United States Court of Appeals
For the First Circuit
No. 19-1311
APB REALTY, INC.,
Plaintiff, Appellant,
v.
GEORGIA–PACIFIC LLC,
Defendant, Appellee,
LIQUIDITY SERVICES, INC.; BEASLEY FOREST PRODUCTS, INC.,
Defendants.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Leo T. Sorokin, U.S. District Judge]
Before
Howard, Chief Judge,
Lynch and Kayatta, Circuit Judges.
Howard B. D'Amico and Howard B. D'Amico, P.C. on brief for
appellant.
Nicholas D. Stellakis, Timothy J. Fazio, Shauna R. Twohig,
and Hunton Andrews Kurth LLP on brief for appellee.
January 17, 2020
KAYATTA, Circuit Judge. Before our court for the second
time, this case now illustrates one important difference between
facts sufficient to make a claim plausible for pleading purposes
and facts sufficient to render a judgment against the claimant
clearly erroneous. For the following reasons, we affirm as not
clearly erroneous the district court's judgment entered after a
bench trial finding no binding contract between the parties.
I.
APB brought this breach-of-contract claim against
Georgia–Pacific after a putative deal for the sale of rail cars
fell through. In round one of this case, we considered whether
the facts alleged in APB's complaint stated a cause of action
sufficient to survive a motion to dismiss under Federal Rule of
Civil Procedure 12(b)(6). See APB Realty, Inc. v. Ga.–Pac. LLC,
889 F.3d 26, 27–29 (1st Cir. 2018). For the reader's convenience,
we repeat those alleged facts more or less verbatim as follows:
* * *
In April 2015, Georgia-Pacific let APB know that
Georgia-Pacific had eighty-eight rail cars to sell "where is, as
is." APB was interested, and extended an offer to Georgia-
Pacific's broker as follows:
Total for all 88 x Log Stake Railcars
$1,636,000 (Including 16% Buyer's Premium).
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APB spoke further with Georgia-Pacific's broker,
apparently to obtain schematics on the cars. On July 23, Georgia-
Pacific's broker sent another email, stating as follows:
Per our discussion yesterday, here are the
schematics for the cars, that include the
manufacturer information.
Our team has presented your offer to [Georgia-
Pacific] for final approval, and should have
an answer by close of business tomorrow.
I'll let you know when the approval comes, and
please don't hesitate to call if you should
have any additional questions.
One of [our] team members along with [Georgia-
Pacific] will coordinate transfers of all of
the cars upon completion of the sale.
On July 24, Georgia-Pacific's broker emailed APB once more, as
follows:
Here are the two options that [Georgia-
Pacific] has brought back for us to close the
deal on.
Option 1, basically states that for $61K, you
buy insurance that will replace as many
Southern Wheels as needed to eliminate that
problem. [Georgia-Pacific] will manage and
take care of that issue. So after any real
costs, you are paying a small percentage as
insurance against the number being larger than
51 wheel sets.
Option 2 is the deal with you taking
responsibility for any Southern Wheels.
Let me know which deal is best for you, and
I'll get this closed out as early as possible
next week.
The email then proceeded to summarize the options thusly:
Option 1 . . . As is, where is. Georgia-
Pacific assumes responsibility for the
replacement of all southern wheels if found.
Customer retains responsibility for
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transportation to final destination. Proposed
Offer: $1,697,000. . . .
Option 2: . . . As is where is. Customer
assumes responsibility for the replacement of
all southern wheels if found. Customer
retains responsibility for transportation to
final destination. Proposed Offer:
1,636,000.
The complaint does not tell us what "Southern Wheels"
are. But the parties' communications as alleged do make clear
that Georgia-Pacific regarded them as being a problem with some of
the cars that would take on the order of $61,000 ($1,697,000 minus
$1,636,000) to eliminate.
Three days later, APB responded that it was "leaning
towards option 1, should know this afternoon," and confirmed with
Georgia-Pacific's broker one detail that apparently arose in
conversation (45 cars would "come with the free move"). Before
APB confirmed its selection, however, Georgia-Pacific's broker
emailed once again, this time with the news that Georgia-Pacific
accepted an offer to sell all 88 railcars,
which was substantially higher than yours.
This offer has been processed, and we expect
to close on it shortly. If this high offer
does not close we will come back to you and
see if you have a further offer for these cars.
Adding insult to injury, APB shortly thereafter learned that the
interloping purchaser was the same company with which APB, a
broker, had been negotiating to resell the cars. In short, the
seller and the ultimate buyer cut out APB, the middle person.
* * *
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In our prior decision, we held that those alleged facts
allowed us to "plausibly infer the making and breaking of a
contract." Id. at 30. We therefore vacated the dismissal of the
complaint and remanded so that the case might proceed beyond the
pleadings. Id.
On remand, both parties moved for summary judgment. In
so doing, neither party offered any new material evidence,1 and
both agreed to the facts as alleged. In other words, they agreed
that the alleged communications took place as stated, but neither
party offered any further evidence as to how to construe those
communications in light of industry convention or as a result of
other transactions between the parties. The district court
proposed to convert the motions into a bench trial on the paper
record, and the parties agreed. The district court thereafter
issued a decision construing Georgia–Pacific's communications as
conveying an expectation that any agreement should expressly
address the Southern Wheels problem, and so no contract existed
1
Georgia–Pacific submitted an email from APB dated July 27,
2015 (three days after the critical July 24 email that either did
or did not constitute an acceptance). In the July 27 email, APB
referred to the July 24 email as a "counter" (i.e., counteroffer),
which Georgia–Pacific argued showed that APB did not consider the
deal final at that time. APB also filed an affidavit from one of
its employees, Kirk Bryant, indicating his belief that the parties
formed a contract by July 24 and explaining that the "counter"
term did not actually indicate a contrary belief. Because the
district court as factfinder assigned no weight adverse to APB
based on its July 27 email, neither do we.
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because APB never timely conveyed its willingness to provide such
an express term. See Situation Mgmt. Sys., Inc. v. Malouf, Inc.,
724 N.E.2d 699, 703 (Mass. 2000) ("[T]o create an enforceable
contract, there must be agreement between the parties on the
material terms of that contract . . . ."). The court thus entered
judgment in favor of Georgia–Pacific. APB timely appealed.
II.
Courts ordinarily treat the existence of a contract as
a question of fact, see McGurn v. Bell Microprods., Inc., 284 F.3d
86, 93 (1st Cir. 2002), which we review for clear error on appeal
from a bench trial, see Sawyer Bros., Inc. v. Island Transporter,
LLC, 887 F.3d 23, 29 (1st Cir. 2018).
APB has provided no persuasive argument that the
district court committed clear error. The district court found
that, "as of the July 24 email proposing the[] two options,
Georgia–Pacific had decided it wanted responsibility for Southern
Wheels to be an express term of any agreement and that it was
unwilling to rest on an 'as is' provision." "[F]or Georgia–
Pacific," the court said, "APB's acknowledgement of the existence
of Southern Wheels was a material term." As such, the district
court found that the July 24 email did not constitute an acceptance
because the parties did not reach a mutual agreement over the
material terms, and so they did not form a contract.
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This reading of the parties' written communications
seems to us entirely reasonable. As APB claims, one could fairly
read APB's first communication as offering to buy the cars "as is,
where is." Georgia–Pacific's reply, though, did not say that it
considered the offer acceptable. Rather, it offered two options,
each of which included an express statement as to which party
assumed responsibility for the Southern Wheels. Discovery might
plausibly have shown that the express statement manifested merely
a redundant, immaterial reiteration of "as is." On the other hand,
in the absence of such evidence, one could reasonably read Georgia–
Pacific's options as each requiring something APB had not yet
offered: an express acknowledgment of the Southern Wheels problem
and of which party would take on responsibility for this problem.
In short, the record allowed a ruling in favor of either party.
APB argues that the district court failed to appreciate
that our prior appellate decision "shifted the burden" to Georgia–
Pacific to prove that no contract existed. In particular, APB
points to our observation that "Georgia–Pacific may well have
arguments that the context surrounding the communications,
evidence not yet before the court, or relevant convention and usage
lead ultimately to a conclusion that no contract was formed here."
APB Realty, 889 F.3d at 29. Thus, APB argues in effect that the
district court violated the "law of the case" doctrine by ruling
in favor of Georgia–Pacific without Georgia–Pacific's having put
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forward any substantial new evidence. See, e.g., United States v.
Vigneau, 337 F.3d 62, 67 (1st Cir. 2003); Kapche v. City of San
Antonio, 304 F.3d 493, 496 (5th Cir. 2002).
This argument ignores the fact that the procedural
posture of the case has shifted. In our first decision, we
reviewed a grant of a motion to dismiss for failure to state a
claim. Under the standard of review we apply in assessing a
challenge to such rulings, we said that we could "plausibly infer"
that the parties had formed a contract. APB Realty, 889 F.3d at
30; see also Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009); Bell
Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). We similarly
said that "[o]ne could reasonably interpret Georgia–Pacific's
[July 24] email" as an acceptance of a contract offer. APB Realty,
889 F.3d at 29 (emphasis added). Nothing in that statement
suggests that we would not also consider a contrary interpretation
reasonable, even without any new evidence from Georgia–Pacific.
Just because a complaint states a plausible claim for relief does
not mean that the claimant has conclusively proven that claim. A
well-pleaded complaint need only "raise a reasonable expectation
that discovery will reveal evidence" supporting the claim.
Twombly, 550 U.S. at 556; see also Cardigan Mountain Sch. v. N.H.
Ins. Co., 787 F.3d 82, 88 (1st Cir. 2015). APB's subsequent
failure to produce new evidence dashed that expectation, thereby
reducing, rather than strengthening, its case.
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By reading too much into our prior ruling, APB also
misapprehends the manner in which the burden of proof rested once
the district court tried the case to a decision. As plaintiff
alleging a breach of contract, APB assumed the burden of proving
a contract and a breach. See Martin v. Vector Co., 498 F.2d 16,
25 (1st Cir. 1974); see also 2 McCormick on Evidence § 337 (8th
ed.) (explaining the difference between burden of pleading, burden
of production, and burden of persuasion).
III.
For the foregoing reasons, we affirm.
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APB Realty, Inc. v. Georgia-Pacific LLC
Combined Opinion