Filed: Jan. 23, 2015
Latest Update: Mar. 02, 2020
Summary: UNPUBLISHED UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT No. 13-2321 TRIAD PACKAGING, INCORPORATED; LOUIS WETMORE, Plaintiffs – Appellants, v. SUPPLYONE,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. DURHAM BOX COMPANY, INCORPORATED,
Summary: UNPUBLISHED UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT No. 13-2321 TRIAD PACKAGING, INCORPORATED; LOUIS WETMORE, Plaintiffs – Appellants, v. SUPPLYONE,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. DURHAM BOX COMPANY, INCORPORATED, ..
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UNPUBLISHED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.
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Affirmed in part, vacated in part, and remanded by unpublished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Unpublished opinions are not binding precedent in this circuit.
2
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, Inc., and Durham Box Company, Inc., to
SupplyONE, Inc. SupplyONE, in turn, filed counterclaims to
recover what Wetmore allegedly owed under 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. The
jury returned verdicts against both parties, apportioning
damages accordingly.
We affirm the district court’s order of summary judgment,
as well as the jury’s verdict and the damages award to
SupplyONE. However, we vacate the jury’s award to Wetmore for
“contractual 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 cardboard boxes used in
3
commercial packaging and shipping in North Carolina and South
Carolina. In late 2007, Wetmore entered into discussions to
sell the assets of his companies to SupplyONE, a national
company also engaged in the corrugated box 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 the due diligence period, however, SupplyONE
determined that the deal was not as advantageous as it had
originally thought. 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 post-
closing price adjustments, and (3) cash payments.
• Section 2.7 provided three avenues for price
adjustment on or after closing:
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.
4
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 closing, the parties disputed the amounts by
which the price should be adjusted under Section 2.7.
Initially, SupplyONE failed to produce the balance sheet within
the time-frame provided by the agreement. As a result, Wetmore
disputed the extent of any asset deficiency and refused to
reimburse SupplyONE for either the alleged deficiency or for the
value of the unsold inventory and uncollected accounts
receivable. Eventually, SupplyONE instituted claim proceedings
5
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, (3) fraud, and (4) unfair and deceptive trade
practices. SupplyONE removed the case to federal court and
asserted counterclaims for breach of contract and breach of
warranty. On multiple motions for summary 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.
6
inventory, uncollected accounts receivable, and assets related
to the AP Exhaust client. In addition, it rejected Wetmore’s
individual claim that SupplyONE breached their employment
agreement. 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 disposed of at summary
2
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.
7
judgment--are supported by bare assertions of error in no more
than two paragraphs of Wetmore’s opening brief. Consequently,
we do not consider them here. 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 district court erred in denying his motion for
interest, costs, and attorneys fees--effectively waives that
issue. 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, we identify two broad issues warranting
discussion: (1) Wetmore’s contention that the district court
erroneously granted summary judgment to SupplyONE on Wetmore’s
unjust enrichment, fraud, and unfair and deceptive trade
practices claims (presented in Wetmore’s Issue I) 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 seeking reversal of the jury’s “contractual damages”
award to Wetmore.
8
Because this case comes to us through our diversity
jurisdiction, we apply North Carolina law. 3 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). Such a claim
3
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.
9
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. However, this claim
fails because the Asset Purchase 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 regarding confidentiality, non-solicitation, and
professional fees, the letter is non-binding. Second, 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 all
prior agreements or understandings among the parties.” J.A.
135. Finally, Wetmore himself alleged in the complaint that the
purchase agreement “was a contract entered into by and between
the Plaintiffs and Defendant SupplyONE.” J.A. 9.
10
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, and (3) alleged misrepresentations regarding its
performance of certain terms in the purchase 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 relating to future conduct. Ragsdale v.
Kennedy, 209 S.E.2d 494, 500 (N.C. 1974). Indeed, we 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,
11
exemplified by the letter’s non-binding nature. They cannot,
therefore, form the basis of a fraud claim. 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 both
with North Carolina law and sound commercial practice.” Strum,
15 F.3d at 329. We likewise reject such an attempt here.
3.
Finally, Wetmore fails to substantiate his claim under
North Carolina’s Unfair and Deceptive Trade Practices Act
(“UDTPA”), N.C. Gen. Stat. § 75-1.1 et seq. This claim is based
12
on allegations similar to those Wetmore makes for his fraud
claim: essentially, that SupplyONE’s misrepresentations and
delay forced Wetmore to settle for a deal with terms less
lucrative than those he had originally agreed to. 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 also devotes significant time to the novel
argument, first identified in his post-trial “Motion for
Judgment Conforming with the Evidence,” that SupplyONE’s lawsuit
13
against Wetmore for indemnification--filed in the Western
District of Pennsylvania and recently dismissed on grounds of
res judicata--demonstrates “post-verdict” unfair and deceptive
actions that should invalidate the court’s earlier summary
judgment motion. However, Wetmore provides no authority
supporting this notion, and as such, we decline to consider it.
See Edwards, 178 F.3d at 241 n.6.
We conclude that the district court correctly granted
summary judgment on Wetmore’s claims for unjust enrichment,
fraud, and unfair and deceptive trade practices.
B.
Wetmore further contends that the district court erred in
denying his motion for a directed verdict on SupplyONE’s
counterclaim for breach of contract. 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)
14
Although Wetmore presents these issues in a pre-verdict
posture, they arise from the district court’s 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 non-
moving 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. Dotson v. Pfizer, Inc.,
558 F.3d 284,
292 (4th Cir. 2009). 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 post-
closing access to information. According to Wetmore, this
“prior uncured breach” discharged his obligation to pay
SupplyONE the amounts he owed under the price adjustment
provisions of the agreement. 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).
15
The “general rule” of bilateral contracts is that if either
party materially breaches a contract, the other party is not
required to perform further. Williams v. Habul, 724 S.E.2d 104,
112 (N.C. Ct. App. 2012). 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. See, e.g., Restatement (Second) of Contracts
§ 242 cmt. a (1981) (a party’s remaining duties are not
discharged if the other party cures its breach in a timely
manner).
At trial, there was no dispute that SupplyONE failed to
provide a balance sheet within 60 days of closing, or that
Wetmore refused to reimburse SupplyONE for any net asset
deficiency. 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 under the price adjustment provisions of the
purchase agreement. Nevertheless, although the jury found
SupplyONE breached this portion of the purchase agreement by not
providing the balance sheet “within 60 days of closing,” it also
16
found Wetmore breached its subsequent obligation to reimburse
SupplyONE under the price adjustment provisions of the
agreement. J.A. 2764–770. Wetmore argues that SupplyONE’s
complete failure to provide him a balance sheet prevented him
from performing, and therefore the jury’s finding that he
breached the section of the agreement was unreasonable. We
disagree.
First, the record shows that SupplyONE engaged in
preliminary and final calculations in an effort to create a
closing date balance sheet. Specifically, internal emails in
January 2009 show spreadsheets calculating the assets and
liabilities Wetmore transferred at closing, as well as the
subsequent net asset shortfall. Moreover, 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, the jury’s verdict that
17
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 SupplyONE breached its obligation to use “best
efforts” to collect accounts receivable and sell inventory.
Critically, the purchase agreement does not define the term
“best efforts.” As a result, the court instructed the jury that
it must “ultimately decide what the parties intended by
including the best efforts standard” but that best efforts
generally means “diligent attempts to carry out an obligation.”
J.A. 2335.
Here, the jury heard testimony from Forest Hammer, the
president of SupplyONE’s North Carolina subsidiary, that
SupplyONE used its best efforts to resolve the old inventory and
outstanding accounts receivable transferred as part of the sale.
Specifically, Hammer testified that although much of the
problematic inventory was obsolete, the company had sales
representatives and managers reach out to customers about
purchasing it. In addition, employees in the accounting
department “worked . . . diligently for days and weeks” to
collect accounts receivable. J.A. 2160. Overall, Hammer
testified that
18
[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 with Wetmore’s contention that because
SupplyONE did not use the same procedures Wetmore 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
19
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 jury’s award to Wetmore included two components.
First, the jury awarded $123,571 from the escrow account.
Second, the jury awarded $211,363 in unspecified “contractual
damages.”
Here, the only evidence regarding damages came from
Wetmore, whose testimony focused on three specific 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. Second, he sought $129,977 owed to him under
the promissory 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. Although
the district court and Wetmore have identified a 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
under the purchase agreement “with mathematical certainty.”
Although it may be true that SupplyONE’s 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. Consequently, that portion of
the award grappled with and resolved whatever uncertainty
surrounded Wetmore’s damages. 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 breach of the implied
covenant of good faith and fair dealing. 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)). In our view, the district
court’s conclusion that 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.
21
Co., 229 S.E.2d 297, 301 (N.C. 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
