American Computer Trust Leasing v. Jack Farrell Implement Co.
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Full Opinion
*1480 ORDER
This matter is before the court on the following motions:
1. Plaintiff American Computer Trust Leasing and counterclaim defendant Automatic Data Processing, Inc.âs motion for summary judgment;
2. Counterclaim defendant Navistar International Corporationâs motion for summary judgment;
3. Counterclaim defendant J.I. Case Co.âs motion for summary judgment; and
4. Defendants Jack Farrell Implement Co. and Boerboom Internationalâs motion to stay entry of any judgment against them.
Based on a file, record and proceedings herein, the motions for summary judgment are granted and defendantsâ motion to stay entry of judgment is denied.
BACKGROUND
Plaintiff American Computer Trust Leasing (âACTLâ) brought suit against defendants Boerboom International, Inc. (âBoer-boomâ) and Jack Farrell Implement Co. (âFarrellâ) (collectively referred to as the defendants) to collect payments for computer hardware leased from ACTL. Boer-boom and Farrell each claim that their obligation should be excused because the hardware did not work properly. The defendants also bring various counterclaims against plaintiff ACTL and counterclaim defendants Automatic Data Processing, Inc. (âADPâ), Navistar International Transportation Corporation (formerly International Harvester) (âIHâ) and J.I. Case Company (âCaseâ). The counterclaims may be divided into three main groups. First, the defendants bring computer system claims alleging that they were defrauded in connection with their acquisition of ADP computer systems. They further allege that the computer systems performed poorly and assert claims for breach of contract and breach of express and implied warranties. The breach of contract and breach of express and implied warranty claims are found in Counts I and II of the counterclaims while the fraud claim appears primarily in Count III. Second, the defendants bring various conspiracy claims. Boerboom and Farrell allege that IH, Case and ADP conspired to force the defendants to purchase ADP computer systems. The defendants assert claims based on civil conspiracy (Count III), violation of state and federal antitrust laws (Count IV) and violations of the Racketeer Influenced and Corrupt Organizations Act (Count IV). Finally, the defendants bring software deactivation claims alleging that their computer software was wrongfully deactivated, relying on various statutes. (Counts VI through XI). ADP brings separate claims against Farrell and Boerboom to collect payments due pursuant to their leases for computer services.
Farrell and Boerboom are presently Case agricultural equipment dealers and were IH dealers before the January 1985 sale of IHâs farm equipment business to Case. Before 1983, IH furnished computer services directly to all of its farm implement dealers in exchange for a monthly fee. IH decided to outsource the dealer computer services because of the severe financial strain it experienced during the early 1980s as a result of the downturn in the U.S. farm economy. 1 IH made the decision in 1982 to stop providing such services to its dealers and began to look for an outside vendor to provide those services. IH discussed its plan with eleven system vendors. One of those companies was ADP. IH communicated to the potential vendors that if selected as a vendor a company would be required to develop a system of hardware and software capable of communication with IHâs mainframe. IH also wanted vendors to develop software that would provide dealers with capabilities in the area of parts ordering, inventory tracking, accounting, customer record keeping, warranty records and whole goods ordering.
IH decided to endorse only one vendor, ADP, and ADP and IH entered into a contract on May 16, 1983. The contract required ADP to develop a communications *1481 software package called the Dealer Communications Systems (âDCSâ) which would enable IH and its dealers to communicate with each other through a dealers communications network (âDCNâ) and also permit dealers to communicate amongst themselves. ADP agreed to develop and provide suitable hardware for both on-line and on-site dealer computer needs. IH further required ADP to modify its existing dealer software products to specifically meet the needs of IH dealers. ADP also agreed to participate in a steering committee which monitored the transition to the ADP system.
IH endorsed only ADP for a number of reasons. ADP was a large stable company and one of the pioneers in the computer services industry. 2 Second, ADP agreed to tailor its computer products to meet the needs of IH and its dealers. Third, IH believed that endorsing only one vendor would facilitate a smoother transition to a new system for both IH and its dealers. Fourth, IHâs strained financial condition mandated a quick termination of its computer services business and a single endorsement would help streamline that process.
Both the contracts between IH and ADP and between IH and its dealers expressly provide that vendors other than ADP could provide computer services to the dealers. Vendors who wanted to provide the DCN component of the computer services to IH dealers were required to submit to a testing process to ensure that the vendor met DCN specifications. The specifications were made available to vendors early in the conversion process and numerous other vendors developed DCN capability and competed with ADP for sales. Only the DCN component required such certification. Dealers could use any parts managements or accounting system without reference to compatibility with the IH communications center.
IH had a considerable investment in its computerized dealer communication network. It also incurred considerable expense in outsourcing the dealer computer services. It sought to recoup some of this expense in its contract with ADP. During negotiations IH initially sought a lump sum payment of $1,000,000 as consideration for its investment. ADP was reluctant to make such a payment because of IHâs uncertain future and insisted on paying a royalty for each dealer sale as a method of defraying IHâs costs and investment. 3 ADP therefore contracted to pay IH a royalty for each system sold in amounts varying from $500 to $4,250, with an average royalty of $1,700. 4
Defendant Boerboom had served as an IH dealer since at least 1980. Boerboom agreed to purchase an ADP system on October 9,1984. Stephen Boerboom, the general manager and vice president of Boer-boom, considered the purchase of another type of computer system before choosing ADP. Boerboom also testified that before the purchase he knew that IH allowed other computer vendors to certify that they met DCN specifications. Boerboom attended an ADP-IH sponsored roll-out meeting on October 9, 1984. 5 Although Boerboom at that time was considering the purchase of a different computer system, the roll-out meeting and Boerboomâs own investigation caused him to conclude that the ADP system was the equivalent of the other system it was considering. Shortly thereafter, on November 6, 1984, Boerboom entered into *1482 an equipment lease for an ADP Series 2000 Model 2020 computer system. IH received a $500 royalty payment as a result of Boer-boomâs purchase. Case received nothing.
Defendant Farrell had been an IH dealer since 1962. Farrell also attended the roll-out meeting sponsored by IH and ADP on October 9, 1984. On January 31, 1985, IH sold its agricultural equipment business to Case. Following a brief transition period which ended in late spring of 1985, IH had no further involvement with its former agricultural dealers, including Boerboom and Farrell, regarding any matters, including those relating to communication and computer services. On May 9, 1985, approximately three months after becoming a Case dealer, Farrell signed an ADP software license agreement and an ADP equipment purchase agreement. In August 1985, the purchase agreement was modified when Farrell signed an agreement to lease rather than buy the equipment. In that contract, Farrell leased a Series 2000 Model 2015 computer system. Steve Farrell, primary operating officer of Farrell, testified that Farrell looked at four or five vendors, narrowed its choice to either ADP or Farm Equipment Association and eventually chose an ADP system. Neither IH nor Case received a royalty payment as a result of this transaction.
The relationship between the defendants, and ADP and ACTL is governed by three contracts: the purchase and maintenance agreement and the software license agreement with ADP, and the equipment lease agreement with ACTL. Under the purchase and maintenance agreement and the software license agreement, Boerboom and Farrell each agreed to purchase computer hardware from ADP, to pay ADP a monthly fee for maintenance and support of the computer hardware and to license several software applications from ADP. Both Boerboom and Farrell decided to exercise their options to lease their computer hardware from ACTL. Their decision to lease the computer hardware canceled that part of the purchase and maintenance agreements concerning the direct sale of the computer hardware but left the remaining provisions of the agreements in force. Boerboom and Farrell both entered into an equipment lease agreement with ACTL which provided for a seven-year term of monthly lease payments to ACTL. Neither IH nor Case is a party to the contracts between the defendants and ADP and ACTL.
After acquiring the IH assets, Case extended offers to both Farrell and Boerboom to become agricultural equipment dealers for Case. Farrell and Boerboom accepted their respective offers. Farrell and Case entered into an agricultural equipment dealer agreement effective March 12, 1985. Boerboom and Case entered into a similar contract effective February 20, 1985. Both Farrell and Boerboom continue today as Case dealers.
On January 7, 1985, shortly after Case announced that it (and its parent company Tenneco) would be purchasing certain assets of IHâs agricultural equipment operations, Case notified all of its North American dealers that it had signed letters of intent to endorse two computer system suppliers, ADP and Dealer Information Systems. On January 7, 1985, before Farrell had signed any contracts with ADP, Case sent its dealers a letter stating that its endorsement meant that it judged that both the ADP and DIS systems would be effective for its equipment dealers use. The letter further stated that the endorsed suppliers were judged to be experienced and proven performers in the dealer system market and that the suppliers were obligated by contract with Case to meet Caseâs communications requirements. The letter also noted that Case required all of its dealers obtain some type of communication system by the end of 1986. 6 In ap *1483 proximately March 1985, Case announced that it approved three additional manufacturers, RIMSS, Dubuque Data Systems and NFPEGA, as vendors for dealer computer systems.
On May 6, 1985, Case and ADP entered into a contract concerning the development and implementation of a communications bridge between Caseâs host processing computer and the ADP dealer communication system that had been developed for the IH dealers. The agreement provided that the ADP computer system would be available to Case dealers in regional system selection meetings between May 6, 1985 and December 31, 1986. That agreement specifically noted that DIS, the other manufacturer endorsed by Case, would also be present at those roll-out meetings as a Case-endorsed vendor. 7 The Case-ADP contract further provided royalties for ADP systems purchased by Case dealers. Case, however, would not earn royalties for computer installations where the royalty had been paid or was due to be paid to IH pursuant to the ADP-IH agreement. 8
Boerboom and Farrell defaulted on their obligations to ACTL under the equipment lease agreements and ACTL seeks judgment against them. The defendants bring a myriad of claims against ACTL, ADP, IH and Case. The defendants also move to stay entry of any judgment against them. ACTL, IH and Case seek summary judgment on all of defendantsâ counterclaims. ADP also moves for summary judgment on all of defendantsâ counterclaims except for their breach of express warranty claims.
DISCUSSION
Rule 56(c) of the Federal Rules of Civil Procedure provides that summary judgment âshall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.â This standard mirrors the standard for a directed verdict under Federal Rule of Civil Procedure 50(a), which is that the trial judge must direct a verdict if, under the governing law, there can be but one reasonable conclusion as to the verdict. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250, 106 S.Ct. 2505, 2511, 91 L.Ed.2d 202 (1986). Stated in the negative, summary judgment will not lie if the evidence is such that a reasonable jury could return a verdict for the nonmoving party. Id. at 248, 106 S.Ct. at 2510. In order for the moving party to prevail, it must demonstrate to the court that âthere is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.â Celotex Corp. v. Catrett, 477 U.S. 317, 325, 106 S.Ct. 2548, 2553, 91 L.Ed.2d 265 (1986); Fed.R.Civ.P. 56(c). A fact is material only when its resolution affects the outcome of the case. Anderson, 477 U.S. at 248, 106 S.Ct. at 2510. On a motion for summary judgment, all evidence and inferences are to be viewed in a light most favorable to the nonmoving party. Id. at 250, 106 S.Ct. at 2511. The nonmoving party, however, may not rest upon mere denials or allegations in the pleadings, but must set forth specific facts sufficient to raise a genuine issue for trial. Celotex, 477 U.S. at 324, 106 S.Ct. at 2553. Moreover, if a plaintiff cannot support each essential element of its claim, summary judgment must be granted because a complete failure of proof regarding an essential element necessarily renders all other facts immaterial. Id. at 322-23, 106 S.Ct. at 2552-53. With this standard at hand, the court will consider all of the motions.
I. ACTLâs Motion for Summary Judgment on Its Claims Against Defendants
Plaintiff ACTL seeks summary judgment on its claims against Boerboom *1484 and Farrell. Those claims are governed by the contracts between the parties: Boer-boomâs November 6, 1984 equipment lease agreement and Farrellâs August 19, 1985 equipment lease agreement. The central provision of the agreements provides that:
This agreement provides for a net lease and the rent and other amounts due hereunder from Lessee to Lessor shall not be subject to any defense, claim, reduction, set-off or adjustment for any reason whatsoever.
This section is a âhell or high waterâ clause common to equipment leasing agreements. See, e.g., In re OPM Leasing Servs., Inc., 21 B.R. 993 (S.D.N.Y.1982). This clause obligates Boerboom and Farrell to make the payment's required by the equipment lease agreements regardless of any defenses that they may raise. Boerboom and Farrell do not attack the validity of the equipment lease agreements and thus Boerboom and Farrell must pay ACTL the amounts owed pursuant to the lease agreements. 9 The court in In re OPM Leasing Services stated:
[cjourts have uniformly given force and effect to âhell and high waterâ clauses in the face of various kinds of defaults by the party seeking to enforce them (citations omitted). The courts ... held that clauses containing unconditional promises are strictly enforceable as a matter of law. In doing so, they have found summary judgment in favor of the lessor or its assignee because no facts submitted or to be submitted by the lessee opposing summary judgment are in any way relevant to the lesseeâs unequivocal liability based on these hell and high water provisions.
Under the terms of the equipment lease agreements, Boerboom and Farrell are liable to ACTL. Both have defaulted on the equipment lease agreements. The agreements give ACTL the right to repossess and sell the equipment and to recover damages. 11
Boerboom and Farrell raise two defenses to ACTLâs damages calculation: (1) they contend that they did not receive a stipulated loss value sheet; and (2) they argue that ACTL delayed in reselling the computer equipment, thus reducing the value that ACTL received on resale. Defendantsâ assertion that they did not receive the stipulated loss value sheet is irrelevant because it provides no defense to their liability for the breach of contract. ACTL concedes that defendantsâ second argument, that ACTL failed to mitigate its damages, raises a material fact issue and seeks judgment calculated by using the figure that defen *1485 dants claim represents the fair market value of the computers at the time of ACTLâs repossession. 12 Based on the foregoing, ACTLâs motion for summary judgment against Boerboom and Farrell is granted in the amounts of $20,855.42 against Boer-boom and $33,020.46 against Farrell.
11. ACTLâs Motion for Summary Judgment on Defendantsâ Counterclaims
ACTL is named as party in Counts III through XI of the defendantsâ counterclaims. Each of the counterclaims will be examined in turn to determine if summary judgment is appropriate. The counterclaims may be divided into three main areas. First there are computer system claims in which the defendants allege that they were defrauded in their acquisition of ADP computer systems. The fraud claim appears to be centered in Count III of the counterclaims. They also allege that the computer systems performed poorly and assert claims for breach of contract and breach of express and implied warranties, found in Counts I and II of the counterclaims. Second, the defendants bring various conspiracy claims. Boerboom and Farrell allege that IH, Case, ACTL and ADP conspired to force them to purchase ADP computer systems. Boerboom and Farrell assert claims based on civil conspiracy (Count III), violation of state and federal antitrust law (Count IV) and violation of the Racketeer Influenced and Corrupt Organizations Act (Count V). Finally, Boer-boom and Farrell bring software deactivation claims asserting that their computer software was wrongfully deactivated and bringing claims based on various statutes (Counts VI through XI). ACTL now seeks summary judgment on all of Boerboom and Farrellâs counterclaims.
A. Defendantsâ Fraud Claims
A fraud claim must involve a false statement of a past or present material fact. Dollar Travel Agency, Inc. v. Northwest Airlines, 354 N.W.2d 880 (Minn.Ct.App.1984). Boerboom and Farrell proffer no evidence that ACTL made any false statements to them, and thus ACTL is entitled to summary judgment on their fraud claims.
B. Conspiracy and Software Deactivation Claims
The defendants main allegation concerning ACTL is that ACTL is owned primarily by ADP and thus ACTL must be involved in the fraud, conspiracy and software deactivation allegations they make against ADP, IH and Case. However, the defendants do not offer any evidence that ACTL made any fraudulent statements to them, deactivated their software or otherwise had anything to do with those allegations. ACTL offers evidence to rebut defendantsâ allegations concerning its involvement. James Sproule, Director of Credit and Operations for ADP, testified that ACTLâs only involvement with Boer-boom and Farrell involved the financing of their acquisition of ADP computer systems and administering their lease agreements. Boerboom and Farrell offer no evidence to dispute this and thus summary judgment is granted in favor of ACTL on all of defendantsâ counterclaims. 13
III. ADPâs Motion for Summary Judgment on Defendantsâ Claims
ADP also seeks summary judgment on all of defendantsâ counterclaims except for the breach of express warranty claims.
*1486 A. ADPâs Motion for Summary Judgment on Defendantsâ Fraud Claims
Defendants rest their counterclaims for fraud on two separate bases. First, the defendants claim that it was fraudulent for ADP, IH and Case to fail to disclose the arrangement for royalty payments. Defendantsâ second allegation of fraud arises from statements by ADP, Case and IH which allegedly induced the defendants to purchase computer systems which defendants contend failed to function as promised.
To prevail on a claim of fraud, a party must prove that it relied on a false representation (or a failure to disclose a material fact which the other party had a duty to disclose) and the party was damaged as a result of the reliance. Veit v. Anderson, 428 N.W.2d 429, 433 (Minn.Ct. App.1988). The representation must be false and made with knowledge of its falsity, or held out as true although made without knowledge of its truth or falsity. Id. Moreover, the party making the representation must intend that the other party rely on it, the statement must be material and must concern a past or present fact rather than a promise of future performance. Id.
Boerboom and Farrell first claim that ADP is guilty of fraud because it failed to disclose the existence of royalty payments to its clients. Nondisclosure, however, does not constitute fraud unless one party is âunder a legal or equitable obligation to communicate to the other.â Daher v. G.D. Searle & Co., 695 F.Supp. 436, 440 (D.Minn.1988) (quoting Richfield Bank & Trust Co. v. Sjogren, 309 Minn. 362, 365, 244 N.W.2d 648, 650 (1976)). The obligation to disclose arises in two situations: (1) where one party owes a fiduciary duty to the other, see Minnesota Timber Producers Assân, Inc. v. American Mutual Ins. Co., 766 F.2d 1261, 1267-68 (8th Cir.1985); or (2) where the circumstances are such that failure to disclose renders misleading statements which have already been made. Estate of Jones v. Kvamme, 430 N.W.2d 188, 193 (Minn.Ct.App.1988) (citations omitted), revâd in part on other grounds, 449 N.W.2d 428 (Minn.1989). Neither situation applies to the relationship between ADP and Boerboom and Farrell. ADP is not a fiduciary of the dealers because ADP, Boerboom and Farrell are business entities who bargained at armâs length in a commercial setting. See, e.g., Minnesota Timber Producers, 766 F.2d at 1268 (finding that no fiduciary relationship existed between two parties who merely contracted at armâs length); W.K.T. Distrib. Co. v. Sharp Elec. Corp., 746 F.2d 1333, 1336-37 (8th Cir.1984) (applying Minnesota law to hold that an ordinary supplier-distributor relationship does not lead to a confidential relationship); Groseth Inti, Inc. v. Tenneco, Inc., 410 N.W.2d 159, 168-69 (S.D.1987) (upholding summary judgment that no fiduciary relationship existed between International Harvester and one of its dealers). ADP owes no fiduciary duty to the defendants. The defendants also proffer no evidence to demonstrate that ADPâs alleged failure to disclose the royalty arrangements rendered misleading other statements which had already been made. Thus, ADP had no duty to disclose the royalty arrangement it reached with either IH or Case.
Defendants also assert a fraud claim based on the alleged concealment of material information concerning the royalty arrangements. Both Boerboom and Farrell testified that they were unaware of the royalty payment arrangement between ADP and IH and ADP and Case. The defendants present no other evidence to support their claim that the royalty payment arrangements were intentionally concealed. ADP, however, proffers evidence that it did disclose the royalty payments through the testimony of Gordon Gibbs, a nonparty fact witness. Gibbs attended a national IH dealer council meeting in February 1984, well before either Boerboom or Farrell leased from ADP. During that meeting, attended by various dealers and representatives of ADP and IH, the royalty payments were discussed. Gibbs testified specifically that ADP and/or IH disclosed to all members of the dealer council that ADP would make a royalty payment in the average amount of $2,000 directly to IH for *1487 each ADP system sold to an IH dealer. Gibbs further testified that he told other dealers about the royalty payments and that any dealer could have learned about what was discussed at the dealer council meeting by calling the dealer representative. Thus, defendantsâ allegations of fraudulent concealment are unsupported by the facts and ADPâs motion for summary judgment on this claim is granted.
Defendants further claim that ADP made a myriad of allegedly fraudulent statements. In order for such representations to be actionable, they must be false statements of a past or present fact. Iten Leasing Co. v. Burroughs Corp., 684 F.2d 573, 575 (8th Cir.1982) (applying Minnesota law). A wide variety of statements ordinarily used in sales negotiations are not actionable as fraud. These include ordinary sales puffing, Hollerman v. F.H. Peavey & Co., 269 Minn. 221, 228-29, 130 N.W.2d 534, 540 (1964), statements of opinion, Mutsch v. Rigi, 430 N.W.2d 201, 204 (Minn.Ct.App.1988) (citation omitted), and promises of future performance, Iten Leasing Co., 684 F.2d at 575. Moreover, any representation or expectation of future acts is not sufficient to support a fraud claim merely because the represented act or event does not occur. RJM Sales & Mktg. v. Banfi Prods. Corp., 546 F.Supp. 1368, 1377 (D.Minn.1982) (applying Minnesota law).
Defendants seek to impose liability on the basis of these types of statements, including:
âADP is a proven dealer in data processing.â
â[T]his Harvester/Case/ADP relationship will give us (Harvester/Case) leadership.â
âThe Harvester/Case/ADP relationship will ensure support.â
âNo other system compares to ADP.â
âADP is capable of dramatically increasing the efficiency and profitability within our dealership.â
None of the alleged misrepresentations is actionable because each statement is either true, constitutes ordinary sales talk or puffing, or is a representation of future acts. 14 Defendants also list a number of statements of opinion as a basis for fraud. For example, the defendants offer a statement that âthe competing challenger system does not have a chance of surviving.â Statements of opinion are also not actionable. Mutsch, 430 N.W.2d at 204. Because Boerboom and Farrell proffered no evidence of any actionable statements, summary judgment is granted in favor of ADP on the defendantsâ fraudulent misrepresentation counterclaims.
B. ADPâs Motion for Summary Judgment on Defendantsâ Claims of Breach of Contract and Breach of Warranty
1. ADPâs Motion for Summary Judgment on the Breach of Implied Warranty Claims
The purchase and maintenance agreements govern Boerboom and Farrellâs claims for breach of warranty and contract. Article 10 of both agreements defines ADPâs warranties as:
A. ADP represents and warrants to Client that, except as provided in paragraph 3 above, the Equipment shall be free and clear of all liens, claims, encumbrances and security interests whatsoever and that the Equipment shall be free from defects and material and workmanship at the Installation Date thereof.
B. EXCEPT AS SPECIFICALLY PROVIDED HEREIN, THERE ARE NO WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIM *1488 ITED TO, ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
Under Minnesota law an exclusion of an implied warranty of merchantability is effective if it mentions merchantability and if in writing, the writing must also be conspicuous. Minn.Stat. § 336.2-316. An exclusion of the implied warranty of fitness is effective if it is in writing and is conspicuous. The Minnesota Commercial Code defines the term âconspicuousâ as follows:
âConspicuous:â A term or clause is conspicuous when it is so written that a reasonable person against whom it is to operate ought to have noticed it. A printed [sic] heading in capitals (as: NONNEGOTIABLE BILL OF LADING) is conspicuous. Language in the body of a form is âconspicuousâ if it is in larger or other contrasting type or color. ... Whether a term or clause is âconspicuousâ or not is for decision by the court.
Minn.Stat. § 336.1-201(10); see Dubbe v. A.O. Smith Harvestore Prods., Inc., 399 N.W.2d 644 (Minn.Ct.App.1987) (holding that claims for breach of implied warranty are particularly well suited for summary judgment because the court determines whether or not an exclusion of warranties is conspicuous).
The signature lines for the client in the purchase and maintenance agreements are in the lower right-hand corner on the front page of the agreements. Immediately above the place where Boerboom and Farrell signed is the following statement printed in bold:
THIS AGREEMENT IS SUBJECT TO ADDITIONAL TERMS AND CONDITIONS ON THE REVERSE SIDE WHICH CLIENT ACKNOWLEDGES HAVE BEEN READ AND ARE PART OF THIS AGREEMENT.
This exclusion term itself is printed in all capital letters while the surrounding terms are almost entirely in regular type. The language directed Boerboom and Farrell to examine the back of the contract where the exclusion provision is printed in contrasting type. Both Boerboom and Farrell admit that they had the opportunity to read the contract. Moreover, Boerboom and Farrell do not contest ADPâs arguments concerning the exclusion of implied warranties. Based on the foregoing, the exclusion is conspicuous as a matter of law and ADP's motion for summary judgment on the implied warranty claims is granted. 15
2. ADPâs Motion for Partial Summary Judgment on the Measure of Damages for Defendantsâ Breach of Express Warranty and Breach of Contract Claims
The Minnesota Commercial Code provides for the recovery using two measures of damages for breach of warranty: direct damages and consequential damages. Minn.Stat. § 336.2-714. Direct damages are defined as âthe difference at the time and place of acceptance between the value of goods accepted and the value they would have had if they had been as warranted.â Id; see also Eleven v. Geigy Agric. Chems., 303 Minn. 320, 323, 227 N.W.2d 566, 569 (1975). The Minnesota Supreme Court has defined consequential damages as:
Those that âdo not arise directly according to the usual course of things from the breach of the contract itself, but are rather those which are the consequence of special circumstances known to or reasonably supposed to have been contemplated by the parties when the contract was made.â
Id. at 324, 227 N.W.2d at 569 (citation omitted); see also Minn.Stat. § 336.2-715.
The purchase and maintenance agreements limit Boerboom and Farrell to direct damages for their breach of warranty claims. Article 11 of the Agreements provides:
B. IN NO EVENT WILL ADP BE RESPONSIBLE FOR SPECIAL, INDIRECT, INCIDENTAL OR CONSE *1489 QUENTIAL DAMAGES WHICH CLIENT MAY INCUR OR EXPERIENCE ON ACCOUNT OF ENTERING INTO OR RELYING ON THIS AGREEMENT, EVEN IF A ADP HAD BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
Under Minnesota law the exclusion of consequential damages is valid unless such exclusion is unconscionable. Minn.Stat. § 336.2-719(3). The question of uncon-scionability is for the court. See Minn.Stat. § 336.2-302, U.C.C. Comment 3. In the present case, the exclusion allocates the risk of consequential damages in advance in a commercial setting and operates against two experienced businesses. 16 Under these circumstances the exclusion of consequential damages is not unconscionable and thus valid as a matter of law. See, e.g., Eleven, 303 Minn. at 329, 227 N.W.2d at 572. Therefore, ADPâs motion for partial summary judgment limiting Boerboom and Farrell to the recovery of direct damages on their breach of express warranty claims is granted. 17
C. ADPâs Motion for Summary Judgment on Defendantsâ Conspiracy Claims
1. ADPâs Motion for Summary Judgment on Defendantsâ Civil Conspiracy Claims
Conspiracy is defined as a combination of persons to accomplish either an unlawful purpose or a lawful purpose by unlawful means. Harding v. Ohio Casualty Ins. Co., 230 Minn. 327, 337, 41 N.W.2d 818, 824 (1950) (citation omitted). To prove a civil conspiracy claim, a wrongful act must be done to the injured party. The mere existence of a combination of persons acting in concert is insufficient to establish civil conspiracy. Id. If there is no underlying wrong there can be no civil conspiracy. Id. A civil conspiracy claim thus is merely a means for asserting vicarious or joint and several liability. Id. at 338, 41 N.W.2d at 825.
The defendantsâ civil conspiracy claim is found in Count III of the counterclaims. They assert the following as the wrongful acts committed by the conspiracy: (1) IHâs endorsement of ADP; (2) fraud in the computer sales; (3) the defective nature of the computers; (4) the alleged deactivation of software and misappropriation of information; (5) witness tampering with Gordon Gibbs; and (6) threats made to Farrell by a collection agency. The vast majority of these allegations concern only ADP and do not implicate the other parties in the case. Thus, even if all of the claims were valid, the defendantsâ allegations fail to support their claims of civil conspiracy because they provide no evidence that any other party agreed with ADP or conspired with ADP to commit the alleged wrongful acts. 18 Defendants also seem to allege that IH, Case and ADP all made misrepresentations to them concerning the defendantsâ leasing of the ADP computer systems. They also offer no evidence of any conspiracy regarding the misrepresentations and thus these allegations constitute ordinary fraud claims at most.
Finally, the defendants allege as a basis for civil conspiracy violations of Minn.Stat. §§ 609.52, 609.88 and 609.89, which concern the wrongful taking of property, computer theft and computer damage. *1490 These claims also fail because Boerboom and Farrell proffer no evidence that their systems were damaged or that any information was taken. In addition, they provide no evidence that if such acts occurred, that ADP acted intentionally or with an intent to injure, as required for such violations.
Based on the foregoing, ADPâs motion for summary judgment on the defendantsâ civil conspiracy claims is granted.
2. ADPâs Motion for Summary Judgment on the Antitrust Conspiracy Claims
The defendants accuse ADP, IH and Case of conspiracy and restraint of trade in violation of Minn.Stat. § 325D.51 and § 1 of the Sherman Act, 15 U.S.C. § 1. Specifically, they claim that ADP, IH and Case conspired to force them to buy ADP computer systems. They contend that their status as farm implement dealers would have been jeopardized if they had refused to buy ADP systems. The defendants essentially allege that this conspiracy is a tying arrangement in violation of the state and federal antitrust laws. 19
Courts define a tying relationship as the sale of one item (the tying product) on the condition that the buyer must also purchase a second item (the tied product) from the same source.
Northern Pac. Ry. Co. v. United States,
356 U.S. 1, 5-6, 78 S.Ct. 514, 518-519, 2 L.Ed.2d 545 (1958);
Rosebrough Monument Co. v. Memorial Park Cemetery Assân,
666 F.2d 1130, 1140 (8th Cir.1981). The elements of an illegal tying arrangement are: (1) separate and distinct tying and tied products; (2) the seller will only sell the tying product on the condition that the buyer purchases the tied product; (3) the seller has market power in the market for the tying product; (4) the tying arrangements has foreclosed a substantial volume of commerce in the market for the tied product; (5) the seller has an economic interest in the market for the tied product; (6) the sellerâs activities affected interstate commerce; and (7) plaintiff was injured in its business or property because of the tying arrangement.
See Jefferson Parish Hosp. Dist. No. 2 v. Hyde,
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