PMC Corp. v. Houston Wire & Cable Co.

797 A.2d 125, 147 N.H. 685, 47 U.C.C. Rep. Serv. 2d (West) 1327, 2002 N.H. LEXIS 68
CourtSupreme Court of New Hampshire
DecidedMay 10, 2002
DocketNo. 2000-705
StatusPublished
Cited by3 cases

This text of 797 A.2d 125 (PMC Corp. v. Houston Wire & Cable Co.) is published on Counsel Stack Legal Research, covering Supreme Court of New Hampshire primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
PMC Corp. v. Houston Wire & Cable Co., 797 A.2d 125, 147 N.H. 685, 47 U.C.C. Rep. Serv. 2d (West) 1327, 2002 N.H. LEXIS 68 (N.H. 2002).

Opinion

Duggan, J.

This is an appeal from a jury verdict in favor of the plaintiff, PMC Corporation (PMC), and a denial by the Superior Court (Lynn, J.) of the defendant’s, Houston Wire & Cable Company (Houston), motion for judgment notwithstanding the verdict. Houston contends that the superior court erred in denying its motion for judgment notwithstanding the verdict because the writings at issue were insufficient to comply with the requirements of the statute of frauds contained in the Uniform Commercial Code, RSA ch. 382-A (1994), and that insufficient evidence existed for the jury to conclude that the parties intended to form a binding contract. We affirm.

This case arises out of the dealings between PMC, a supplier of thermocouple wire and cable, and one of its customers, Houston, a distributor of wire and cable products. In the early 1990s, Houston began purchasing thermocouple products from PMC. In 1994, PMC and Houston began discussions about entering into a relationship in which PMC would provide training on thermocouple applications and other services to Houston to assist it in selling thermocouple products directly to end users. In turn, PMC would become Houston’s primary vendor of thermocouple products.

In late 1994, PMC’s president, John Gehrisch, asked Houston to put its commitment to purchase primarily from PMC in writing. On January 4, [687]*6871995, Gehrisch wrote to Tom Adelman, vice president of operations at Houston, proposing a contract covering Houston’s purchases of thermocouple wire and cable items. In the letter, Gehrisch requested a written commitment from Houston, in the form of a purchase order, to buy a minimum of $800,000 per year of thermocouple products to cover Houston’s inventory for a three-year period. Gehrisch also requested a letter of intent from Houston confirming its recognition of PMC as its primary source for thermocouple products and confirming its intent to purchase thermocouple products totaling $2,000,000 in 1995, $3,000,000 in

1996, and $4,000,000 in 1997. This amount represented Houston’s total purchases of thermocouple products to cover both its corporate inventory and branch requirements.

Regis Lageman, PMC’s vice president, subsequently spoke to Adelman about the proposed contract. Adelman informed Lageman that Houston could not guarantee purchases of $800,000 per year. The parties, however, discussed PMC’s need for a letter of intent from Houston so it could obtain leverage at its bank and so that PMC would have something to give to the bank when it was negotiating for capital to expand the factory.

On January 13, 1995, Lageman sent a draft of a revised agreement via facsimile transmission to Houston. The facsimile cover sheet explained that the draft was “ ‘an intent to purchase’ that in no way locks [Houston] into purchases from PMC but merely indicates an intent.” On January 17, 1995, Edward Holland, Houston’s president, directed his secretary to retype on Houston’s letterhead the revised agreement drafted by Lageman and to affix Adelman’s signature to the agreement. The agreement began by stating, “[Houston] agrees in principal [sic] with the proposed agreement submitted by PMC January 4, 1995. We have reviewed that proposal and have added some additional details to finalize the 1995 purchasing agreement between [Houston] and PMC as follows ....” Some of the additional details were:

5.0 [Houston] expects to purchase in excess of $2,000,000 of thermocouple products in 1995. [Houston] recognizes PMC as a major thermocouple manufacturer and preferred supplier for this thermocouple business. While [Houston] cannot commit, to exclusive purchase of this total from PMC, [Houston] recognizes PMC as a preferred supplier. As such, with competitive pricing, service, delivery, and the above rebate schedule PMC can expect to receive a major share of the total thermocouple business. It is not unrealistic to project total purchases by [Houston] from PMC to be in the $2,000,000 range in 1995.
[688]*6886.0 Future business: With the commitment that PMC has made to help [Houston] grow its thermocouple business [Houston] is projecting future thermocouple business as follows:
1996 $8,000,000
1997 $4,000,000
It is also [Houston’s] intent to purchase the major portion of this product from PMC.

During trial, Gehrisch explained that he did not expect Houston to purchase one hundred percent of its thermocouple product from PMC, but, rather, Houston could purchase from other vendors on the rare occasions when PMC could not supply the product or could not match a competitor’s pricing.

After this correspondence, Houston’s orders from PMC began to decrease. During a meeting on February 21,1995, Houston informed PMC that it was planning to purchase the bulk of its thermocouple products from Belden, a competing manufacturer.

In 1998, PMC initiated this lawsuit claiming, among other things, that Houston breached its contract with PMC and that Houston made negligent misrepresentations. The case culminated in a jury verdict in favor of PMC on its breach of contract and negligent misrepresentation claims. Houston moved unsuccessfully for judgment notwithstanding the verdict, or, in the alternative, to set aside the jury verdict. This appeal followed.

Houston first argues that as a matter of law, the writings in question were unenforceable under the statute of frauds because they failed to contain the required quantity element. Whether the superior court correctly concluded that the quantity element of the statute of frauds is met is a question of law that we review de novo. See Byblos Corp. v. Salem Farm Realty Trust, 141 N.H. 726, 729 (1997).

Pursuant to the Uniform Commercial Code’s statute of frauds, a contract for the sale of goods of $500 or more is not enforceable unless in writing. See RSA 382-A:2-201(l). The statute of frauds requires that the writing be “sufficient to indicate that a contract for sale has been made between the parties and signed by the party against whom enforcement is sought____” Id. The official comments to the Uniform Commercial Code explain that to satisfy this requirement, a party need only produce a writing that: (1) evidences a contract for the sale of goods; (2) is signed by the party against whom it is to be enforced; and (3) recites a quantity term. See RSA 382-A:2-201 comment 1; see also 1 J. WHITE & R. SUMMERS, Uniform Commercial Code § 2-4, at 59 (4th ed. 1995). But see Advent [689]*689Systems Ltd. v. Unisys Corp., 925 F.2d 670, 676-79 (3d Cir. 1991) (holding that a contract may be enforceable despite its omission of quantity term).

Houston does not question that the January 17, 1995 letter is sufficient to indicate a sale of goods and that it is signed by the party sought to be charged. Houston submits, however, that the writing is insufficient to satisfy the statute of frauds because it does not contain a definite quantity term. Although the letter stated that Houston expected to purchase a “major share” or “major portion” of its thermocouple products from PMC, Houston contends that these references to quantity are too indefinite to comply with the statute of frauds.

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797 A.2d 125, 147 N.H. 685, 47 U.C.C. Rep. Serv. 2d (West) 1327, 2002 N.H. LEXIS 68, Counsel Stack Legal Research, https://law.counselstack.com/opinion/pmc-corp-v-houston-wire-cable-co-nh-2002.