Novacore v. GST

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<pre> [NOT FOR PUBLICATION NOT TO BE CITED AS PRECEDENT] United States Court of Appeals For the First Circuit No. 98-2159 NOVACORE TECHNOLOGIES, INC., Plaintiff, Appellant, v. GST COMMUNICATIONS CORPORATION, Defendant, Appellee. APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MASSACHUSETTS [Hon. Patti B. Saris, U.S. District Judge] Before Selya, Circuit Judge, Campbell, Senior Circuit Judge, and Boudin, Circuit Judge. Peter A. Johnson, Anthony E. Kilbridge, and Lane Altman & Owens, LLP on brief for appellant. Joseph F. Ryan and Lyne, Woodworth & Evarts LLP on brief for appellee. September 24, 1999

Per Curiam. This appeal arises from a dispute over the right to revoke acceptance of a custom-tailored software system. Plaintiff-appellant Novacore Technologies, Inc. (Novacore) designs customized computer software. In or around November 1994, defendant-appellee GST Communications Corporation (GST) asked Novacore to design and install a complex international voice callback telephone switch system to service its international telecommunications business. Following a lengthy negotiation, the parties entered into a contract in March of 1995. Novacore then designed the system and delivered it to GST in April. The district court found that GST accepted it that summer. See Novacore Tech., Inc. v. GST Comms. Corp., 20 F. Supp.2d 169, 185 (D. Mass. 1998). GST knew then that the system was not fully operational, but nonetheless accepted it, relying (or so the district court supportably found) on Novacore's assurances that necessary fine- tuning would occur within a reasonable time. See id. at 186. The relationship between the parties soured when, after Novacore tried for months to "de-bug" the system, GST notified Novacore in October 1995 that it was exercising its "right" to revoke its earlier acceptance. At the same time, GST demanded the return of all payments theretofore made in connection with its acquisition of the system. Displeased by this turn of events, Novacore sued GST in a Massachusetts state court. Citing diversity of citizenship and the existence of a controversy in the requisite amount, GST removed the case to the federal district court, see 28 U.S.C. 1332(a), 1441(a), and counterclaimed against Novacore. The battle lines were clearly drawn. Novacore maintained that its system fulfilled the conditions of the contract and that GST had failed to give it either enough time or enough cooperation to correct relatively innocuous problems. Further, Novacore averred that GST had acted in bad faith by prematurely replacing the system with another product. GST denied these allegations and counterclaimed on grounds that the Novacore system had never measured up to contract specifications and that Novacore, not GST, had acted in bad faith. After a four-day bench trial, the district court rejected Novacore's claims and found it to be in breach of the agreement. See Novacore, 20 F. Supp.2d at 186. Concomitantly, the court ruled that GST had a right to revoke its acceptance in light of the system's failure to perform in accordance with contract specifications. See id. The court awarded GST damages equivalent to a refund of the purchase price, together with other relief. See id. In adjudicating this dispute, Judge Saris wrote a meticulously detailed opinion in which she concluded that GST, rather than Novacore, should prevail. Having perused the record and carefully considered the parties' briefs, we find no basis to second-guess her thoughtful decision. To the contrary, we regard this as a near-perfect situation in which to put into practice our previous preaching that "when a lower court produces a comprehensive, well-reasoned decision, an appellate court should refrain from writing at length to no other end than to hear its own words resonate." Lawton v. State Mut. Life Assur. Co., 101 F.3d 218, 220 (1st Cir. 1996); accord Ayala v. Union de Tronquistas, 74 F.3d 344, 345 (1st Cir. 1996); In re San Juan Dupont Plaza Hotel Fire Litig., 989 F.2d 36, 38 (1st Cir. 1993). Consequently, we affirm the judgment for substantially the reasons elucidated in the opinion below. We add only two brief comments. First: Novacore in essence beseeches us to reweigh the facts anew. The appropriate standard of review, however, is considerably more circumscribed. Following a jury-waived trial, an appellate court is not warranted in rejecting the trial judge's "findings of fact or conclusions drawn therefrom unless, on the whole of the record, [the court of appeals] form[s] a strong, unyielding belief that a mistake has been made." Cumpiano v. Banco Santander P.R., 902 F.2d 148, 152 (1st Cir. 1990). The record in this case, read fair-mindedly, does not yield a conviction that a mistake has been made, and no error (clear or otherwise) is discernible. To be sure, depending how the facts are arrayed, two different versions of the relevant events potentially emerge. Since the court chose one of these, however, there can be no clear error and we are powerless to disturb the court's findings. So viewed, the standard of review dooms Novacore's importunings. Second: The parties agree that Massachusetts law controls here. In Massachusetts, there are two lawful ways to revoke acceptance of a good: (1) The buyer may revoke his acceptance of a lot or commercial unit whose non-conformity substantially impairs its value to him if he has accepted it (a) on the reasonable assumption that its non-conformity would be cured and it has not been seasonably cured; or (b) without discovery of such non-conformity if his acceptance was reasonably induced either by the difficulty of discovery before acceptance or by the seller's assurances. Mass. Gen. Laws ch. 106, 2-608 (1957). The lower court found that GST had revoked rightfully under the first of these subsections. See Novacore, 20 F. Supp.2d at 186. Novacore responds that GST did not effectively revoke its acceptance of the system under section 2-608(1)(a) for three principal reasons, viz., (1) it (Novacore) did not give GST any reason to believe, at the time of acceptance, that the system would be materially improved; (2) the so-called "debit card problem" could not be a basis for revocation because Novacore never told GST that it could be corrected; and (3) the fact that GST, prior to its revocation, had purchased another product capable of replacing the Novacore system betrayed its belief that the Novacore system could not be perfected. The district court dealt effectively with this asseverational array. As to Novacore's first two points, it is undisputed that at the time of acceptance the system did not conform to the contract specifications. The district court's conclusion that GST would not have accepted a customized system without some assurances that it would eventually conform, see id., derives ample support both from the record and from a commonsense appraisal of business realities. As to the "debit card" problem, the district court's ruling, at bottom, is a credibility call and we rarely meddle in such matters. See, e.g., Dedham Water Co. v. Cumberland Farms Dairy, Inc., 972 F.2d 453, 457 (1st Cir. 1992) (acknowledging that appellate courts ordinarily should defer to "the trier's superior ability to gauge credibility"). The district court's conclusion that there was no bad faith vis--vis GST's acquisition of a replacement system is equally impervious to attack. See Novacore, 20 F. Supp.2d at 186- 87. GST had a history of purchasing multiple systems, for limited purposes, and it offered a plausible explanation for having purchased a parallel system in this instance. This evidence, coupled with evidence that despite the Novacore system's patent inadequacies, GST substantially paid for it and gave Novacore nearly six months from the time of installation to get its act in order, adequately grounds the district court's conclusion that GST exercised good faith. We need go no further. The judgment of the district court is summarily affirmed. See 1st Cir. R. 27.1. Affirmed.</pre>

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