MEMORANDUM OF DECISION AND ORDER
This is an action arising out of the termination of Plaintiff, KBQ, Inc. (“KBQ”), under a franchise agreement with Defendant, E.I. DuPont de Nemours and Co. (“DuPont”). KBQ’s complaint contains two counts for breach of contract, and counts for breach of the implied covenant of good faith and fair dealing, promissory estoppel, tortious interference with an advantageous relation, breach of fiduciary duty, fraudulent misrepresentation, misappropriation of trade secrets, uneonseionability, defamation, and violation of Mass.G.L. c. 93A, § 11.
DuPont has moved for summary judgment on all counts; .KBQ has moved, for partial summary judgment on one of the counts for breach of contract, and on the counts for fraudulent misrepresentation, misappropriation of trade secrets, and violation of c. 93A. The Court has diversity jurisdiction pursuant to 28 U.S.C. § 1332.
I. FACTS
The Court treats the following facts as' undisputed unless othervdse noted:
DuPont is a Delaware corporation with its principal place of business in Wilmington, Delaware. DuPont is the manufacturer of Corian® (“Corian”), a tony solid surface material used in commercial and residential Mtchen and bath fixtures. DuPont sells its Corian product trough a network of authorized distributors who each cover a specified territory, or “Geographical Marketing Area” (“G.M.A.”). Distributors, in turn, sell the Corian product to fabricators and dealers who must be “certified” by DuPont. Certification entitles fabricators and dealers to fabricate and/or resell the Corian product purchased from distributors.
KBQ, a Massachusetts corporation operating out of Westborough, Massachusetts, became an authorized distributor of Corian effective January 1, 1991. Prior to that, Urell’s, Inc. — a company that is owned in part by KBQ’s president and part-owner, Richard Douglas Urell — had been a Corian distributor since June of 1981. Mr. Urell is a college graduate who briefly attended law school.
Under their written agreement (“Distributor Agreement”), KBQ acted as a distributor for DuPont’s Corian product line. KBQ was initially assigned the G.M.A. covering Massachusetts. In August 1993, DuPont assigned KBQ the G.M.A. covering the Albany, New York region as well.
In November 1994, DuPont notified KBQ of perceived problems in the staffing of KBQ. At a subsequent meeting, John Charamella, DuPont Corian’s Northeast Manager of Distribution, and Paul Clegg, DuPont Corian’s Regional Manager for North America, discussed the staffing issues with Urell. In that meeting, DuPont directed KBQ to hire a new residential segment manager as a solution to KBQ’s staffing shortcomings. KBQ purchased approximately $3,762 million in Cori-an products from DuPont in 1994, which was still a 2% overall decrease from their purchases for the previous year. As directed by DuPont, KBQ hired a new residential segment manager in January 1995. At a later meeting, held in February 1995, Clegg, reviewed KBQ’s progress approvingly and set a growth benchmark of 18% for the coming six months. In a letter dated May 30, 1995, DuPont wrote to KBQ congratulating them for meeting the goal set in the November, 1994 meeting.
In 1995, DuPont set a 14% growth target for all distributors to reach in order to qualify for DuPont’s 1995 Reward for Growth rebate program. That year, KBQ purchased approximately $4,686 million in inventory from DuPont, a 26% increase from 1994. On August 21, 1995 DuPont wrote a letter congratulating KBQ on having met or exceeded its growth objective for the year to date and invited KBQ’s employees to the Ryder Cup Golf Tournament as a reward for having met the growth goal. On December 4, 1995 DuPont wrote to KBQ congratulating it on having met or exceeded it 1995 growth objective. On December 21, 1995 DuPont sent another letter to the same effect.
In 1996, DuPont again set a 14% growth target for the year. During 1996, KBQ showed slower growth in the first three quarters of the year, but by the last quarter made sufficient Corian purchases to qualify for 1996. By the end of the year, KBQ had purchased approximately $5,335 million in inventory from DuPont, an increase of 14% from the previous year’s purchases. In March 1996 DuPont treated the residential sales staff to a ski weekend at Mt. Snow as a reward for KBQ’s performance. On November 15, 1996, DuPont wrote to KBQ: “Congratulations on your Distributorship earning a rebate for 1996 .... We look forward to a continuing year of outstanding growth in 1997.”
In late 1996, KBQ submitted to DuPont its 1997 business plans which included its, 1997 Residential Business Marketing Plan, its 1997 Innovative Builder Level II Marketing Plan, its 1997 Builder Program Proposal and
In addition to submitting its regular business plans for the coming year, KBQ committed to participate in a three-year advertising program beginning in 1997 called “Ignition 2000.” DuPont billed KBQ for the 1997 portion of the programs, an amount of $73,455. KBQ invested in an upgrade for its computer system so as to be compatible with DuPont’s. Also, on March 10, 1997, KBQ hired an additional sales employee based upon DuPont’s request that KBQ add a “Builder Specialist” to support the Builder and Remodeler, pro-.' grams at KBQ.
During the spring and summer of 1996, William Fleming, DuPont’s Corian National Distribution Manager, discussed with other franchised distributors the possibility of taking over the G.M.A. then serviced by KBQ. Then, in November or December of 1996, Fleming spoke specifically with Kilstrom Distribution (“Kilstrom”), Dolan & Traynor (“Dolan”) and two other adjacent distributors about the feasibility of taking over KBQ’s G.M.A. On February 28, 1997, at a meeting for the North American Leadership Team for Corian, Clegg approved a proposal to terminate KBQ as a distributor. The parties, however, dispute whether such approval was conditional subject' to finding suitable replacements in KBQ’s G.M.A. On April 2, 1997, DuPont sent a letter to four authorized distributors officially requesting proposals for replacement in KBQ’s G.M.A. Later, DuPont assigned the Massachusetts G.M.A. to Kilstrom and the Albany G.M.A. to Dolan.
On April 22,1997, Fleming and Charamel-la met with Urell and delivered DuPont’s written notice of termination to KBQ, effective May 25, 1997. At no time prior to the meeting was KBQ informed that DuPont was considering termination. Some time shortly thereafter, Mr. Charamella released to Kil-strom and Dolan all of the information in KBQ’s 1997 business plans as well as KBQ’s fabricator sales information. By the end of May 1997, KBQ’s purchases from DuPont amounted to- approximately $2,314 million for the year-to-date. ■ ’ '
After giving KBQ notice, DuPont offered to repurchase all of KBQ’s current inventory at chrrent price and refund certain advertising money. There is no evidence that DuPont followed’through on the performance of such an offer, or that KBQ accepted the offer.
On May 23, 1997, KBQ brought-the present action in Massachusetts Superior Court by filing a twelve count everything-but-the-kitchen-sink(-and-countertop) ■ complaint. Subsequently,' the action was removed here pursuant to 28 U.S.C. § 1441. KBQ sought to reverse the termination with a motion for preliminary injunction. This Court denied that motion along with DuPont’s motion to dismiss. KBQ now moves for summary judgment on’ four counts of the Complaint; DuPont has countered with' a cross motion for summary judgment.
II. DISCUSSION
• A motion for summary judgment must be allowed if “the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” Fed.R.Civ.P. 56(c). “To succeed [in a motion for summary judgment], the moving party must show that there- is an absence of evidence to support the nonmoving party’s position.”
Rogers v. Fair,
Summary judgment in favor of either party is inappropriate on several counts of the complaint due to vigorous factual disputes and that are both genuine and material. The motion is denied with respect to Counts II (good faith and fair dealing), III (promissory estoppel), V (tortious interference with advantageous relation), VII (fraudulent misrepresentation), VIII (misappropriation of trade secrets), IX (defamation), and XII (c. 93A). Two material issues of fact, among others, which are particularly hotly disputed, are worth highlighting: the date on which DuPont resolved to terminate KBQ and the reasonableness of KBQ’s reliance on statements made by DuPont.
The motions as they relate to the counts for breach of contract, breach of fiduciary duty, and unconscionability merit greater discussion.
A. Breach of Contract, Termination ,
Moving for summary judgment on the breach of contract claim for termination of the distributor relationship, DuPont relies on the termination clause of the Distributor Agreement:
2. TERM/TERMINATION
A. The term of this Agreement shall be effective as of January 1, 1991, and shall continue in effect thereafter unless and until terminated by,[sic] either party, with or without cause, upon at least thirty (30) days prior written notice.
DuPont argues that this clause gives it the unrestrained right to terminate KBQ with or without cause upon at least thirty days’ notice.
KBQ counters that the termination clause must be read in conjunction with other provisions of the Distributor Agreement, namely Paragraph 4, which contains the criteria by which a distributor will be evaluated, 1 and portions of Schedule E, which states that DuPont agrees to “[c]reate an environment built on trust and openness that allows for continuous improvement mnd insures long term business success.” KBQ argues these provisions amount to an agreement on the part of DuPont only to terminate for failure to meet performance goals and to give KBQ an opportunity to respond to or remedy any problems which might result in termination.
The parties agree that, pursuant to the choice of law provision of the Distributor Agreement, KBQ’s contract claims are governed by Delaware law. Because there is no compelling reason to do otherwise, this Court will “honor the parties’ choice of law on all counts upon which they agree.”
Steinke v. Sungard Financial Systems, Inc.,
Because DuPont has moved for summary judgment on this count, the Court will examine the facts and the inferences drawn therefrom in the light most favorable to KBQ. The termination provision of the Distributor Agreement is explicit: either party may terminate the agreement, with or without cause, upon notice of at least thirty days.
In the alternative, KBQ argues that the subsequent course of conduct between DuPont and KBQ modified the original agreement to the extent that, by 1997, DuPont was allowed to terminate only for cause’and after reasonable notice, despite the language of the Distributor Agreement.
KBQ faces a difficult standard in advancing this argument. The subsequent course of conduct must be of “such specificity ‘as to leave no doubt of the intention of the parties to change what they previously solemnized by formal document.’ ”
Haft v. Dart Group Corp.,
KBQ’s argument also fails as a matter of law. There is no evidence that either party explicitly expressed a desire to modify the termination clause; in fact, KBQ proffers no evidence that the provision was discussed by the parties at all. In support of its argument that the course of conduct modified the explicit termination clause' of the Distributor Agreement, KBQ relies instead on several factors which deal only indirectly with the parties’ termination rights. First, KBQ argues that the events of late 1994 and early 1995 where DuPont gave KBQ the opportunity to cure perceived shortcomings in staffing are evidence of an unspoken agreement to terminate only for cause and after a reasonable opportunity to respond. 2 Second, KBQ argues that the approval of KBQ’s 1997 Business Plans, along with KBQ’s hiring of new personnel and financial contribution to an upcoming advertising campaign, reflects DuPont’s agreement that the relationship between KBQ and DuPont was secure for at least the coming year. Finally, KBQ argues that DuPont’s statements of congratulation on achieving growth goals and repeated use of terms such as “partnership” and “long term relationship” manifest DuPont’s agreement to more narrow termination rights. Nonetheless, the, cumulative effect of this course of conduct is, as a matter of law, not sufficiently specific to modify the explicit termination provisions of the Distributor Agreement.
Finally, KBQ cannot avail itself of the protections of the Delaware Franchise Security Law (“DFSL”), Del.Code Ann. tit. 6, §§ 2551-2556.
3
The DFSL applies to franchised distributors “with a place of business within the State” of Delaware.
Id.
at § 2551(1).
Cf. 33 Flavors of Greater Delaware Valley, Inc. v. Bresler’s 33 Flavors, Inc.,
B. Breach of Contract, Profit Passover
Both parties have moved for summary judgment on Count IV of the Complaint, alleging breach of contract on the so-called “Profit Passover” clause of the Distributor Agreement:
7. PROFIT PASSOVER
It is recognized that AUTHORIZED DISTRIBUTORS bear a significant expense in complying with their duties hereunder in their respective G.M.A., including, without limitation, the duties set forth in Section 8 hereto. Accordingly in a reasonable effort to provide compensation for the accomplishment of such duties with respect to sales outside the G.M.A. the following rules shall apply:
A. For all sales by AUTHORIZED DISTRIBUTOR outside G.M.A. AUTHORIZED DISTRIBUTOR shall pay the AUTHORIZED CORIAN® DISTRIBUTOR in whose G.M.A. such sales are made, ten percent (10%) of the amount of such sales. B. AUTHORIZED DISTRIBUTOR promptly shall provide to DU PONT notification of all Product sales outside of G.M.A., and verification of “Profit Passover” payments for such sales.
KBQ contends that DuPont is responsible for profit passover payments for Corian sales made by Kilstrom and Dolan in KBQ’s former G.M.A. DuPont argues that the provision does not obligate DuPont to make such payments because the contract obliges franchised distributors to make profit passover payments to each other without DuPont’s intervention.
The proper interpretation of the provision is an issue of law.
See Rhone-Pou-lenc,
C. Breach of Fiduciary Duty
DuPont has moved for summary judgment on Count VI of the Complaint, for breach of a fiduciary duty, on the grounds that no fiduciary relationship exists between the parties. KBQ argues that material facts exist as to whether DuPont obliged itself to observe a fiduciary duty.
The parties disagree on whether this Court should apply Massachusetts or Delaware law to KBQ’s non-contraetual claims. That issue, however, need not be resolved because the outcome is the same under the substantive law of either jurisdiction.
See Lambert v. Kysar,
KBQ argues that disputed issues of material fact exist because DuPont may have created a fiduciary duty by frequently referring to the “partnership” that existed be-, tween DuPont and its- franchised distributors. Mere reference to a “partnership” does not, however, create a fiduciary , relationship. See id. at 74 (“By referring to the relationship that existed between [the distributors] and the Company as a ‘special partnership,’ the Company has not created a legal partnership with associated fiduciary duties.”).
D. Unconscionability
DuPont has moved for summary judgment on Count IX, for unconscionability, on the grounds that KBQ cannot proffer sufficient evidence in support of the claim. KBQ argues that the count cannot be resolved on summary judgment because the parties dispute material issues of fact.
A party seeking to show that an agreement is unconscionable under Massachusetts or Delaware law must show that, at the time the agreement was formed, there was an absence of meaningful choice and the contract terms unreasonably favor one party.
Tulowitzki v. Atlantic Richfield Co.,
Viewed in the light most favorable to KBQ, there is no evidence that the contract meets the legal standard of unfairness required for unconscionability. Mr. Urell has operated a business as a franchised distributor for at least sixteen years, and he is a college graduate who briefly attended law school. There are no facts which suggest that Mr. Urell is an unsophisticated businessman or that he did not understand the meaning of the termination clause. The termination clause is neither buried in the contract nor obscurely phrased. In short, KBQ can offer no evidence that he was unfairly surprised by the existence of the termination clause. By the same token, KBQ can offer no evidence, such as standard industry practice, that the clause was oppressively one-sided. The termination clause allowed both parties equal termination rights. Courts have generally held that termination provisions similar to this one are not unconscionable.
See, e.g., Communications Maintenance, Inc. v. Motorola, Inc.,
III. ORDER
The motion of Defendant E.I. DuPont De Nemours and Co. for summary judgment (Docket No. 57) is ALLOWED with respect to Counts I, VI, and IX of the Complaint and DENIED with respect to all other counts. The Plaintiff KBQ’s Motion for Partial Summary Judgment (Docket No. 60) is DENIED.
Notes
. 4. BUSINESS PLAN
The Business Plan for AUTHORIZED DISTRIBUTOR is set forth in Schedule "D” hereto. Before the commencement of every succeeding year hereunder, DU PONT and AUTHORIZED DISTRIBUTOR will agree in writing to a one (1) and five (5) year Business Plan. Du Pont will judge the performance of AUTHORIZED DISTRIBUTOR based upon compliance with Business Plan and achievement of target segment market shares in G.M.A.
. Based on this argument, KBQ seems to imply that DuPont was obligated to terminate KBQ in late 1994 if DuPont had wanted to preserve the effectiveness of the termination clause.
. Under the DFSL, a franchise may terminated only for "good cause” and upon at least 90 days ■notice. Del.Code Ann. tit. 6, § 2552(a) and § 2554.