Colonial Trading, LLC v. Bassett Furniture Industries, Inc.

530 F. App'x 218
CourtCourt of Appeals for the Fourth Circuit
DecidedJune 21, 2013
DocketNos. 12-2296, 12-2358
StatusPublished
Cited by5 cases

This text of 530 F. App'x 218 (Colonial Trading, LLC v. Bassett Furniture Industries, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fourth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Colonial Trading, LLC v. Bassett Furniture Industries, Inc., 530 F. App'x 218 (4th Cir. 2013).

Opinion

Affirmed by unpublished PER CURIAM opinion.

Unpublished opinions are not binding precedent in this circuit.

PER CURIAM:

A jury awarded $1,312,665.35 to Colonial Trading, LLC (“Colonial”) on its breach of contract claim against Bassett Furniture Industries, Inc. (“Bassett”) based on a dispute involving recalled baby cribs. The jury also awarded Colonial $41,472.08 on its North Carolina Unfair and Deceptive Trade Practices Act (“UDTPA”) claim, N.C. GemStat. § 75-1 et seq., which the district court trebled under N.C. Gen.Stat. § 75-16. Bassett appeals, challenging the jury instructions, Colonial’s UDTPA award, and the damages calculation. Colonial cross appeals the district court’s denial of its request for trebled contract damages. For the reasons that follow, we affirm.

I.

A.

Colonial is a North Carolina furniture sourcing agent that imports furniture from Chinese companies for sale to American furniture distributors. The distributors make specific product orders through Colonial, who effectively advances the cost of the goods on behalf of the distributor by paying the Chinese company directly for the imported furniture. The Chinese company then releases bills of lading when the goods reach American ports, and Colonial invoices the distributor for the cost of the products.

The case before us involves orders for three crib models, designed by Bassett, which Colonial sourced from Chinese companies, and which Bassett had contracted to resell to Babies’R’Us. In 2005, during the course of the Colonial-Bassett relationship, Colonial signed Bassett’s “Import Sourcing Policy”; the policy subjects each import order to Bassett’s “standard quality control procedures.” J.A. 1249. Additionally, the crib invoices Colonial submitted to Bassett stated that Colonial’s product would “be 100% free of manufacturing defects and raw material defects.” J.A. 1261.

Under the quality control procedures, Bassett supervised the first production run and paid for third-party auditing of each of the three crib models at issue. Beginning in 2007, however, reports from consumers and internal testing results led Bassett to issue voluntary recalls of each of the three crib lines, damaging its relationship with Babies’R’Us.

Instead of paying Colonial’s mounting invoices for the cribs and other furniture products, Bassett attempted to “charge back” its recall costs by crediting those costs against invoices from Colonial, including invoices for furniture other than the cribs in question. Additionally, when Colonial refused to advance more funds to Chinese manufacturers for Bassett’s orders, effectively halting the release of the requisite bills of lading, Bassett approached the Chinese manufacturers and paid at least one of them more than the contracted amount for the furniture so the manufacturer would release bills of lading directly to Bassett.1

[221]*221B.

Colonial sued Bassett in North Carolina court, alleging that Bassett (1) breached its contract with Colonial by failing to pay its invoices, improperly cancelling orders, and applying unauthorized chargebacks; (2) tortiously interfered with Colonial’s third-party contracts; and (3) committed unfair and deceptive trade practices in violation of the North Carolina UDTPA, by, among other things, inducing Colonial’s suppliers to deal with Bassett instead of Colonial by bribery or coercion. Bassett removed the case to federal court and counterclaimed, alleging that it had properly revoked its acceptance of the cribs because Colonial (1) breached its contract with Bassett; (2) tortiously interfered with Bassett’s contracts with manufacturers;2 and (3) breached its express warranty and implied warranty of merchantability by delivering defective cribs.

After an eight-day trial, the district court reviewed the parties’ proposed jury instructions at length before sending the case to the jury. Although the court primarily used its own set of prepared instructions, it did include Colonial’s proposed Instruction 16, regarding warranties and manufacturing defects, see infra Part II, despite Bassett’s objection that the Instruction was “misleading or confusing,” J.A. 866.

After deliberations, the jury awarded Colonial $1,312,665.35 on its breach of contract claim and $1 on its tortious interference claim. With respect to the UDTPA, the jury found that Bassett’s conduct was in or affected commerce, that Bassett acted with the intent of interfering with Colonial’s relationships with its suppliers, and that Bassett committed seven alleged unfair trade practices — all the elements of a UDTPA claim.3 The jury awarded UDT-PA damages of $41,472.08 on the alleged unfair trade practice listed at 3(c)(F) of the verdict form — that Bassett “[i]nduce[d] Colonial’s suppliers to deal with Bassett instead of Colonial by bribery or coercion,” J.A. 235; supra note 3. It awarded $1 in nominal damages on the other six alleged unfair trade practices. The jury denied Bassett’s counterclaims, except for its claim for breach of express warranty, which it found Colonial had breached. It awarded $1 in nominal damages to Bas-sett.

Following trial, Colonial moved for attorneys’ fees and treble damages on its breach of contract and UDTPA awards. The district court granted Colonial’s request for treble damages with respect to its UDTPA recovery, explaining that, since distinct conduct supported the breach of contract and UDTPA awards, treble UDT-PA damages were not duplicative of Colo[222]*222nial’s recovery for breach of contract. Therefore, the district court trebled the UDTPA damages to $124,416.24. This appeal followed.

II.

The primary thrust of Bassett’s appeal focuses on Number 16 of the jury instructions (“Instruction 16” or “the Instruction”), which the district court adopted from Colonial’s proposed instructions. Instruction 16 reads, in its entirety:

I further instruct you that warranting a shipment to be without defects does not mean that each and every part of each and every crib would have no manufacturing defects. Because any crib of a specific model breaches a warranty does not mean that the purchaser is entitled to any and all of its expenses related to all cribs of that design. In order to permit rejection of and expenses incident to an entire shipment for nonconformity the purchase must show that the defect rate was higher than agreed upon or lacking specific agreement was higher than the standard in the industry.
To the extent that Bassett has shown that specific cribs have manufacturing defects [and] will fail to meet the warranties made by Colonial[,] Bassett is entitled to damages for breach of warranty for such cribs.

J.A. 1041. Bassett contends that the Instruction (1) caused the jury to ignore the express warranty signed by Colonial; (2) misinstructed the jury about damages in breach of warranty cases, generating confusion about the appropriate award; and (3) misinformed the jury about the law governing Bassett’s breach of contract, revocation of acceptance, and implied warranty claims, so as to require a new trial. We address each argument in turn.

A. Standard of Review

While we review a district court’s decision to give or not give a jury instruction for abuse of discretion, “we conduct a de novo review of any claim that jury instructions incorrectly stated the law.” United States v.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Cite This Page — Counsel Stack

Bluebook (online)
530 F. App'x 218, Counsel Stack Legal Research, https://law.counselstack.com/opinion/colonial-trading-llc-v-bassett-furniture-industries-inc-ca4-2013.