Kuwaiti Danish Computer Co. v. Digital Equipment Corp.

9 Mass. L. Rptr. 127
CourtMassachusetts Superior Court
DecidedAugust 24, 1998
DocketNo. 930216E
StatusPublished
Cited by1 cases

This text of 9 Mass. L. Rptr. 127 (Kuwaiti Danish Computer Co. v. Digital Equipment Corp.) is published on Counsel Stack Legal Research, covering Massachusetts Superior Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Kuwaiti Danish Computer Co. v. Digital Equipment Corp., 9 Mass. L. Rptr. 127 (Mass. Ct. App. 1998).

Opinion

van Gestel, J.

This matter comes before the Court on the third count of the plaintiffs complaint, charging violations of G.L.c. 93A. The remainder of the case was tried to a jury that, on August 18, 1998, rendered its verdict in favor of the plaintiff, Kuwaiti Danish Computer Co. (“Kuwaiti Danish”), on the second count of the complaint alleging misrepresentation. Part of the first count, alleging breach of contract, was determined earlier on a motion for summary judgment. The remainder of the first count was decided by the jury when it concluded that the defendant, Digital Equipment Corporation (“DEC”), did not fail to perform or repudiate its contract with Kuwaiti Danish.

In deciding this c. 93A claim, the Court expressly did not send any part of it to the jury for an advisory opinion. At the same time the Court, obviously, is aware of the jury’s conclusions on the special questions propounded to it. Nevertheless, the Court’s findings and rulings here are its own, and independent from those of the jury.

FINDINGS OF FACT

The plaintiff, Kuwaiti Danish, and its wholly owned subsidiary Kuwaiti Digital Computer Co., the latter a Massachusetts corporation located in Wellesley, were highly sophisticated purchasers and resellers, principally in the Middle East, of computer equipment and computer systems. At least as early as 1984, one or the other — they seemed somewhat oblivious to the technicalities of their corporate status — had numerous business transactions with DEC in Massachusetts wherein they purchased computer equipment for delivery to and resale in Kuwait. This business rela[128]*128tionship was permitted to lapse in 1989. Thereafter, at DEC’S insistence, Kuwaiti Danish began buying its products destined for Kuwait from DEC’S United Kingdom facility or from DEC’S independent distributor in the United Kingdom who had authority from DEC to resell product destined for Kuwait.

In September of 1990, Iraq invaded Kuwait and in the following January the Gulf War ensued. The Court presumes that DEC, a major world wide producer and marketer of computer products, was fully aware of the war and, at least minimally, cognizant of the physical devastation wreaked upon Kuwait and its infrastructure.

It was in that context and time frame that Farouk Ayoub (Ayoub) of Kuwaiti Digital Computer Co., acting for Kuwaiti Danish, in September of 1991 approached DEC’S Waltham, Massachusetts, office inquiring about the purchase of a significant computer system for the University of Kuwait. There is — believe it or not — a dispute as to whether Ayoub and Kuwaiti Danish concealed from DEC the fact that the University of Kuwait was located in Kuwait, and whether DEC instead was truly of the belief that the University of Kuwait actually had a campus in Washington, D.C. DEC’S Waltham office, in any event, apparently thought that the University of Kuwait had a campus in Washington, D.C., and, therefore, directed Kuwaiti Danish’s inquiry to personnel in DEC’S Washington area office that specifically dealt with sales to educational institutions. That referral included DEC’S sending of a facsimile copy of Kuwaiti Danish’s highly detailed list of computer parts — called configurations — to one Norris Roy (Roy), the designated salesman in its Washington office.

Roy, being a good salesperson, was delighted to receive the lead. In this context, Roy’s investigation of the potential customer began. For a sophisticated computer manufacturer, the investigation was shallow in the extreme. Roy dialed “411" and was told that there was a local Washington, D.C., telephone number for the University of Kuwait. Additionally, Roy asked for a Dun & Bradstreet Report on the University of Kuwait. This report, dated October 2, 1991, reflected that, although its headquarters were in Kuwait, the University had a branch office at the Kuwaiti Embassy in Washington that had as its purpose placing students in American universities. Thus armed, Roy proffers this information as support for his assumption that the University of Kuwait had a campus or educational facility in the District of Columbia area that would have need for the kind of computer system sought by Kuwaiti Danish. It is doubtful that Roy really cared all that much about the University of Kuwait’s location. He was a salesman with a chance to make a large sale.

Roy and Robin McFadden (McFadden), the first DEC sales representative contacted in Waltham, Massachusetts, were not the only DEC employees suggesting an initial assumption that the University of Kuwait was located in Washington, D.C.1 Roy was designated by his Sales Manager, Luletha Cheatham (Cheatham), another DEC believer in a D.C. situs for the University, to be the salesperson responding to the Kuwaiti Danish inquiry. It was Cheatham who took the initial call from McFadden in Waltham.

Further, before participating in the early conference call described below, Roy had a brief conversation with Robert Burklow (Burklow), the District Operations Manager in charge of “nonstandard pricing terms and conditions,” as well as DEC “policies and procedures.” Burklow’s input was required on nonstandard pricing issues here because, as Roy knew, Kuwaiti Danish was looking for an educational discount.

Kuwaiti Danish was pursuing DEC for computer equipment because it had been awarded a fixed-price turnkey contract from the University of Kuwait to supply, install and maintain a computer system for the College of Engineering at the University. The project was to include DEC VAX 6510 systems, Sun SPARC systems, Apple Macintosh systems and IBM/DOS systems. All of the systems were to be linked and to communicate with each other through a system offered by Kuwaiti Danish.

At the time of the initial contact by Kuwaiti Danish with DEC, it was well along in the process of assembling the various components for the coordinated system. The process involved communications and negotiations with suppliers or manufacturers of the major elements of the system, not just DEC. The contact with DEC was particularly important, however, because the DEC VAX system was the heart of the project. Pricing was also a major consideration, in part because of the fixed-price nature of the arrangement with the University, and partly because it would, therefore, have a direct effect on Kuwaiti Danish’s overall profit on the transaction. Thus, the Kuwaiti Danish representatives were ready, willing and able to negotiate aggressively on the price component. It was on this latter issue that the DEC educational discount became a significant factor.

When Roy received from his colleague McFadden the facsimile describing what it was Kuwaiti Danish was looking for, he called Ayoub, Kuwaiti Digital Computer Company’s representative in Massachusetts. It was Ayoub who had originally called McFadden. Roy had a few questions for Ayoub about some of the components. Once those questions were answered, Roy went into the DEC computerized automatic quoting system and generated a quotation that he says he sent by facsimile to Ayoub on September 24, 1991. The total unit price on this first quotation was $912,885.00, with the educational discount reducing the number to $667,748.50.

Ultimately, there were several additional versions of the DEC quotation. It is notable, however, that even on the veiy first version there were DEC product [129]*129number designations and power supply requirements that would reveal to even the average electronic technician that the system was destined for use in other than the United States.

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Bluebook (online)
9 Mass. L. Rptr. 127, Counsel Stack Legal Research, https://law.counselstack.com/opinion/kuwaiti-danish-computer-co-v-digital-equipment-corp-masssuperct-1998.