Triad Packaging, Incorporated v. SupplyONE, Incorporated
Filing
UNPUBLISHED AUTHORED OPINION filed. Originating case number: 5:10-cv-00005-RLV-DCK. Copies to all parties and the district court/agency. [999516019]. [13-2321, 13-2362]
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UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 13-2321
TRIAD PACKAGING, INCORPORATED; LOUIS WETMORE,
Plaintiffs – Appellants,
v.
SUPPLYONE, INCORPORATED,
Defendant – Appellee,
and
DAVIDSON, HOLLAND & WHITESELL & CO., PLLC,
Respondent,
v.
DURHAM BOX COMPANY, INCORPORATED,
Third Party Defendant – Appellant.
No. 13-2362
TRIAD PACKAGING, INCORPORATED; LOUIS WETMORE,
Plaintiffs – Appellees,
v.
SUPPLYONE, INCORPORATED,
Defendant – Appellant,
v.
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DURHAM BOX COMPANY, INCORPORATED,
Third Party Defendant – Appellee.
Appeals from the United States District Court for the Western
District of North Carolina, at Statesville.
Richard L.
Voorhees, District Judge. (5:10−cv−00005−RLV−DCK)
Argued:
October 30, 2014
Decided:
January 23, 2015
Before DUNCAN, KEENAN, and DIAZ, Circuit Judges.
Affirmed in part, vacated in part, and remanded by unpublished
opinion.
Judge Diaz wrote the opinion, in which Judge Duncan
and Judge Keenan joined.
ARGUED: Matthew Kyle Rogers, Hickory, North Carolina, for
Appellants/Cross-Appellees.
John Scott Kingston, THOMPSON
COBURN LLP, St. Louis, Missouri, for Appellee/Cross-Appellant.
ON BRIEF: Mark W. Kinghorn, MCGUIREWOODS LLP, Charlotte, North
Carolina, for Appellee/Cross-Appellant.
Unpublished opinions are not binding precedent in this circuit.
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DIAZ, Circuit Judge:
The
case
before
us
is
facially
complex
but
in
reality
involves a straightforward breach of contract action.
In the
district court, Louis Wetmore sought to recover damages from a
bad deal, in which he sold the assets of his two companies,
Triad
Packaging,
SupplyONE,
recover
Inc.,
Inc.
what
and
SupplyONE,
Wetmore
Durham
in
Box
turn,
allegedly
Company,
owed
under
to
counterclaims
filed
Inc.,
to
their
purchase
agreement.
The district court granted summary judgment on the majority
of Wetmore’s claims against SupplyONE but allowed the parties’
respective breach of contract claims to proceed to trial.
jury
returned
verdicts
against
both
parties,
The
apportioning
damages accordingly.
We affirm the district court’s order of summary judgment,
as
well
as
SupplyONE.
“contractual
the
jury’s
verdict
and
the
damages
award
to
However, we vacate the jury’s award to Wetmore for
damages,”
as
we
can
discern
no
basis
for
that
award.
I.
Wetmore
is
the
owner
and
majority
shareholder
of
Triad
Packaging and Durham Box Company, two companies formerly engaged
in
manufacturing
and
supplying
3
cardboard
boxes
used
in
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commercial packaging and shipping in North Carolina and South
Carolina.
sell
the
In late 2007, Wetmore entered into discussions to
company
assets
also
of
engaged
his
in
companies
the
to
SupplyONE,
corrugated
box
a
national
industry.
These
discussions were memorialized by a letter of intent, signed in
April 2008, which contemplated closing in July of that year.
The letter also proposed a purchase price of $3.5 million.
During
determined
the
that
due
the
originally thought.
diligence
deal
was
not
period,
as
however,
advantageous
SupplyONE
as
it
had
It therefore obtained Wetmore’s agreement
to extend the deadline for closing and recommenced negotiations,
resulting in an adjusted purchase price of just over $3 million.
The deal finally closed in October 2008 with the signing of an
Asset Purchase Agreement.
The agreement contained the following relevant provisions:
•
Section
2.6
provided
for
a
purchase
price
of
$3,094,350.52, payable by (1) a promissory note in the
amount of $100,000, due to mature in October 2013, (2)
$175,000 in an escrow account to cover any postclosing price adjustments, and (3) cash payments.
•
Section
2.7
provided
three
adjustment on or after closing:
avenues
for
price
1. If, after preparing a “Closing Date Balance Sheet,”
it was discovered that the assets delivered to
SupplyONE fell below the minimum amount provided by
the agreement ($727,000), Wetmore would be required
to make up the difference.
The agreement required
SupplyONE to provide the balance sheet to Wetmore
within 60 days of closing.
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2. Any unsold or obsolete inventory and uncollected
accounts receivable remaining 180 days after closing
would be returned to Wetmore, who would reimburse
SupplyONE for their value.
3. The value of inventory and accounts receivable
attributable to one particular client (“AP Exhaust”)
would not be included in the assets transferred, and
their value would be deducted from the purchase
price.
•
Section 2.8 provided for allocations of the purchase
price
among
the
purchased
assets
and
required
SupplyONE to prepare the appropriate IRS form within
90 days of closing.
•
Section 6.10 required SupplyONE to use its best
efforts to sell inventory and to collect accounts
receivable it assumed as part of the sale.
•
Section
6.11
required
both
parties
to
provide
reasonable access to information for the purpose of
concluding the transaction.
In addition, as part of the sale, Wetmore and SupplyONE entered
into an employment agreement, under which Wetmore would remain
with the company for several years in a sales capacity.
Following
which
the
closing,
price
the
should
parties
be
disputed
adjusted
under
the
amounts
Section
by
2.7.
Initially, SupplyONE failed to produce the balance sheet within
the time-frame provided by the agreement.
disputed
the
extent
of
any
asset
As a result, Wetmore
deficiency
and
refused
to
reimburse SupplyONE for either the alleged deficiency or for the
value
of
receivable.
the
unsold
inventory
and
uncollected
accounts
Eventually, SupplyONE instituted claim proceedings
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under the escrow agreement to recover the amounts it alleged it
was owed.
In response, Wetmore filed suit in North Carolina state
court, alleging four claims: (1) unjust enrichment, (2) breach
of
contract,
practices.
asserted
warranty.
(3)
fraud,
SupplyONE
(4)
removed
counterclaims
On
and
multiple
for
unfair
the
breach
motions
case
of
for
and
to
deceptive
federal
contract
summary
and
trade
court
and
breach
of
judgment
by
both
parties, the district court dismissed Wetmore’s first, third,
and fourth claims but allowed the parties’ remaining claims to
proceed to trial. 1
After a seven-day trial, the jury returned verdicts for
both Wetmore and SupplyONE.
Specifically, the jury found that
SupplyONE breached the agreement in four ways: (1) it did not
produce the balance sheet within 60 days of closing, (2) it did
not provide the allocation of purchase price IRS form within 90
days of closing, (3) it did not provide Wetmore post-closing
access to information, and (4) it breached its implied covenant
of good faith and fair dealing.
However, the jury rejected
Wetmore’s claims that SupplyONE breached the purchase agreement
by failing to correctly adjust the purchase price for unsold
1
However, because SupplyONE voluntarily dismissed its
breach of warranty claim during trial, only its breach of
contract claim was submitted to the jury.
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inventory, uncollected accounts receivable, and assets related
to the AP Exhaust client.
individual
claim
agreement.
that
In addition, it rejected Wetmore’s
SupplyONE
breached
their
employment
The jury awarded Wetmore $211,363 in “contractual
damages,” in addition to $123,571 from the escrow account.
The jury also found that Wetmore breached the agreement by
failing
to
pay
SupplyONE
for
the
asset
deficiency,
the
uncollected accounts receivable, and the unsold inventory.
The
jury awarded SupplyONE $332,605 in damages to satisfy the price
adjustment provisions of the agreement.
The district court denied the parties’ post-trial motions,
affirmed
the
jury’s
verdicts,
and
entered
judgment
in
the
amounts awarded at trial. 2
II.
Wetmore asserts ten issues on appeal, the majority of which
are either duplicative or underdeveloped.
For example, Issues
II, III, IV, and VII--all essentially challenging the district
court’s refusal to allow Wetmore to introduce at trial evidence
and
arguments
relevant
to
his
claims
2
disposed
of
at
summary
In addition, the district court ordered SupplyONE to pay
the outstanding promissory note owed to Wetmore, resulting in a
total award to Wetmore of $464,911. The court also ordered that
the remainder of the escrow account be distributed to SupplyONE,
for a $384,034 total award to SupplyONE.
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judgment--are supported by bare assertions of error in no more
than two paragraphs of Wetmore’s opening brief.
we do not consider them here.
Consequently,
See Edwards v. City of Goldsboro,
178 F.3d 231, 241 n.6 (4th Cir. 1999) (finding that a party
abandons
all
claims
that
do
not
conform
with
the
“specific
dictates” of Federal Rule of Appellate Procedure 28, which, in
pertinent part, mandates “citations to the authorities . . . on
which the appellant relies”).
Further, Wetmore’s failure to
make any argument in his opening brief with respect to Issue IX-that
the
interest,
issue.
district
costs,
court
and
erred
attorneys
in
denying
his
fees--effectively
motion
waives
for
that
See Hillman v. I.R.S., 263 F.3d 338, 343 n.6 (4th Cir.
2001) (citing Edwards, 178 F.3d at 241 n.6).
However,
discussion:
we
(1)
identify
Wetmore’s
two
broad
contention
issues
that
the
warranting
district
court
erroneously granted summary judgment to SupplyONE on Wetmore’s
unjust
enrichment,
practices
claims
fraud,
(presented
and
in
unfair
and
Wetmore’s
deceptive
Issue
I)
trade
and
(2)
Wetmore’s argument that the court should not have denied his
renewed motions for judgment as a matter of law (presented in
Issues V, VI, VIII, and X).
We also address SupplyONE’s cross-
appeal
the
seeking
reversal
of
award to Wetmore.
8
jury’s
“contractual
damages”
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Because
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this
case
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comes
to
us
through
jurisdiction, we apply North Carolina law. 3
our
diversity
Ellis v. Louisiana-
Pacific Corp., 699 F.3d 778, 782 (4th Cir. 2012).
A.
Wetmore contends that the district court improperly granted
summary judgment to SupplyONE on Wetmore’s claims for unjust
enrichment, fraud, and unfair and deceptive trade practices.
We
review the district court’s grant of summary judgment de novo.
Long v. Dunlop Sports Grp. Ams., Inc., 506 F.3d 299, 301 (4th
Cir.
2007).
Despite
vociferous
arguments
to
the
contrary,
Wetmore cannot make out a prima facie case of unjust enrichment,
nor can he point to evidence in the record amounting to fraud or
unfair
or
deceptive
trade
practices
in
the
formation
or
performance of the purchase agreement.
1.
The equitable claim of unjust enrichment provides relief
where one party confers a benefit on the other party but the
injured party cannot make out a claim for breach of contract.
Booe v. Shadrick, 369 S.E.2d 554, 556 (N.C. 1988).
3
Such a claim
Although the purchase agreement provides that Delaware law
governs any dispute, both parties and the district court have
applied North Carolina law throughout the course of this
proceeding.
See Triad Packaging, Inc. v. SupplyONE, Inc., 925
F. Supp. 2d 774, 786 (W.D.N.C. 2013).
Because the parties do
not contest the application of North Carolina law, we do not
address the issue further.
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is often referred to as one in quasi-contract or a contract
implied in law.
Id.
Critically, however, for a claim in quasi-
contract to sound, no express contract must exist: “If there is
a contract between the parties the contract governs the claim
and the law will not imply a contract.”
Id.; see also Whitfield
v. Gilchrist, 497 S.E.2d 412, 415 (N.C. 1998).
Wetmore contends that SupplyONE’s actions inconsistent with
the parties’ letter of intent--failure to close by July 2008,
and failure to pay the original purchase price of $3.5 million-resulted in SupplyONE’s unjust enrichment.
fails
because
the
Asset
Purchase
However, this claim
Agreement
functioned
as
an
express contract governing the parties’ entire arrangement.
The following facts support this conclusion.
First, the
letter of intent expressly states that, with the exception of
provisions
professional
regarding
fees,
confidentiality,
the
letter
is
non-solicitation,
non-binding.
Second,
and
the
letter was followed by the purchase agreement, which includes an
integration clause providing that the agreement “sets forth the
entire
understanding
of
the
parties . . . and
supersedes
prior agreements or understandings among the parties.”
135.
all
J.A.
Finally, Wetmore himself alleged in the complaint that the
purchase agreement “was a contract entered into by and between
the Plaintiffs and Defendant SupplyONE.”
10
J.A. 9.
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As both parties, at least in the initial pleadings, agreed
on the existence of a contract--the Asset Purchase Agreement-that contract governs.
We therefore conclude that the district
court correctly granted summary judgment on Wetmore’s claim of
unjust enrichment.
2.
Wetmore’s fraud claim is based on SupplyONE’s (1) alleged
misrepresentations in the letter of intent (the $3.5 million
purchase price and the earlier closing date), (2) failure to
immediately disclose its misgivings about the original terms of
the
deal,
performance
and
of
(3)
alleged
certain
terms
misrepresentations
in
the
purchase
regarding
its
agreement.
We
agree with the district court that Wetmore’s fraud claim fails
as a matter of law.
An action for fraud must be predicated on a misstatement
regarding a “subsisting or ascertainable fact” as opposed to
representations
Kennedy,
209
relating
S.E.2d
494,
to
500
future
(N.C.
conduct.
1974).
Ragsdale
Indeed,
we
v.
have
instructed that “[t]he mere failure to carry out a promise in
contract . . . does not support a tort action for fraud.”
Strum
v. Exxon Co., 15 F.3d 327, 331 (4th Cir. 1994) (applying North
Carolina law).
Here, SupplyONE’s statements regarding the sale price and
closing date in the letter of intent are classic projections,
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exemplified by the letter’s non-binding nature.
therefore, form the basis of a fraud claim.
They cannot,
Further, Wetmore’s
claimed reliance on the letter’s closing date--or on SupplyONE’s
alleged failure to disclose its eventual desire to renegotiate
the deal--is expressly negated by the fact that he later signed
an agreement to extend the closing deadline.
Finally, despite
his contentions that SupplyONE never intended to follow through
on its representations in the letter of intent, Wetmore has been
unable to adduce any evidence to that effect.
In
essence,
Wetmore
is
trying
to
convert
his
breach
of
contract claim to a tort claim by arguing that SupplyONE did not
follow through on material terms in the agreement.
Appellant’s
Br. at 38 (asserting that SupplyONE “committed fraud relating to
general performance of the [purchase agreement]”).
In Strum,
where a plaintiff similarly tried to “shoehorn [his] case into a
tort framework,” we cautioned against this approach, concluding
that an “attempt to turn a contract dispute into a tort action
with
an
accompanying
punitive
dimension
is
inconsistent
with North Carolina law and sound commercial practice.”
15 F.3d at 329.
both
Strum,
We likewise reject such an attempt here.
3.
Finally,
North
Wetmore
Carolina’s
fails
Unfair
and
to
substantiate
Deceptive
(“UDTPA”), N.C. Gen. Stat. § 75-1.1 et seq.
12
his
Trade
claim
Practices
under
Act
This claim is based
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on
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allegations
claim:
delay
similar
essentially,
forced
to
those
that
Wetmore
to
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Wetmore
SupplyONE’s
settle
for
makes
for
his
misrepresentations
a
deal
with
lucrative than those he had originally agreed to.
terms
fraud
and
less
We find that
Wetmore cannot show SupplyONE violated the UDTPA.
The UDTPA prohibits “unfair or deceptive acts or practices
in or affecting commerce.”
N.C. Gen. Stat. § 75-1.1(a).
We
have held that only practices involving “some type of egregious
or aggravating circumstances” violate the UDTPA.
S. Atl. Ltd.
P’Ship of Tenn. v. Riese, 284 F.3d 518, 535 (4th Cir. 2002)
(alteration omitted) (quoting Dalton v. Camp, 548 S.E.2d 704,
711 (2011)).
Moreover, we have emphasized that garden-variety
breaches of contract “rarely” violate the statute.
See id. at
536.
Here, Wetmore argues that SupplyONE’s delay in closing was
the fountainhead of the wrong and amounted to an aggravating
circumstance that violated the UDTPA.
He cannot, however, show
any actions by SupplyONE that constitute egregious circumstances
beyond
normal
deliberations
and
negotiations
(and
the
corresponding adjustments in terms) that accompany a transaction
of this nature.
Wetmore
argument,
also
first
devotes
identified
significant
in
his
time
to
post-trial
the
“Motion
novel
for
Judgment Conforming with the Evidence,” that SupplyONE’s lawsuit
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against
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Wetmore
for
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indemnification--filed
in
the
Western
District of Pennsylvania and recently dismissed on grounds of
res judicata--demonstrates “post-verdict” unfair and deceptive
actions
judgment
that
should
motion.
invalidate
However,
the
court’s
Wetmore
earlier
provides
no
summary
authority
supporting this notion, and as such, we decline to consider it.
See Edwards, 178 F.3d at 241 n.6.
We
conclude
that
summary
judgment
on
the
district
Wetmore’s
court
claims
for
correctly
unjust
granted
enrichment,
fraud, and unfair and deceptive trade practices.
B.
Wetmore further contends that the district court erred in
denying
his
motion
for
a
directed
counterclaim for breach of contract.
verdict
on
SupplyONE’s
According to Wetmore, the
verdict against him on the counterclaim was erroneous because
SupplyONE’s “prior uncured breach” discharged his obligation to
pay amounts owed to SupplyONE under the agreement, and the jury
erroneously
concluded
that
SupplyONE
did
not
breach
the
provision of the agreement requiring “best efforts” to collect
accounts receivable and sell inventory. 4
4
Wetmore also asserts for the first time on appeal that the
jury’s verdict on the counterclaim was based on an incorrect
construction of an “ambiguous” net asset threshold amount in the
agreement. His failure to raise this point of error before the
district court waives our review of the issue.
See United
(Continued)
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Although
posture,
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Wetmore
they
arise
presents
from
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these
the
issues
district
in
a
court’s
pre-verdict
denial
of
Wetmore’s post-verdict, renewed motion for judgment as a matter
of law under Federal Rule of Civil Procedure 50(b).
We review
the denial of a motion for judgment as a matter of law de novo,
viewing the evidence in the light most favorable to the nonmoving party.
See Konkel v. Bob Evans Farms, Inc., 165 F.3d
275, 279 (4th Cir. 1999).
We may not disturb a verdict where
sufficient evidence could support a reasonable jury’s finding in
favor of the non-movant.
292
(4th
Cir.
2009).
Dotson v. Pfizer, Inc., 558 F.3d 284,
We
conclude
that
the
district
court
properly denied Wetmore’s motion.
1.
Wetmore first urges that SupplyONE never cured its failures
to provide a closing date balance sheet and to provide him postclosing
access
“prior
uncured
SupplyONE
the
to
information.
breach”
amounts
According
discharged
he
provisions of the agreement.
owed
his
under
to
Wetmore,
obligation
the
price
to
this
pay
adjustment
We think the evidence supports a
conclusion that SupplyONE eventually remedied its failure, and
therefore Wetmore was not relieved of his obligation.
States ex rel. Bunk v. Gosselin World Wide Moving, N.V., 741
F.3d 390, 405 (4th Cir. 2013).
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The “general rule” of bilateral contracts is that if either
party materially breaches a contract, the other party is not
required to perform further.
112 (N.C. Ct. App. 2012).
Williams v. Habul, 724 S.E.2d 104,
In addition, “[i]t is a salutary rule
of law that one who prevents the performance of a condition, or
makes it impossible by his own act, will not be permitted to
take advantage of the nonperformance.”
Mullen v. Sawyer, 178
S.E.2d 425, 431 (N.C. 1971) (quoting Harwood v. Shoe, 53 S.E.
616, 616 (N.C. 1906)).
However, such a failure will discharge
the other party’s performance only so long as the deficiency
remains uncured.
§ 242
cmt.
discharged
a
if
See, e.g., Restatement (Second) of Contracts
(1981)
the
(a
other
party’s
party
remaining
cures
its
duties
breach
are
in
a
not
timely
manner).
At trial, there was no dispute that SupplyONE failed to
provide
a
balance
Wetmore
refused
deficiency.
sheet
to
within
reimburse
60
days
SupplyONE
of
closing,
for
any
or
net
that
asset
Moreover, the district court instructed the jury
that SupplyONE’s breach of its obligation to supply the balance
sheet could operate to excuse Wetmore’s failure to fulfill his
obligations
purchase
under
agreement.
the
price
adjustment
Nevertheless,
provisions
although
the
of
jury
the
found
SupplyONE breached this portion of the purchase agreement by not
providing the balance sheet “within 60 days of closing,” it also
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found Wetmore breached its subsequent obligation to reimburse
SupplyONE
under
agreement.
the
J.A.
price
2764–770.
adjustment
Wetmore
provisions
argues
that
of
the
SupplyONE’s
complete failure to provide him a balance sheet prevented him
from
performing,
breached the
and
section
therefore
of
the
the
jury’s
agreement
was
finding
that
he
unreasonable.
We
disagree.
First,
preliminary
the
and
record
final
shows
calculations
closing date balance sheet.
January
2009
liabilities
subsequent
show
Wetmore
net
that
an
engaged
effort
to
in
create
a
Specifically, internal emails in
spreadsheets
transferred
asset
in
SupplyONE
calculating
at
shortfall.
closing,
the
as
Moreover,
assets
well
as
and
the
correspondence
between Wetmore and SupplyONE in May and June 2009--in which
Wetmore disputed SupplyONE’s claims of a net asset deficiency-suggests that Wetmore received accounting information, at the
very latest, during an April 2009 meeting between Wetmore and
SupplyONE representatives.
Although Wetmore may not have received a document titled
“Closing
Date
Balance
Sheet,”
the
record
shows
that
Wetmore
received post-closing balance sheet information, which allowed
him to commence discussions on the proper valuation of the net
assets
transferred.
Consequently,
17
the
jury’s
verdict
that
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Wetmore breached his obligation by refusing to pay any net asset
deficiency is supported by substantial evidence.
2.
Wetmore further argues that the district court erred in
denying him judgment as a matter of law with respect to his
claim
that
efforts”
SupplyONE
to
Critically,
collect
the
must
accounts
purchase
“best efforts.”
it
the
its
obligation
receivable
agreement
to
and
does
use
sell
not
“best
inventory.
define
the
term
As a result, the court instructed the jury that
“ultimately
including
breached
best
decide
efforts
what
the
standard”
parties
but
intended
that
best
by
efforts
generally means “diligent attempts to carry out an obligation.”
J.A. 2335.
Here,
jury
of
president
the
heard
SupplyONE’s
testimony
North
from
Forest
Carolina
Hammer,
subsidiary,
the
that
SupplyONE used its best efforts to resolve the old inventory and
outstanding accounts receivable transferred as part of the sale.
Specifically,
problematic
Hammer
inventory
representatives
and
was
that
obsolete,
managers
reach
purchasing
it.
department
“worked . . . diligently
collect
accounts
In
testified
addition,
receivable.
18
the
out
for
much
company
to
employees
J.A.
testified that
although
of
the
had
sales
customers
about
in
the
accounting
days
and
weeks”
2160.
Overall,
to
Hammer
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[e]verybody
had
looked
into
the
receivables.
Everybody had done a very thorough effort for
collections. Up to this point everybody had tried to
dispose of the inventory in every way which we knew
how.
J.A. 2152.
Indeed, Hammer noted that SupplyONE made an “all
American” and “extraordinary effort” to recover these assets.
J.A. 2159–60.
We
disagree
SupplyONE
did
not
with
use
Wetmore’s
the
same
contention
procedures
that
Wetmore
because
used
to
collect old accounts or to move unsold or obsolete inventory,
SupplyONE did not use its best efforts.
Hammer’s testimony, in
particular, demonstrates SupplyONE’s diligence.
Consequently,
the jury was entitled to rely on this testimony to conclude that
SupplyONE met its best efforts obligation.
III.
Finally, SupplyONE argues that the record evidence does not
support the jury’s award of $211,363 in “contractual damages” to
Wetmore.
A
jury’s
damage
award
should
stand
unless
“no
substantial evidence is presented to support it, it is against
the clear weight of the evidence, it is based upon evidence that
is
false,
or
it
will
result
in
a
miscarriage
of
justice.”
Barber v. Whirlpool Corp., 34 F.3d 1268, 1279 (4th Cir. 1994).
However, a jury may not award damages where the evidence allows
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no more than speculation as to the amount.
Weyerhaeuser Co. v.
Godwin Bldg. Supply Co., 234 S.E.2d 605, 607 (N.C. 1977).
The
First,
jury’s
the
award
jury
to
awarded
Wetmore
$123,571
included
from
the
two
components.
escrow
account.
Second, the jury awarded $211,363 in unspecified “contractual
damages.”
Here,
Wetmore,
the
whose
only
evidence
testimony
regarding
focused
on
three
damages
came
specific
from
requests.
First, conceding that he owed SupplyONE a net asset deficiency
of $51,429, Wetmore sought $123,571 of the funds held in the
escrow account.
the
promissory
Second, he sought $129,977 owed to him under
note
(including
both
principal
and
interest).
Finally, he sought $480,000 in damages relating to SupplyONE’s
alleged breach of the employment agreement.
These were the only
damages requested by Wetmore’s attorney in his closing argument.
This testimony clearly supports the jury’s award of the
escrow monies to Wetmore.
However, we can find no evidence
supporting the remaining $211,363 of the jury’s award.
the
district
court
and
Wetmore
have
identified
a
Although
number
of
potential bases for the award, we find none of them persuasive.
Initially, we do not accept the district court’s conclusion
and Wetmore’s contention that the $211,363 award was reasonable
because SupplyONE’s breaches “frustrated” Wetmore from “proving
up actual damages” and prevented calculation of the amounts owed
20
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under
the
Although
Filed: 01/23/2015
purchase
it
may
Pg: 21 of 22
agreement
be
true
“with
that
mathematical
SupplyONE’s
certainty.”
breaches
hindered
calculation of the purchase price adjustments, Wetmore testified
that he was owed an exact sum from the escrow account--$123,571-and the jury awarded that sum.
the
award
grappled
with
and
surrounded Wetmore’s damages.
Consequently, that portion of
resolved
whatever
uncertainty
The deficiency in the remaining
$211,363 of the award lies not in its lack of certainty but in
its lack of evidentiary foundation.
Further, we reject the district court’s reasoning that the
damages
could
be
based
on
SupplyONE’s
covenant of good faith and fair dealing.
breach
of
the
implied
No evidence adduced at
trial showed concrete damages stemming from SupplyONE’s breach
of that covenant.
See Thrower v. Coble Dairy Prods. Coop.,
Inc., 105 S.E.2d 428, 431 (N.C. 1958) (“[W]here actual pecuniary
damages are sought, there must be evidence of their existence
and extent, and some data from which they may be computed.”
(internal quotation marks omitted)).
court’s
conclusion
that
In our view, the district
SupplyONE’s
bad-faith
actions
in
refusing to use a third-party accountant, failing to mediate, or
attempting
to
recover
rent
could
support
a
damages
award
is
based more on a punitive theory of tortious injury than actual
contractual damages.
See, e.g., Newton v. Standard Fire Ins.
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Co.,
Doc: 37
229
S.E.2d
Filed: 01/23/2015
297,
301
(N.C.
Pg: 22 of 22
1976)
(punitive
damages
not
allowed for breach of contract).
Finally, we find meritless Wetmore’s speculation that the
jury intended to compensate him for breach of the employment
agreement.
The jury’s verdict expressly rejected this claim.
Thus, any contention that the jury’s $211,363 award was premised
on this non-existent breach is nonsensical.
Because nothing in the record supports the jury’s award of
an additional $211,363 in damages to Wetmore, we conclude that
the award has no reasonable basis.
IV.
For these reasons, we affirm the district court’s order of
summary
judgment
and
the
majority
of
the
jury’s
verdict,
vacating only the award of “contractual damages,” to Wetmore.
We remand the case to the district court for entry of judgment
accordingly.
AFFIRMED IN PART,
VACATED IN PART,
AND REMANDED
22
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