Contract – Breach of Contract – Monetary Compensation in Exchange for Design Drawings

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Because the Court could not determine whether a breach occurred without first resolving whether a contract existed and what its terms were, these factual disputes prevented the Court from addressing the remaining elements of Plaintiff’s breach of contract claim.

We vacated the district court’s judgment and remanded.

An action arose from a construction project contract dispute between Plaintiff/Appellant East Coast Storage Equipment Co., Inc., a manufacturing company, and Defendants/Appellees ZF Transmissions Gray Court, LLC, and ZF North America, Inc. (collectively, ZF), two technology companies. The district court granted summary judgment to ZF on all claims, finding that East Coast received the full benefit of its bargain. We disagreed.

East Coast filed a complaint in state court, raising claims against ZF for breach of contract, promissory estoppel, unjust enrichment, and quantum meruit. The case was removed to federal court, and ZF unsuccessfully moved to dismiss East Coast’s claims. ZF subsequently moved for summary judgment, which the district court granted in full. The district court reasoned that East Coast received the full benefit of its alleged agreement with ZF because East Coast was actually hired to supply the racking structures for the project.

On appeal, East Coast claimed the parties entered into an oral contract wherein East Coast agreed to be the sole supplier of the project’s racking system and earn revenue through this role in exchange for providing ZF with the design drawings for a request for quotation (RFQ). It argued ZF breached this contract by encouraging Defendant THS Constructors Inc. to terminate East Coast from the project and approving THS’ request for payment that excluded payment to East Coast. ZF responded that there was no breach of contract because East Coast received the racking subcontract it bargained for and no promise of monetary compensation was ever made. We found East Coast’s argument persuasive. A reasonable jury could find the parties had a contract that included monetary compensation to East Coast in exchange for the design drawings it provided for the RFQ.

First, the Court found that there was a genuine dispute of material fact as to whether the parties had a contract. But even if a jury were to find that the parties mutually assented to a binding agreement, a genuine dispute of material fact remains as to its terms—namely, whether it included monetary compensation to East Coast in exchange for the design drawings.

Vacated and remanded.

East Coast Storage Equipment Co. Inc. v. ZF Transmissions Gray Court LLC (Lawyers’ Weekly No. 003-035-26, 13 pp.) (DeAndrea Gist Benjamin, J.) Appealed from the U.S. District Court for the District of South Carolina, at Greenville (Timothy M. Cain, J.) ARGUED: Adam C. Bach, TONNSEN BACH, LLC, Greenville, South Carolina, for Appellant. Sean P. McNally, TROUTMAN PEPPER LOCKE LLP, Charlotte, North Carolina, for Appellees. ON BRIEF: Emily R. Godwin, TONNSEN BACK, LLC, Greenville, South Carolina, for Appellant. William J. Farley III, TROUTMAN PEPPER HAMILTON SANDERS LLP, Charlotte, North Carolina, for Appellees. U.S. Court of Appeals for the Fourth Circuit Unpublished