon withdrew from New England and rebranding, Kurrle rebranded with Shell and began purchasing from another distributorship (Evans), and Kurrle’s transport company delivered fuel to Foti’s former customers. Foti then worked for Packard Fuels.
- Kurrle counterclaimed for breach of the noncompetition agreement, breach of the covenant of good faith and fair dealing (based on Foti’s Packard employment), and violations of the Vermont Consumer Fraud Act (CFA) for alleged false promises made at the sale.
- Trial court granted JMOL for Foti on the noncompetition-based contract claims (finding no damages) but submitted the CFA claim to the jury. The jury awarded large damages, which the court vacated via renewed Rule 50(b) JMOL, holding the CFA did not apply because the sale was not "in commerce." Kurrle appealed.
Issues
| Issue | Foti's Argument | Kurrle's Argument | Held |
|---|---|---|---|
| Whether plaintiff could raise in Rule 50(b) the statute-of-coverage (CFA "in commerce") argument not fully briefed pre-verdict | JMOL renewal simply elaborated the already-raised argument and the court had signaled concerns earlier; timely | The argument was new on rehearing and therefore improper under Rule 50(b) | Held for Foti: argument was not novel; court had raised the issue and parties had opportunity to respond |
| Whether the CFA applies to this sale (transaction occurs "in commerce") | CFA does not reach private, highly negotiated sale of an ongoing business not offered to the public; statute targets consumer-market wrongs | CFA covers the sale because of broad remedial purpose and alleged deceptive statements to induce purchase | Held for Foti: CFA does not apply — "in commerce" limited to consumer-market/public business context; affirmed JMOL vacating jury award |
| Whether Kurrle proved damages from breach of noncompetition sufficient to send contract claims to jury | JMOL: Kurrle failed to prove lost profits or other reliable damages, so breach claims must fail | Kurrle asserted lost revenues/consequential lost profits and alternatively sought restitution (return of consideration paid for noncompete) | Held for Kurrle in part: trial court erred to the extent it foreclosed all relief; consequential lost-profit proof was insufficient, but restitution (return of consideration) is an available alternative remedy; breach claims remanded for jury determination |
| Which noncompetition instrument governs | Asset-purchase noncompete or later, more specific standalone noncompetition agreement? | Foti: later specific agreement and delayed payment modified terms; Kurrle: earlier asset agreement terms | Held for Foti: later specific standalone noncompetition agreement governs (specific controls general; year delay was consideration) |
Key Cases Cited
- Christie v. Dalmig, Inc., 396 A.2d 1385 (Vt. 1979) (CFA requires unfair or deceptive act in commerce)
- Carter v. Gugliuzzi, 716 A.2d 17 (Vt. 1998) (interpretation of "in commerce" and consumer standing under CFA)
- McGee Constr. Co. v. Neshobe Dev. Inc., 594 A.2d 415 (Vt. 1991) (measure of contract damages per Restatement)
- Vt. Elec. Supply Co. v. Andrus, 373 A.2d 531 (Vt. 1977) (damages measure for breach of noncompetition focuses on plaintiff's provable loss)
- Lantner v. Carson, 373 N.E.2d 973 (Mass. 1978) ("in commerce" requirement limits consumer protection act to business/consumer context)
- Zeeman v. Black, 273 S.E.2d 910 (Ga. Ct. App. 1980) (consumer fraud statutes do not reach private, bilateral business sales)