RBC Nice Bearings, Inc. v. SKF USA, Inc.

CourtSupreme Court of Connecticut
DecidedSeptember 22, 2015
DocketSC19253
StatusPublished

This text of RBC Nice Bearings, Inc. v. SKF USA, Inc. (RBC Nice Bearings, Inc. v. SKF USA, Inc.) is published on Counsel Stack Legal Research, covering Supreme Court of Connecticut primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
RBC Nice Bearings, Inc. v. SKF USA, Inc., (Colo. 2015).

Opinion

****************************************************** The ‘‘officially released’’ date that appears near the beginning of each opinion is the date the opinion will be published in the Connecticut Law Journal or the date it was released as a slip opinion. The operative date for the beginning of all time periods for filing postopinion motions and petitions for certification is the ‘‘officially released’’ date appearing in the opinion. In no event will any such motions be accepted before the ‘‘officially released’’ date. All opinions are subject to modification and technical correction prior to official publication in the Connecti- cut Reports and Connecticut Appellate Reports. In the event of discrepancies between the electronic version of an opinion and the print version appearing in the Connecticut Law Journal and subsequently in the Con- necticut Reports or Connecticut Appellate Reports, the latest print version is to be considered authoritative. The syllabus and procedural history accompanying the opinion as it appears on the Commission on Official Legal Publications Electronic Bulletin Board Service and in the Connecticut Law Journal and bound volumes of official reports are copyrighted by the Secretary of the State, State of Connecticut, and may not be repro- duced and distributed without the express written per- mission of the Commission on Official Legal Publications, Judicial Branch, State of Connecticut. ****************************************************** RBC NICE BEARINGS, INC., ET AL. v. SKF USA, INC. (SC 19253) Palmer, Zarella, Eveleigh, McDonald, Espinosa and Robinson, Js. Argued January 5—officially released September 22, 2015

David Richman, pro hac vice, with whom were Mat- thew D. Janssen, Robert B. Flynn and, on the brief, Steven J. Zakrzewski, for the appellant (defendant). Kim E. Rinehart, with whom were Tadhg A.J. Dooley and, on the brief, Joseph W. Martini and Matthew C. Brown, for the appellees (plaintiffs). Opinion

ESPINOSA, J. This appeal arises from a dispute over a contract for the sale of goods. The plaintiffs, RBC Nice Bearings, Inc., Roller Bearing Company of America, Inc., and Roller Bearing Company of America, Inc., doing business as Nice Ball Bearings, Inc., manu- facture industrial ball bearings. They appealed to the Appellate Court from the judgment of the trial court, which had denied the plaintiffs’ claim for contractual damages on the basis of its finding that the plaintiffs had waived a contractual requirement that the defen- dant, SKF USA, Inc., a distributor, purchase a minimum dollar value of bearings from the plaintiffs each year. See RBC Nice Bearings, Inc. v. SKF USA, Inc., 146 Conn. App. 288, 294, 78 A.3d 195 (2013). The Appellate Court reversed the trial court’s judgment, concluding that, even if there was sufficient evidence to support a finding that the plaintiffs had waived the minimum purchase requirement as to certain years of the con- tract, the trial court’s finding that the waiver continued into subsequent contract years was clearly erroneous. Id., 310–11. We subsequently granted the defendant’s petition for certification to appeal, limited to the follow- ing questions: (1) ‘‘Did the Appellate Court properly determine that the judgment of the trial court should be reversed or did it substitute its judgment for that of the trial court when it determined that the conduct of the parties did not give rise to a waiver of the minimum purchase requirement?’’; and (2) ‘‘Did the Appellate Court properly determine that the trial court incorrectly decided that the [plaintiffs] failed to retract [their] waiver of [the defendant’s] minimum purchase require- ment . . . ?’’ RBC Nice Bearings, Inc. v. SKF USA, Inc., 310 Conn. 962, 963, 83 A.3d 345 (2013). With respect to the second certified question, we conclude that certi- fication was improvidently granted.1 With respect to the first certified question, we conclude that the record contained sufficient evidence to support the trial court’s finding that the plaintiffs waived the minimum purchase requirement on a continuing basis. Accordingly, we reverse in part the judgment of the Appellate Court.2 The decision of the Appellate Court, as supplemented by the record, reveals the following factual background and procedural history. The defendant owned Nice Ball Bearings, Inc. (Nice), producer of the oldest line of ball bearings manufactured in the United States, until 1997, when it sold the product line and associated manufac- turing assets to the plaintiffs. RBC Nice Bearings, Inc. v. SKF USA, Inc., supra, 146 Conn. App. 291. ‘‘The parties simultaneously executed a ‘Sales and Supply Agreement’ (1997 agreement) through which the defen- dant became the plaintiffs’ exclusive distributor for cer- tain Nice products [to certain aftermarket customers]. The 1997 agreement provided for a term of eight years and required that the defendant expend, at a minimum, $9 million for the purchase of Nice products from the plaintiffs each year.’’ Id. Although the defendant failed to purchase the con- tractual minimum during the first three years of the 1997 agreement, the plaintiffs did not demand compli- ance with the minimum purchase requirement, nor did they take any steps to challenge the defendant’s failure to comply with that requirement. Id. Rather, on July 31, 2000, the parties negotiated a new sales and supply agreement to reflect what they agreed were changed market realities (2000 agreement). Id. This 2000 agreement superseded the 1997 agreement. Id. It extended the term of the parties’ exclusive supply rela- tionship through the end of 2008, while lowering the minimum purchase requirement by providing that the defendant was required to buy not less than $6 million per year of Nice products. Id. The 2000 agreement also contained an adjustment clause that allowed for future increases in the minimum annual purchase requirement to reflect price increases in the marketplace. Id., 291–92. The new agreement also allowed for downward adjust- ments in the minimum purchase requirement under cer- tain exceptional circumstances outlined in the agreement. Id., 292. Each contract year was designated to run from March 1 to the end of the following February.3 Id. The 2000 agreement provided that, if a deficit remained after the close of a given contract year, the defendant could designate a portion of its March sales during the follow- ing year toward making up the shortfall. Id. In any event, the defendant would be required to purchase enough Nice product to make up the shortfall by April 30 of the following year. Id. The 2000 agreement also provided, however, that, upon the expiration or termination of the agreement, the plaintiffs were obligated to repurchase from the defendant all salable Nice products in the defendant’s inventory. Finally, the 2000 agreement retained the defendant’s exclusive distributorship, under which it held exclusive rights to sell Nice prod- ucts to certain industrial aftermarket customers. Id. During the first year of the 2000 agreement, the defen- dant purchased the required amount of bearings from the plaintiffs. Id. Although its purchases in the second contract year fell short of the $6 million minimum, this shortfall was contractually excused because the terror- ist attacks of September 11, 2001, resulted in a signifi- cant falloff in demand for industrial bearings in the second half of the contract year. For reasons that are disputed by the parties, the defendant was unable to satisfy its minimum purchase requirements during the third through sixth years of the 2000 agreement. The shortfalls amounted to $221,584 in the year ending February 28, 2003; $1,810,638 in the year ending February 29, 2004; $2,150,515 in the year ending February 28, 2005; and approximately $2 million in the year ending February 28, 2006.

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