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Atlantech Inc. v. American Panel Corporation

United States Court of Appeals, First Circuit

February 20, 2014

ATLANTECH INCORPORATED, Plaintiff, Appellant/Cross-Appellee,
v.
AMERICAN PANEL CORPORATION, APC AQUISITION CORPORATION INCORPORATED, and UNIVERSAL AVIONICS SYSTEMS CORPORATION, Defendants, Appellees/Cross-Appellants.

APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MASSACHUSETTS [Hon. Douglas P. Woodlock, District Judge]

Irwin B. Schwartz, with whom Nicholas R. Cassie and BLA Schwartz, PC were on brief, for Atlantech, Inc.

Michael J. King, with whom John F. Farraher, Jr. and Greenberg Taurig, LLP were on brief, for American Panel Corporation and Universal Avionics Systems Corporation.

John A. Christy, with whom Michelle Roback Kraynak, Schreeder, Wheeler & Flint, LLP, Justin P. O'Brien, and Collora LLP were on brief, for APC Acquisition Corporation, Inc.

Before Selya, Stahl, and Lipez, Circuit Judges.

STAHL, Circuit Judge.

Plaintiff Atlantech Incorporated ("Atlantech") filed a seven-count amended complaint against Defendants American Panel Corporation ("APC"), APC Acquisition Corporation, Inc. ("APC Acquisition"), and Universal Avionics Systems Corporation ("Universal") (collectively, "Defendants") asserting claims related to the alleged breach of various agreements involving the sale of aviation equipment. After a jury trial, the parties filed post-trial motions, which the district court resolved partially in favor of Atlantech and partially in favor of Defendants. Atlantech appeals and Defendants cross-appeal. We affirm.

I. FACTUAL BACKGROUND

Atlantech was a dealer of aircraft LCD displays and APC was its primary product supplier. Pursuant to an August 2002 agreement, Atlantech was the exclusive vendor to Ulyanovsk Instrument Manufacturing Design Bureau ("UIMDB"), which integrated the displays into its own product for use in aircraft instrument panels. On December 2, 2003, APC, operating at the time as a division of Universal, entered into a Memorandum of Agreement with Atlantech for the sale of 103 1040-100 AMLCD displays ("1040 MOA"). At the same time, APC and Atlantech reached a Non-Circumvention Agreement ("NCA") preventing APC from conducting direct business with UIMDB for two years after the last completed transaction between APC and Atlantech.

The 1040 MOA required APC to "support" the product through December 31, 2012 ("Support Agreement"); the parties dispute the meaning of the word "support" in the context of this provision. The Support Agreement further required APC to maintain "Data Warehouse Documents" recording the intellectual property necessary for the production and repair of the displays. In the event that APC discontinued the product, the Support Agreement obligated APC to provide those documents to Atlantech. The 1040 MOA also exempted Defendants from liability for "consequential, incidental, indirect, special or punitive damages, " including "lost profits" and "cost of replacement goods."

APC stopped producing 1040-100 displays in 2004. To obtain "form, fit, and function replacements" for the discontinued model, Atlantech purchased two hundred 1040-725 displays in February 2006 ("2006 Purchase Order"). APC did not deliver any displays under the 2006 Purchase Order. Under a separate purchase agreement, APC eventually did deliver fifteen 1040-725 displays. According to subsequent communications between Atlantech and APC, these displays did not function properly.

In April 2006, Atlantech, invoking diversity jurisdiction, see 28 U.S.C. § 1332(a), filed an action in the District Court of Massachusetts against APC for breach of contract and negligent misrepresentation. Later that year, it voluntarily dismissed the complaint. In January 2007, APC sold its assets to APC Acquisition. At the same time, APC, APC Acquisition, and Universal agreed among themselves not to sell any further product to Atlantech without obtaining either a release from Atlantech of all liability or the written consent of the three parties to the agreement. Over the course of 2008 and 2009, APC Acquisition, in violation of the 1040 MOA, sold sixteen display units to a third-party vendor, knowing that it intended to develop business with UIMDB.

II. PROCEDURAL HISTORY

This case has followed a convoluted course, and in order to place the parties' arguments in context it is necessary to trace its procedural path in some detail. On February 21, 2007, Atlantech filed a complaint against Defendants alleging breach of warranty, breach of the 1040 MOA, breach of the 2006 Purchase Order, and negligent misrepresentation. After two amendments to the complaint, the parties filed cross-motions for summary judgment. Judge Tauro, in an order dated March 24, 2008 ("March 2008 Order"), granted partial summary judgment in favor of Atlantech. While that order decided a number of issues, it left others unresolved. Among the issues it addressed, Judge Tauro held that APC was "in breach of its obligations under the Data Warehouse Documents provision" and granted injunctive relief to Atlantech requiring that APC provide it with the 1040-100 Data Warehouse Documents.

Despite the presence of unresolved issues, Judge Tauro entered judgment in favor of Atlantech, effectively closing the case. A series of motions to reopen and appeals followed, culminating in this court's order dated May 19, 2010 ("May 2010 Order"), which left in place the injunctive relief related to the Data Warehouse Documents and otherwise vacated the March 2008 Order.

On remand, the case was reassigned to Judge Woodlock. Two further amendments to the complaint followed. Atlantech filed the final version, the Fourth Amended Complaint, on June 1, 2011, alleging seven counts: Breach of Contract - Warranty (1040 MOA, 1040-72X MOA, and 890 MOA)[1] (Count I); Breach of Contract - Support and Product Availability (1040 MOA, 1040-72X MOA, 890 MOA, and Purchase Order #40323) (Count II); Breach of Contract - Data Warehouse Documents (1040 MOA, 1040-72X MOA, and 890 MOA) (Count III); Breach of Contract - 2006 Purchase Order (Count IV); Negligent Misrepresentation (Count V); Intentional Interference with Contractual Relations (Count VI); and ...


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