Mass Cash Register, Inc. v. Comtrex Systems Corp.

901 F. Supp. 404, 29 U.C.C. Rep. Serv. 2d (West) 110, 1995 U.S. Dist. LEXIS 15268, 1995 WL 598220
CourtDistrict Court, D. Massachusetts
DecidedAugust 15, 1995
DocketCiv. A. 93-10853-PBS
StatusPublished
Cited by33 cases

This text of 901 F. Supp. 404 (Mass Cash Register, Inc. v. Comtrex Systems Corp.) is published on Counsel Stack Legal Research, covering District Court, D. Massachusetts primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Mass Cash Register, Inc. v. Comtrex Systems Corp., 901 F. Supp. 404, 29 U.C.C. Rep. Serv. 2d (West) 110, 1995 U.S. Dist. LEXIS 15268, 1995 WL 598220 (D. Mass. 1995).

Opinion

MEMORANDUM AND ORDER

SARIS, District Judge.

INTRODUCTION

This dispute arises out of an alleged agreement between plaintiff Mass Cash Register, Inc. (Mass Cash) and defendant Comtrex Systems Corporation (Comtrex). In its complaint, Mass Cash alleges breach of contract (Count I), tortious interference with advantageous contractual relationships (Count II), unjust enrichment (Count III), fraud (Count IV), and violation of Mass.Gen.L. ch. 93A (Count V). 1 On May 24, 1995, the Court heard oral argument on defendant Comtrex’s motion for summary judgment on all counts pursuant to Fed.R.Civ.P. 56(b). For the reasons illustrated below, after hearing, the mo *410 tion for summary judgment is ALLOWED on all Counts except for the claim for unjust enrichment and quantum meruit.

FACTUAL BACKGROUND

For the purposes of this motion, the undisputed facts are as follows.

1.The Players.

a.Mass Cash.

Plaintiff Mass Cash is a Massachusetts corporation which sells, installs, and services electronic cash registers. In 1990, Mass Cash was a dealer for various companies which produced point-of-sale (POS) equipment and cash registers, including Omron, Sharp Electronics, and TEC. 2

Since its incorporation in 1978, Thomas Speropoulos has served as the president of Mass Cash. From January 1985 until January 1991, William Mitchell was employed by Mass Cash as its sales manager and major account manager.

b.Comtrex.

Defendant Comtrex is a New Jersey corporation with its principal place of business located in Moorestown, New Jersey. Formed in 1981, Comtrex originally serviced electronic cash registers but extended its business to include the manufacturing, marketing, and distribution of electronic cash registers used in the food service industry, including fast-food establishments. In 1993, Comtrex sold approximately 3500 electronic cash registers. Since February of 1989, Jeffrey Rice has been the president, chief executive officer, and a director of Comtrex.

c.Dunkin’ Donuts.

Although not named in the lawsuit, Dun-kin’ Donuts is at the vortex of this controversy. In 1990, Dunkin’ Donuts had approximately 2000 to 2500 stores, including both franchised and company-owned stores. Under Dunkin’ Donuts franchise agreements, the ultimate decision of whether to purchase a new POS terminal was for the franchisee to make, but franchisees could purchase only those POS terminals which Dunkin’ Donuts had approved.

Davie Bent, a Dunkin’ Donuts’ employee since 1984 and the manager of field service systems in 1989, was in charge of personally evaluating and testing various POS terminals. Comtrex, Tranti, TEC, Fastfax, Panasonic, Sharp, and Omron were among the brands evaluated by Bent during the period pertinent to this controversy.

2. Mass Cash’s Relationship With Dun-kin’ Donuts.

Beginning in 1978, Mass Cash sold cash registers and POS equipment to Dunkin’ Donuts, and serviced them. For the past eleven years, Mass Cash has been the principal supplier of cash register terminals to Dunkin’ Donuts, most of which are manufactured by Omron Systems Corporation (Omron), a competitor of Comtrex. Indeed, from 1985 to 1990 Omron provided about 2500 registers to Dunkin’ Donuts and its franchisees. Mass Cash would buy the registers from Omron at 40-48 percent off list price and then resell them to Dunkin’ Donuts at ten percent off list plus charge an installation fee.

Dunkin’ Donuts was Mass Cash’s largest major account in 1990. William Mitchell was the salesman for Mass Cash handling the Dunkin’ Donuts account.

Beginning in 1988, Dunkin’ Donuts informed Mass Cash of its need for a new POS terminal. Accordingly, Mitchell talked to various manufacturers, including Citizen, Tranti, Sanyo, Sharp, FDS, and others. Mass Cash also notified Omron of Dunkin’ Donuts’ request for more sophisticated POS terminals in May, 1989. Mitchell’s search proceeded for two years until he found a manufacturer that offered a solution for Dun-kin’ Donuts. That manufacturer was Com-trex.

3. Comtrex’s Relationship With Dunkin’ Donuts.

Dunkin’ Donuts’ introduction to Comtrex originated in 1987, when Bent attended a *411 food service show in New York City. Thereafter, Comtrex sent Bent a proposal regarding its POS terminal for Dunkin’ Donuts to review, and shipped a POS terminal which Bent spent more than one week evaluating and testing. Subsequently, Bent visited Comtrex’s offices in New Jersey for two days for a demonstration of the Comtrex POS terminal.

After his visit, Bent concluded that Com-trex could not fulfill Dunkin’ Donuts’ need without changes on Comtrex’s part. Dunkin’ Donuts decided not to pursue the Comtrex POS terminals in 1988 for three reasons: (1) the price point of the basic terminal was too high; (2) the software operated under a UNIX system instead of MS-DOS, and; (3) the hardware was limited in its memory capacity.

Although Bent does not recall any further conversations with Comtrex until the meeting set up by Mass Cash in October 1990, Rice testified that he spoke with Bent in May of 1990 and provided a detailed update on the Comtrex Sprint product line. Rice also testified that he had numerous follow-up conversations with Bent from May to September 1990.

4. Mass Cash’s Relationship With Com-trex.

In 1988, Speropoulos met with a Comtrex salesperson at Mass Cash’s office to view Comtrex’s product. As a result of the meeting, Speropoulos attended a Comtrex meeting at their New Jersey office that same year. Between 1988 and 1990, Speropoulos had three or four telephone conversations with Comtrex personnel regarding the possibility of selling the Comtrex product. In these discussions, no dealership agreement was reached.

a. Negotiations.

Sometime in the spring of 1990, Andy Fus-co, a consultant for Comtrex, contacted Sper-opoulos to inform him that Comtrex had a new president, Jeff Rice, and that a new product was being enhanced. Comtrex had hired Fusco to review Comtrex sprint systems, and introduce it to some of the dealers. During this conversation between Fusco and Mass Cash, there was a “very light discussion” on a dealer agreement including negotiations over a geographic region. At no time during the conversation did the issue of compensation arise. Despite a discussion on the pricing of Comtrex products, no agreement was reached. Indeed, these preliminary negotiations were undertaken with an eye toward executing a written dealer agreement.

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901 F. Supp. 404, 29 U.C.C. Rep. Serv. 2d (West) 110, 1995 U.S. Dist. LEXIS 15268, 1995 WL 598220, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mass-cash-register-inc-v-comtrex-systems-corp-mad-1995.