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SPAGNOL ENTERPRISES v. DIGITAL EQUIPMENT CORPORATION (12/20/89)

filed: December 20, 1989.

SPAGNOL ENTERPRISES, INC., A CORPORATION, AND DELMAR LEASING CORPORATION, APPELLEE,
v.
DIGITAL EQUIPMENT CORPORATION, APPELLANT



Appeal from the Judgment of the Court of Common Pleas of Allegheny County, Civil Division at No. 79-29877.

COUNSEL

Arthur H. Stroyd, Jr., Pittsburgh, for appellant.

Michael J. Seymour, Bethel Park, for appellee.

McEwen, Popovich and Montgomery, JJ.

Author: Popovich

[ 390 Pa. Super. Page 373]

This case involves an appeal from the order*fn1 of the Court of Common Pleas of Allegheny County awarding damages in favor of the plaintiffs (Spagnol Enterprises, Inc. and Delmar Leasing Corp.) in the amount of $41,105.92 and denying the defendant's (Digital Equipment Corp.'s) motion for judgment n.o.v. and/or a new trial. We affirm.

[ 390 Pa. Super. Page 374]

As was reiterated by this Court in Babich v. Pittsburgh & New England Trucking Co., 386 Pa. Super. 482, 563 A.2d 168, 171 (1989), quoting Rocker v. Harvey Co., 370 Pa. Super. 32, 36, 535 A.2d 1136, 1138 (1988):

The standard of review of an appellate court when considering an order granting or denying judgment n.o.v. is the same as that used by the trial court; we must determine whether there was sufficient competent evidence to sustain the verdict, granting the verdict winner the benefit of every reasonable inference that can be reasonably drawn from the evidence and rejecting all unfavorable testimony and inferences. Judgment n.o.v. is appropriate only in a clear case where the facts are such that no two reasonable minds could fail to agree that, as a matter of law, the party has failed to make out his case.

Viewed under such a standard, the facts reveal that Arthur J. Spagnol, president of both Spagnol Enterprises Inc. (a corporation operating eight retail lumber yards) and Delmar Leasing Corp. (a company which owned and held real estate), was in the market to update his computer services to get daily inventories of his stock. In an effort to accomplish this task, Spagnol contacted Digital Equipment Corporation's (DEC) sales department and spoke to a Mr. Dunn in March of 1975. Dunn suggested various types of equipment to meet Spagnol's needs and to engage the services of an original equipment maintenance (OEM) company to program the system. Several weeks after this meeting, a representative of an OEM company, Computer Management Resources (CMR), contacted Spagnol and the two met. Nothing came of this meeting because the cost of the Digital equipment Spagnol wanted to purchase was prohibitive.

By mid-August of 1975, the CMR representative advised Spagnol that Digital's cost had been reduced for the equipment he needed. However, before an agreement would be executed, Spagnol wanted to meet with an official at DEC "since the equipment was coming from them." The meeting

[ 390 Pa. Super. Page 375]

    was held on September 8, 1975, in DEC's office and present were Spagnol, Ron Smith (from CMR) and Josephine Niedbala, who was in charge of OEM sales which Smith worked under in conjunction with DEC. Spagnol understood this relationship to mean that:

Before Spagnol would sign a contract to purchase the equipment through CMR, he requested a definite delivery date for the merchandise because he "wanted to get on line with [his] inventory for [the] year ending in 1975." Niedbala, according to Spagnol, guaranteed a 30-day delivery date to occur by October 10, 1975. This was confirmed by Niedbala with the main office in Massachusetts. Thereafter, Spagnol executed a contract (dated September 8, 1975) with CMR for the purchase of a model PDP 11-T-35 Digital computer with an RSX-11-M operating system.

When Spagnol received a maintenance contract in the mail from DEC on October 10, 1975, he did not sign it since the system had not yet arrived as promised. He learned that the equipment was not being shipped because CMR could not pay for it. As a result, by letter dated October 22, 1975, Spagnol contacted a Ms. Halpern at Digital (who was in charge of credit at the main office) "offering [his] financial statement so that [he] could get shipment of the computer . . . ." Halpern refused Spagnol's offer. In an effort to resolve this impasse, Spagnol arranged for a "letter of credit" to be issued by his bank. To secure the bank's interest, Spagnol pledged money from the sale of property held by Delmar Leasing Corporation.

A letter of credit was provided by the bank in DEC's name and Delmar Leasing Corporation was the "issuer of the letter of credit guaranteed by [the bank]." Once this document was sent, the equipment was received at ...


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