Primarque Products Co., Inc. v. Williams W. & Witt's Prod. Co.

988 F.3d 26
Court of Appeals for the First Circuit·Decided February 12, 2021·No. 19-1463P·Published·Cited by 3 cases

Opinion

United States Court of Appeals For the First Circuit

Nos. 19-1463, 19-1484 PRIMARQUE PRODUCTS CO., INC., Plaintiff, Appellant / Cross-Appellee, v.

WILLIAMS WEST & WITTS PRODUCTS COMPANY d/b/a INTEGRATIVE FLAVORS,

Defendant, Appellee / Cross-Appellant.

APPEALS FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MASSACHUSETTS

[Hon. Timothy S. Hillman, U.S. District Judge]

Before

Thompson and Barron,

Circuit Judges.*

Andrew Lawlor, with whom Fedele and Murray, P.C. was on brief, for Appellant/Cross-Appellee.

Rodney L. Lewis, with whom Polsinelli, P.C. was on brief, for Appellee/Cross-Appellant.

* Judge Torruella heard oral argument in this matter and participated in the semble, but he did not participate in the issuance of the panel's opinion in this case. The remaining two panelists therefore issued the opinion pursuant to 28 U.S.C. § 46(d).

February 12, 2021

BARRON, Circuit Judge. The appeal and cross-appeal at issue here stem from litigation in the District of Massachusetts that followed the termination, without advance notice, of a thirty- nine-year business relationship between a company that manufactured and supplied soup base products and a company that distributed them. Following a five-day trial, the jury awarded the distributor $255,000 in total damages for its Massachusetts- law breach of contract and tortious interference with business relations claims against the manufacturer, although the District Court denied the distributor's motion for prejudgment interest on those damages. The District Court also granted summary judgment to the manufacturer on the distributor's claim against it under Chapter 93A of the Massachusetts Consumer Protection Act, Mass. Gen. Laws ch. 93A ("Chapter 93A"), and to the manufacturer on its counterclaim for breach of contract under Massachusetts law, for which the District Court awarded the manufacturer $97,843.22 in damages, plus prejudgment interest. The distributor now appeals from various of the District Court's pre- and post-verdict rulings, while the manufacturer cross-appeals. We reverse in part and vacate in part in the distributor's appeal, and we affirm in the manufacturer's cross-appeal.

I.

A.

The following facts, which were supportably found by the District Court both at summary judgment and in its rulings on certain post-trial motions, are undisputed on appeal. Primarque Products Co. ("Primarque"), the appellant, is a Massachusetts- based distributor of food products, including soup base products. Williams West & Witts Products Co. d/b/a Integrative Flavors ("WWW"), the cross-appellant, is an Indiana-based manufacturer and supplier of soup base products that is incorporated in Illinois. Primarque and WWW have conducted business with each another since 1976.

Primarque and WWW briefly entered into written distribution agreements in, respectively, 1987 and 1990, but, by 1993, each of those agreements had terminated. After the period in which those agreements were in effect, however, the parties continued to do a large amount of business with each other.

Their repeated transactions during this period involved Primarque as a distributor sending a purchase order to WWW detailing the desired soup base type, quantity, cost, method of shipping, and delivery location; WWW as a manufacturer and supplier filling the order and invoicing Primarque; Primarque paying WWW for what it had been invoiced; and Primarque reselling the products that it purchased from WWW to a variety of retail customers. The

parties' transactions during this period also involved what the parties referred to as the "Drop Ship Arrangement," pursuant to which WWW shipped soup base products directly to certain retail customers known as the "Drop Ship Customers" that had purchased soup base products through Primarque.

The Drop Ship Arrangement relieved Primarque, as a distributor, of the hassle of receiving, storing, and re-shipping the soup base products; and this practice, in turn, made Primarque's pricing for those products more competitive with its retail customers. WWW, however, did not during this period directly solicit business from Drop Ship Customers. Moreover, if those customers made inquiries with WWW about directly purchasing its soup base products, WWW referred them to Primarque. Primarque, for its part, did not solicit business from customers buying soup base products from WWW directly.

Primarque did sell other suppliers' soup base products to certain of its retail customers, but it still was WWW's largest purchaser of those products. WWW, in turn, was Primarque's largest supplier of them. As an indication of the scale of the business that the two parties did with each other, in 2014, Primarque

purchased approximately $1,313,175.59 worth of soup base products from WWW.1 The events that precipitated the dispute that gives rise to these appeals began in May of 2014, when Primarque, without notifying WWW, started meeting with competitors of WWW about their supplying Primarque with "replacement" soup base products for Primarque to sell to its retail customers. Primarque signed memoranda of understanding with two of those competitors, Major Foods and Eatem. As Major Foods and Eatem developed replacement products for Primarque to distribute, Primarque began relying on them to supply it with some of the soup base products that it had previously relied on WWW to supply.

On March 9, 2015, WWW reviewed its sales numbers and identified certain downward trends related to its business with Primarque. The next day, WWW sent an e-mail to Jack Barron, Primarque's owner and president, in which it inquired whether Primarque's business was down generally or whether it was transitioning some of its business away from WWW. Barron replied: "[a] combination of both."

Two days later, on March 12, 2015, WWW notified Primarque that it would no longer be selling its products to Primarque,

1 This was about a $60,000 increase from calendar year 2013, when Primarque purchased $1,254,674.56 worth of soup base products from WWW.

effective that day. On the same day, WWW informed the Drop Ship Customers that Primarque was no longer distributing WWW products and that these customers could now obtain soup base products directly from WWW at lower prices. WWW thereafter began selling soup base products directly to some of the Drop Ship Customers.

B.

In response to WWW's actions, Primarque filed suit in Massachusetts state court on March 19, 2015. WWW then removed the case to the United States District Court for the District of Massachusetts based on diversity jurisdiction.

Primarque's complaint asserted four claims against WWW under Massachusetts law: breach of contract (Count I), promissory estoppel (Count II), tortious interference with business relations (Count III), and a violation of Chapter 93A (Count IV). Primarque sought damages based on lost profits from sales that it alleged that it would have made to the Drop Ship Customers in the absence of WWW's abrupt termination of their relationship, including sales that Primarque alleged that it would have made to those customers after the filing of the complaint.

WWW in turn filed a counterclaim under Massachusetts law for breach of contract. WWW based this claim for breach of contract on Primarque's conceded withholding of payment on a final shipment of $97,843.22 worth of goods that it had received from

WWW, for which WWW sought the unpaid amount plus prejudgment interest.

C.

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Primarque Products Co., Inc. v. Williams W. & Witt's Prod. Co., 988 F.3d 26 (1st Cir. 2021).

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