Appromed Corp. v. the Dehner Company, Inc.

NOTICE: Summary decisions issued by the Appeals Court pursuant to M.A.C. Rule

23.0, as appearing in 97 Mass. App. Ct. 1017 (2020) (formerly known as rule 1:28,

as amended by 73 Mass. App. Ct. 1001 [2009]), are primarily directed to the parties

and, therefore, may not fully address the facts of the case or the panel's

decisional rationale. Moreover, such decisions are not circulated to the entire

court and, therefore, represent only the views of the panel that decided the case.

A summary decision pursuant to rule 23.0 or rule 1:28 issued after February 25,

2008, may be cited for its persuasive value but, because of the limitations noted

above, not as binding precedent. See Chace v. Curran, 71 Mass. App. Ct. 258, 260

n.4 (2008).

COMMONWEALTH OF MASSACHUSETTS

APPEALS COURT

23-P-964

APPROMED CORP.

vs.

THE DEHNER COMPANY, INC.

MEMORANDUM AND ORDER PURSUANT TO RULE 23.0

The plaintiff, ApproMed Corp. (ApproMed), brought suit

against the defendant, The Dehner Company, Inc. (Dehner),

regarding a business dispute. Following a trial, ApproMed

appeals from a final judgment in favor of Dehner. ApproMed

argues that the trial judge erred in allowing a motion for a

directed verdict on two of ApproMed's claims: conversion and

breach of an oral contract.1 We affirm.

1ApproMed's claims for misrepresentation, breach of

contract, and breach of the covenant of good faith and fair

dealing were submitted to a jury, which found in favor of

Dehner. The trial judge likewise found in favor of Dehner on an

additional claim for violation of G. L. c. 93A. ApproMed raises

no arguments with respect to those claims on appeal.

Background. In reviewing the allowance of a motion for a

directed verdict, we recite the evidence in the light most

favorable to ApproMed.2 See Parsons v. Ameri, 97 Mass. App. Ct.

96, 105 (2020).

ApproMed is in the business of providing merchandise to

government agencies. Dehner is in the business of manufacturing

military-grade boots. ApproMed wanted to work with Dehner to

submit a bid to supply boots to the Massachusetts State Police.

To that end, the president of ApproMed, Oliver Udemba, contacted

the president of Dehner, Jeffrey Ketzler, to discuss entering

into a distributor agreement; such an agreement was a required

part of the bid to the State Police. On March 3, 2015, during a

telephone call between the two, Ketzler said that he would "back

[Udemba] up" and sent him an application to be a distributor of

Dehner's boots. Udemba returned the application to Ketzler.

Udemba also prepared an exclusive distributor agreement for

Ketzler to sign. However, Ketzler stated in an e-mail message

to Udemba that he could not sign an exclusive distributor

agreement. Udemba then removed the exclusivity provision, at

which point Ketzler, again through e-mail correspondence, raised

other concerns, including one related to what ApproMed's

2 We note that ApproMed has not included in the record

appendix the copies of any trial exhibits, but only the trial

transcript. Accordingly, our review is limited to the

transcript.

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discount on the boots would be, which cost $650 per pair.

Ultimately, Ketzler did return an unsigned distributor agreement

to Udemba, but it did not state what ApproMed's discount on the

boots would be.

ApproMed submitted a bid of $779.56 per boot pair to the

Massachusetts State Police, assuming that the cost to acquire

the boots from Dehner would be the undiscounted amount of $650

per pair. Dehner, unbeknownst to Udemba at the time, submitted

a bid of $650 per pair and won the contract.

Discussion. We review the grant of a motion for a directed

verdict to determine

"whether, without weighing the credibility of the witnesses

or otherwise considering the weight of the evidence, the

jury could reasonably return a verdict in favor of the

plaintiff, i.e., whether from the evidence it was possible

to draw enough reasonable inferences to make out the

elements of the plaintiff's case."

W. Oliver Tripp Co. v. American Hoechst Corp., 34 Mass. App. Ct.

744, 751 (1993).

We first address ApproMed's claim for conversion. "The

elements of conversion may be established by a showing that one

person exercised dominion over the personal property of another,

without right, and thereby deprived the rightful owner of its

use and enjoyment." Matter of Hilson, 448 Mass. 603, 611

(2007). ApproMed argues that Dehner converted ApproMed's

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proprietary pricing information by using it to submit a lower

bid. We are not persuaded.

As a preliminary matter, there was no evidence that Dehner

knew the amount that ApproMed planned to bid. Udemba testified

that he did not tell Ketzler either the amount that ApproMed

would be bidding or how much ApproMed would be marking up the

boots.3 ApproMed argues only that financial data can be a trade

secret but does not (1) explain why its pricing information,

specifically, qualified as a trade secret, or (2) provide any

support for the proposition that, even if the pricing

information did qualify as a trade secret, it could have been

the subject of an action for conversion. See Restatement

(Second) of Torts § 242 (1965) (action for conversion lies with

respect to intangible property only if intangible property was

"merged in a document"). See also Blake v. Professional Coin

Grading Serv., 898 F. Supp. 2d 365, 386 (D. Mass. 2012) ("a

plaintiff is not entitled to recover for conversion of

intangible property"). Accordingly, the argument is waived.

See Mass. R. A. P. 16 (a) (9) (A), as appearing in 481 Mass.

1628 (2019); Toney v. Zarynoff's, Inc., 52 Mass. App. Ct. 554,

564 n.10 (2001). In any event, Dehner's act of offering the

State Police the price it is undisputed Dehner charged other

Udemba first testified that he did tell Ketzler but then

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clarified that he misunderstood the question.

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distributors is not a conversion of ApproMed's pricing. The

judge did not err by directing a verdict for Dehner.

We next address ApproMed's claim for breach of an oral

contract. To prevail on a claim for breach of contract, a

plaintiff must demonstrate that (1) there was an agreement

between the parties; (2) the agreement was supported by

consideration; (3) the plaintiff was ready, willing, and able to

perform his or her part of the contract; (4) the defendant

committed a breach of the contract; and (5) the plaintiff

suffered harm as a result. See Bulwer v. Mount Auburn Hosp.,

473 Mass. 672, 690 (2016). Concerning the first element, "[i]t

is axiomatic that to create an enforceable contract, there must

be agreement between the parties on the material terms of that

contract, and the parties must have a present intention to be

bound by that agreement" (citation omitted). Lambert v. Fleet

Nat'l Bank, 449 Mass. 119, 123 (2007). Further, "[w]hile it is

not necessary that every term of the agreement be specified with

precision, '[t]he parties must . . . have progressed beyond the

stage of "imperfect negotiation"'" (citation omitted). Id.

ApproMed argues that the trial judge erred in concluding

that any oral contract between the parties to "work together"

was invalidated by the Statute of Frauds or the provisions of

the Uniform Commercial Code. We need not reach this issue

because Udemba's own testimony demonstrates that the parties

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never reached an agreement that amounted to an enforceable

contract. Instead, the evidence supports a reasonable inference

that, on March 3, they engaged in an initial conversation

regarding working together to further Udemba's efforts in

submitting a bid to the State Police. Udemba described the

contract as follows:

"That Dehner is going to back me up all the way for me to

submit a bid offering his boots and he's going to provide

me with all the specifications I need, and that he's going

to support me to submit one bid by ApproMed Corp. offering

boots sourced from Dehner."

However, after having the conversation which led Udemba to

conclude he had such an agreement with Dehner, the parties

negotiated, yet failed to agree to, key terms of an enforceable

contract. For example, ApproMed's claim that it arrived at an

oral contract with Dehner to "work together" is undermined by

the parties' inability to agree to the distributor discount

ApproMed would receive as well as Ketzler's subsequent refusal

to sign the proposed distributor agreement prepared by Udemba.4

This distributor agreement, according to Udemba, was "one of the

4 Although Udemba testified that Ketzler told him that other

distributors received a standard twenty-seven percent discount,

or "cut," he conceded that Ketzler never explicitly offered

ApproMed a twenty-seven percent discount. In fact, Udemba

testified that he did not take into account a twenty-seven

percent discount when he submitted the bid. Because Ketzler had

not included this information in the final distributor agreement

documents that they exchanged, the final agreement documents

contained no pricing information.

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most important elements" of their agreement because it was a

necessary component of his bid to the State Police. Udemba

further admitted that he needed Ketzler's signature on the

distributor agreement in order "to bind him." However, after

receiving the distributor agreement from Udemba, Ketzler said

that the agreement contained "problems," and expressed

reluctance to be bound by the proposed terms. By rejecting the

terms of ApproMed's proposed distributor agreement, Ketzler

clearly signaled that he had not intended to be bound by their

initial oral discussion, but instead, reserved committing to

material terms until the execution of a more formal agreement.

Lambert, 449 Mass. at 123.

The parties' ongoing negotiations concerning material terms

of an agreement demonstrate the parties had not previously

entered into an enforceable oral contract. Accordingly, a jury

could not have reasonably concluded the plaintiff established

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that the parties formed an oral contract that the defendant

later breached. The judge properly directed out the claim.

Judgment affirmed.

By the Court (Henry,

Hershfang & Smyth, JJ.5),

Clerk

Entered: March 6, 2025.

5 The panelists are listed in order of seniority.

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