Memc v. Bp

9 A.3d 508, 196 Md. App. 318
CourtCourt of Special Appeals of Maryland
DecidedDecember 3, 2010
Docket1517, September Term, 2009
StatusPublished

This text of 9 A.3d 508 (Memc v. Bp) is published on Counsel Stack Legal Research, covering Court of Special Appeals of Maryland primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Memc v. Bp, 9 A.3d 508, 196 Md. App. 318 (Md. Ct. App. 2010).

Opinion

9 A.3d 508 (2010)
196 Md. App. 318

MEMC ELECTRONIC MATERIALS, INC., et al.
v.
BP SOLAR INTERNATIONAL, INC.

No. 1517, September Term, 2009.

Court of Special Appeals of Maryland.

December 3, 2010.

*513 Maury S. Epner (Donna E. McBride, Miller, Miller & Canby, Chtd., on the brief) Rockville, MD, for appellant.

Ava E. Lias-Booker (John C. Armstrong, McGuire Woods LLP, on the brief, Baltimore, MD) and Deborah M. Russell (McGuire Woods LLP, on the brief, Richmond, VA), for appellee.

Panel: EYLER, JAMES R., KEHOE, JAMES A. KENNEY, III (Retired, specially assigned), JJ.

EYLER, JAMES R., J.

MEMC Electronic Materials, Inc. and MEMC Pasadena, Inc. (collectively referred to as "MEMC" or "appellant") appeal from a judgment entered by the Circuit Court for Frederick County, after a jury verdict awarding damages for breach of contract to BP Solar International, Inc. ("BP Solar" or "appellee").[1] Prior to 2004, *514 pursuant to a longstanding relationship, appellant supplied appellee with silicon powder for use in manufacturing solar panels at its Frederick, Maryland facility. Seeking to continue that relationship, the parties exchanged e-mails in 2004 concerning a long-term supply contract to run through 2007. After shipping nearly 224 metric tons (MT) of silicon powder in 2005, appellant discontinued its shipments.

Consequently, on April 30, 2007, appellee filed suit charging appellant with breach of contract. Prior to trial, appellee filed four amended complaints.[2] At trial, appellee contended that the e-mail exchanges and the parties' previous course of dealing and performance created a three-year contract, requiring appellant to ship its output of silicon powder to appellee, with a minimum of 150 MT per year. Appellant's primary contention was that there was no meeting of the minds between the parties and, therefore, no contract. After an extensive two-week trial, the jury determined that the parties did form an agreement, and returned a verdict in favor of appellee in the amount of $8,849,447 as partial cover damages for appellant's discontinued performance. Perceiving no reversible error, we shall affirm.

Factual and Procedural Background

Appellee, a manufacturer of solar energy products, makes photovoltaic panels (also known as solar panels) that are used to convert sunlight into electricity. Appellant is in the business of selling wafers, polysilicon, and other silicon raw feedstock. In 1996, appellee purchased silicon powder from appellant, previously a waste by-product of appellant's polysilicon production process, in order to determine whether the silicon powder, inexpensive at the time, could be used to lower manufacturing costs.

Silicon powder proved useful in reducing costs, and it created a competitive advantage for appellee. Consequently, in 1997, the parties entered into a written, one and a half page sales agreement for the purchase of silicon powder for a two-year period running from April 1, 1997, through March 30, 1999. The agreement required appellant to supply appellee with four MT of silicon powder per month at a price of $3.00 per kilogram. Over the two-year period, appellee sent purchase orders confirming quantity, price, shipping, and other details, and appellant sent the appropriate invoices.

In March 1998, the parties extended this agreement through December 31, 2000. The extension increased the amount of silicon powder to ten MT per month at a price of $3.25 per kilogram, beginning January 1, 1999, and continuing through the end of the contract. Again, confirming purchase orders and subsequent invoices were issued.

Between 2001 and 2004, the parties entered into less formal documented arrangements. These supply agreements were generally consummated through and documented by e-mail exchanges.[3] Each *515 time, after agreement, the parties would follow the usual sequence of purchase orders, invoices, and contractual performance.

Ultimately, anticipating imminent shortages in the market for silicon feedstock supplies, appellee recognized a need to secure long term contracts for the supply of silicon powder. As a result, Pat Barron, appellee's Frederick warehouse manager, was authorized to arrange a long term supply contract with appellant. Herein lies the dispute. It is uncontested that several e-mails were exchanged between August 4, 2004, and November 9, 2004, concerning a long term supply contract between the parties. A printed copy of each e-mail was admitted into evidence. The primary dispute concerns the legal significance of those e-mails.

On August 4, 2004, Mr. Barron e-mailed Sanjeev Lahoti, appellant's product manager, requesting a "quotation (e-mail is fine) for 300 MT of powder per year for calendar years 2005 through 2007. Upon receipt, BP Solar will forward our purchase agreement for these quantities." Mr. Lahoti's September 17 response stated:

After reviewing our options we want to commit 150MT of powder per year for the next 3 years. The pricing for 2005 would be $3.50/kg. Pricing for 2006 and 2007 would be negotiated in October of the previous year. MEMC would offer to BP any additional quantity available for the following year at th[at] time.

Thereafter, on September 27, 2004, Mr. Barron and Mr. Lahoti discussed, via telephone, the arrangement or contemplated arrangement between the parties. In an e-mail later the same day to Bill Poulin, plant manager at BP Solar's Frederick plant, on which Mr. Lahoti was copied, Mr. Barron described this conversation as follows:

I had a phone conversation with Sanjeev this morning clarifing [sic] the MEMC proposal below. Sanjeev indicates that the 150MT is essentially the minimum available for each calendar year 2005-2007. Since this is scrap material for MEMC, their engineering staff has been tasked with improving yield and this is their target based on current levels of production. Sanjeev anticipates the available quantity of powder will be larger (especially in 2005) but did not want to quote a figure higher than their budgeted targets. He has confirmed BP Solar's "right of first refusal" for all quantities of powder they produce. Pricing can be negotiated during MEMC's visit in October.

(Emphasis in original). In his responsive e-mail the following day, Mr. Lahoti stated, "I agree with Pat's comments below. I look forward to meeting you and Pat during our visit."

Two weeks later, on October 13, 2004, Mr. Barron e-mailed Mr. Lahoti asking for confirmation on price. The e-mail stated:

I hope MEMC felt as poitive [sic] about our meeting as we did. As a follow up, you mentioned that you felt you could do better on the pricing of the powder going forward. If you would please send me something in writing, I can begin moving things on this end in terms of a purchase agreement. As stated earlier, BP Solar will commit to taking all quantities available in 2005 and would like to have a right of first refusal in 2006-2007.

On November 9, 2004, Mr. Barron e-mailed Mr. Lahoti concerning purchase orders for the 2005 and 2006 shipments of silicon powder. He stated:

*516 BP Solar has submitted to MEMC our purchase orders #22692 and #22693 for silicon powder to cover calendar years 2005 and 2006. We are not limiting the quantities we would purchase as we will take all the powder that is available under our agreement of right-of-first-refusal (see below).

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Bluebook (online)
9 A.3d 508, 196 Md. App. 318, Counsel Stack Legal Research, https://law.counselstack.com/opinion/memc-v-bp-mdctspecapp-2010.