Vision Systems, Inc. v. EMC Corp.

19 Mass. L. Rptr. 139
CourtMassachusetts Superior Court
DecidedFebruary 28, 2005
DocketNo. 034305BLS
StatusPublished
Cited by1 cases

This text of 19 Mass. L. Rptr. 139 (Vision Systems, Inc. v. EMC Corp.) is published on Counsel Stack Legal Research, covering Massachusetts Superior Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Vision Systems, Inc. v. EMC Corp., 19 Mass. L. Rptr. 139 (Mass. Ct. App. 2005).

Opinion

van Gestel, J.

This matter is before the Court on a motion for summaiy judgment (Paper #13), by the defendant, EMC Corporation (“EMC”). The Amended Complaint contains seven counts, as follows: Count I, breach of contract (UCC); Count II, breach of contract (CISG); Count III, promissoiy estoppel; Count IV, [140]*140breach of covenant of good faith and fair dealing; Count V, quantum meruit; Count VI, unjust enrichment; and Count VII, violation of G.L.c. 93A.

At heart, what is involved is a claimed breach of an oral contract.

BACKGROUND

The following facts are recited in the light most favorable to the non-moving parties.

EMC is a Massachusetts corporation, based in Hopkinton, Massachusetts.

Vision Systems, Inc. (“VSI”) is a Maiyland corporation qualified to do business in Massachusetts, once located in Hingham and now located in Norwell, Massachusetts.

Vision Fire & Security Pty, Ltd. (“VFS”) is an Australian corporation, with its principal place of business in Mt. Waverley, Victoria, Australia.

VSI and VFS will collectively be called “Vision” in this memorandum, unless they need to be individually identified.

EMC was introduced to Vision after Vision learned of a potential to sell smoke detection units (“SDUs”) to EMC for integration into EMC’s Symmetrix 5 (“Symm 5”) data storage system. EMC’s first contact was with Ronald D. Ouimette (“Ouimette”), a business development executive employed by VSI. Ouimette was directly responsible for developing the business relationship between Vision and EMC. Thereafter, EMC began purchasing SDUs from Vision, and integrating them into EMC’s Symm 5s.

Ouimette remained Vision’s principal contact with EMC. He was the “Account Manager for EMC,” and was EMC’s main contact person for “orders, deliveries, etc.”

James Rose, another VSI employee, was principally responsible for various engineering issues relating to the integration of Vision’s products into EMC’s data storage systems. He was the only other Vision employee in regular contact with EMC.

Price quotations to EMC were provided by VSI. Sales to EMC were to be “F.O.B Hingham, MA.” Orders from EMC were submitted to VSI at its Hingham office.

In November 2000, EMC informed Vision that it was developing a new mass storage device called Sym-metrix 6 (“Symm 6”). With EMC’s knowledge, Vision designed a new SDU system for the Symm 6. At that time, certain EMC employees traveled to Australia. The primary purpose of the trip was for EMC to conduct a vendor audit, inspecting the manufacturing capabilities and quality of VFS. EMC was aware that all of Vision’s research, development and manufacturing was performed in Australia.

By July 2001, Vision hoped that it could use the new SDU as the basis for a product line for sale to other manufacturers of high-tech equipment, in addition to EMC. EMC is said to have constantly assured Vision that EMC would buy the Symm 6 SDUs at a volume and price that would allow Vision to recoup all of the research and development costs attributable to the Symm 6 project.

Vision and EMC then began negotiating a contract for the purchase and sale of SDUs, including the new SDU for the Symm 6 system. Both companies intended the written contract to govern any purchases and sales between them. Negotiations proceeded over a period of many months, and numerous drafts of complex written contracts were exchanged between the parties over nearly a year. No final agreement was ever reached, however, and no written contract was ever executed.

Vision’s research and design efforts were successful, and EMC, despite the lack of a written contract, began purchasing production units of the new SDUs for inclusion into the Symm 6 date storage devices.

In the spring of 2002 EMC requested pricing options based on EMC’s up-front payment of some or all of Vision’s research and development costs to obtain lower per-unit cost for the Symm 6 SDU. The research and development costs were substantial, said to have amounted to approximately $2.59 million.

On June 10, 2002, Ouimette sent to EMC an e-mail setting forth certain NRE2 payment options. Because of its significance to one of the elements in this case, the cover memorandum and key parts of the document enclosed are set forth here.

Ouimette’s cover memorandum reads, in its entirety;

Jack,
As promised see the attached document. Please run it up the flagpole and let me know what you think. I will call you to discuss.
Best Regards,
Ron Ouimette.

The “attached document” reads, in material part, as follows:

Thank you for meeting with David Lloyd and me. I believe the meeting was productive. Based on our discussions we are taking an optimistic look at the future growth and volume with EMC for the SYM 6 cabinets and possible migration into the Clarion family. That said and based on your projections of 2,300 SDUs per year we are moving EMC into the next improved pricing category as indicated in the table below. A summary of our meeting follows:
1. Volume of SYM 6 SDU is significantly less than originally projected 9K+ per year, now 2,300 per year. . .
2. Based on the new conservative forecast of 2,300 SDU per year we have formulated a price schedule that considers a non-NRE scenario and an NRE scenario amortized over a period of 3 years.
3. . . .
[141]*1414. . . .
5. . . . Whether EMC elects an NRE or non-NRE route the volume dollar breaks will be in effect according to the original table.
Notes:
The Special price above is based upon EMC projected annual volume of 2300 units.
If Vision does not receive a purchase order for NRE before June 30, 2002 then the unit pricing will be in line with the 2501 to 5000 unit quantity.

(Emphasis added, except for the word “Notes.”)

EMC never issued an NRE purchase order, nor did it reject the summary of the meeting in writing or otherwise. Instead, EMC proceeded to begin ordering Symm 6 SDUs at $700 per unit.

EMC informed Vision in November 2002, that it intended to discontinue all further purchases of SDUs. At that time EMC had purchased 1,247 production units of the Symm 6 SDUs, paying an aggregate sum of $872,900 therefor. These 1,247 production units were all that Vision had manufactured at the time EMC stopped purchasing.

DISCUSSION

“Summary judgment is appropriate when, viewing the evidence in the light most favorable to the nonmov-ing party, all material facts have been established and the moving party is entitled to judgment as a matter of law.” M.P.M. Builders, LLC v. Dwyer, 442 Mass. 87, 89 (2004); Kesler v. Pritchard, 362 Mass. 132, 134 (1972). Mass.R-Civ.P. Rule 56(c).

The burden of proof at trial is on Vision as to all elements of its claims.

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Cite This Page — Counsel Stack

Bluebook (online)
19 Mass. L. Rptr. 139, Counsel Stack Legal Research, https://law.counselstack.com/opinion/vision-systems-inc-v-emc-corp-masssuperct-2005.