Opinion
No. 98-1435-D
June 13, 2002
INTRODUCTION
This case arises from the termination of a business relationship between Dallas Semiconductor Corporation ("Dallas"), a manufacturer of electronic components, and Mill-Bern Associates, Inc. ("Mill-Bern"), which served as its manufacturer's representative. Mill-Bern has brought multiple claims against Dallas and two of its employees individually. Before the Court are motions of all defendants for summary judgment on all counts. For the reasons that will be explained, the motions will be allowed.
BACKGROUND
The record submitted in connection with the present motions and opposition provides the following factual background. Mill-Bern acted as New England area sales agent for Dallas from August, 1989 until January, 1998. A series of written contracts governed their relationship from late 1989 through the end of 1994. The most recent of those, referred to as the 1994 agreement, contained the following provisions of relevance to the present dispute.
The defendants have submitted a statement of undisputed material facts, with supporting record references, as required by Superior Court Rule 9A(b)(5). The plaintiff's response falls short of the requirements of the rule. As to a number of the facts that it identifies as disputed, it provides no citation to supporting evidentiary material. As to some, citations appear but, upon examination, the cited evidence does not establish a dispute. Plaintiff's statement also sets out certain additional facts, identified as "clarification," not in separate paragraphs as the rule requires, but interspersed with its responses to the defendants' factual assertions, some with supporting references but some without. In addition, plaintiff's memorandum asserts certain additional facts, not included in either side's Rule 9A(b)(5) statement, some supported by record references but some not. As the rule provides, the Court treats as admitted those facts set forth in the moving parties' Rule 9A(b)(5) statements that the plaintiff has not controverted in the manner provided by the rule, with citation to supporting evidentiary material, and does not consider facts not set forth, with supporting references, as required by the rule. The Court has nevertheless carefully examined all the materials submitted in support of and in opposition to the motion, so as to identify those facts, material to the claims alleged, that appear to be genuinely in dispute. As to all such disputed facts, this summary reflects the version most favorable to the plaintiff for which the record provides identified evidentiary support.
The agreement recited, at section 2, that Dallas "hereby appoints Representative on a non-exclusive basis to solicit orders on behalf of Manufacturer from Customers for the sale of Products in the Territory. Representative hereby accepts this appointment by Manufacturer upon the terms and conditions contained in this Agreement." The agreement provided, at section 3, for an effective period of one year from January 1, 1994, subject to renewal "at the option of the Manufacturer, in its sole discretion . . . for one (1) additional one (1) year period upon giving Representative advance written notice of its desire to do so."
Section 7.4 of the 1994 agreement included the following release language:
. . . Representative hereby expressly releases manufacturer, together with its subsidiaries, officers, directors, employees[,] agents, successors and assigns from any and all claims, demands, causes of action, suits and proceedings of any kind whatsoever, whether arising under this agreement or otherwise, except with respect to the payment of such commissions . . .
Termination of the agreement was addressed in section 9, as follows:
This Agreement shall automatically terminate upon the expiration of the Term unless it is renewed in accordance with the provision of Section 3. Additionally, this Agreement may be terminated as follows: . . . 9.3 By Manufacturer, for any reason whatsoever, upon thirty (30) days prior written notice to Representative, in which case Representative shall be entitled to receive Commissions . . . on all Sales made in accordance with the provisions of this Agreement within the first sixty (60) days after the date of termination, providing that such Sales were accepted by the Manufacturer prior to the date of termination.
Upon the expiration of the 1994 agreement, Dallas did not give written notice of renewal. Nor did the parties enter into a new written contract, nor does any evidence indicate that they ever negotiated or entered into any oral contract. Nevertheless, for the next three years plus three weeks, Mill-Bern continued to act as Dallas's sales representative, and Dallas continued to compensate Mill-Bern, in the manner that had been provided under the expired agreement.
Mill-Bern has provided a copy of an August 1, 1995, memorandum expressing Dallas's dissatisfaction with a number of aspects of Mill-Bern's performance at that time. The memorandum concludes by stating that "At this time this office is placing Mill-Bern Associates on probation for an unspecified amount of time. During this time period this office will work with Mill-Bern in order to facilitate a program that will be conducive to DSC needs. If a program cannot be implemented, then this office will exercise its responsibility to DSC and terminate the relationship between Mill-Bern Associates and Dallas Semiconductor." The record does not reveal when, if ever, the "probation" imposed at that time came to an end.
Beginning in March of 1996 and continuing through the events in issue here, Gregory Cappelli served as Eastern Sales Manager for Dallas, reporting to National Sales Manager Jack Von Gillern. William Galluccio was Dallas's New England Regional Sales Manager from September 1995 through the time in issue here; he reported to Cappelli. George Miller was Mill-Bern's sole owner during the relevant times, and Dallas's principal contact. Other Mill-Bern personnel involved with the Dallas account included Jay Wessel, Jeff Brodsky, and Patricia Wilcinski. Mill-Bern's largest client other than Dallas was IBM, until IBM terminated the relationship in late 1997.
In January of 1997, Cappelli received a request from a representative of Genesis Associates, another manufacturer's representative, to meet with that firm. Capelli did so, but informed Genesis, according to his uncontradicted affidavit, "that Dallas was not going to change representatives at that time." Cappelli informed Miller of that meeting, telling him that it was "a courtesy to Genesis and an opportunity to learn about the market, not an interview of Genesis to potentially replace Mill-Bern."
Beginning in the fall of 1997, Cappelli became dissatisfied with Mill-Bern's performance. He expressed his dissatisfaction to Miller, as well as to Von Gillern and Galluccio. He raised concerns regarding staffing, the lack of an "opportunity tracking system," and low sales for the third quarter of 1997. Mill-Bern made certain staffing and organizational decisions requested by Cappelli, but Cappelli remained unsatisfied. Mill-Bern was aware of Cappelli's continuing dissatisfaction.
In late November, 1997, with Von Gillern's approval, Cappelli instructed Galluccio to interview other manufacturer's representatives. Galluccio did so beginning in December. Miller was aware of the interviews, and informed Mill-Bern's employees. According to deposition testimony of Miller, given as Mill-Bern's designee pursuant to M. R. Civ. P. 30(b)(6), Miller asked Cappelli "Does that mean that we're in trouble?" to which Capelli responded "Oh, no. I just want to make sure that he is aware of all other opportunities that are out there." Miller protested that such interviews would damage Mill-Bern's reputation; Cappelli responded "that is not my problem."
Cappelli's deposition testimony on this subject adds the following: "Mr. Miller did tell me at one point in time that it was a problem for him hiring people because of the rumor on the street; and what I said was that if he had a person that he'd like to hire and that was the stumbling block that I'd be more than willing to discuss with the person the situation and inform them that Mill-Bern was not going to lose the line." Nothing in the evidence indicates that the hypothetical circumstance referred to ever arose.
When asked at Mill-Bern's 30(b)(6) deposition "was Dallas Semiconductor restricted from interviewing other firms, in your view?' Miller responded "No, I don't believe they were." Asked "did you lose any customers or any business as a result of Mr. Cappelli's instruction to Mr. Galluccio in the fall of 1997 to interview other manufacturer's reps?" Miller responded "No." When asked "Did anybody from Dallas ever give you any assurances or representations regarding the length of time for which Mill-Bern would continue to be Dallas's representative?" Miller answered "No."
Miller has submitted an affidavit in which he asserts that "from December 1994 until Dallas terminated the relationship in 1998, Mill-Bern was the exclusive Dallas representative in the Territory for products other than touch memory and software." The affidavit does not assert that the parties ever made any agreement as to exclusivity, or that any discussion ever occurred on the subject. To the extent that the assertion of exclusivity seeks to renege on Miller's 30(b)(6) deposition testimony regarding Dallas' freedom with respect to other representatives, Mill-Bern is bound by the deposition testimony. See Spilios v. Cohen, 38 Mass. 338, 340-341 n. 2 (1995); Morrell v. Precise Engineering, 36 Mass. App. Ct. 935, 937 (1994); O'Brien v. Analog Devices, Inc., 34 Mass. App. Ct. 905, 906 (1993).
By early January, 1998, Dallas had decided, in the words of Von Gillern's deposition testimony as Dallas's designee, that "unless they dramatically changed the staffing level or the approach, we were going to separate from them." Cappelli requested a meeting with Mill-Bern, which was scheduled for on January 21, 1998. The purpose of the meeting, according to Cappelli's and Galluccio's affidavits, was "to discuss whether Mill-Bern was capable of continuing its representation of Dallas." Miller's deposition testimony is consistent with, but not identical to this description; he testified that Cappelli requested the meeting, saying that "we want to have a final refinement of seeing what you guys have done. We already interviewed two reps. We want to come in and talk to you guys." From Mill-Bern's point of view, the purpose of the meeting was to demonstrate to Dallas the progress Mill-Bern had made; he expected that the parties would "sit down together and go over yet another pass, fine tuning . . . of the distribution support plan, would show them the work we had done on this opportunity tracker, and in fact we had finally found a prepackaged piece of software . . . and the third thing, we had just redesigned our web page so that there would be a pointer that would go directly when our line came up . . . there was a great big Dallas logo. . . ."
Before the January 21, 1998, meeting with Mill-Bern, Dallas personnel met to discuss the situation. Present were Von Gillern, Cappelli, and Galluccio, along with Dallas's general counsel and its chief executive officer. A termination letter was prepared, which Von Gillern signed and authorized Cappelli to present to Mill-Bern if the meeting did not adequately resolve Dallas' concerns. Von Gillern, when asked at his deposition whether he was aware at that time "that the termination of Mill-Bern might cause it to go out of business," responded that "that's possible in any rep. termination," and that the decision had to be made based on Dallas's needs.
Present at the January 21, 1998, meeting were Cappelli and Galluccio for Dallas, and Miller, Wessel, and Brodsky, for Mill-Bern. Mill-Bern announced organizational changes, and Brodsky made a slide presentation on how Mill-Bern proposed to enhance distribution for Dallas. The presentation featured "REPSYS," a software package with "opportunity tracking" that it had purchased and configured for the Dallas account. Although Miller considered the presentation "the best distribution presentation I have ever seen," Cappelli and Galluccio were unimpressed, viewing it as "pretty much status quo."
At the conclusion of the meeting, Cappelli and Galluccio conferred outside and then returned and delivered to Miller the letter that Von Gillern had previously signed. It read:
After giving the matter considerable thought, we have decided not to renew the SALES REPRESENTATIVE AGREEMENT between our companies. For your ready reference a copy is attached. The agreement provides that it will terminate on February 2, 1998 unless renewed. While not required by the agreement, we are prepared to provide some extended commissions. We will provide details of this offer within the next few days.
The record does not indicate whether a copy of the 1994 agreement, or any other agreement, was actually attached to the letter. Mill-Bern has provided a copy of a facsimile cover sheet reflecting transmission of a copy of the 1994 agreement from Cappelli to Miller on January 22, 1998.
February 2, 1998, was the anniversary of Dallas's signature on the 1994 agreement, dated February 2, 1994. Mill-Bern's signature on the 1994 agreement was dated January 21, 1994, precisely four years before delivery of the letter. On this basis, Dallas's memorandum suggests that its option to renew or not arose as of the anniversary of that date, so that its action was non-renewal rather than termination. As stated supra, however, the agreement recites its effective date as January 1, 1994, and its expiration date as one year thereafter.
According to Cappelli's deposition, the letter referred to non-renewal because he assumed at the time that Mill-Bern was operating under Dallas's standard representative contract. Mill-Bern offers no contradictory evidence on this point, beyond pointing out the involvement of Dallas's general counsel in preparation of the letter.
In February of 1998, Dallas entered into an agreement with Synergy Associates, Inc., to serve as its manufacturer's representative. Mill-Bern was unable to survive the loss of the Dallas account, having already lost the IBM account, and closed its business soon thereafter. Among the consequences, according to Mill-Bern's interrogatory answer, was that it had to lay-off its remaining employees and terminate its representation of its one remaining client.
Mill-Bern asserts that a factual dispute exists as to whether Dallas had decided to terminate Mill-Bern, and to engage Synergy, at some earlier time. The only evidence cited in support of this assertion is deposition testimony of Miller to the effect that, during a meeting in November of 1997, in which he and Cappelli disagreed regarding staffing, Miller had the impression that Cappelli "was looking for a confrontation." Miller further speculated that Cappelli may have taken that approach in the belief that a confrontation would be necessary to persuade Dallas's chief executive officer, with whom Miller had a longstanding relationship, to authorize termination of Dallas's relationship with Mill-Bern. Miller's perceptions of Cappelli's manner, and his speculations as to the reasons therefor, do not establish a genuine dispute of material fact.
Cappelli and Galluccio took no materials with them from the January 21, 1998, meeting other than Cappelli's notes, which included no substantive information. Nothing shown at the meeting was identified as confidential, nor did Mill-Bern request any agreement of non-disclosure or take any other security measures. Miller's deposition testimony acknowledges that Mill-Bern had no proprietary rights in the software presented, and that nothing revealed constituted a trade secret. Miller did assert that "I consider the distribution plan and the way we configured the REPSYS software to be proprietary," but acknowledged that Cappelli and Galluccio did not take the software with them, and that Mill-Bern has no evidence that Dallas has ever made any use of anything presented at the meeting.
Mill-Bern's response to the defendants' Rule 9A(b)(5) statement asserts that a genuine dispute of material fact exists on this point, but provides no record citation.
Mill-Bern filed this action on March 20, 1998, naming as defendants Dallas, Cappelli, and Galluccio. Against Cappelli and Galluccio Mill-Bern alleges interference with existing and prospective contractual and advantageous relations (counts I, II, III, and IV), violation of G.L.c. 93A, § 11 (counts VII, VIII), violation of G. L. c. 93, § 42 (counts X, XI), and "fraud and misrepresentation" (counts XIV, XV). Against Dallas the complaint alleges each of those causes of action (counts V, VI, IX, XII, and XVI), and adds counts for "breach of the implied covenant of good faith and fair dealing" (count XIII) and "promissory estoppel" (count XVII). The complaint does not include any claim against Dallas for breach of any express contract.
The delay in the proceedings from that date to this apparently arises in part from Dallas's removal of the case to Federal Court, Galluccio's unsuccessful motion for summary judgment in that Court while discovery was on-going, and that Court's remand to this Court on the ground that Galluccio's involvement defeated diversity.
DISCUSSION
This Court grants summary judgment where there are no genuine issues of material fact and the record entitles the moving party to judgment as a matter of law. See Mass.R.Civ.P. 56(c); Cassesso v. Commissioner of Correction , 390 Mass. 419, 422 (1983); Community National Bank v. Dawes, 369 Mass. 550, 553 (1976). The moving party bears the burden of establishing that there is no genuine dispute on every material issue. See Pederson v. Time, Inc., 404 Mass. 14, 16-17 (1989). A party moving for summary judgment who does not bear the burden of proof at trial may demonstrate the absence of a genuine dispute of material fact for trial either by submitting affirmative evidence negating an essential element of the non-moving party's case, or by showing that the non-moving party has no reasonable expectation of proving an essential element of its case at trial. See Flesner v. Technical Communications Corp., 410 Mass. 805, 809 (1991); Kourouvacilis v. General Motors Corp., 410 Mass. 706, 716 (1991).
Once the moving party establishes the absence of a triable issue by either of these methods, the party opposing the motion must respond with evidence of specific facts establishing the existence of a genuine dispute. See Pederson v. Time, 404 Mass. 14, 17 (1989). The opposing party may not rest on the allegations of the pleadings, nor may it rely on "bare assertions and conclusions regarding [its own] understandings, beliefs, and assumptions." Key Capital Corp. v. M S Liquidating Corp., 27 Mass. App. Ct. 721, 728 (1989). Mere contradictions of factual allegations, without evidentiary support, are insufficient to raise questions of material fact sufficient to defeat a summary judgment motion. See Madsen v. Erwin, 395 Mass. 715, 721 (1985), quoting Olympic Junior, Inc. v. David Crystal, Inc., 463 F.2d 1141, 1146 (3rd Cir. 1972) (noting that conclusory statements, denials, and allegations are insufficient to raise material issues of fact). The opposing party's obligation, rather, is to demonstrate the existence of admissible evidence sufficient to meet its burden of proof on the issues raised by the motion.
In deciding motions for summary judgment, the Court may consider pleadings, depositions, answers to interrogatories, admissions on file and affidavits. The Court reviews the evidence in the light most favorable to the nonmoving party, but does not weigh evidence, assess credibility or find facts. See Dawes, 369 Mass. at 553; Mass.R.Civ.P. 56(c); Colley v. Benson, Young Downs Insurance Agency, Inc., 42 Mass. App. Ct. 527, 528; see also Kelley v. Rossi, 395 Mass. 659, 663 (1985). In cases "where notice, intent, or state of mind questions are at issue" summary judgment is often, but not always, inappropriate. See Brunner v. Stone Webster Engineering Corp., 413 Mass. 698, 705 (1992) (further citations omitted).
1. Interference with Actual and Prospective Contractual and Advantageous Business Relations.
In an action for intentional interference with contractual relations, a plaintiff must prove that: (1) it had a contract with a third party; (2) the defendant knowingly induced the third party to break that contract; (3) the defendant's interference, in addition to being intentional, was improper in motive or means; and (4) the plaintiff was harmed by the defendant's actions. See G.S. Enters., Inc. v. Falmouth Marine, Inc., 410 Mass. 262, 272 (1991). The elements of interference with advantageous business relations are similar; the plaintiff must show that: (1) it had a business relationship for economic benefit with a third party; (2) the defendant knew of the relationship; (3) the defendant interfered with the relationship through improper motive or means; and (4) the plaintiff suffered a loss of advantage resulting directly from the defendant's conduct. See Kurker v. Hill. 44 Mass. App. Ct. 184, 191 (1998).
Here, the facts as set forth reveal the plaintiff's inability to prove the elements of either of these claims as to any of the defendants. With respect to Dallas, the evidence is devoid of anything to indicate the existence of any contract or business relationship with a third party with which Dallas could have interfered. Although Mill-Bern makes vague references to other potential clients it might have pursued if it had known earlier that it would lose Dallas, it offers nothing to indicate that any actual relationship existed. Nor does it offer any evidence that Dallas ever acted toward it for any motive other than to further its own business interests, as it genuinely perceived them, or that it acted by any means other than simply exercising its freedom to terminate its business relationship. That Mill-Bern may have disagreed with Dallas's evaluation of Mill-Bern's performance does not render Dallas's conduct improper.
As to Cappelli and Galluccio, Mill-Bern's memorandum indicates that the only third party contract or relationship it contends they interfered with was that between Mill-Bern and Dallas. As reflected in the record, the interference, if it can properly be called that, was at most that, as employees of Dallas, they sought and obtained from their superiors authority to terminate the relationship, and then exercised that authority, based on what they viewed as Dallas's business interest. Here again, no improper motive or means appears. The only suggestion Mill-Bern makes of any personal motive on the part of these defendants is that, under Dallas's incentive system, Mill-Bern's disappointing sales in the latter part of 1997 had an adverse effect on their own compensation. Nothing in the record suggests any discord between Dallas and its employees in this regard; to the contrary, the only reasonable inference is that Dallas, like other employers, used an incentive compensation system to promote exactly the sort of conduct displayed here — that is, to encourage employees to make decisions calculated to maximize sales of the employer's product. That Mill-Bern may disagree with these defendants' evaluation of how best to promote Dallas's interests does not render their conduct improper. No genuine dispute exists as to any fact material to counts I through VI, and the defendants are entitled to judgment as a matter of law on those counts.
2. Violation of G.L.c. 93, § 42 .
General Laws, c. 93, § 42, provides, in pertinent part:
Whoever embezzles, steals or unlawfully takes, carries away, conceals, or copies, or by fraud or by deception obtains, from any person or corporation, with intent to convert to his own use, any trade secret, regardless of value, shall be liable in tort to such person or corporation for all damages resulting therefrom.
The statute incorporates the definition of "trade secret" that appears in G.L.c. 266, § 30 (4); that statute defines the term to include:
anything tangible or intangible or electronically kept or stored, which constitutes, represents, evidences or records a secret scientific, technical, merchandising, production or management information, design, process, procedure, formula, invention or improvement.
To demonstrate misappropriation of trade secrets, a plaintiff must prove that: (1) the information in question is a trade secret; (2) the plaintiff took reasonable steps to preserve the secrecy of that information; and (3) the defendant used "improper means, in breach of a confidential relationship, to acquire and use the trade secret." DB Riley, Inc. v. AB Engineering Corp., 977 F. Supp. 84, 89 (D.Mass. 1997); see J.T. Healy Son, Inc. v. James A. Murphy Son, Inc., 357 Mass. 728, 737-739 (1970); see also USM Corp. v. Marson Fastener Corp., 379 Mass. 90, 98-101 (1979).
As appears from the facts set forth, Mill-Bern is unable to prove any of these elements. No evidence indicates that anything presented at the January 21, 1998, meeting constituted a trade secret, or that Cappelli or Galluccio took or used any such material, either personally or on behalf of Dallas. Implicitly acknowledging the absence of any factual support, Mill-Bern fails entirely to address its claims under this statute in its memorandum in opposition to the present motions. Accordingly, summary judgment will enter for the defendants on counts X through XII.
Mill-Bern's opposition memorandum is organized according to factual matters that Mill-Bern contends are in dispute, rather than according to the claims presented in the complaint or the elements of those claims. This approach does not facilitate the Court's consideration of Mill-Bern's arguments; the materiality of any factual dispute that may exist depends of the elements of the claims alleged.
Fraud and Misrepresentation.
To sustain a claim of misrepresentation, a plaintiff must show that (1) the defendant made a false statement of material fact; (2) that the defendant did so with the intent to induce the plaintiff to act in reliance on the statement; (3) that the plaintiff did rely on the statement, and did so reasonably in the circumstances; and (4) that such reliance resulted in the plaintiff's detriment. See Zimmerman v. Kent, 31 Mass. App. Ct. 72, 77 (1991). In addition, the plaintiff must show either that the defendant knew the statement to be false, or, "if through a modicum of diligence, accurate facts are available to the speaker," that the defendant spoke "as of the party's own knowledge," without ascertaining the truth of the statement. See Id. at 77 (further citations omitted).
The tort of fraud is also referred to as "misrepresentation" or "deceit." See Damon v. Sun Co., Inc., 87 F.3d 1467, 1471 (1st Cir. 1996).
The statement in issue must be one of fact, not opinion, estimate or judgment. See id. A statement of present intention can support a claim of fraud only if it is false when made — that is, if the speaker does not in fact have the stated intention at the time of the statement. See Starr v. Fordham, 420 Mass. 178, 187 (1995); compare Cellucci v. Sun Oil Co., 2 Mass. App. Ct. 722, 730 (1974) (discussing exception to the general rule that representations as to future events are not actionable). But the mere fact that a prediction proves inaccurate, or that a promise is not kept, does not show fraud; if it did, every breach of contract would be fraud. Something more is required: the plaintiff must show actual dishonesty in the prediction, or intention to breach the promise, as of the time it was made.
Mill-Bern's memorandum identifies the basis of its claim as "statements made by Cappelli that Mill-Bern was not going to be terminated." As the facts set forth reveal, however, no evidence indicates that any of the statements Cappelli made as to Mill-Bern's status with Dallas were false when made. What the record reveals, at most, is that over a period of several months preceding the decision to terminate the relationship, Cappelli was dissatisfied, and expressed his dissatisfaction, but also provided rather vague, general assurances. The import of the assurances given, to any reasonable listener in Mill-Bern's position, was that Dallas was evaluating the situation and considering its options. Nothing in the record would support a finding that that was not the case at the time any such statement was made.
Moreover, Mill-Bern offers no evidence of any reasonable reliance to its detriment. Its memorandum asserts, in general terms, that it "continued to work on design wins, book long term sales, hired new employees, reorganized its sales force, and did not seek other principals to represent." But nothing in the evidence identifies any particular action it took, or opportunity it passed up, in reliance on any statements of Cappelli, nor does anything in the evidence indicate any harm it suffered as a result of any such reliance. Without such evidence, Mill-Bern cannot sustain its claim, and the defendants are entitled to judgment as a matter of law on counts XIV through XVI.
4. Promissory Estoppel.
The concept of promissory estoppel finds recognition by the Appeals Court in Loranger Constr. Corp. v. E.F. Hauserman Co., 6 Mass. App. Ct. 152, 154 (1978). The Court there held that promissory estoppel "permits recovery if (1) a promisor makes a promise which he should reasonably expect to induce action or forbearance of a definite and substantial character on the part of the promisee, (2) the promise does induce such action or forbearance, and (3) injustice can be avoided only by enforcement of the promise." On further appellate review in that same case, the Supreme Judicial Court declined to "use the expression 'promissory estoppel,'since it tends to confusion rather than clarity." 376 Mass. 757, 761 (1978). The Court nevertheless confirmed that a promise may be "enforceable, in whole or in part by virtue of reliance," "pursuant to traditional contract theory." Id. Such enforcement, however, depends on a showing that the plaintiff reasonably relied on the alleged promise to its detriment. See Hall v. Horizon House Microwave, Inc., 24 Mass. App. Ct., 84, 93, (1987). See Rooney v. Paul D. Osborne Desk Co., 38 Mass. App. Ct. 82, 83, (1995) (promissory estoppel "consists simply of a promise that becomes enforceable because of the promisee's reasonable and detrimental reliance"). An action based on such reliance "is equivalent to a contract action, and the party bringing such action must prove all the necessary elements of a contract other than consideration." Rhode Island Hosp. Trust Nat'l Bank v. Varadian, 419 Mass. 841, 850 (1995).
Mill-Bern's claim on this theory fails for essentially the same reasons as its fraud claim. The evidence fails to identify any statement of Dallas promising that the relationship would continue for any particular period of time. See generally, Simons v. American Dry Ginger Ale Co., 335 Mass. 521, 523 (1957); Conos v. Sullivan, 250 Mass. 376, 378 (1924) (terms must be definite, not vague, to establish existence of contract). As discussed supra, none of the various statements reflected in the evidence could reasonably have been understood as indicating anything more than that, although Dallas was dissatisfied with Mill-Bern and was considering its options, it had not decided to terminate the relationship as of the time of the statements. Nor does the evidence indicate any specific action or inaction by Mill-Bern in reliance on such statements, with resulting harm to Mill-Bern, such that enforcement is necessary to prevent injustice. On this point Mill-Bern's memorandum asserts that it "refrained from seeking other lines," but Mill-Bern offers no evidence to give content to this assertion; it identifies neither particular other lines that were available to it, nor particular steps it refrained from taking, nor any basis to conclude that it would have succeeded in obtaining any such other business if it had attempted to do so. Dallas is entitled to judgment as a matter of law on count XII.
Breach of the Covenant of Good Faith and Fair Dealing
"Every contract implies good faith and fair dealing between the parties to it." Anthony's Pier Four, Inc. v. HBC Assocs., 411 Mass. 451, 471 (1991), quoting Warner Ins. Co. v. Commissioner of Ins., 406 Mass. 354, 362 n. 9 (1990) and Kerrigan v. Boston, 361 Mass. 24, 33 (1972). The covenant of good faith and fair dealing that is implicit in every contract provides "that neither party shall do anything that will have the effect of destroying or injuring the rights of the other party to receive the fruits of the contract . . . ." Anthony's Pier Four, Inc., 411 Mass. 451 at 471-472, quoting Druker v. Roland Wm. Jutras Assocs., 370 Mass. 383, 384 (1976) and Uproar Co. v. National Broadcasting Co., 81 F.2d 373, 377 (1st Cir.) cert. denied, 298 U.S. 670 (1936).
The implied covenant does not give rise to a cause of action independent of the underlying contract; rather, a claim for breach of the implied covenant is, in substance, a claim of breach of contract, albeit breach not of any express covenant, but rather of the covenant that is implied by law in all contracts, whether written or oral. See Levenson v. L.M.I. Realty Corporation, 31 Mass. App. Ct. 127, 131 (1991). Thus, to prove a claim based on violation of the implied covenant, the plaintiff must show (1) that a contract existed between the parties, and (2) that the defendant acted in bad faith, causing the plaintiff to be deprived of a benefit promised under the contract. See, e.g., Anthony's Pier Four, Inc., 411 Mass. 451 at 471-472; Fortune v. National Cash Register Co., 373 Mass. 96, 105 (1977).
Here, the evidence is sufficient to establish the existence of a contract. A fact-finder could properly conclude that the course of conduct between the parties reflected implicit agreement to a series of annual renewals of the 1994 agreement, without the formality of written notice of renewal. See LiDonni, Inc. v. Hart, 355 Mass. 580, 583 (1969) ("In the absence of an express agreement, a contract implied in fact may be found to exist from the conduct and relations of the parties"); Steranko v. Inforex, Inc., 5 Mass. App. Ct. 253, 261 (1977) ("When one has been employed for a definite period at an annual wage and continues in the same position after the expiration of the term, there is a presumption of a continuance of the employment relationship for another year upon the same terms"); 1 Corbin, Contracts § 18 (continued performance after expiration of express contact supports inference of agreement to renew for similar period). On that view, the termination provision of the 1994 agreement remained in effect, so that Dallas was free to terminate at any time, for any reason, upon thirty days notice.
Alternatively, a fact-finder could infer that the course of conduct between the parties reflected an implied agreement to continue the relationship on an at-will basis, subject to termination by either side at any time, upon reasonable notice. See Lord's Lady's Enterprises, Inc. v. John Paul Mitchell Systems, 46 Mass. App. Ct. 262, 270 (1999) (contract that specifies no term is terminable at will on reasonable notice). The only evidence in the record that would bear on determination of what notice would be reasonable is the thirty day period provided in the 1994 agreement. Thus, either way, Dallas had the right to terminate upon thirty days notice, as well as to interview and to employ other representatives even during the contract term. The only benefit guaranteed to Mill-Bern under the contract was to receive whatever commissions resulted from its representation while the contract was in effect.
Mill-Bern has not, for example, offered evidence of any norms in the industry.
For the reasons discussed at note 3, supra, the court does not consider the assertion in Miller's affidavit that the relationship was exclusive during the time in issue, or the arguments based on that assertion.
Given these contract terms, Mill-Bern cannot establish a violation of the implied covenant of good faith merely by showing that Dallas terminated the relationship, even if Dallas did so without reason and without warning. Rather, to make out this claim Mill-Bern would have to show that the termination caused Mill-Bern to be deprived of commissions earned through sales made under the contract, and indeed that Dallas acted in a bad faith effort to avoid paying such commissions. Compare Fortune v. National Cash Register, 373 Mass. at 104-105 (salesman terminated while "on the brink of successfully completing the sale" for which he would have earned a large bonus). Mill-Bern makes that assertion in its memorandum, but offers no evidence to support it. Accordingly, Dallas is entitled to judgment as a matter of law on count XIII.
Mill-Bern may have a viable claim for breach of contract based on Dallas's failure to give thirty days notice of termination. The complaint, however, contains no such claim. Nor does the record appear to indicate that Mill-Bern suffered any damages caused by the difference between thirty days notice and the twelve days notice that was given. It bears noting that, under section 16 of the 1994 agreement, any claim for breach of that agreement would have to be brought in Texas.
As indicated supra, the termination letter informed Mill-Bern that Dallas was "prepared to provide some extended commissions." The parties' statements pursuant to Rule 9A(b)(5) include nothing on this subject, nor has either party directed the Court's attention to anything in the materials submitted to indicate whether any sales occurred for which commissions remain unpaid. The complaint contains no claim either for recovery in quantum meruit or for violation of G.L.c. 104, § 9, both of which receive passing reference in Mill-Bern's memorandum.
Chapter 93A, § 11.
To establish a violation of c. 93A, § 11, the plaintiff must show conduct that is "at least within the penumbra of some common-law, statutory or other established concept of unfairness," or is "immoral, unethical, oppressive or unscrupulous" and "caused substantial injury" to the plaintiff. PMP Assocs., Inc. v. Globe Newspaper Co., 366 Mass. 593, 596 (1975). That determination depends on examination of the "nature of [the] challenged conduct and the purpose and effect of that conduct." Massachusetts Employers Ins. Exchange v. Propac-Mass. Inc., 420 Mass. 39, 42-43 (1995). Conduct that a reasonable business person would find reprehensible is unfair. Schwanbeck v. Federal-Mogul Corp., 31 Mass. App. Ct. 390, 414 (1991).
Here, resolution of the c. 93A claim follows from resolution of the other claims, since the conduct on which the plaintiff relies for this claim is the same conduct for which the plaintiff fails to provide the necessary evidence to establish the elements of the other claims. The evidence shows no deception, nothing "immoral, unethical, oppressive or unscrupulous," and certainly nothing that a reasonable business person would find reprehensible. At most the evidence shows a breach of contract in the giving of twelve days notice rather than thirty, without any identified injury resulting from that breach. Mere breach of contract does not amount to a violation of G.L.c. 93A. See Vmark Software, Inc. v. EMC Corp., 37 Mass. App. Ct. 610, 624 (1994); Madan v. Royal Indemnity Co., 26 Mass. App. Ct. 756, 762 (1989), citing Whitinsville Plaza, Inc. v. Kotseas, 378 Mass. 85, 100-101 (1979).
CONCLUSION AND ORDER
For the reasons stated, the Motion of Defendant Dallas Semiconductor for Summary Judgment on Counts V, VI, IX, XII, XIII, XVI, and XVII, and the Motion of Defendants Gregory Cappelli and William Galluccio for Summary Judgment as to Counts I, II, III, IV, VII, VIII, X, XI, XIV and XV are ALLOWED. It is hereby ordered that JUDGMENT enter for defendants on all counts of the complaint.