Virgin Islands Distributor, Inc. v. Durkee Foods

19 V.I. 85, 1982 U.S. Dist. LEXIS 9250
CourtDistrict Court, Virgin Islands
DecidedMarch 31, 1982
DocketCivil No. 1980/76
StatusPublished
Cited by7 cases

This text of 19 V.I. 85 (Virgin Islands Distributor, Inc. v. Durkee Foods) is published on Counsel Stack Legal Research, covering District Court, Virgin Islands primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Virgin Islands Distributor, Inc. v. Durkee Foods, 19 V.I. 85, 1982 U.S. Dist. LEXIS 9250 (vid 1982).

Opinion

O’BRIEN, Judge

MEMORANDUM OPINION

The defendants in this case have moved for summary judgment, claiming that the four-year oral agreement under which the plaintiff seeks relief is unenforceable under the Virgin Islands Statute of [88]*88Frauds. Because the Court finds that the oral agreement is for four years and therefore in violation of the one year provision of the Statute of Frauds, the motion will be granted and the amended complaint will be dismissed.

FACTS

Plaintiff, in its amended complaint for breach of contract (hereafter “Plaintiff’s Amended Complaint”) and subsequent documents, alleged the existence of a four-year oral agreement whereby plaintiff was to be a local distributor for the defendants’ spice products in the Virgin Islands. The plaintiff also alleged that it was agreed that plaintiff would order the spices from defendants and defendants would deliver them to the plainiff for sale and distribution in the Virgin Islands. With each delivery, defendants allegedly were to provide plaintiff with a “true and correct company cost and price listing for each item ordered which would then sufficiently inform plaintiff so as to enable it to market such goods at a reasonable profit.” Plaintiff’s Amended Complaint at 2. Plaintiff ordered and received three trailers of spices. As a result of defendants’ alleged failure to provide price lists with those deliveries, plaintiff claims that it sold the products at a price below its cost price and that it subsequently lost profits and was forced to sell its inventory to prevent further losses.

I. NATURE OF THE AGREEMENT A.

Fed. R. Civ. P. 56(c) provides that a motion for summary judgment will be granted if the affidavits, pleadings, depositions, and other discovery documents show that there is no genuine issue as to any material fact and that the moving party is entitled to such judgment as a matter of law. The defendants submitted an excerpt from a deposition of Abdel Suid (hereafter “Mr. Suid”), the “sole principal” of plaintiff, in which he stated the agreement with defendants was for four years. The plaintiff has also stated that the agreement was for four years. Plaintiff’s Opposition to Defendants’ Motion for Summary Judgment (hereafter “Plaintiff’s Opposition Memorandum”) at 1. It is undisputed, therefore, that a four-year agreement existed between the parties. Plaintiff did not present an affidavit raising any other factual issues.

Although plaintiff, in its Amended Complaint, refers to the oral agreement as a sales contract, Mr. Suid has previously described his relationship with defendants as a distributorship in a [89]*89number of instances.1 In light of plaintiffs consistent characterization of its relationship with defendants as a distributor, this Court finds that the contract at issue is in fact a distributorship agreement.2

B.

The defendants argued, in oral argument and in memoranda submitted to this Court, that the Statute of Frauds provision contained in 28 V.I.C. § 244(1) applies. Section 244(1) provides that any oral agreement which cannot be performed within one year is void.3 Plaintiff, however, claims, that the agreement is governed by the Statute of Frauds provision under the Uniform Commercial Code [90]*90(hereafter “U.C.C.”), 11A V.I.C. § 2 — 201(1), which does not contain a one-year requirement.

Section 2 — 201 applies to a “contract for the sale of goods for the price of $500 or more.”4 The first question is whether a distributorship is a “contract for the sale of goods.”5 The Court has failed to find in Virgin Islands law where a distributorship has been classified as any type of contract. There are cases where state law determined whether distributorships were covered or not covered under the U.C.C. Vigano v. Wylain, Inc., 633 F.2d 522, 525 n.3 (8th Cir. 1980) (the Eighth Circuit reluctantly found that under Missouri law, distributorship agreements were not covered by Article 2 of the U.C.C.); Artman v. International Harvester Co., 355 F.Supp. 482 (W.D. Pa. 1973) (dealership or distributorship franchise found to fall under U.C.C.).

A number of courts have resorted to a balancing test. The Seventh Circuit, in Pittsburgh-Des Moines Steel Co. v. Brookhaven Manor Wat., 532 F.2d 572 (7th Cir. 1976), in determining whether a contract was one of sales or services, accepted the test established by the Eighth Circuit in Bonebrake v. Cox, 499 F.2d 951 (8th Cir. 1974): “whether their predominant factor, their thrust, their purpose, reasonably stated, was the rendition of service with goods incidentally involved, or a sale and purchase of ‘movable’ ‘things’, with labor or services incidentally involved.” 532 F.2d at 580 n.6. See also North American Leisure Corp. v. A & B Duplicators, Ltd., 468 F.2d 695, 697 (2d Cir. 1972) (test was the “essence” of the agreement). The Third Circuit has used a similar test although it was applied to determine whether an agreement to purchase the [91]*91assets of a car dealership was for “goods” within the meaning of the U.C.C. The Court noted:

For the Statute of Frauds relating to the sale of goods to become applicable, we do not believe every asset subject to the sale must qualify under the “movable” test of U.C.C. § 2 — 105. See n.7 supra. Rather than a view of mechanical technicality or of mathematical nicety, a view of the reasonable totality of the circumstances should control the characterization of the contract for sale. If, viewed as a whole, it can be concluded that the essential bulk of the assets to be transferred qualify as “goods,” then it is appropriate to consider the transaction a “contract for the sale of goods”.

De Filippo v. Ford Motor Co., 516 F.2d 1313, 1323 (3rd Cir.), cert. denied, 423 U.S. 912 (1975).

In looking at the oral agreement as a whole, paying particular attention to the description provided in Plaintiff’s Amended Complaint, we find that the agreement is more like a sale and purchase of movable things with labor or services incidentally involved, than a service contract with goods incidentally involved. The major transaction is the buying and selling of spices and the service of providing price lists appears incidental to the transaction of the goods. The distributorship agreement, is, therefore, a “contract for the sale of goods” and the U.C.C. is applicable.

C.

Although the U.C.C. is applicable to the distributorship agreement, this does not imply that 28 V.I.C. § 244(1) is not applicable. The general rule is that where two statutes are in irreconcilable conflict, the later act controls. If the acts cannot be harmonized, the later act operates as a repeal of the first only to the extent of the irreconcilable inconsistency. Ocasio v.

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Bluebook (online)
19 V.I. 85, 1982 U.S. Dist. LEXIS 9250, Counsel Stack Legal Research, https://law.counselstack.com/opinion/virgin-islands-distributor-inc-v-durkee-foods-vid-1982.