Tar Heel Industries, Inc. v. E. I. duPont De Nemours & Co.

370 S.E.2d 449, 91 N.C. App. 51, 1988 N.C. App. LEXIS 703
CourtCourt of Appeals of North Carolina
DecidedAugust 2, 1988
Docket885SC82
StatusPublished
Cited by12 cases

This text of 370 S.E.2d 449 (Tar Heel Industries, Inc. v. E. I. duPont De Nemours & Co.) is published on Counsel Stack Legal Research, covering Court of Appeals of North Carolina primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Tar Heel Industries, Inc. v. E. I. duPont De Nemours & Co., 370 S.E.2d 449, 91 N.C. App. 51, 1988 N.C. App. LEXIS 703 (N.C. Ct. App. 1988).

Opinion

*53 SMITH, Judge.

I. Facts

The affidavits and exhibits before the trial court on DuPont’s motion for summary judgment on the Chapter 75 claim showed that in 1974 plaintiff and DuPont entered into a contract for intrastate carriage of yarn and staple fiber from DuPont’s Cape Fear plant in Leland, North Carolina to warehouses in Brunswick County including a warehouse known as the Maco warehouse. The service plaintiff provided was known as a “shuttle service” and was required on a twenty-four hour basis since DuPont’s Cape Fear plant had no on-site warehouse. On 15 December 1980, the parties entered into a new contract. The 1980 contract provided in part:

1. Period of Agreement
This Agreement shall commence on January 1, 1981 and remain in effect until December 31, 1981, and shall continue in full force and effect thereafter, subject to the right of either party to terminate this Agreement at any time upon giving the other party at least sixty (60) days’ prior written notice.

DuPont’s employee John A. Rigsbee was responsible for monitoring the shuttle operation. His office was located in the Maco warehouse which was owned by DuPont and operated under a distribution contract by Gulf Atlantic Corporation (Gulf Atlantic). Rigsbee’s duties included reducing the overall costs of the shuttle operation. During 1981, DuPont attempted to lower costs on the shuttle service by reducing the number of plaintiffs employees per shift and by reducing the number of trailers. On 15 December 1981, the parties executed an amendment to the 1980 contract reflecting the reduced number of trailers effective 1 January 1982.

Throughout 1981 and 1982, Rigsbee investigated other ways to obtain the shuttle service. He looked at a “management fee” system and a DuPont-operated system using leased trailers. Rigs-bee also received proposals from Lebarnold, Inc. (affiliated with ADW, Inc.). In November 1981, Rigsbee sent a memo to a DuPont employee indicating that the management fee system would be more expensive than plaintiffs contract and that “[t]he only other *54 way we can sell this is through better control considering [plaintiffs president] is ready to retire and his manager of the shuttle is 71 years old.” In May 1982, DuPont requested Lebarnold, Inc. and plaintiff to submit bids for the shuttle service. Plaintiffs bid was not the lowest bid, and plaintiff was allowed to submit a second bid in June 1982. Plaintiffs second bid was still not the lowest, but DuPont decided to continue using plaintiffs services because Lebarnold did not have the necessary intrastate operating authority from the Utilities Commission.

On 23 August 1982, plaintiff and DuPont executed a second amendment to the 1980 contract which changed the pricing system used to compensate plaintiff. This amendment followed DuPont’s insistence that plaintiff reduce costs under the contract. On 28 February 1983, the parties executed a third amendment to the 1980 contract to account for charges for transportation to a warehouse not named in the original contract.

On 29 November 1983, DuPont again sought bids for the shuttle service and invited Williams Trucking Co., Guignard and plaintiff to submit bids. In its complaint, plaintiff alleges that Rigsbee demanded a copy of plaintiffs bid before the bidding period was closed and that Rigsbee shared plaintiffs bid with Guig-nard before Guignard’s bid was submitted. However, plaintiff presented no evidence of these alleged facts at the hearing on summary judgment. DuPont presented evidence that its employees did not see plaintiffs bid before receiving Guignard’s bid and that Guignard’s employees did not see plaintiffs bid before Guignard’s bid was submitted to DuPont.

Plaintiffs bid was not the lowest. Plaintiffs president, E. G. Lackey, wrote a letter to DuPont questioning whether DuPont had fully explained the contract requirements to Guignard. DuPont met with Guignard representatives and presented a draft of the contract reflecting Guignard’s bid which bore the notation: “Draft only. In no way should receipt of a copy of this AGREEMENT BE INTERPRETED AS A COMMITMENT ON THE PART OF E. I. DUPONT DE Nemours.” DuPont again allowed plaintiff to submit another bid. Plaintiff did not rebid on DuPont’s specifications but instead rebid on an alternative proposal.

On 26 January 1984, DuPont gave plaintiff 60 days’ notice of DuPont’s intent to terminate the 1980 contract. Plaintiff respond *55 ed by demanding that DuPont repurchase five trailers and the licenses used in the shuttle operation. DuPont proposed to purchase four of the trailers but did not acknowledge legal responsibility for the trailers and licenses.

Guignard was awarded the shuttle service contract and published a tariff for the shuttle services. Plaintiff filed a complaint before the North Carolina Utilities Commission (NCUC) on 24 February 1984 challenging the Guignard tariff as an illegal rebating scheme and seeking to prevent actual operation under the tariff. On 26 March 1984, plaintiff offered to continue providing service under the terms of the terminated contract. DuPont agreed to extend the contract on a temporary basis but reserved the right to cancel immediately upon written notice. Plaintiff’s president signed and returned DuPont’s letter extending the contract on 2 April 1984.

In a recommended order, the NCUC rejected plaintiff’s charge of illegal rebating and proposed to allow Guignard’s tariff to become effective. Plaintiff appealed to the full Commission which on 18 September 1984 adopted the proposed order to be effective on 7 December 1984.

On 26 November 1984, DuPont advised plaintiff of its intent to terminate the contract extension effective 10 December 1984. Plaintiff appealed the NCUC order to this Court and obtained a stay of the order allowing Guignard’s tariff to become effective. DuPont then extended plaintiff’s contract “on a day-to-day basis” after 10 December 1984. Subsequently, this Court reversed the NCUC order. State ex rel. Utilities Comm. v. Tar Heel Industries, Inc., 77 N.C. App. 75, 334 S.E. 2d 396 (1985).

In early April 1985, DuPont entered into a labor service agreement for drivers with Gulf Atlantic and an equipment lease agreement with L. B. Guignard, Inc. On 11 April 1985, DuPont informed plaintiff of its intent to terminate the contract extension on 20 April 1985. Plaintiff filed the complaint in this case and obtained a temporary restraining order and a preliminary injunction extending the effective date of the termination until 60 days after the 11 April 1985 notice. DuPont subsequently cancelled the labor contract with Gulf Atlantic and the equipment lease with L. B. Guignard, Inc. On 12 June 1985, Conoco, Inc., a subsidiary of DuPont, began providing shuttle service for DuPont.

*56 When plaintiff first began providing shuttle services'to DuPont in 1974, it had other customers besides DuPont. Over the years, plaintiff decided to devote all its business resources to the DuPont shuttle contract and stopped serving all its other customers. When Conoco took over the shuttle service, plaintiff ceased all operations.

II. Chapter 75 Claim

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Bluebook (online)
370 S.E.2d 449, 91 N.C. App. 51, 1988 N.C. App. LEXIS 703, Counsel Stack Legal Research, https://law.counselstack.com/opinion/tar-heel-industries-inc-v-e-i-dupont-de-nemours-co-ncctapp-1988.