988 F.3d 26
1st Cir.2021Background:
- Primarque (MA distributor) and WWW (manufacturer) had a 39‑year commercial relationship involving repeated purchase orders and a “Drop Ship” arrangement; no current written distribution contract after 1993.
- In March 2015 WWW abruptly told Primarque it would no longer sell to it and immediately began selling directly to some Drop Ship customers; Primarque sued 7 days later in state court asserting breach of contract, promissory estoppel, tortious interference, and Chapter 93A claims; WWW counterclaimed for unpaid invoices.
- District Court granted summary judgment for WWW on promissory estoppel, Chapter 93A, and parts of Primarque’s contract claim; allowed a contract claim to proceed to jury based on an implied contract governed by Mass. UCC § 2‑309(3) (reasonable‑notice term).
- Jury found (special verdict) an implied continuing contract, that WWW breached by failing to give reasonable notice, and that WWW tortiously interfered with Primarque’s relations; awarded $51,000 (breach) and $204,000 (tort). District Court reduced/adjusted post‑verdict: struck the $51,000 as duplicative (vacated), entered judgment for WWW on its counterclaim (~$97,843 + interest), denied prejudgment interest on Primarque’s $204,000, and granted summary judgment to WWW on Chapter 93A.
- Primarque appealed (challenging duplicative strike, denial of prejudgment interest, Chapter 93A summary judgment and related rulings); WWW cross‑appealed (challenging denial of JMOL on contract and tort claims and asking reduction of tort damages).
Issues:
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Existence of enforceable contract / applicability of UCC § 2‑309(3) (reasonable‑notice term) | Course of dealing created an implied‑in‑fact distribution contract subject to a reasonable‑notice term | No binding distribution agreement existed; § 2‑309(3) inapplicable absent a contract | Jury reasonably could find an implied contract from course of dealing; denial of JMOL affirmed |
| Was WWW’s same‑day termination reasonable or excused by Primarque’s pre‑termination conduct | Same‑day notice was unreasonable given Primarque’s substantial ongoing purchases and lack of adequate substitutes | Primarque was lining up alternatives in 2014 so WWW’s notice was reasonable or Primarque breached first | Reasonableness of notice was for the jury; same‑day termination could be found unreasonable and not excused |
| Tortious interference claim: was WWW’s conduct tortious? | Abrupt, unreasoned termination induced Drop Ship customers to stop dealing with Primarque | WWW had no legal obligation to give notice, so termination not tortious as a matter of law | Because a jury reasonably could find a contractual notice obligation, tortious interference verdict was supportable; judgment affirmed on tort claim |
| Damages duplication, prejudgment interest, and offset | Primarque sought prejudgment interest on $204,000 and offset of WWW’s counterclaim; breach award should stand | WWW argued breach award duplicated tort award and that tort award should be reduced as speculative; opposed prejudgment interest | Court held the $51,000 breach award was not necessarily duplicative but reduced reinstatement to $39,017 (max provable 90‑day breach damages); denial of prejudgment interest on $204,000 reversed (Primarque entitled to prejudgment interest); offset denial vacated; tort award ($204,000) affirmed |
Key Cases Cited
- Cherick Distribs., Inc. v. Polar Corp., 669 N.E.2d 219 (Mass. App. Ct. 1996) (unreasonable abrupt termination can violate UCC reasonable‑notice principle and support Chapter 93A claim)
- Teitelbaum v. Hallmark Cards, Inc., 520 N.E.2d 1333 (Mass. App. Ct. 1988) (adequacy of notice depends on whether a substitute supplier could be obtained)
- Zimmerman v. Bogoff, 524 N.E.2d 849 (Mass. 1988) (business tort damages may be recovered despite uncertainty in measuring future losses)
- Anthony's Pier Four v. HBC Assocs., 583 N.E.2d 806 (Mass. 1991) (repudiation of contractual arrangements can be an unfair practice under Chapter 93A)
- Datacomm Interface, Inc. v. Computerworld, Inc., 489 N.E.2d 185 (Mass. 1986) (approach to assessing damages and uncertainty in business torts)
- Rombola v. Cosindas, 220 N.E.2d 919 (Mass. 1966) (possibility of no future profits does not bar recovery of prospective profits)
- Gettens Elec. Supply Co. v. W.R.C. Props., Inc., 489 N.E.2d 217 (Mass. App. Ct. 1986) (interpretation of "written contract" in non‑UCC statute; distinguished here)