Contents    Prev    Next    Last

            Title Cooper Distributing Company, Inc. v. Amana Refrigeration, Inc.

 

            Date 1995

            By Alito

            Subject Misc

                

 Contents

 

 

Page 1

LEXSEE 63 F.3D 262

COOPER DISTRIBUTING CO., INC., a New Jersey Corporation, Appellant in 94-5570 v. AMANA REFRIGERATION, INC., a Delaware Corporation, Appellant in No. 94-5569

No. 94-5569, 94-5570

UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT

63 F.3d 262; 1995 U.S. App. LEXIS 23744

May 5, 1995, Argued

August 22, 1995, Filed

SUBSEQUENT HISTORY:   **1    Rehearing Denied

September 28, 1995, Reported at: 1995 U.S. App. LEXIS

27719.

PRIOR HISTORY: ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY. (D.C. Civ. No. 91-05237).

LexisNexis(R) Headnotes

COUNSEL: STEPHEN J. HOLTMAN, ESQ. (Argued), DAVID  A.  HACKER,  ESQ.  LEONARD  T.  STRAND, SIMMONS,  PERRINE,  ALBRIGHT  &  ELLWOOD,

1200  Firstar  Bank  Building,  Cedar  Rapids,  IA  52401-

1266,   Attorneys   for   Appellant   and   Cross-Appellee, Amana Refrigeration, Inc.

FRANZBLAU  DRATCH,  A  Professional  Corporation,

3  ADP  Boulevard,  Roseland,  New  Jersey  07068,  On the  Brief:   KENNETH  K.  LEHN,  ESQ.  (Argued),  Of Counsel:  S. M. CHRIS FRANZBLAU, ESQ. Attorneys for Appellee and Cross-Appellant,  Cooper Distributing Co. Inc.

BERTRAM  P.  GOLTZ,  JR.  ESQ.  Office  of  Attorney

General  of,  New  Jersey,  124  Halsey  Street,  P.  O.  Box

45029,  Newark,  New  Jersey  07101,  For  the  Attorney

General of the State of, New Jersey,.

JUDGES:  Before:   SLOVITER,  Chief  Judge,  ALITO, Circuit Judge and SCHWARZER, Senior District Judge

*

*  Hon.  William  W  Schwarzer,   Senior  United States  District  Judge  for  the  Northern  District  of California, sitting by designation.

OPINIONBY: ALITO

OPINION:   *266   OPINION OF THE COURT

ALITO, Circuit Judge:

Defendant  Amana  Refrigeration,   Inc.  ("Amana"), a  manufacturer  of  home  appliances,  appeals   **2       a judgment  for  $9,375,000  in  favor  of  plaintiff  Cooper Distributing Co., Inc. ("Cooper"), a distributor of Amana home appliances. After supplying Cooper with its prod- ucts for approximately 30 years, Amana attempted to ter- minate its relationship with Cooper. Cooper sued, claim- ing that the termination and the circumstances surround- ing it gave rise to a variety of state law claims. At trial, Cooper asserted four claims against Amana:  (1) illegal termination of a franchise, in violation of the New Jersey Franchise Practices Act ("NJFPA" or "the Act"), N.J.S.A.

§ 56:10-1 et seq.; (2) breach of contract; (3) breach of the implied obligation of good faith and fair dealing; and (4) tortious interference with prospective business advantage. At the conclusion of a five-week trial, the jury returned a verdict of liability on all four counts and awarded dam- ages as follows:  (1) $4.375 million on Cooper's NJFPA claim, (2) $2 million on Cooper's breach of contract claim,

(3) $0 on Cooper's claim for breach of the obligation of good faith and fair dealing, (4) $0 in actual damages on Cooper's tortious interference claim, and (5) $3 million in punitive damages on Cooper's tortious interference **3  claim. The district court upheld the entire $9,375,000 ver- dict and denied Amana's post-trial motions attacking the liability verdicts on Cooper's NJFPA, the breach of con- tract, and the tortious interference claims.

Amana  appeals  from  the  district  court's  denial  of these motions,  and Cooper cross-appeals from the dis- trict court's denial of its motion for prejudgment interest on its NJFPA claim. For the reasons discussed below, we

(1) affirm the district court's denial of Amana's post-trial motions attacking the NJFPA claim, (2) reverse the dis- trict court's denial of Amana's motion for a new trial on NJFPA damages, remanding for a new trial on damages,

63 F.3d 262, *266; 1995 U.S. App. LEXIS 23744, **3

Page 2

(3) reverse the district court's denial of Amana's motion for  judgment  as  a  matter  of  law  on  the  breach  of  con- tract claim, (4) reverse the award of punitive damages on Cooper's tortious interference claim,  and (5) affirm the denial of Cooper's motion for prejudgment interest on its NJFPA claim.

I. FACTS AND PROCEDURAL HISTORY

Amana began to manufacture home appliances in the

1940's. App. 3954. Currently, Amana is a "full line" home appliance  manufacturer:   it  offers  for  sale  a  full  set  of home appliances, including refrigerators,   **4   cooking and laundry appliances, dishwashers, and air condition- ers. App. 680. For many years, Amana employed a two- step process in the distribution of its products. It would sell its products to a network of independent wholesale distributors,  who,  pursuant to agreements with Amana, would sell to retail dealers located in the wholesale dis- tributors' contractually recognized sales regions. The re- tail dealers would then sell the products to consumers. Cooper began operating as an independent wholesale distributor in 1931. App. 3954. In 1961, Cooper started to distribute Amana products. Cooper and Amana signed an  agreement  permitting  Cooper  to  distribute  Amana's products in New Jersey and New York and have period- ically signed new agreements over the years. Their most recent Distribution Agreement (the "Agreement"), which was signed in 1990, allowed Cooper to distribute Amana products  in  New  Jersey,  New  York,  Connecticut,  and Pennsylvania.  App.  3978-3983.  The  Agreement  stated that it was to be construed "in accordance with the laws

of the State of Iowa." App. 3982.

Beginning in the late 1970's, the majority of Cooper's business  (78%  to  100%)  was  derived  from  the  sale  of Amana products. **5  App. 644. Cooper also distributed other  major  brands  of  appliances,  including  Hardwick, In-Sink--Erator, and Dacor, App. 959, although   *267  Amana occasionally subjected Cooper to competitive re- straints. App. 961-62.

During  its  relationship  with  Amana,  Cooper  oper- ated a showroom/marketing center,  first in Newark and subsequently in Englewood Cliffs,  New Jersey. Cooper used this facility for Amana product demonstrations, App.

2005-08, dealer training in Amana products, App. 2006, and dealer open houses. App. 690. Cooper's sales man- agers studied the Amana product line, App. 2013-2017, and in turn gave Amana product training to retail deal- ers. App. 690-92. Cooper also placed Amana advertise- ments in the yellow pages and newspapers, App. 1021-

22,  advertised  as  an  authorized  Amana  servicer,  App.

4016-17, instructed its servicemen to wear Amana uni- forms,  App.  1963,  distributed  promotional  items  bear-

ing  the  Amana  name,  App.  1023,  and,  pursuant  to  the Agreement, promised to "use its best efforts to promote sales" of Amana products. App. 3979. Cooper's dealers perceived Amana and Cooper as being one and the same. App. 1748.

In the early 1980's, the marketing of appliances be- gan to change, and by **6   the late 1980's most full-line manufacturers had eliminated the first step in the two-step distribution process. App. 1169, 1679-81. Instead of sell- ing to wholesale distributors, the manufacturers sold di- rectly to retail dealers. Consistent with this trend, Amana started to depart from its previous practice of selling its products to the wholesale distributors. Instead, Amana be- gan to sell directly to certain retail dealers located in the wholesale distributors' sales regions. Amana first sold its appliances directly to "national" retail dealers like Sears. App. 988. The Agreement explicitly permitted Amana to make such sales to national retailers. App. 3981. Then, in the summer of 1991, Amana went further. Relying on a provision of the Agreement that reserved for Amana the

"right to make sales directly," App. 3981, Amana began to deal directly for the first time with a non-national re- tail dealer in Cooper's region, P.C. Richard & Son ("P.C. Richard"). P.C. Richard had a chain of 20 retail stores and represented Cooper's largest account. App. 3955. Amana also sold its products directly to other smaller local retail dealers. Until Amana began selling to the national and local retailers,   **7   Cooper had been the exclusive dis- tributor in its region for nearly 30 years. App. 988, 2504-

06.

At the same time that the home appliance industry saw the elimination of two-step distribution, Amana's market- ing  responsibilities  changed.  Amana's  parent  company, Raytheon,  which also sold other appliance brands such as Speed Queen and Caloric, decided to consolidate the distribution of its brands. App. 2322-23. The result was that several of the distributors that sold one but not all of Raytheon's brands were eliminated. In November 1991, Amana terminated its relationship with Cooper pursuant to a provision of the Agreement that allowed either party to terminate the Agreement on ten days written notice. App. 3981. At the same time, Amana also terminated its relationships with 20 of the other 23 remaining Amana wholesale distributors across the country. App. 2825.

In  response  to  its  termination,  Cooper  commenced this  action  in  New  Jersey  state  court  alleging,  among other  things,  that  Amana  had  (1)  violated  section  5  of the NJFPA, N.J.S.A. § 56:10-5, by terminating Cooper's franchise  without  good  cause;  (2)  breached  the  1990

Agreement  by  selling  to  the  local  retailers  in  Cooper's region;   **8   (3) breached the Agreement's implied obli- gation of good faith and fair dealing;  and (4) tortiously

63 F.3d 262, *267; 1995 U.S. App. LEXIS 23744, **8

Page 3

interfered with Cooper's prospective economic advantage. App. 26-46. In November 1991, the state court issued a temporary restraining order prohibiting termination of or interference with Cooper's Amana distributorship. App.

2157.  After  the  case  was  removed  by  Amana  to  fed- eral  court,  n1  a  preliminary  injunction  was  entered  on February 10,  1992,  enjoining Amana "from taking any action whatsoever to limit . . . or in any way interfere with Cooper's activities as a distributor of Amana products." n2   *268   App. 100-54, 2157.

n1 Cooper was incorporated and had its prin- cipal place of business in New Jersey; Amana was a Delaware Corporation with its principal place of business in Amana, Iowa. The district court prop- erly exercised jurisdiction pursuant to 28 U.S.C. §

1441.

n2   The   Attorney   General   of   the   State   of New  Jersey  intervened  because  Amana  raised  a Commerce  Clause  challenge  to  the  extraterrito- rial application of the NJFPA. We have since held that  the  NJFPA  does  not  violate  the  Commerce Clause. See Instructional Systems, Inc. v. Computer Curriculum Corp. 35 F.3d 813 (3d Cir. 1994), cert. denied, 130 L. Ed. 2d 1128, 115 S. Ct. 1176 (1995).

**9

During   the   pendency   of   the   injunction,   Amana dropped Cooper from its mailing list, thereby allegedly leaving Cooper -- and Cooper's retail dealers -- unaware of Amana discounts and model changes. App. 1067-73. Additionally, Amana refused to support Cooper in its at- tempt to sell Amana air conditioners to Trader Horn, one of Cooper's larger retail dealers. App. 1047-61.

Trial  commenced  in  February  1994,  and  after  five weeks  the  jury  returned  a  verdict  for  Cooper  totalling

$9.375  million.  The  jury  first  found  that  Cooper  had proved that it possessed a franchise under the NJFPA and that Amana's attempted termination violated the Act. For this violation, the jury awarded Cooper $4.375 million in compensatory damages, a sum that corresponded to the value of the franchise in November 1991, as estimated by Cooper's expert. The jury also awarded Cooper $2 million on its breach of contract claim, finding that the Agreement had granted Cooper an exclusive regional distributorship and that Amana had violated the Agreement by selling directly to P.C. Richard and other local retailers. The jury likewise  found  for  Cooper  on  its  claims  for  breach  of the implied covenant of good faith and fair **10   deal- ing  and  for  tortious  interference  with  prospective  busi- ness advantage. With respect to the tortious interference claim, the jury found that Amana had tortiously interfered

with Cooper's business relations both by its direct sales to Cooper's local retail dealers and by other unjustifiable conduct occurring after the entry of the preliminary in- junction. Although the jury awarded no actual damages to Cooper on either the implied covenant or tortious interfer- ence claims, it did award $3 million in punitive damages on the tortious interference claim.

After  trial,  the  district  court  entered  judgment  for Cooper  in the amount of $9,375,000  and dissolved the preliminary injunction. App. 5000-02. Amana moved for post-trial judgment as a matter of law pursuant to Fed. R. Civ. P. 50(b) and, alternatively, for a new trial pursuant to Fed. R. Civ. P. 59(a). Amana argued:  (1) that it was entitled to a judgment or a new trial as to liability under the NJFPA; (2) that it was entitled to a new trial as to damages on the NJFPA claim; (3) that it was entitled to a judgment or a new trial as to liability for breach of con- tract; (4) that it was entitled to judgment on the tortious interference claim;   **11   and (5) that it was entitled to judgment or a new trial on the issue of punitive damages. App. 4927-77.

Cooper moved for attorneys' fees and costs under the NJFPA and for prejudgment interest on its breach of con- tract  and  NJFPA  recoveries.  The  district  court  rejected all of Amana's post-trial arguments, App. 5702-25, and awarded Cooper attorneys' fees and costs, App. 5726-36, and prejudgment interest on the breach of contract claim. However,  the district court denied Cooper's request for prejudgment  interest  on  the  NJFPA  claim.  App.  5737-

41. Amana appealed, challenging the denial of its post- trial motions. Cooper cross-appealed, seeking additional prejudgment interest. We turn first to the NJFPA issues. II. NEW JERSEY FRANCHISE PRACTICES ACT Prompted in large part by the practices of automobile manufacturers and major oil companies, New Jersey en- acted the NJFPA in 1971. See Instructional Systems, Inc. v. Computer Curriculum Corp., 130 N.J. 324, 614 A.2d

124, 132 (N.J. 1992) (hereinafter "ISI"). The Act protects franchisees against indiscriminate termination by provid- ing that "it shall be a violation of this act for a franchisor to  terminate,  cancel,  or  fail  to  renew  a  franchise  with- out **12   good cause." N.J.S.A. § 56:10-5. A franchise exists under the NJFPA if: (1) there is a "community of in- terest" between the franchisor and the franchisee; (2) the franchisor granted a "license" to the franchisee; and (3) the parties contemplated that the franchisee would *269  maintain a "place of business" in New Jersey. N.J.S.A. §§

56:10-3a,--4.  Contending  that  it  was  not  properly  held liable  under  the  NJFPA,  Amana  argues,  first,  that  as  a matter of law Cooper was not a "franchisee" under the Act n3 and second,  that the district court gave the jury prejudicially erroneous instructions on the NJFPA claim.

63 F.3d 262, *269; 1995 U.S. App. LEXIS 23744, **12

Page 4

We will discuss each of these arguments in turn.

n3  Amana  does  not  argue  that  the  termina- tion of its business relationship with Cooper was for  "good  cause,"  a  concept  that  is  "limited  to failure  by  the  franchisee  to  substantially  comply with those requirements imposed upon him by the franchise." N.J.S.A. § 56:10-5; see also Westfield Centre Service, Inc. v. Cities Service Oil Co., 86

N.J. 453, 432 A.2d 48, 55 (N.J. 1981) (holding that a franchisor who in good faith and for bona fide reasons terminates a franchise for any reason other than substantial  nonperformance  has  violated  the Act).

**13

A. Franchisee as a matter of law.

In  reviewing  a  district  court  order  denying  a  post- trial  motion  for  a  Rule  50(b)  judgment  as  a  matter  of law, we "determine whether the evidence and justifiable inferences most favorable to the prevailing party afford any rational basis for the verdict." Intermilo, Inc. v. I.P. Enterprises, Inc., 19 F.3d 890, 892 (3d Cir. 1994) (quot- ing Bhaya v. Westinghouse Elec. Corp., 832 F.2d 258, 259

(3d Cir. 1987), cert. denied, 488 U.S. 1004, 102 L. Ed.

2d 774, 109 S. Ct. 782 (1989)); see also Cassidy Podell

Lynch, Inc. v. Snyder General Corp., 944 F.2d 1131, 1137

(3d Cir. 1991). We will apply this standard to each of the three franchise requirements.

1. Community of interest.

The NJFPA requires a franchisee to show that it has a "community of interest" with a franchisor. N.J.S.A. §

56:10-3a. The New Jersey Supreme Court has explained:

Community of interest exists when the terms of the agreement between the parties or the nature of the franchise business requires the licensee, in the interest of the licensed busi- ness's success, to make a substantial invest- ment in goods or skills that will be of minimal utility outside the franchise.

ISI, 614 A.2d at **14   1 (quoting Cassidy, 944 F.2d at

1143). The court continued:

The  Act's  concern  is  that  once  a  business has  made  substantial  franchise-specific  in- vestments which are of minimal utility out- side the franchise,  it loses virtually all of its bargaining power. . . . Specifically, the fran-

chisee  cannot  do  anything  that  would  risk termination,  because that would result in a loss of much or all of the value of its fran- chise-specific  investments.  Thus,  the  fran- chisee  has  no  choice  but  to  accede  to  the demands  of  the  franchisor,  no  matter  how unreasonable these demands may be.

ISI, 614 A.2d at 141; see also Neptune T.V. & Appliance

Service, Inc. v. Litton Microwave Cooking Products Div.,

190 N.J. Super. 153, 462 A.2d 595, 601 (N.J. Super. Ct. App. Div. 1983) (looking to the "vulnerability of the al- leged franchisee").

Thus, in order to find a "community of interest," two requirements  must  be  met:   (1)  the  distributor's  invest- ments must have been "substantially franchise-specific", ISI, 614 A.2d at 141, and (2) the distributor must have been required to make these investments by the parties' agreement or the nature of the business. N.J.S.A. § 56:10-

3a.   New Jersey American, Inc.   **15            v. The Allied Corporation, 875 F.2d 58, 64 (3d Cir. 1989); see also Colt Industries,  Inc.  v.  Fidelco  Pump  &  Compressor  Corp.,

844 F.2d 117, 120-121 (3d Cir. 1988) (affirming district court's finding of a lack of community of interest because the franchise-specific investments were "suggested, not required"). In this appeal, Amana has not addressed the second of these requirements, n4 but Amana has strenu- ously   *270   argued that Cooper failed to meet the first of these requirements, i.e., that it failed to show that its investments were substantially franchise-specific.

n4 Because Amana's briefs do not raise or ad- dress  the  question  whether  Cooper  was  required to  make  any  franchise-specific  investments  that were  made,  we  do  not  believe  that  that  question is properly  before  us. In any event,  however,  we believe  that  there  was  sufficient  evidence  to  sat- isfy  this  requirement.  The  nature  of  the  business required Cooper to acquire Amana-specific knowl- edge since, without such knowledge, it would have been  unable  to  educate  the  retail  dealers  about Amana's  unique  products.  Amana  conceded  that such dealer training was "vital" to the successful marketing of Amana products. App. 834, 2012. In addition, the nature of the home appliance indus- try  mandated  that  Cooper  make  certain  goodwill investments, like purchasing advertising, that ben- efitted Amana. App. 1566. Also,  Cooper was re- quired to implement marketing strategies that were dictated  by  Amana  and  were  designed  to  create goodwill. App. 834-35. Finally, although Cooper was not required to limit its distributing solely to Amana products, App. 959, Amana imposed vari-

63 F.3d 262, *270; 1995 U.S. App. LEXIS 23744, **15

Page 5

ous competitive restraints. App. 961-62, 171-172. Thus, a reasonable jury could have concluded that Cooper was required to make its franchise-specific investments.

**16

The question of substantial franchise-specificity de- pends  on  whether  Cooper's  investments  were  "useful beyond  the  relation  the  contract  in  question  created." Cassidy, 944 F.2d at 1144. Amana argues that Cooper's investments  --  specifically  (1)  Cooper's  knowledge  of home appliances, (2) its goodwill, and (3) its tangible as- sets -- were "tremendously useful" outside the context of its relationship with Amana, New Jersey American, 875

F.2d at 64, and therefore were not substantially franchise- specific. n5 Although we do not find Cooper's evidence on this point to be overwhelming, we conclude that a rea- sonable jury could have found that Cooper's assets were substantially franchise-specific.

n5  As  an  example  of  a  franchise-specific  in- vestment,  the  New  Jersey  Supreme  Court  noted that  "McDonald's  franchisees  were  required  for many years to purchase and install 'Golden Arches,' which would be  of little value if the franchise were lost." ISI, 614 A.2d at 141.

First, we note that Cooper made a significant **17  investment in the acquisition of knowledge about Amana products.  In  Cassidy,  we  held  that  a  franchise-specific investment could take the form of the "years of effort re- quired to gain specialized skills or knowledge valuable to market the licensed product efficiently,  but of little use beyond that." Cassidy, 944 F.2d at 1144. Here, Cooper in- troduced evidence that its employees invested much time over the years in acquiring knowledge about Amana prod- ucts and that this knowledge was not transferable outside the Amana-franchise context. Robert Nathan, a Cooper sales  manager,  testified  that  he  spent  200  hours  a  year

(10% of his time) learning about Amana products, App.

2013, and that much of what he and his sales force learned during this time related to Amana products that contained

"exclusive or unique features not generally found in com- parable products performing the same purpose in the mar- ketplace." App. 2014; see also App. 2015-17; 1964-70

(identifying unique Amana features). He added that this knowledge would be "of no value," App. 2027, and "use- less," App. 1968-69, outside the realm of Amana sales. n6

n6   Amana   contends   that   since   its   prod- ucts   change   yearly,       Cooper's   knowledge   of

Amana's products would become obsolete in time. Therefore,  Amana maintains,  the termination did not  cause  Cooper  to  lose  the  value  of  its  fran- chise-specific  knowledge.  This  argument,  how- ever, merely shows that Cooper's Amana-specific knowledge, like virtually any other asset, was sub- ject to depreciation. Thus, this argument does not show that Cooper's Amana-specific knowledge was valueless. On the contrary,  we believe that a rea- sonable  jury  could  conclude  that,  as  of  the  date of  termination,  Cooper's  Amana-specific  knowl- edge still retained substantial value. See, e.g., App.

2012-19 (sales manager Nathan discussing how his vast product knowledge would be rendered useless by termination).

**18

Second,  and  perhaps  most  important,  a  reasonable jury could find that one of Cooper's most important assets was franchise-specific goodwill. It is clear that goodwill can constitute a franchise-specific asset. See New Jersey American, 875 F.2d at 62; ISI, 614 A.2d at 144; Neptune,

462  A.2d  at  599.  To  qualify,  however,  the  goodwill  in question must be useful for the alleged franchisee only in the context of its relationship with the alleged franchisor. Moreover, if a distributor sells the products of many man- ufacturers and creates some goodwill for all or many of these  manufacturers,  that  kind  of  goodwill  "cannot  be enough to create a 'community of interest.'" ISI, 614 A.2d at 141. n7

N7 As the ISI court elaborated:

To  develop  goodwill  generally  for  a product  cannot  be  enough  to  create a  community  of  interest.  Otherwise, any licensee distributing a brand-name product could claim it has a commu- nity of interest with its supplier. For ex- ample, a department store selling Sony name products could claim a commu- nity of interest with the manufacturer despite  the  fact  that  the  department store's goodwill investments are not in- timately tied to the manufacturer and therefore lack the economic character of genuine franchise investments.

614 A.2d at 141.

**19

*271   In this case, it is undisputed that Cooper's in-

63 F.3d 262, *271; 1995 U.S. App. LEXIS 23744, **19

Page 6

vestments created goodwill. See App. 1023 (promotional items  bearing  the  Amana  name);  App.  1021-22  (yel- low page and newspaper advertising of Amana products); App. 1025 (in-store demonstrations of Amana products). Further, there is evidence in the record that goodwill ac- counted for nearly half the value of the Cooper franchise. App.  1813-16,  4605  (Cooper  valuation  expert,  Melvin Konner,  determining the value of the franchise and the portion of the value attributable to goodwill).

In addition, Cooper provided substantial evidence that much of this goodwill was not transferable. For example, sales  manager  Nathan  explained  that  it  was  not  possi- ble for Cooper's salespeople, after representing for many years that Amana's products were superior, to claim, af- ter  the  termination,  that  another  product  was even  bet- ter. App. 3238 ("I've been telling everybody Amana's the greatest thing since love the last 12 years, and now I got to go out and say wait a second, we have this other line called Friederich, it's the greatest thing since love. Who's going to believe that."). Even Michael Napoletano, a re- tail dealer who testified for Amana, admitted **20   that Cooper would have a credibility problem if it took such an approach. App. 2806-07.

This point is supported by the New Jersey Supreme Court's   decision   in   ISI.   There,   the   court   held   that Computer Curriculum Corp. ("CCC"), a producer of com- puter learning systems, had a community of interest with Instructional Systems, Inc. ("ISI"), a regional distributor of CCC's products. Part of the reason that the court found the existence of a community of interest was that ISI's previous efforts at creating goodwill for CCC's products gave rise to a credibility problem for ISI outside the CCC context. The court explained:

For close to twenty years, ISI has persuaded its  customers  to  choose  the  CCC's  system. The goodwill . . . would vanish in the event of a termination.

ISI,  614  A.2d  at  144;  see  also  id.  ("ISI's  competitors, including CCC, would denigrate ISI with references to its prior endorsement of the CCC product line.").

It is also noteworthy that Cooper's customers, the re- tail dealers, viewed Cooper and Amana as "one and the same." App. 2796-97; see also id. at 1748 ("Amana was Cooper,  Cooper  was  Amana").  This  fact  lends  support to  the  conclusion  that   **21    Cooper's  investments  in goodwill were not transferable. See ISI, 614 A.2d at 145

(relying on the fact that "the evidence revealed that ISI's customers considered ISI and CCC as synonymous").

Finally, we consider Cooper's investments in tangible

assets. The NJFPA protects franchise-specific "tangible capital investments, such as 'a building designed to meet the style of the franchise, special equipment useful only to produce the franchise product, and franchise signs.'" ISI,

614 A.2d at 141 (quoting New Jersey American, 875 F.2d at 62). In this case, Cooper introduced evidence showing that it had invested in some tangible items that were of no value outside the Amana-franchise context --  for exam- ple, the display housing for Cooper's showroom bearing the Amana logo,  App. 1034,  Amana product literature, App. 1032, and Amana demonstration models.

We  do  not  mean  to  imply  that  all  of  Cooper's  in- vestments  were  Amana-specific.  On  the  contrary,  the record  shows  that  Cooper  possessed  assets  that  would clearly  be useful  outside the Amana context. See,  e.g., App. 1041 (electronic mail system), App. 1032-22 (com- puter system), App. 1036-37 (repair tools). n8 However, the jury **22    was not required to find that Cooper's investments were entirely franchise-specific but merely that they were "substantially franchise-specific." ISI, 614

A.2d at 141 (emphasis added). Looking at all of the ev- idence of Cooper's investments in the light most favor- able  to  Cooper,  we  hold  that  a  jury  reasonably  could

*272   conclude that Cooper's assets were substantially franchise-specific.

n8  The  parties  dispute  whether  Cooper's  in- vestment in Amana inventory, App. 3343-45, and whether its investment in the showroom, the parts display area, and the service office, App. 1034-38, were  franchise-specific.  Because  we  believe  that Cooper's investments were substantially franchise- specific even if these particular investments were not, we need not decide these disputes.

This holding is supported further by the fact that, as of the termination,  85% of Cooper's revenues were de- rived from Amana products. App. 664, 679-80, 987-88. n9 While we have held that dependence on a single sup- plier  cannot  automatically  qualify   **23    a  distributor for protection under the Act (or else "all exclusive distrib- utors could unilaterally decide to convert their distribu- torships into franchises," Cassidy, 944 F.2d at 1141), the New Jersey Supreme Court has characterized economic dependence as perhaps the "most important" factor in de- termining whether a community of interest exists.   ISI,

614 A.2d at 145.

n9 The Act states that a distributor cannot be a franchisee if it derives 20% or less of its gross sales from its franchisor, see N.J.S.A. § 56:10-4, implying "that a firm may be a franchise even if only  21%  of  its  gross  sales  are  derived  from  the

63 F.3d 262, *272; 1995 U.S. App. LEXIS 23744, **23

Page 7

franchisor." New Jersey American, 875 F.2d at 63.

2. License.

Before a party may be deemed a "franchisee" subject to  the  Act's  protections,  it  must  show  that  it  has  been granted "a license to use a trade name, trade mark, ser- vice mark, or related characteristic ." N.J.S.A. § 56:10-

3a.  The  New  Jersey  Supreme  Court  has  explained  that

"the  Act's  'license  to  use'  requirement  does  not   **24  encompass a definition of license in the word's broadest sense,  that is:  permission to do something that  with- out the license would not be allowable." ISI, 614 A.2d at

138. Accordingly, the mere fact that Cooper was permit- ted to use the Amana insignia, an act that would normally

"not be allowable" due to trademark laws, did not in it- self create a license. Otherwise, "any business selling a name brand product would, under New Jersey law, neces- sarily be considered as holding a license." ISI, 614 A.2d at 138 (quoting Colt Industries, Inc. v. Fidelco Pump & Compressor Corp.,  844 F.2d 117,  120 (1988)). Instead, the term "license" is more narrowly defined. It means "to use as if it is one's own. It implies a proprietary interest . .

. ." Finlay & Assoc., Inc. v. Borg-Warner Corp., 146 N.J. Super. 210, 369 A.2d 541, 546 (N.J. Super. Ct. Law Div.

1976), aff'd on other grounds, 155 N.J. Super. 331, 382

A.2d 933 (N.J. Super. Ct. App. Div.), certif. denied, 391

A.2d 483 (N.J. 1978). The New Jersey Supreme Court has further explained:

At a minimum, the term "license" means that the alleged franchisee must use the name of the franchisor "in such a manner as to create a reasonable belief on the part of **25   the consuming public that there is a connection between the . . . licensor and the licensee by which the licensor vouches,  as it were,  for the activity of license." Neptune, 462 A.2d at

599.

ISI, 614 A.2d at 138; see also Neptune, 462 A.2d at 599

(noting that the hallmark of a license is that the franchisor gives its approval to the franchisee's business enterprise with regard to the franchisor's product such that the public is induced "to expect from the franchisee  a uniformly acceptable and quality controlled service endorsed by the franchisor  itself").

Amana maintains that it did not vouch for Cooper's activities in relation to the Amana name. We hold, how- ever,   that  a  reasonable  jury  could  have  inferred  the existence  of  a  "license"  based  on  various  aspects  of the  lengthy  Amana-Cooper  relationship.  We  note  that

Cooper's showroom displayed the Amana sign, App. 723-

24, and Cooper's servicemen wore Amana uniforms. App.

1963, 4077. In these respects, this case resembles Cassidy, where the distributor "maintained signs bearing the man- ufacturer's  name" at its facility and employed "service- men who  wore uniforms bearing the manufacturer's  tradename."   **26   Cassidy, 944 F.2d at 1135.

There was also evidence that Cooper's employees, like those of the plaintiff in ISI, were "integrally related" to the proper functioning of Amana products, ISI, 614 A.2d at 139, and this relationship could reasonably be viewed as likely to strengthen the public perception that Amana vouched  for  Cooper's  use  of  its  name.  The  Agreement required Cooper to give "warranty" service on the Amana product line. App. 3801, 794. Cooper advertised as a "ser- vicer" of Amana products, App. 4016-17, and on occasion

*273   made in-home visits to consumers with product problems. App. 1743-44. Cooper was responsible for fix- ing certain defective Amana products, App. 809-810, was an  "authorized   Amana   parts  distributor,"  App.  4011-

4014, and could give "factory authorized service." App.

4016-17. Amana itself also emphasized that Cooper's cus- tomer service was important so that customers would dis- tinguish Amana from other manufacturers, App. 808, and Amana stressed that it was "vital" for Cooper to train its dealers in the "unique" features of Amana products. App.

834. See also App. 17, 2012. n10

n10  Amana  argues  that  ISI  is  distinguishable since the court there noted that the franchisee "ed- ucated and trained users" of the franchisor's prod- uct, ISI, 614 A.2d at 139 (emphasis added), while Cooper  only  trained  dealers.  We  can  see  no  sig- nificance  in  this  distinction  for  present  purposes. Under the Agreement, Cooper sold to dealers, not consumers. App. 3979. It therefore follows that the public, for the purposes of determining whether a perception existed that Amana vouched for Cooper, must  be  the  dealers,  not  the  consumers.  This  is buttressed  by  the  fact  that  the  Act  expressly  ap- plies to wholesalers,  who do not typically sell to consumers. See N.J.S.A. § 56:10-3(a) (noting that Act applies to "the marketing of goods or services at wholesale, retail, . . . or otherwise") (emphasis added).

**27

It is likewise noteworthy that Cooper was the exclu- sive Amana distributor to local dealers in Cooper's four- state territory for 30 years, App. 988, 2504-06, and that Amana allowed Cooper to maintain advertisements in the yellow pages and newspapers stating that it was an autho- rized distributor and servicer of Amana products. App.

63 F.3d 262, *273; 1995 U.S. App. LEXIS 23744, **27

Page 8

4011-21. In ISI, the New Jersey Supreme Court found these factors to be highly important. See ISI, 614 A.2d at

139-140. n11

n11 Amana claims that ISI is distinguishable in this regard because ISI was required to hold itself out as a CCC distributor, see ISI 614 A.2d at 139, whereas Cooper was merely allowed to hold itself out as an Amana distributor. We find this distinc- tion to be without merit because in Neptune, a case upon which the ISI court relied heavily, the court found a license despite the fact that the plaintiff was merely allowed to hold itself out as an authorized service center for the defendant. See Neptune, 462

A.2d at 599.

It is also **28   significant that Cooper was required under  the  Agreement  to  use  its  best  efforts  to  promote Amana sales. App. 3979. In ISI, the New Jersey Supreme Court found it significant that the franchisee was required to use its best efforts to promote the franchisor's name.

614 A.2d at 139. n12 Amana tries to distinguish ISI by pointing to the difference between promoting the sale of a company's products and promoting its name. See Liberty Sales Assoc.,  Inc. v. Dow Corning Corp.,  816 F. Supp.

1004, 1011 (D.N.J. 1993). However, at least in the con- text  of  this  case --  where  Cooper  sold  Amana's  entire product line and was Amana's sole distributor to dealers within the relevant region for 30 years -- this distinction is ephemeral.

n12 Cf.  Cassidy, 944 F.2d at 1138 (distributor required to "use its best efforts to diligently promote the sale of the manufacturer's products"); Neptune,

462 A.2d at 599 (distinguishing other cases where the plaintiff did not use its best efforts to promote sales).

Finally,   **29    there  was  additional  testimony  by Cooper's dealers and by Amana witnesses that strongly suggested  that  a  "license"  was  present.  Retail  dealer Michael Napoletano, who testified for Amana, admitted that "Amana vouches for Cooper by standing behind the quality of what it sells." App. 2792. Moreover, the deal- ers perceived a "special relationship" between Amana and Cooper. ISI, 614 A.2d at 140 (quoting Finlay, 369 A.2d at

546). Dealers would address letters to Cooper as "Cooper Distributors,  c/o  Amana,"  App.  4101,  and  many  deal- ers regarded Amana and Cooper as being "one and the same." App. 1748;  see also App. 1914 (testimony of a retail dealer that the dealers "always felt that Amana was sold through Cooper").

We  recognize  that  Amana  provided  important  evi- dence suggesting that it did not grant Cooper a license. Nevertheless,  taking all the evidence together,  we hold that a reasonable jury could have inferred that there was a public perception that Amana vouched for Cooper's ac- tivities in relation to the Amana name. n13

n13 The fact that Cooper did not operate un- der Amana's trade name does not mandate a con- trary result. The New Jersey Supreme Court has ex- pressly held that independently-named franchisees may still have a license from the franchisor. As that court explained:

The         inclusion                of             independently- named  businesses  is  implicit  in  the Act's  definition  of  franchise  by  the Act's limitation to a franchise "where more  than  20%  of  the  franchisee's gross  sales  are  intended  to  be  or  are derived from such franchise." N.J.S.A.

56:10-4(3).

ISI, 614 A.2d at 140. "Therefore," the Court con- cluded, "if only a 'mirror-image' relationship could constitute a franchise,  the legislature would have added a superfluous requirement . . . that the fran- chise sales constitute twenty percent of the entire business." Id.

**30

*274   3. New Jersey place of business.

The NJFPA applies only to an agreement "the perfor- mance of which contemplates or requires the franchisee to  establish  or  maintain  a  place  of  business  within  the State of New Jersey." N.J.S.A. § 56:10-4. In order to sat- isfy this third requirement, Cooper was required to show that the Agreement contemplated (1) that Cooper would operate a place of business ("POB") within the meaning of the NJFPA and (2) that this POB would be located in New Jersey.

The NJFPA defines "place of business" as:

a  fixed  geographical  location  at  which  the franchisee displays for sale and sells the fran- chisor's goods or offers for sale and sells the franchisor's services. Place of business shall not  mean  an  office,  warehouse,  a  place  of storage, a residence or a vehicle.

N.J.S.A. § 56:10-3(f).

63 F.3d 262, *274; 1995 U.S. App. LEXIS 23744, **30

Page 9

Cooper maintains that its showroom/marketing cen- ter in Englewood Cliffs, New Jersey, constituted a POB. There is ample evidence in the record that Cooper regu- larly used this facility for activities that were an integral part of the sales process. For example, the record shows that this facility was often used for product demonstra- tions, App. 2007-08 (sales manager **31   Nathan met once a week with customers in showroom);  App. 2005

(Nathan's  three  salesmen  each  used  showroom  two  to four times a week for demonstrations), for dealer training, App. 2006-09, and dealer open houses. App. 690. Amana argues, however, that this facility was not a POB because Cooper did not actually consummate sales there. See App.

1346-1404, App. 692, App. 1231, App. 1351-52. Relying on the statutory definition of a POB as a fixed location where "the franchisee displays for sale and sells the fran- chisor's goods," N.J.S.A. § 56:10-3(f) (emphasis added), Amana argues that the statute requires both activity lead- ing up to the sale ("displays for sale") and the sale itself

("sells"). See Greco Steam Cleaning, Inc. v. Associated

Dry Goods Corp., 257 N.J. Super. 594, 608 A.2d 1010,

1013 (N.J. Super. Law Div. 1992). Consequently, Amana argues,  Cooper's  showroom  did  not  constitute  a  POB within the meaning of the Act.

We are constrained to disagree. As a federal court sit- ting in diversity, "we are not free to impose our own view of what state law should be; we are to apply state law as in- terpreted by the state's highest court." McKenna v. Pacific Rail Service, 32 F.3d 820, 825 (3d Cir.   **32    1994). Where a state's highest court has not squarely addressed an issue, we "must be governed by a prediction of how the state's highest court would decide were it confronted with the problem." McKenna v. Ortho Pharmaceutical Corp.,

622 F.2d 657, 661 (3d Cir.), cert. denied, 449 U.S. 976, 66

L. Ed. 2d 237, 101 S. Ct. 387 (1980). Relying on ISI, we predict that the New Jersey Supreme Court would hold that Cooper's activities at its showroom/marketing center were sufficient to constitute "sales" for purposes of the NJFPA.

In  ISI,  the  New  Jersey  Supreme  Court,  in  finding that ISI's Hackensack facility was a POB, noted that ISI

"had been giving more than one hundred demonstrations a year" at that facility, ISI, 614 A.2d at 138, and that ISI had used the facility to acquaint prospective purchasers with the functioning of its product. See id. The court made no mention of any actual sales at the facility but instead relied exclusively on the demonstrations and inspections -- the very same types of activities that took place at Cooper's Englewood Cliffs facility. The New Jersey Supreme Court summarized its holding as follows:

In short, the record sustains the trial court's

finding that ISI **33    set up a marketing facility in Hackensack where its customers, education professionals, can inspect the CCC computer system and receive a sales demon- stration  on  the  operation  of  its  computer product.  ISI's  Hackensack  facility     *275  thus  could  be  found  to  constitute  a  "place of business" under the Act.

ISI, 614 A.2d at 138. Based on ISI, we feel compelled to  predict  that  the  New  Jersey  Supreme  Court,  if  con- fronted with this case,  would hold that Cooper's show- room/marketing center was a POB. n14

n14 Cooper argues that a reasonable jury could have found that actual order taking occurred at the showroom. Since we hold that a POB exists even without order taking, we need not discuss this ques- tion.

Apart  from  requiring  Cooper  to  establish  that  the showroom was a POB, the statute also obligated Cooper to show that the parties contemplated or required that the POB be located in New Jersey. See N.J.S.A. § 56:10-4; see also Finlay, 369 A.2d at 545. The ISI court explained that "a franchise would **34    be governed by the Act whether the contract required a place of business in New Jersey or whether the parties reasonably anticipated that the franchisee would establish a New Jersey place of busi- ness." ISI, 614 A.2d at 136.

We hold that a reasonable jury could have found that the  parties  "reasonably  anticipated"  that  Cooper  would establish a New Jersey POB. Throughout its 31-year rela- tionship with Amana, Cooper had its showrooms in New Jersey,  first  in  Newark  and  then  in  Englewood  Cliffs. App.  683-701.  When  Amana  expanded  Cooper's  New York sales territory in 1982, Cooper declined to purchase Amana's Long Island facility, telling Amana that it was a New Jersey-based firm and would not "split the  opera- tion." App. 683. Even Amana conceded that it "knew that Cooper's business was located in New Jersey." Appellant's Brief at 32. Consequently, when the parties entered into the 1990 Agreement, these facts were more than enough to create a reasonable anticipation that Cooper would con- tinue to have a POB in New Jersey during the life of the new  Agreement.  See  ISI,  614  A.2d  at  136-37  (finding that a 1984 agreement contemplated a New Jersey POB because,  in part,  ISI had  operated   **35    a  marketing facility in New Jersey since 1977); Liberty, 816 F. Supp. at 1008 (New Jersey location when first contracting with supplier is enough to give rise to inference of anticipation of New Jersey location). n15

63 F.3d 262, *275; 1995 U.S. App. LEXIS 23744, **35

Page 10

n15 Amana also argues that the ISI court,  by suggesting that ISI could not sell its product without its facility, see ISI, 614 A.2d at 138, implicitly held that a facility cannot constitute a POB unless the fa- cility is necessary for the plaintiff's business. A rea- sonable jury could have concluded, however, that Cooper's showroom was necessary to its business since there was evidence that the showroom was used  for  "important"  demonstrations,  App.  1231, and for "vital" sales training. App. 834.

In sum, we hold that a reasonable jury could have con- cluded (1) that Cooper and Amana had a "community of interest," (2) that Amana granted Cooper a "license," and

(3) that Cooper established a New Jersey POB. Therefore, a reasonable jury could have found that Cooper had a fran- chise within the meaning **36   of the Act. Accordingly, we affirm the district court's denial of Amana's motion for judgment as a matter of law on Cooper's NJFPA claim.

B. Jury Instructions

Amana contends that,  even if it was not entitled to judgment as a matter of law on Cooper's NJFPA claim, it was at least entitled to a new trial due to the district court's allegedly erroneous jury instructions. We review the dis- trict court's instructions to determine "whether the charge, taken  as  a  whole  and  viewed  in  light  of  the  evidence, fairly and adequately submitted the issues in the case to the  jury."  Limbach  Co.  v.  Sheet  Metal  Workers  Intern. Ass'n, 949 F.2d 1241, 1259 n.15 (3d Cir. 1991) (quoting Link v. Mercedes-Benz of North America, Inc., 788 F.2d

918, 922 (3d Cir. 1986)). We grant a new trial "only if the instruction was capable of confusing and thereby mis- leading the jury." Link, 788 F.2d at 922. When reviewing instructions, we consider "the totality of the instructions and not a particular sentence or paragraph in isolation." In re Braen, 900 F.2d 621, 626 (3d Cir. 1990), cert. denied,

498 U.S. 1066, 112 L. Ed. 2d 845, 111 S. Ct. 782 (1991). Amana contends that the court gave improper instructions on each of the three **37   franchise requirements.

*276   1. Community of interest.

The district court denied Amana's request for several jury instructions regarding community of interest. First, it refused to give the following instruction:

The fact that other brands or lines . . . may or may not presently be available for distribu- tion by Cooper Distributing is not relevant to the issue of whether or not a community of interest existed between Amana and Cooper Distributing in the marketing of Amana prod- ucts.

App. 351. Amana contends that Cooper was unable to find another product line to distribute due to market changes and  that  these  changes  could  not  convert  Cooper's  as- sets into franchise-specific assets. Amana argues that the above instruction should have been given to ensure that the jury understood this point.

Without deciding whether Amana's argument regard- ing the effect of market changes under the NJFPA is cor- rect, we hold that the district court's detailed and accu- rate  community-of--interest  charge  (see  App.  3901-05) taken as a whole was not capable of confusing the jury. Not only did this instruction provide a clear and correct general  description  of  this  concept  and  the  concept  of

**38    franchise-specific  assets,  but  the  three  specific types  of  investments  that  the  instruction  mentioned  -- goodwill, product-specific knowledge, and inventory -- are  not  types  of  investments  that  could  easily  become non-transferable due to market changes. The court told the jury that franchise-specific assets in this case might include:

Business goodwill developed by Cooper with its customers associated with using Amana's name or built up by significant advertising, marketing,  or  promotional  efforts  with  re- spect to Amana home appliances and not able to be transferred or utilized by Cooper out- side  of  the  relationship  with  Amana;  .  .  . and  any  skill  or  knowledge  Cooper  gained in  the  marketing  of  Amana's  home  appli- ances which could not be used in selling other brands of home appliances, even if lines of appliances other than Amana were available to Cooper.

App. 3905 (emphasis added). Thus, looking at the instruc- tions as a whole, we do not think that they were capable of leading the jury into believing that assets rendered non- transferable merely by market changes could contribute to a finding of franchise-specificity.

Second,  the  district  court  denied  Amana's  request

**39    for  an  instruction  asking  the  jury  to  "consider whether the written contracts between Amana and Cooper Distributing required Cooper Distributing to direct all of its energy and resources to developing demand for Amana products." App. 369 (emphasis added). The district court did  not  err  in  refusing  to  give  this  instruction  because Cooper, in order to prove a community of interest, was not required to show that it directed all of its energy and resources to promoting the sale of Amana products. See N.J.S.A. § 56:10-4 (minimum of 20% of gross sales must be from franchisor); New Jersey American, 875 F.2d at

63 F.3d 262, *276; 1995 U.S. App. LEXIS 23744, **39

Page 11

63 (noting that "a firm may be considered a franchisee even if only 21% of its gross sales are derived from the franchisor"). n16

n16 The court also denied Amana's request for an instruction asking the jury to consider whether

"the  dealers  to  whom  Cooper  Distributing  sold Amana  products  sold  not  only  Amana  but  also other brands of appliances." App. 376. We do not think that this instruction had a bearing on whether Amana and Cooper had a community of interests and we consequently hold that the district court's failure to give this instruction was not erroneous.

**40

2. License.

Amana  argues  that  the  district  court  erred  in  deny- ing  three  requested  jury  instructions  on  the  subject  of whether Amana created a license. First, Amana contends that the court should have given a charge stating that, in determining whether Cooper had a "license" at the time of termination, the jury should not consider certain practices that Cooper had already by this time abandoned, such as its previous practices (see App. 749-50) of performing in-home repair service on Amana appliances while dis- playing the Amana logo on its truck. See App. 318. We disagree. As previously noted, the New Jersey Supreme Court  has  explained  that  "the  term  'license'  means  that the alleged   *277   franchisee must use the name of the franchisor  'in  such  a  manner  as  to  create  a  reasonable belief on the part of the consuming public that there is a connection between the . . . licensor and licensee by which the licensor vouches,  as it were,  for the activity of the licensee.'" ISI, 614 A.2d at 139 (citation omitted). Cooper's  past practices  could  be regarded as contribut- ing to the public's perception of the relationship between Cooper and Amana. We therefore hold the district court's denial **41   of Amana's requested instruction was not erroneous.

Second, Amana contends that the district court erred in refusing to give an instruction asking the jury to con- sider whether Amana's products were "'off-the--shelf' type products that could  be purchased at regular business out- lets (such as appliance stores)." App. 322. We hold, how- ever, that the district court's "license" charge as a whole was not capable of confusing the jury. This instruction was  based  squarely  on  ISI.  See  App.  3899.  Under  the NJFPA, the distinction between "off-the--shelf" products and others is not of such critical significance that a specific instruction on this point was essential.

Third,  Amana argues that the district court erred in denying its request for an instruction asking the jury to

consider whether the Agreement required Cooper to use its best efforts to promote Amana's name, as opposed to Amana's products. App. 329-330. As previously noted, however, we view the distinction between the promotion of the Amana name and the promotion of Amana products to be of little substance in the context of this case. See supra page 22.

3. Place of Business.

The  district  court  gave  the  following   **42    POB

instruction:

A place of business is defined as "a fixed ge- ographical location at which the franchisee displays  for  sale  and  sells  the  franchisor's services."

. . .

To meet the place of business requirement, . .

. it is not necessary that the sale of goods in- clude only order taking at the location. Using the  location  for  display  and  demonstration of the franchisor's goods to prospective cus- tomers is sufficient.

App. 3899. Amana contends that this charge was inaccu- rate, but we find Amana's argument to be without merit. As noted, we predict that the New Jersey Supreme Court would hold that the actual taking of orders is not neces- sary and that demonstrations are sufficient in order to find a POB. See supra pages 24-26.

In summary, we hold that the trial court did not err in denying Amana's motion for judgment as a matter of law or its motion for a new trial on Cooper's NJFPA claim. We thus turn to the question of damages.

C. NJFPA Damages

The jury awarded Cooper $4.375 million in damages under the NJFPA. App. 4794. Amana requests a new trial on damages,  arguing that the district court erred in up- holding the verdict. Amana claims that the verdict **43  was against the great weight of the evidence because the jury based its damages award on the false assumption that Cooper had a contractual right in the four-state territory to be Amana's exclusive distributor to retail dealers. App.

4954. Because we agree that Cooper had no such right and because we additionally hold that the franchise was valued as of the wrong date, we remand for a new trial on damages.

We are mindful that our scope of review of a dam- ages award is "exceedingly narrow." Williams v. Martin Marietta  Alumina,  Inc.,  817  F.2d  1030,  1038  (3d  Cir.

63 F.3d 262, *277; 1995 U.S. App. LEXIS 23744, **43

Page 12

1987) (quoting Walters v. Mintec/International, 758 F.2d

73, 80 (3d Cir. 1985). The district court's refusal to grant a new trial is reviewed for abuse of discretion. See Frank Arnold Contractors, Inc. v. Vilsmeier Auction Co., Inc.,

806 F.2d 462, 465 (3d Cir. 1986). We will reverse, how- ever, when "the verdict is contrary to the great weight of the evidence, thus making a new trial necessary to pre- vent  a  miscarriage  of  justice."  Roebuck  v.  Drexel,  852

F.2d 715, 736 (3d Cir. 1988).

*278   In the current case, Cooper's valuation expert, Melvin  Konner,  in  calculating  the  value  of  the  Cooper franchise, assumed that Cooper **44   had an exclusive right to sell to the retail dealers in its four-state territory and "that Amana had no right to sell to the dealers  di- rect ly. " App. 1841. Furthermore, Konner explained that his calculation of the value of the Cooper franchise would have  been  "considerably  less"  if  "Amana  did  have  the right to sell directly" to the dealers. App. 18. The jury's award appears to have been based on Konner's estimate. As will be discussed below, however, see infra p. 36-42, Amana did not grant Cooper the exclusive right to sell to the retail dealers, and therefore Konner's assumption was incorrect. Consequently, we hold that the jury's ver- dict was against the great weight of the evidence, and we therefore remand for a new trial on NJFPA damages.

We also find that the Cooper franchise was valued as of the wrong date. The district court instructed the jury to value the franchise as of November 5, 1991, the date that Amana attempted to terminate the franchise, App. 2917, and  Konner  likewise  calculated  Cooper's  value  as  that date. App. 1780. However, as a result of the preliminary injunction entered by the district court, Cooper continued to operate its franchise until the date **45   of judgment, March  8,  1994,  which  was  also  the  date  on  which  the district court dissolved the preliminary injunction. App.

5000-02. Although Amana unquestionably attempted to terminate the Cooper franchise on November 5, 1991, the franchise was not effectively terminated until the dissolu- tion of the preliminary injunction on March 8, 1994, since Cooper continued to operate and receive profits from the franchise until that latter date. We therefore hold that the franchise should have been valued as of that date, when Cooper actually stopped running the franchise.

Valuing the franchise as of the earlier date would be- stow a double recovery on Cooper. When franchises are valued, the "price should be approximately equal to the present value of all income that can be derived far into the future from the business." Johnson v. Oroweat, 785

F.2d 503, 507 (4th Cir. 1986). This incorporation of fu- ture earnings into the current value of a business explains

"why courts allow a plaintiff to recover either the present value of lost future earnings or the present market value

of the lost business,  but not both." Id. at 508; see also

Arnott v. American Oil Co., 609 F.2d 873, 886 (8th Cir.

**46    1979) ("It is improper to permit a plaintiff . . . to recover both the value of the business as a going con- cern . . . and future profits of that business . . . . Future profit potential is taken into consideration in valuing the business as a going concern."), cert. denied, 446 U.S. 981

(1980). Consequently, valuing the Cooper franchise as of November 5, 1991, would give rise to a double recovery because Cooper would receive both (1) the value of the franchise as of the earlier date -- (which would include the present value of the future earnings from that date to the date of judgment) n17 and (2) the actual profits derived from the franchise between the date of the attempted ter- mination and the date of judgment. To avoid this double recovery, we conclude that the proper date of valuation in this case is March 8, 1994. n18

n17  See  App.  1799  (valuation  expert  Konner predicting "how the  business was  going to do" after 1991).

n18 The New Jersey Supreme Court's decision in Westfield Centre Service, Inc. v. Cities Service Oil Co., 86 N.J. 453, 432 A.2d 48 (N.J. 1981), does not mandate a contrary result. In its opinion in that case,  the  court  observed  that  where  a  franchisor violates the NJFPA but is motivated by good faith business reasons, the franchisee's damages "should be measured . . . in terms of the actual or reason- able  value  of  the  franchisee's  business  when  the franchisor cuts off the franchise." 432 A.2d at 55. In the current case,  Cooper's franchise should be viewed as having been effectively "cut  off" when the preliminary injunction was vacated.

**47

III. CONTRACT CLAIM

We  now  turn  to  Cooper's  breach  of  contract  claim. In the early summer of 1991,  a few months before the attempted termination, Amana began selling products di- rectly  to  P.C.  Richard,  Cooper's  largest  dealer,   *279  App. 2309-13,  n19 and other local dealers. Cooper as- serted that the Agreement prohibited Amana from sell- ing directly to such dealers in Cooper's territory and that therefore  Amana  was  in  breach.  The  district  court,  af- ter concluding that the Agreement was ambiguous as to Amana's right to make direct sales in Cooper's territory, App. 170-71, submitted the contract interpretation issue to the jury. The court instructed the jury to consider course of dealing and course of performance evidence in deter- mining whether Amana had the right to make such sales. App. 3909-10. Apparently relying on such evidence, n20

63 F.3d 262, *279; 1995 U.S. App. LEXIS 23744, **47

Page 13

the jury concluded that Amana did not reserve the right to sell to dealers in Cooper's region and awarded Cooper

$2 million for Amana's breach. Amana maintains that the district  court  committed  reversible  error  in  concluding that  the  contract  was  ambiguous  and  in  submitting  the question of contract interpretation to the jury. We agree.

n19 P.C. Richard, a local dealer, was an annual purchaser of $6 million of Amana products, repre- senting one-third of Cooper's total Amana business and 60% of Cooper's New York Amana sales. App.

910, 1014-16, 3955.

**48

n20   See,   e.g.,   App.   988   (testimony   from Cooper's president and general manager, William Cooper,  that,  except for Amana's sales to the na- tional  accounts,  Cooper  had  been  the  exclusive dealer for 30 years); App. 994 (announcement from Amana to the retail dealers in Cooper's area that Cooper was "the exclusive distributor of Amana's domestic appliances" in that region);  App. 3379-

80 (testimony that Amana repeatedly told Cooper that Cooper had an exclusive sales territory).

The Agreement provides that any disputes under the Agreement are "subject to the  laws of the State of Iowa." App. 3982. Under Iowa law, the test for ambiguity is an objective one: "whether the language is fairly susceptible to two or more different meanings." PMX Industries, Inc. v. LEP Profit Intern.,  31 F.3d 701,  703 (8th Cir. 1994)

(citing Iowa Fuel & Minerals, Inc. v. Iowa State Bd. of Regents, 471 N.W.2d 859, 862-63 (Iowa 1991)); see also Taylor v. Continental, 933 F.2d 1227, 1232 (3d Cir. 1991)

("A term is ambiguous if it is susceptible to reasonable interpretations."). Furthermore, where a "written contract

**49    is unambiguous,  Iowa law does not allow con- sideration  of  extrinsic  evidence."  PMX  Industries,  Inc. v.  LEP  Profit  International,  31  F.3d  701,  703  (8th  Cir.

1994); see also Iowa Fuel, 471 N.W.2d at 862 (parties' in- tent determined by the words of the contract); Anderson v.  Aspelmeier,  Fisch,  Power,  Warner,  &  Engberg,  461

N.W.2d 598, 600 (Iowa 1990) (extrinsic evidence may not be used to modify, enlarge, or curtail the contract terms). n21 While extrinsic evidence, such as the course of per- formance evidence submitted to the jury in this case, may be admissible to "supplement  or explain " the terms of the agreement, it cannot be used to contradict unambigu- ous terms.   Ralph's Distributing Co. v. AMF, Inc.,  667

F.2d  670,  673  (8th  Cir.  1981).  The  decision  whether  a contract is ambiguous is one for the court to decide as a matter of law, see Boge v. State of Iowa, 309 N.W.2d 428,

430 (Iowa 1981), and therefore our review is plenary.

n21 The Iowa Supreme Court has not addressed the  question  whether  the  Uniform  Commercial Code (UCC) applies to distributorship agreements under  Iowa  law.  However,  In  Corenswet,  Inc.  v. Amana Refrigeration, Inc., 594 F.2d 129 (5th Cir.), cert. denied, 444 U.S. 938, 62 L. Ed. 2d 198, 100 S. Ct. 288 (1979), the Fifth Circuit applied the UCC to a distributorship under Iowa law, explaining:

Although  most  distributorship  agree- ments  .  .  .  are  more  than  sales  con- tracts, the courts have not hesitated to apply the Uniform Commercial Code to cases involving such agreements.

Id.  at  132  (citations  omitted);  see  also  Ralph's Distributing Co. v. AMF, Inc., 667 F.2d 670, 673 n.6 (8th Cir. 1981) (following Corenswet).

Assuming  that  the  Iowa  courts  would  apply the  Iowa  version  of  the  UCC  in  this  case,  the result  would  not  be  affected.  Under  Iowa  Code

§  554.2202,  the  express  terms  of  the  Agreement could not be contradicted by contrary course-of-- dealing evidence.

**50

We hold that the language of the Agreement between Amana and Cooper unambiguously provided for a non- exclusive distributorship arrangement and therefore that the district court erred in submitting to the jury the ques- tion of whether Amana reserved the right to sell directly to  dealers  in  Cooper's  territory.  One  provision  of  the Agreement states:

*280   The Distributor Cooper  shall have the  non-exclusive  right  to  purchase  from Amana for resale . . . .

App. 3979 (emphasis added).

Another even more specific provision states: Amana reserves the right to make sales di- rectly or through other channels of distribu- tion including, but not limited to, sales:  (a) to any national, state or local government, or any agency or subdivision thereof; (b) for ex- port; (c) to another manufacturer, (d) under trademarks other than Amana such as prod- ucts  manufactured  under  private  label,  (e)

63 F.3d 262, *280; 1995 U.S. App. LEXIS 23744, **50

Page 14

for commercial use; (f) to national accounts;

(g)  to  general  contractors,  sub-contractors, builder  distributor/dealers  or  developers  of business  or  home  building  projects;  (h)  to leasing and/or rental accounts. Any sales un- der this provision may be made by Amana without  notice,   compensation   **51           or other obligation of any kind to Distributor.

App. 3981 (emphasis added).

In arguing that this provision is ambiguous, Cooper re- lies on the fact that sales by Amana to local retailers, such as P.C. Richard, are not specifically mentioned in the list contained in the provision. But since this list is prefaced by the phrase "including but not limited to," this argument is unconvincing. The list merely gives examples of enti- ties with whom Amana reserved "the right to make sales directly." By using the phrase "including, but not limited to," the parties unambiguously stated that the list was not exhaustive. See Foods, Inc. v. Iowa Civil Rights Comm'n,

318 N.W.2d 162, 171 (Iowa 1982) (noting that the "includ- ing, but not limited to" language created a considerably discretionary standard);  In re Forfeiture of $5,264,  432

Mich. 242, 439 N.W.2d 246, 251 n.7 (Mich. 1989) (in- ferring a broad construction from use of the "including, but not limited to" language); Jackson v. O'Leary, 689 F. Supp. 846,  849 (N.D. Ill. 1988) (noting that the phrase

"including,  but  not  limited  to"  is  "the  classic  language of  totally  unrestricted  (and  hence  totally  discretionary) standards").

Cooper's contention **52   that our interpretation of the contract noted above should be governed by the rule of  ejusdem  generis  is  unpersuasive.  Under  this  rule  of construction, general words near a specific list are "not to be construed to their widest extent, but are to be held as applying only to . . . things of the same general kind . . . as those specifically listed ." Black's Law Dictionary, 464

(5th ed. 1979); see also In re Syverson's Estate, 239 Iowa

800, 32 N.W.2d 799, 804 (Iowa 1948); Attorney General v. Blue Cross & Blue Shield of Michigan, 168 Mich. App.

372, 424 N.W.2d 54, 58 (Mich. Ct. App. 1988). Assuming that sales to retail dealers are not of the same general kind as the other transactions listed in the Agreement, Cooper contends that we should infer that Amana cannot make such direct sales. But the rule of ejusdem generis applies only if the provision in question does not express a con- trary intent. See In re Syverson's Estate, 32 N.W.2d at 804; Blue Cross, 424 N.W.2d at 58. Thus, since the phrase "in- cluding, but not limited to" plainly expresses a contrary intent,  the  doctrine  of  ejusdem  generis  is  inapplicable. See  In re  Forfeiture  of $5,264,  439  N.W.2d  at 251  n.7

(noting that the rule **53    of ejusdem generis did not apply because the proviso contained the "including, but

not limited to" language);  Ramirez, Leal & Co. v. City

Demonstration Agency, 549 F.2d 97, 104 (9th Cir. 1976)

(explaining that "including, but not limited to" language is "often used to mitigate" the rule of ejusdem generis); Blue Cross, 424 N.W.2d at 58.

In an effort to support its argument, Cooper cites other cases involving contractual language which, according to Cooper, withheld exclusive distributorship rights in lan- guage that was even clearer than that in the Agreement at issue here. This argument, however, misses the mark. The question is not whether the Agreement could have been even more emphatic, but rather whether the language of the Agreement is susceptible to more than one reason- able  interpretation.  Since  we  hold  that  the  language  is unambiguous, it is irrelevant whether even more forceful language might have been possible. See PMX, 31 F.3d at

703. Accordingly, we hold that the Agreement unambigu- ously permitted Amana to make any direct sales it wished and that the introduction of contradictory extrinsic evi- dence in this regard was impermissible. n22   *281   We therefore reverse **54   the judgment entered in favor of Cooper on its breach of contract claim and remand for the entry of judgment in favor of Amana on this claim. n23

n22 Ralph's Distributing Co. v. AMF, Inc., 667

F.2d  670  (8th  Cir.  1981),  is  not  to  the  contrary. There, Ralph's Distributing Company, a wholesale distributor of snowmobiles, sued AMF, a snowmo- bile manufacturer that had entered into a franchise agreement with Ralph's. Pursuant to the agreement, Ralph's was to buy the snowmobiles directly from AMF and then resell them to retail dealers in its des- ignated territory. When AMF began to sell directly to the retail dealers in Ralph's territory, Ralph's sued for breach of contract, alleging that AMF's direct sales in Ralph's territory violated Ralph's contrac- tual right to be the exclusive distributor. Interpreting Iowa law,  the Eighth Circuit considered extrinsic evidence in interpreting the contract. Ralph's is dis- tinguishable  from  the  current  case,  however,  be- cause "the contracts designating Ralph's sales area

were  silent as to whether or not it would be the exclusive AMF snowmobile  distributor in that ter- ritory." Ralph's, 667 F.2d at 673.

**55

n23 Amana argued that the judgment in favor of Cooper on the breach of contract claim should be reversed in whole or in part, for two additional rea- sons:  (1) because the district court allegedly gave incorrect jury instructions and (2) because Cooper's contract damages were duplicative of its recovery

63 F.3d 262, *281; 1995 U.S. App. LEXIS 23744, **55

Page 15

under the NJFPA. Because we hold, for the reasons explained above, that Amana is entitled to judgment on Cooper's breach of contract claim, we need not reach either of these arguments.

IV.           TORTIOUS            INTERFERENCE   WITH PROSPECTIVE BUSINESS ADVANTAGE

The jury found for Cooper on its claim for tortious interference  with  prospective  business  advantage,  App.

4795-96, but the jury did not award any actual damages on this claim. Id. The jury did, however, award $3 million in punitive damages. Id. As the district court explained to the jury, Cooper's tortious interference claim was the only  claim  on  which  punitive  damages  were  available. App. 3921.

Under New Jersey law,  the elements of a claim for tortious interference with prospective business advantage are as follows:  1) a prospective economic **56    rela- tionship from which the plaintiff has a reasonable expec- tation of gain; 2) intentional and unjustifiable interference with that expectation, and 3) a causative relationship be- tween  the  interference  and  the  loss  of  the  prospective gain. See Printing Mart-Morristown v. Sharp Electronics Corp., 116 N.J. 739, 563 A.2d 31, 37 (N.J. 1989).

Cooper based its tortious interference claim on two independent  sets  of  alleged  facts:   (1)  Amana's  sale  of products directly to P.C. Richard and (2) other conduct in which Amana engaged after the district court prelimi- narily enjoined Amana from terminating the Cooper fran- chise. n24 App. 3912-13. The jury returned a verdict for Cooper on both bases, n25 App. 4795-96, and the district court  entered  judgment  in  accordance  with  the  verdict. App. 5703-11.

n24 For example, Cooper offered evidence that was intended to prove that, after the preliminary in- junction, Amana intentionally delayed approval of an air conditioner sales program between Cooper and one of its largest dealers,  Trader Horn. App.

1047-61;  see  also  App.  1067-73  (evidence  that Amana dropped Cooper from its mailing list and thus left Cooper unaware of discounts and model changes).

**57

n25  In  light  of  our  prior  discussion  concern- ing Cooper's breach of contract claim, the punitive damage claim could not be sustained based on the first theory set out above.

Assuming arguendo that there was legally sufficient evidence  to  support  the  jury's  finding  of  tortious  inter- ference,  Amana  contends  that  the  award  of  $3  million in punitive damages must be reversed because the jury, by  awarding  $0  in  actual  damages,  found  that  Cooper suffered no injury. We agree with Amana's argument.

Under New Jersey law, a plaintiff must suffer some injury in order to recover punitive damages. See Nappe v. Anschelewitz, Barr, Ansell & Bonello, 97 N.J. 37, 477

A.2d  1224,  1232  (N.J.  1984)  ("Punitive  damages  may be  assessed  .  .  .  where  some  injury,  loss,  or  detriment to  the  plaintiff  has  occurred.")  (emphasis  in  original); Lightning Lube, Inc. v. Witco Corp., 4 F.3d 1153, 1195

(3d Cir. 1993). Despite the jury's finding of $0 in actual damages, Cooper makes two arguments that it did suffer injury and that punitive damages were therefore permit- ted.   *282   First, Cooper claims that the finding of harm necessary **58   to an award of punitive damages need not be monetarily measurable but can be intangible or un- quantifiable. Second, it claims that the jury "molded" the breach of contract verdict with the tortious interference verdict and that we should infer that the jury did award some actual damages for Amana's tortious interference. As for Cooper's argument that it suffered intangible injury and was therefore entitled to a punitive award, the New Jersey Supreme Court has explained that a plaintiff need not show injury which gives rise to compensatory damages in order to receive punitive damages. See Nappe,

477 A.2d at 1231-32. The question we must answer is whether Cooper may recover punitive damages in the ab- sence of an award of even nominal damages.

In Lightning Lube, we considered whether Lightning Lube, a lube oil dealer, could recover punitive damages from  Witco,  an  oil  equipment  supplier,  on  Lightning Lube's fraud and misrepresentation claim where the jury found that the plaintiff had sustained no damages. We held that in light of the jury's refusal to award nominal dam- ages to the plaintiff, we could infer that the plaintiff did not suffer sufficient injury to warrant an award of **59  punitive damages. We explained:

Inasmuch as the jury did not find sufficient in- jury to award nominal damages on this claim, the . . . fraud cannot sustain an award of puni- tive damages.

Lightning Lube, 4 F.3d at 1195. Relying on Lightning Lube,  Amana  contends  that  because  the  jury  did  not find sufficient injury to award even nominal damages to Cooper, the tortious interference claim cannot sustain a punitive award.

63 F.3d 262, *282; 1995 U.S. App. LEXIS 23744, **59

Page 16

The district court rejected Amana's argument by seek- ing to distinguish Lightning Lube. App. 5708. Whereas neither party in the current case requested a nominal dam- ages instruction, the jury charge in Lightning Lube con- tained the following instruction:

If  you  find  that  the  defendant  has  violated the legal rights of the plaintiff in accordance with  the  law  upon  which  I  have  instructed you,  and  if  you  find  that  the  plaintiff  has proven it has sustained damages but they are not computable, you may enter an award of nominal damages.

App. 5708 (district court citing Lightning Lube jury in- structions). Based upon this instruction, it was clear that

"the jury knew to award nominal damages expressly if it desired to do so," Lightning **60   Lube, 4 F.3d at 1195, and therefore the jury's failure to award nominal damages in that case implied that the jury did not find any injury. In the current case,  the district court noted,  no instruc- tions on nominal damages were sought or given, and the district court therefore opined that the jury's finding of $0 in damages on Cooper's tortious interference claim could

"not be read to imply a finding that Cooper had suffered no damages as result of Amana's tortious interference." App.

5710. In addition, the district court stated that it could be inferred that the jury found that Cooper suffered actual harm  because  the  jury  awarded  punitive  damages  after being instructed that such damages could not be awarded unless "some harm to the plaintiff has occurred, even if intangible or unquantifiable." App. 3922. Therefore, the district  court  held  that  the  jury  found  that  Cooper  did suffer sufficient injury to warrant punitive damages.

We find the district court's reasoning unconvincing. Much like the jury in this case, the Lightning Lube jury was instructed that it could award punitive damages only if the "defendant had committed fraud or misrepresenta- tion which had caused plaintiff   **61     damage." App.

5721 (emphasis added). Yet despite this instruction, we held that the jury's punitive damages award was improper because  the  jury  there,  as  here,  awarded  $0  in  actual damages. Thus, the mere fact that the punitive damages instructions in this case required a finding of actual harm is insufficient to sustain the punitive damages award. Moreover,  we  do  not  think  that  the  fact  that  "the Lightning Lube jury was specifically made aware of the availability of nominal damages," App. 5708, can justify a contrary result. We decline to accept Cooper's invita- tion  to  place  the  burden  on  the  defendant  to  request  a nominal  damages  instruction.   *283    Cooper  was  the party seeking a finding of actual injury and, as such, bore

the  responsibility  of  requesting  a  nominal  damages  in- struction if it wanted the jury to consider that option. Of course,  Cooper may well have decided for tactical rea- sons that it did not want the jury to consider that option. But whether Cooper failed to request an instruction on nominal  damages  by  choice  or  inadvertence,  it  should bear the consequences. Because Cooper did not request such an instruction, it cannot now contend that we should infer a finding of **62   nominal damages. See Walker v. Anderson Electrical Connectors, 944 F.2d 841, 844-45

(11th Cir. 1991) (holding that plaintiff was not entitled to a presumption of nominal damages when she had failed to request them), cert. denied, 122 L. Ed. 2d 352, 113 S. Ct. 1043 (1993); n26 Sims v. Mulcahy, 902 F.2d 524, 535

(7th Cir.), cert. denied, 498 U.S. 897, 112 L. Ed. 2d 207,

111 S. Ct. 249 (1990). n27

n26 The Eleventh Circuit in Walker suggested that the reason that it placed the burden of such a request on the plaintiff was because she had some- thing to gain by its absence. The court, quoting the defendant's brief, noted that:

if  there  had  been  an  instruction  .  .  . on  nominal  damages,  the  jury  might have given it, and that was a risk to be avoided by the plaintiff since she was after substantial money.

Walker, 944 F.2d at 845 n.7.

n27 Cooper's reliance on Singer Shop-Rite, Inc. v.  Rangel,  174  N.J.  Super.  442,  416  A.2d  965,

968 (N.J. Super. Ct. App. Div.), certif. denied, 425

A.2d 299 (N.J. 1980), is misplaced since Rangel explained  that  punitive  damages  will  be  upheld

"where  actual  damage  has  been  shown  to  accrue from the tortious act."

**63

We  next  address  Cooper's  contention  that  the  jury

"molded"  the  tortious  interference  verdict  with  the  $2 million  breach  of  contract  verdict  and  in  fact  awarded substantial compensatory damages on the tortious inter- ference claim. Cooper maintains that because there was evidence in the record that Cooper lost $1,959,000 as a result of Amana's direct sales to P.C. Richard, App. 4607, and because there was evidence in the record that Cooper lost  $41,000  as  a  result  of  Amana's  allegedly  tortious post-injunction conduct, App. 4611, we should infer that the jury's $2 million breach of contract award was really a

63 F.3d 262, *283; 1995 U.S. App. LEXIS 23744, **63

Page 17

"molding" of its breach of contract verdict and its tortious interference verdict.

In support of its argument, Cooper relies on Universal Computers  (Systems)  Ltd.  v.  Datamedia  Corp.,  653  F. Supp. 518 (D.N.J.), aff'd, 838 F.2d 1208 (3d Cir. 1988)

(no published opinion). In Datamedia, the jury found for the plaintiff on several theories, one of which, fraud, could have supported an award of punitive damages. The jury, however,  did not fill in the damages line on its special verdict form for any of the theories except the first one and instead left the line next to **64    all the remain- ing theories,  including fraud,  blank. See id. at 532-34. Concluding that the jury had misunderstood the verdict form  and  had  aggregated  all  the  damages  on  a  single line, the district court held that in actuality the jury had awarded actual damages for fraud and that the award of punitive  damages  could  be  upheld.  See  id.  at  530.  Of course,  Datamedia  is  not  binding  on  us  and,  even  if  it were, it would be inapplicable here. In this case, the jury did not leave a blank next to the line for tortious inter- ference; instead the jury wrote "$ 0." App. 4795-96. In the face of such an express finding of $0 damages,  we refuse to infer that the jury "molded" its verdict and in fact awarded actual damages for tortious interference.

This result is buttressed by the fact that the sum total of Cooper's alleged losses from its contract claim com- bined with Cooper's alleged losses from its tortious inter- ference claim do not really equal $2 million, as Cooper erroneously suggests. Although there was evidence in the record that Cooper lost $1,959,000 as a result of Amana's direct sales to just P.C. Richard, App. 4607, there was also evidence in the record that Cooper lost **65  $2,001,000 as a result of Amana's direct sales to all of Cooper's lo- cal retail dealers (i.e.,  P.C. Richard plus the other local retailers). App. 4606. Since the breach of contract ver- dict question on the special verdict form asked the jury to  consider  Amana's  direct  sales  "to  P.C.  Richard  and other dealers," App. 4794 (emphasis added), the facts do not support Cooper's inventive theory that the jury aggre- gated Cooper's claimed breach of contract damages with Cooper's claimed tortious   *284   interference damages. Accordingly, we hold that, pursuant to the jury's verdict, Cooper suffered no actual harm as a result of the tortious interference claim, and we therefore reverse the district court's entry of the $3 million judgment for punitive dam- ages  in  favor  of  Cooper  and  remand  for  the  entry  of  a judgment of $0. n28

n28   Consequently,             we   need   not   address Amana's  two  alternative  arguments  (1)  that  the punitive  damages  did  not  bear  a  reasonable  rela- tionship to the actual damages and (2) that Cooper failed to prove that Amana acted with the malice

necessary to warrant punitive damages.

**66

V. PREJUDGMENT INTEREST

Last,  we turn to Cooper's cross-appeal and its con- tention that it was entitled to prejudgment interest on its NJFPA award. Applying New Jersey law, the district court denied prejudgment interest because "the injunction bar- ring Amana from terminating Cooper precludes Cooper from convincingly arguing that it was denied the use of the value of its own business." App. 5739 n.2. We agree with this holding, n29 and we therefore affirm.

n29 Cooper contends on appeal that, pursuant to the Agreement, Iowa law should govern. However, since Cooper argued to the district court that "New Jersey's approach to prejudgment interest governs the  franchise  claim,"  App.  5193,  we  hold  that Cooper failed to raise the argument that Iowa law should govern the prejudgment interest claim to the district court and that Cooper therefore cannot raise the argument for the first time on appeal. See Harris v. City of Philadelphia, 35 F.3d 840, 845 (3d Cir.

1994) (declining to address a claim raised for the first time on appeal).

**67

On appeal, Cooper argues that it is entitled to prejudg- ment interest on its NJFPA claim no matter whether that claim sounds in contract or tort. In our view,  however, Cooper is not entitled to prejudgment interest in either event.  If  the  NJFPA  claim  is  analogized  to  a  contract claim under New Jersey law, the award of prejudgment interest for claims arising in contract is subject to the dis- cretion of the trial court. See Meshinsky v. Nichols Yacht Sales,  Inc.,  110  N.J.  464,  541  A.2d  1063,  1070  (N.J.

1988). Traditionally,  prejudgment interest was awarded in contract cases only on liquidated damages. See George H.  Swatek,  Inc.  v.  North  Star  Graphics,  Inc.,  246  N.J. Super. 281, 587 A.2d 629, 632 (N.J. Super. Ct. App. Div.

1991) (noting that historically, prejudgment interest was not awarded "where a . . . substantial controversy existed as to the amount due under a contract"). The rationale was that "the person who is liable for the debt does not know the sum he owes and cannot be in default until the amount he owes is determined by judgment." Preston v. Claridge Hotel & Casino Ltd., 231 N.J. Super. 81, 555 A.2d 12,

16 (N.J. Super. Ct. App. Div. 1989). However, "the rule that limited prejudgment interest awards to cases where

**68   damages were liquidated or clearly ascertainable in advance has been significantly eroded." Meshinsky v. Nichols Yacht Sales, Inc., 110 N.J. 464, 541 A.2d 1063,

63 F.3d 262, *284; 1995 U.S. App. LEXIS 23744, **68

Page 18

1070 (N.J. 1988); see also Swatek, 587 A.2d at 633 (pre- judgment interest can be awarded "whether either liqui- dated  or  unliquidated  damages  are  recovered").  Today, the  purpose  of  an  award  of  prejudgment  interest  is  "to indemnify the claimant for the loss of what the moneys due him would presumably have earned if the payment had not been delayed." Ellmex Construction Co., Inc. v. Republic Insurance Co., 202 N.J. Super. 195, 494 A.2d

339, 349 (N.J. Super. Ct. App. Div. 1985), certif. denied,

511 A.2d 639 (N.J. 1986). As the New Jersey Supreme Court explained, "the basic consideration is that the de- fendant has had the use, and the plaintiff has not, of the amount in question." Rova Farms Resort, Inc. v. Investors Insurance Co. of America,  65 N.J. 474,  323 A.2d 495,

512 (N.J. 1974).

In the current case, at no time prior to the judgment did Amana have the use of Cooper's property. We explained above that, due to the operation of the preliminary injunc- tion,  Cooper's  franchise  was  not  effectively  terminated until the date of the court's dissolution of the preliminary

**69    injunction when the judgment was entered, see supra p. 35, and that, for practical purposes, Cooper had the use of its franchise until that date. Consequently, at no time prior to judgment did Amana have the use of some- thing of value owned by Cooper, and we therefore hold that  the  district  court  acted  within  its  discretion  by  re- jecting Cooper's request for NJFPA prejudgment interest predicated on a contract-based theory.   *285

Cooper makes the alternative argument that its NJFPA claim  should  be  considered  to  be  in  tort  and,  as  such, should give rise to prejudgment interest pursuant to New Jersey Court Rule 4:-11(b), which provides for prejudg- ment interest on tort claims. We hold that the fact that Cooper was not denied the use of its property until judg- ment precludes Cooper from receiving prejudgment inter- est even if Cooper's NJFPA claim is viewed as sounding in  tort.  Since  Cooper's  franchise  existed  until  the  date of  judgment,  we  affirm  the  district  court's  holding  that Cooper was not entitled to prejudgment interest. n30

n30 Alternatively, Cooper claims that the dis- trict  court  erred  by  failing  to  award  Cooper  pre- judgment interest in light of Amana's alleged ag- gravated misconduct. See W.A. Wright, Inc. v. KDI Sylvan Pools, Inc., 746 F.2d 215, 219 (3d Cir. 1984)

(egregious  conduct  warranted  prejudgment  inter- est). Again, however, we decline to award prejudg- ment interest where the plaintiff was not deprived of the use of his property until judgment.

**70

VI. CONCLUSION

For the reasons explained above, we affirm the dis- trict court's denial of Amana's motion for a judgment as a matter of law and its motion for a new trial on the NJFPA claim. We reverse the district court's denial of a new trial on NJFPA damages and remand for a new trial on that issue consistent with this opinion. We reverse the judg- ment in favor of Cooper on its breach of contract claim and remand for the entry of judgment for Amana on that claim.  We  reverse  the  award  of  $3  million  in  punitive damages to Cooper on its tortious interference claim and remand for the entry of a judgment for $0. We affirm the district court's denial of Cooper's motion for prejudgment interest. Each side will bear its own costs. n31

n31  While  a  sharing  of  costs  often  follows  a decision in which each side has prevailed on one or more issues, in this case we take the occasion to note that even if Cooper had prevailed, we might not have awarded it costs because of the excessive- ness of the footnotes in its otherwise helpful and persuasive brief. This court's local rules explicitly state that "excessive footnotes in briefs are discour- aged." See LAR 32.2(a). The effect was not only to make the brief more difficult to read, but it meant that many pages contained more than the 27 lines of double-space text permissible under LAR 32.1(c).

**71

CONCURBY: SLOVITER

DISSENTBY: SLOVITER

DISSENT: SLOVITER, Chief Judge, concurring and dis- senting.

I am happy to join the majority's careful and persua- sive opinion in all respects except one: although I believe it is a close question, I cannot agree that the Distributor Agreement unambiguously permitted Amana to sell di- rectly to all dealers in Cooper's territory. I believe that the district court did not err in determining that the distribu- torship agreement between Amana and Cooper was am- biguous and in submitting that issue to the jury. Moreover, I believe that once the issue was properly before the jury, there was adequate evidence from which the jury could have found that Amana's decision to sell directly to P.C. Richard  &  Son,  Cooper's  largest  account,  and  to  other local dealers was a breach of contract.

The  majority  bases  its  decision  that  the  agreement unambiguously reserved to Amana the right to sell to re- tail dealers such as P.C. Richard on (1) the designation of Cooper's "right to purchase from Amana for resale" as "non-exclusive" and (2) the preface of Amana's reser-

63 F.3d 262, *285; 1995 U.S. App. LEXIS 23744, **71

Page 19

vation  of  "the  right  to  make  sales  directly  or  through other channels of distribution" to listed categories with

**72    the words "including,  but not limited to, sales" to those categories. Admittedly,  the contract reflects an understanding that Cooper's right to sell was not exclu- sive, even within its territory, and that the listing of certain categories to which Amana could sell was not exhaustive, but it does not necessarily follow that Amana unambigu- ously reserved the right to sell directly to every customer in Cooper's territory.

The first provision on which the majority relies states that  the  "Distributor  shall  have  the  non-exclusive  right to purchase from Amana for resale." App. 3979 (empha- sis added). Patently, this does not apply to Amana itself. The  "purchase  for  resale"  presumably  applies  to  com- panies  such  as  Cooper,  which  sell  to  retailers,  and  the provision's applicability to P.C. Richard, which sells only to  consumers,  is  unclear.  Thus,  there  is  some  ambigu- ity whether or why this provision has any application to Amana's right to sell directly to a local retailer.

The other provision on which the majority relies is the  reservation  clause.  Here  Amana  did  indeed  reserve the right to make sales *286   "directly or through other channels of distribution" and prefaced the list of the other

**73    "channels  of  distribution"  with  the  words  "in- cluding, but not limited to." App. 3981. I find this more ambiguous than does the majority because none of the enumerated categories resembles a local retail account, such as P.C. Richard, and Cooper was unlikely to be in a position to sell effectively to any of the enumerated ac- counts. The point is not that we could say with certainty that Amana did not reserve the right to make direct sales to retailers, but merely that the issue is not clear as a mat- ter of law. This is markedly different than the contract that was at issue in Manchester Equipment Co. v. Panasonic Indus. Co., 141 A.D.2d 616, 529 N.Y.S.2d 532, 533 (N.Y. Sup.  Ct.  App.  Div.),  appeal  dismissed,  72  N.Y.2d  954,

531 N.E.2d 299, 534 N.Y.S.2d 667 (N.Y.), and appeal de- nied, 534 N.E.2d 329 (N.Y. 1988), where Panasonic had expressly  reserved  "the  unrestricted  right  to  solicit  and make direct sales of the Products to anyone, anywhere."

(emphasis added).

Moreover,  under  Iowa  law,  the  language  reserving sales  to  Amana  should  not  be  read  in  isolation.  The ambiguity vel non of contractual language must be de- termined by looking at the contract as a whole. As the Iowa Supreme Court said in Freese v. Town of Alburnett,

**74  255 Iowa 1264, 125 N.W.2d 790, 792 (Iowa 1964),

"Ambiguity appears when a genuine doubt appears as to the  meaning  of  a  contract,  and  the  instrument  must  be construed as an entirety." Moreover, "a contract will not be interpreted giving discretion to one party in a manner

which would put one party at the mercy of another, unless the contract clearly requires such an interpretation." Iowa Fuel & Minerals, Inc. v. Iowa State Bd. of Regents, 471

N.W.2d 859, 863 (Iowa 1991).

In Freese, the issue was whether a contractor who had drilled a well for a town under a contract requiring him to  "furnish  and  install  all  equipment  for  test  pumping" for a "lump sum of  $500.00" had an obligation to con- duct a second test pumping after the well caved in.  125

N.W.2d at 792. The town contended that the contract un- ambiguously required the contractor "to test pump the  well as many times as was necessary to satisfy the Town's engineer,  for the sum of $500.00,  in order to complete his basic contract." Id. The trial court, after considering evidence presented, refused to accept this contention and found the contract ambiguous, a somewhat different ap- proach to ambiguity than followed by those courts **75  which look only to the contract. The Supreme Court of Iowa stated:

Considering the evidence that this is a time- consuming and costly operation and that the contractor was required to follow implicitly the directions of the engineer, the trial court found considerable doubt as to the meaning of this contract provision. We must agree.

Id. The Court then stated, "It would be most unfair and inequitable to hold the contract  required the contractor to perform this expensive task as often as required by the engineer." 125 N.W.2d at 793.

Thus, we must look in the first instance at the entire contract to ascertain whether it is consistent with all of its provisions to construe the provisions relied on by Amana as  unambiguously  giving  it  the  right  to  sell  directly  to Cooper's largest customer, one who accounted for one- third of its total Amana sales, and 60% of its New York Amana sales. In making this inquiry, I do not suggest that a  court  should  interpose  terms  into  the  contract  that  it deems fair and equitable but merely that the court should decide from an objective standard whether the provision on which the party relies is unambiguous when read in context of the **76   entire contract.

In this case,  we should look at whether the obliga- tions that the Distributor Agreement imposes on Cooper are consistent with a reservation to Amana of the right to  sell  directly  to  retailers  in  Cooper's  territory.  Like the Iowa Supreme Court in Freese, I have "considerable doubt" whether they are, especially considering that 78% to 100% of Cooper's business was derived from the sale of Amana products. For example,  Cooper was required

63 F.3d 262, *286; 1995 U.S. App. LEXIS 23744, **76

Page 20

to use its best efforts to promote sales and "to accept a minimum quota determined by Amana based on sales po- tential  in  the  territory."  App.  3979.  Such  a  sales  quota would be meaningless if Amana could undersell Cooper at will by selling directly to Cooper's customers. In ad- dition, the Agreement obliged Cooper to "purchase and maintain an appropriate inventory of all Products in ac- cordance with Amana's written programs and policies." Id. Such a provision *287   had the potential of strand-

ing Cooper with useless inventory if Amana could sell directly to the retailers.

Reading the contract as a whole, I believe it is am- biguous as to whether Amana had the right to sell directly to retail dealers in Cooper's territory, and that the district

**77    court  did  not  err  in  submitting  the  question  of contract interpretation to the jury. Therefore,  I respect- fully dissent in that respect.

	Contents    Prev    Next    Last