Quinn v. Mar-Lees Seafood, LLC

871 N.E.2d 511, 69 Mass. App. Ct. 688, 2007 Mass. App. LEXIS 881
CourtMassachusetts Appeals Court
DecidedAugust 7, 2007
DocketNo. 06-P-588
StatusPublished
Cited by19 cases

This text of 871 N.E.2d 511 (Quinn v. Mar-Lees Seafood, LLC) is published on Counsel Stack Legal Research, covering Massachusetts Appeals Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Quinn v. Mar-Lees Seafood, LLC, 871 N.E.2d 511, 69 Mass. App. Ct. 688, 2007 Mass. App. LEXIS 881 (Mass. Ct. App. 2007).

Opinion

Cowin, J.

The plaintiff, John Quinn, obtained a favorable jury verdict on his complaint in the Superior Court that the defendant, Mar-Lees Seafood, LLC (Mar-Lees), had committed a breach of a written agreement to pay him royalties based on profits derived from certain of the defendant’s sales. The jury awarded the plaintiff damages in the amount of $389,310.56, and rejected Mar-Lees’s counterclaims for breach of an alleged oral agreement and breach of fiduciary duty. The jury rejected as well Mar-Lees’s claim against the third-party defendant, Northern Harvest, Inc. (Northern Harvest), of which the plaintiff was a principal shareholder, for breach of an alleged obligation to transfer its trade name to the defendant. Final judgment, subsequently amended, entered in accordance with the jury verdicts. The judge denied the plaintiff’s posttrial motion for specific performance of the royalty agreement in the future, and denied as well Mar-Lees’s motion for judgment notwithstanding the verdict or for a new trial, thereby precipitating these cross appeals. We affirm the amended judgment in favor of the plaintiff for damages to the time of trial and against Mar-Lees on its counterclaim and third-party complaint, and the order denying Mar-Lees’s motion for judgment notwithstanding the verdict or for new trial. We affirm as well the order denying specific performance of the agreement in the future, but for a reason other than that advanced by the judge.

1. Background. The plaintiff having obtained a verdict in his favor, we recite the facts in the light most favorable to him. See Situation Mgmt. Sys., Inc. v. Malouf, Inc., 430 Mass. 875, 876 (2000). The plaintiff and a business partner, Joseph O’Donnell, were at all material times the shareholders of Northern Harvest, a company that manufactured and sold packaged fish. In late 1999, the plaintiff and representatives of Mar-Lees, a scallop distributor, entered into discussions regarding a possible merger of the two companies. By December, 1999, there had been sufficient movement to that end that the parties decided to take immediate, albeit preliminary, steps to make the companies “one.” Mar-Lees assumed control of the operational and administrative [690]*690affairs of Northern Harvest; agreed to expedite the purchase of equipment necessary to make use of a “modified atmospheric packaging” technology for the preservation of fish that was then the property of Northern Harvest; and employed the plaintiff, on a salaried basis, as Mar-Lees’s nominal president, effective January 1, 2000. The plaintiff was charged both with persuading Northern Harvest’s current customers to do business with Mar-Lees, and with developing new customers for what was expected to become the reorganized enterprise. The parties also agreed to continue their work toward memorializing the integration of the two companies. This resulted in the acquisition by Mar-Lees of business (and related sales) that would otherwise have been enjoyed by Northern Harvest.

In the course of discharging his new responsibilities, the plaintiff brought together Phillip Walsh, manager of seafood sales of Stop & Shop Supermarkets, Inc. (Stop & Shop), and Jack Morris, vice-president for procurement and sales of Mar-Lees. Following subsequent meetings between Walsh and Morris, an agreement was reached that, effective in March, 2000, Stop & Shop would offer Mar-Lees’s fresh sea scallops in its stores on an exclusive basis.

On April 5, 2000, Northern Harvest and Mar-Lees, as well as the plaintiff, O’Donnell, and John Lees2 individually, signed a letter of intent (agreement) setting forth the possible terms of an asset acquisition by Mar-Lees. With the exception of certain provisions applicable to the plaintiff individually (see infra), which provisions were intended to take effect immediately, the terms of the agreement were not binding, and the parties contemplated the subsequent preparation and execution of “a definitive written acquisition agreement.”

By means of the agreement, the parties decided provisionally that Mar-Lees would acquire, for a nominal sum, certain assets presently owned by Northern Harvest. Assets to be transferred included so-called “modified atmospheric packaging” technology for the preservation of fish that was then controlled by Northern Harvest; Northern Harvest’s customer list; and the good will of Northern Harvest as a going concern. At the same [691]*691time, the plaintiff and O’Donnell, or an entity or entities designated by them, would commence a sequence of acquisitions of Mar-Lees’s stock then owned by John Lees that would result ultimately in their ownership of fifty percent of that company’s stock for a purchase price of $2.5 million. The tentative agreement included a three-year covenant on the part of the plaintiff “not to solicit business from any customer or account acquired from [Northern Harvest], except in [his] capacity as an employee of Mar-Lees.”

Those provisions of the agreement that were intended to be binding forthwith without further negotiation or agreement included section 4.1, entitled “Contingent Profits Interest” (Section 4.1). Section 4.1 acknowledged that the plaintiff was currently employed by Mar-Lees, and that Northern Harvest sales were presently being “booked through Mar-Lees,” presumably in contemplation of the consummation of the asset and stock purchases described elsewhere in the agreement. However, recognizing the possibility that the asset and stock transactions might not take place, section 4.1 provides that

“[i]n the event the Closing[3] fails to occur for any reason, Mar-Lees shall pay John Quinn, commencing on the date John Quinn ceases to be employed by Mar-Lees, continuing royalties equal to 45% of the [Northern Harvest] Profits (as hereinafter defined) on items sold which are not manufactured at a facility owned or leased by Mar-Lees, and 42% of the [Northern Harvest] Profits on items sold which are manufactured at a Mar-Lees facility. For purposes of this letter of intent, the term “[Northern Harvest] Profits” means the net profits on revenues from (i) former customers of [Northern Harvest], and (ii) business developed by John Quinn.”

These provisions are the source of the present dispute.

On April 18, 2000, the parties amended and revised the agreement in various respects (amendment). Of relevance to this appeal is paragraph 2 of the amendment, in which the parties

“hereby acknowledge and agree that for purposes of [692]*692paragraph 4.1 [of the agreement] . . . , ‘former customers’ are identified as follows:
“a. Demoulas Market Basket, its parent and/or affiliates;
“b. Royal Ahold’s affiliates Stop & Shop (excepting ‘Bay Scallops’),[4] Bi-Lo, Giant-Landover, Giant-Carlisle (excepting ‘Bay Scallops’), and Tops Markets;
“c. Streamline, its parent and/or affiliates;
“d. The Hynes Convention Center and its concessionaire Aramark;
“e. Fenway Park concession operators and/or owners.”

The parties further agreed that additional customers could be added in the future, either as “former customers” of Northern Harvest or as “business developed by John Quinn,” thus making the plaintiff eligible for royalties on sales by Mar-Lees to such additional customers as well.5

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Cite This Page — Counsel Stack

Bluebook (online)
871 N.E.2d 511, 69 Mass. App. Ct. 688, 2007 Mass. App. LEXIS 881, Counsel Stack Legal Research, https://law.counselstack.com/opinion/quinn-v-mar-lees-seafood-llc-massappct-2007.