Mecklenburg Furniture Shops, Inc. v. MAI Systems Corp.

800 F. Supp. 1328, 1992 U.S. Dist. LEXIS 13316, 1992 WL 208879
CourtDistrict Court, W.D. North Carolina
DecidedJuly 28, 1992
DocketNo. C-C-90-147-P
StatusPublished

This text of 800 F. Supp. 1328 (Mecklenburg Furniture Shops, Inc. v. MAI Systems Corp.) is published on Counsel Stack Legal Research, covering District Court, W.D. North Carolina primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Mecklenburg Furniture Shops, Inc. v. MAI Systems Corp., 800 F. Supp. 1328, 1992 U.S. Dist. LEXIS 13316, 1992 WL 208879 (W.D.N.C. 1992).

Opinion

MEMORANDUM OF DECISION

ROBERT D. POTTER, District Judge.

THE TRIAL of this Action was held before this Court and a jury from 4 May 1992 through 7 May. 1992 in Charlotte, North Carolina. Plaintiff alleges that Defendant and Plaintiff entered into a contract obligating Defendant to provide Plaintiff a custom computer system capable of performing functions specified by Plaintiff. Complaint of Plaintiff at 2. Plaintiff further alleges that Defendant made misrepresentations to induce Plaintiff to enter this contract and that Defendant ultimately breached the contract. Id. at 2, 3. Appearing for Plaintiff at trial was Bruce M. Simpson of [1329]*1329the Charlotte law firm of James, McElroy & Diehl, P.A. Appearing for Defendant at trial were Charles A. Edwards and John R. Rittelmeyer of the Raleigh office of Graham & James.

At the close of Plaintiffs evidence, Defendant moved this Court for Judgment as a Matter of Law. See Fed.R.Civ.Pro. 50(a). After careful consideration, this Court granted the Motion of Defendant. Now, pursuant to that Order, the Court enters the following Findings of Fact and Conclusions of Law.

FINDINGS OF FACT

The Plaintiff, Mecklenburg Furniture Shops, Inc. (“Mecklenburg”), formerly did business in Charlotte, North Carolina as Mecklenburg Furniture Shops. Trial Transcript at 35, 311. Mecklenburg provided a wide variety of retail services to its customers, including interior planning and design, custom upholstery, rugs, accessories, and furniture. Trial Transcript at 35. In November of 1981, the Crewe family, consisting of Leonard Crewe, his wifé Betty Crewe, and his son, Clarke Crewe, purchased Mecklenburg. Id. The three members of the Crewe family each played an active role in the management of Mecklenburg. Id. Leonard Crewe served as Chairman of the company, Betty Crewe as Secretary and Vice-Chairman, and Clark Crewe as President. Id. at 35, 90. Betty Crewe, in particular, focused on financial management and inventory control. Id. at 91.

In this capacity, Betty Crewe came to realize that Mecklenburg needed to upgrade its computer equipment. Id. Accordingly, in 1982, Mecklenburg purchased an IBM computer system. Id. Mecklenburg used this system for general accounting and inventory functions. Id. at 95. Betty Crewe was “very much involved in selecting” the software for this system and in working with a consultant in “implementing and testing the programs.” Id. at 92. Betty Crewe had extensive prior experience in selecting and evaluating computer systems. Id. Subsequent to the purchase of the IBM system, the Crewes determined that Mecklenburg needed yet another computer system to be used strictly for telemarketing, bulk mail, and pricing. Id. at 93-94. To that end, Mecklenburg purchased a Tandy computer sometime in the mid 1980s. Id. at 94.

These systems soon proved unsatisfactory. Because the IBM system performed general accounting functions, all telemarketing data from the Tandy system had to be entered into the IBM system as well. Id. at 95. Given this and other disadvantages of the older systems, the Crewes decided to purchase another, more powerful computer system. Id. The Crewes hoped to decrease the labor required for duplicate data entry and gain faster computers. Id. Ultimately, the Crewes hoped to better serve their customers through greater efficiency. Id.

To assist Mecklenburg in its search for a new computer system, the Crewe family hired an outside consultant, the accounting firm of Seidman & Seidman BDO (“Seidman”). Id. at 96. Initially, the Crewes and the employees of Mecklenburg discussed the computer functions they needed or wanted. Id. at 97. Then, after committing this list to writing, Mecklenburg gave it to Claudia Miller, the Seidman employee working with Mecklenburg to secure a new computer system. Id. Miller then researched the needs of Mecklenburg and developed her own list. Id. This list, styled by Miller a “Request for Proposal,” consisted of five sections and set out in detail the requirements of Mecklenburg and the criteria by which Mecklenburg would evaluate proposed computer systems. Plaintiff’s Trial Exhibit 1; Trial Transcript at 97-98. On Mecklenburg’s behalf, Seidman sent the Request for Proposal (“RFP”) to six vendors of computer systems. Id. at 246. Of these six, only two submitted proposals. Id.

On 14 June 1988, Claudia Miller and Betty Crewe met to discuss the two responses to the RFP. Id. at 102-03. Just prior to this meeting, Mecklenburg had received a bill for tax and consulting services provided by Seidman. Id. The bill, which totalled approximately $10,000.00, was larger than Mecklenburg had anticipated. Id. As [1330]*1330a result, Betty Crewe informed Miller that Mecklenburg could no longer afford the consulting services of Seidman. Id. at 102, 251. Without Seidman, Mecklenburg was forced to evaluate the two proposals without significant outside assistance. Id. at 251-52.

One of the responding vendors was Defendant, MAI Systems Corporation, then known as MAI Basic Four (“MAI”). Plaintiffs Trial Exhibits 1 and 2; Trial Transcript at 98. In part, MAI responded by making notations on the RFP and returning that document to Seidman. Plaintiffs Trial Exhibit 1; Trial Transcript at 100. Section II of the RFP is entitled “Instructions and Conditions.” Plaintiffs Trial Exhibit 1 at § II. Paragraph six of that section provides:

Vendors are encouraged to submit concise and clear responses to the Request for Proposal. Attention is directed to Section III: Requirements, which provides details on information expected in the vendor responses. Mecklenburg reserves the right to include any part or parts of the selected vendor’s proposal in the final contracts.

Id. An MAI representative made specific notations in the margin of the RFP at section II, paragraph six. Those notations provided: “Reference MAI Manual. S = Standard, W = Willing to Modify N = Not Willing To Modify.” Id. These same abbreviations were used in the MAI manual, a separate document attached by MAI to its proposal. Trial Transcript at 235. Betty Crewe understood those notations to mean that RFP requirements marked “S” by MAI were a part of the standard MAI system, that requirements marked “W” by MAI were not a part of the standard MAI system but that MAI was willing to modify its standard system to meet those requirements, and that requirements marked “N” were unavailable from MAI. Id. at 100. Betty Crewe and others at Mecklenburg began referring to this marked-up RFP as the “SWN papers.” Id. at 98.

On 16 June 1988, Betty Crewe met for the first time with Susan Gayda, an MAI sales representative who had previously worked with Claudia Miller of Seidman on the MAI response to the RFP. Id. at 103. Also at the meeting were Ed Rand, the Mecklenburg Controller, and Jeff Metheny, another Mecklenburg employee. Id. at 105. Those present discussed in detail the needs of Mecklenburg and the proposal submitted by MAI. Id. at 104. Particular attention was paid to those Mecklenburg requirements MAI had marked “W” or “N.” Requirements marked “S” were not discussed. Id. During the course of this discussion, Gayda changed the notation on a few Mecklenburg requirements from “N” to “W.” Id. at 106.

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Bluebook (online)
800 F. Supp. 1328, 1992 U.S. Dist. LEXIS 13316, 1992 WL 208879, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mecklenburg-furniture-shops-inc-v-mai-systems-corp-ncwd-1992.