UNPUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

R.J. CLARKSON COMPANY,
INCORPORATED, d/b/a Jenn-Air of the
Carolinas,
Plaintiff-Appellant,

v.

THE JENN-AIR COMPANY, a wholly
owned subsidiary of the Maytag
                                                               No. 95-1084
Corporation; MAYTAG CORPORATION;
JERRY K. RINEHART; DONALD M.
LORTON; CARL MOE; LARRY NEPPLE,
Defendants-Appelles,

and

MARK D. WILSON,
Defendant.

Appeal from the United States District Court
for the District of South Carolina, at Columbia.
Dennis W. Shedd, District Judge.
(CA-92-1729-3-19)

Argued: March 7, 1996

Decided: May 7, 1996

Before WILKINSON, Chief Judge, and WILLIAMS and
MICHAEL, Circuit Judges.

_________________________________________________________________

Affirmed by unpublished per curiam opinion.

_________________________________________________________________
COUNSEL

ARGUED: John Patrick Freeman, Columbia, South Carolina, for
Appellant. Harold Simmons Tate, Jr., Manton McCutchen Grier,
SINKLER & BOYD, P.A., Columbia, South Carolina, for Appellees.
ON BRIEF: S. Jahue Moore, KIRKLAND, TAYLOR, WILSON,
MOORE & ALLEN, West Columbia, South Carolina, for Appellant.
Hamilton Osborne, Jr., SINKLER & BOYD, P.A., Columbia, South
Carolina, for Appellees.

_________________________________________________________________

Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).

_________________________________________________________________

OPINION

PER CURIAM:

In this diversity case, R.J. Clarkson Company, Inc. (Clarkson Co.)
sued The Jenn-Air Company and its parent company, Maytag Corpo-
ration, alleging fraud, breach of contract, and violations of the South
Carolina Unfair Trade Practices Act (SCUTPA), S.C. Code §§ 39-5-
20(a) & 140(a). Jenn-Air and Maytag asserted a counterclaim seeking
payment for goods sold and delivered. Robert A. Clarkson (Mr.
Clarkson), the president of Clarkson Co., was added as a defendant
on the counterclaim. The district court (1) granted Jenn-Air and
Maytag summary judgment before trial on Clarkson Co.'s SCUTPA
claim, (2) granted Jenn-Air and Maytag judgment as a matter of law
on Clarkson Co.'s remaining claims after Clarkson Co. rested its case
at trial, and (3) after a jury verdict, entered a judgment on the counter-
claim for a little over $1.4 million against Clarkson Co. and against
Mr. Clarkson personally. Clarkson Co. appeals the grant of summary
judgment and judgment as a matter of law to Jenn-Air and Maytag on
the fraud, breach of contract, and SCUTPA claims, but neither it nor
Mr. Clarkson appeals the judgment entered on the counterclaim. We
affirm as to all issues.

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I.

Because this case comes before us after grants of summary judg-
ment and judgment as a matter of law, our review is de novo, and we
view the record in the light most favorable to Clarkson Co., giving it
the benefit of all reasonable inferences. Herold v. Hajoca Corp., 864
F.2d 317, 319 (4th Cir. 1988), cert. denied, 490 U.S. 1107 (1989).
With respect to the SCUTPA claim, we consider the record as it
existed at the time the district court granted summary judgment,
ignoring evidence later presented at trial on other claims. U.S. East
Telecommunications, Inc. v. US West Communications Servs., Inc., 38
F.3d 1289, 1301 (2d Cir. 1994).

Clarkson Co. distributed Jenn-Air kitchen appliances for many
years. Jenn-Air employed what the parties have described as a "two-
step" distribution system, whereby individually owned and operated
distributors bought Jenn-Air products and resold them to retailers and
home builders. Maytag bought Jenn-Air in 1982. Thereafter, Maytag
maintained Jenn-Air's two-step distribution system even though
Maytag generally relied on a "one-step" distribution system, whereby
the manufacturer deals directly with retailers. From time to time,
however, Maytag considered ending the two-step distribution system
for Jenn-Air products so that Jenn-Air products would be handled in
the same way as other Maytag merchandise. Nevertheless, Maytag
and Jenn-Air personnel frequently told Jenn-Air distributors, includ-
ing Mr. Clarkson, that Maytag was committed to two-step distribution
with respect to Jenn-Air products, and that Maytag considered Jenn-
Air distributors to be an important part of its team.

A series of one-year contracts spelled out the relationship between
Clarkson Co. and Jenn-Air. The contracts were terminable by either
party upon sixty days notice. Before 1989 the Clarkson Co./Jenn-Air
relationship was mutually non-exclusive, with Clarkson Co. permitted
to sell other companies' products and Jenn-Air permitted to appoint
other distributors within Clarkson Co.'s territory. Over the years
Clarkson Co.'s territory steadily grew, and in 1987 Jenn-Air proposed
that it and Clarkson Co. enter into an exclusive relationship. Jenn-Air
proposed that it grant Clarkson Co. additional territory and agree not
to appoint any competing distributor within Clarkson Co.'s territory.
In exchange Clarkson Co. would be required to agree to carry only

                    3
Jenn-Air products. Clarkson Co. asked for a five-to-ten year commit-
ment from Jenn-Air, but Jenn-Air refused to enter into any contract
for a term longer than one year and the deal fell through. Clarkson
Co., however, continued to distribute Jenn-Air products under their
earlier non-exclusive arrangement, and Clarkson Co. and Jenn-Air
entered into another one-year non-exclusive contract in 1988.

In 1987 and 1988 Jenn-Air began to sell its products directly to the
nationally-known retailer, Sears, thereby introducing a partial one-
step distribution system. At a distributors' meeting on March 20,
1989, Jenn-Air told its distributors (including Mr. Clarkson), that
even though Jenn-Air independent distributors were an important part
of Jenn-Air's overall marketing strategy, sales to Sears would be han-
dled without any distributor involvement. The distributors were told
that Sears would be handled as a "direct house account," with prod-
ucts being delivered to Sears directly from Jenn-Air's factories and
warehouses in Indiana, rather than from local distributors' ware-
houses. In addition, distributors would have no responsibility to ser-
vice products sold through Sears.

One week later Clarkson Co. agreed to an "exclusive" arrangement
with Jenn-Air. Three annual contracts governing the period from
March 27, 1989, to May 12, 1992, contained language like the follow-
ing (taken from the 1991 contract):

         Distributor [Clarkson Co.] agrees to purchase for resale
         Jenn-Air brand products exclusively. Company [Jenn-Air]
         agrees to appoint Distributor as its exclusive Distributor in
         the area of marketing responsibility [described] and agrees
         that it shall appoint no other Distributor in such area. Com-
         pany shall sell to Distributor such Jenn-Air brand home
         appliances and accessories for the same, as Distributor will
         order and purchase, provided that the item ordered has been
         made available by Company for general sale to its other Dis-
         tributors and in the judgement [sic] of Company it is appro-
         priate to market it in the area herein described. . . . Company

                    4
          reserves the right to sell or service directly any or all of its
          products within the area of Distributor's sales
          responsibility.

(Emphasis supplied.)

On May 12, 1992, Clarkson Co. and Jenn-Air signed a new one-
year contract. With the new contract, their last, they ended their
exclusive arrangement and returned to their pre-1989 non-exclusive
relationship. At that time, Clarkson Co. began to sell General Electric
products.

Each annual contract, including the "exclusive" contracts, also con-
tained language like the following (taken from the 1992 non-
exclusive contract):

          This Agreement supersedes all previous agreements cover-
          ing this distributorship. There are no agreements, written or
          oral, as to the terms and conditions of the distributorship
          except those contained herein and it is expressly understood
          by [Clarkson Co.] that no subsequent agreement modifying
          or altering the terms thereof shall bind [Jenn-Air] unless in
          writing, duly signed by an officer or Director of Sales of
          [Jenn-Air] at Indianapolis. Indiana, U.S.A.

Between April and June 1992 Clarkson Co. ordered and received
a large amount of goods from Jenn-Air. At the time Clarkson Co. had
no ability to pay for them, and Mr. Clarkson had withdrawn an appli-
cation for a letter of credit from his bank and allowed his existing let-
ter of credit to expire. He used proceeds from the sales of the Jenn-
Air goods to buy General Electric merchandise. On June 15, 1992,
Mr. Clarkson announced that Jenn-Air should communicate with him
only through counsel. Two days later Clarkson Co. filed suit, alleging
that Jenn-Air falsely told its distributors that it was intending to main-
tain the two-step distribution system, even though Jenn-Air was plot-
ting the end of the system. On July 6, 1992, Jenn-Air notified
Clarkson Co. that it was invoking their contract's sixty-day termina-
tion provision. Jenn-Air announced the end of its two-step distribution
system on August 24, 1992.

                     5
II.

Clarkson Co.'s fraud claim is without merit because Clarkson Co.
got exactly what it bargained for: a series of one-year distributorship
contracts. Clarkson Co. continued to enter into a series of one-year
contracts even after Jenn-Air expressly refused to agree to a longer-
term commitment. Here, Jenn-Air officials said nothing that could
reasonably be construed as an intention to transform what is clearly
a series of one-year contracts into a long-term agreement. Regardless
of any general statements Jenn-Air officials may or may not have
made to Mr. Clarkson, when the smoke clears it is the negotiated,
written documents that must govern this business relationship.
Florentine Corp. v. PEDA I, Inc., 339 S.E.2d 112, 114 (S.C. 1985);
Woodward v. Todd, 240 S.E.2d 641, 643 (S.C. 1978); see also Call
Carl, Inc. v. BP Oil Corp., 554 F.2d 623, 630 & n.6 (4th Cir.) (apply-
ing Maryland law), cert. denied, 434 U.S. 923 (1977).

Jenn-Air did exactly what the written contract required it to do.
Jenn-Air maintained its two-step distribution system for the entire
time it and Clarkson Co. had a contractual relationship, and it did not
end the two-step system until after Clarkson Co. filed suit (at which
time Clarkson Co. was a non-exclusive distributor). Clarkson Co. and
Jenn-Air were sophisticated business parties dealing at arm's length,
and neither had any duty to disclose future business intentions to the
other. Cheney Bros., Inc. v. Batesville Casket Co., 47 F.3d 111, 114-
15 (4th Cir. 1995) (applying South Carolina law). The district court
correctly granted Jenn-Air judgment as a matter of law on Clarkson
Co.'s fraud claim.

III.

The district court also correctly granted Jenn-Air judgment as a
matter of law on Clarkson Co.'s claims for breach of contract.

The contracts provide for Indiana law to apply, and because the
contracts were for the sale of goods, the Indiana Uniform Commercial
Code governs. Moridge Mfg. Co. v. Butler, 451 N.E.2d 677, 680 (Ind.
Ct. App. 1983).

                    6
A.

Clarkson Co. claims that Jenn-Air breached its duty of good faith
and fair dealing. "Every contract or duty within[the Uniform Com-
mercial Code] imposes an obligation of good faith in its performance
or enforcement." Ind. Code § 26-1-1-203 (Ind. U.C.C. § 1-203). This
claim fails for the same reason that Clarkson Co.'s fraud claim fails.

The parties' agreements expressly provided that each contract
would extend for only one year and that either party could terminate
their relationship upon sixty days notice. The "duty of good faith can-
not override or modify explicit contractual terms." Riggs Nat'l Bank
of Washington, D.C. v. Linch, 36 F.3d 370, 373 (4th Cir. 1994) (inter-
preting federal Equal Credit Opportunity Act). Furthermore, we are
persuaded by the Seventh Circuit's opinion in Vaughn v. General
Foods Corp., 797 F.2d 1403, 1412-14 (7th Cir. 1986), cert. denied,
479 U.S. 1087 (1987), that Indiana courts would not find a breach of
the duty of good faith and fair dealing here. That case held that a
franchisor has no duty to reveal its plans to terminate a franchisee.
Finally, as we stressed earlier, the 1992 non-exclusive contract was
not terminated until after Clarkson Co. filed suit. Jenn-Air did not act
in bad faith.

B.

Clarkson Co. next argues that Jenn-Air breached the exclusive con-
tracts by appointing Sears to be a distributor in territory that by the
terms of the written contracts was to have been exclusive to Clarkson
Co.

We begin by noting that the contract reserved to Jenn-Air "the right
to sell or service directly any or all of its products within the area of
[Clarkson Co.'s] sales responsibility." The question, then, is whether
Jenn-Air's sales to Sears fall within this exception to the exclusivity
agreement. We believe they do, and that the Sears/Jenn-Air relation-
ship is best understood as a direct service and sales relationship,
rather than as a distributorship relationship.

Clarkson Co. entered into the exclusive contract after Jenn-Air
announced how Sears sales would be handled. By knowing of the

                     7
Sears/Jenn-Air relationship, by knowing the nature of that relation-
ship, by knowing that the relationship would continue, and by renew-
ing its own contract with Jenn-Air twice, Clarkson Co. acquiesced in
letting Jenn-Air sell directly to Sears. See Ind. U.C.C. § 2-208(1)
("course of performance accepted or acquiesced in without objection
shall be relevant to determine the meaning of the agreement"); Ind.
U.C.C. § 2-208(3) ("course of performance shall be relevant to show
a waiver or modification of any term inconsistent with such course of
performance"); see also Moody v. McLellan, 367 S.E.2d 449, 451
(S.C. Ct. App. 1988) ("if at the time the contract was entered one
party understood the agreement in a particular sense, and the other
party knew it to be so understood, then the undertaking is to be taken
in that sense, if it is compatible with the language used"); cf. Ind.
U.C.C. § 2-607(3)(a); Courtesy Ents., Inc. v. Richards Labs., 457
N.E.2d 572, 579 (Ind. Ct. App. 1983) ("Ordering additional goods
without indicating dissatisfaction with the product is unreasonable
conduct for one seeking to assert a breach of warranties of quality.").

Even if the Sears/Jenn-Air relationship violated Clarkson's right to
an exclusive distributorship, Clarkson waived any right it may have
had to challenge Jenn-Air's allegedly wrongful conduct. If the non-
breaching "party after the discovery of the breach . . . reaffirms the
original contract without giving any notice of his intention to rely on
its exact terms, he has waived his right to recover for such failure to
perform." White v. First Fed. Sav. & Loan Ass'n of Atlanta, 280
S.E.2d 398, 400 (Ga. Ct. App. 1981). Because Clarkson renewed its
"exclusive" contract with Jenn-Air twice, Jenn-Air's sales to Sears
were not improper.*

IV.

Clarkson Co.'s final claim is under SCUTPA, which prohibits
"[u]nfair methods of competition and unfair or deceptive acts or prac-
tices in the conduct of any trade or commerce." S.C. Code § 39-5-
20(a). This claim was disposed of on summary judgment. We agree
_________________________________________________________________
*We have fully considered Clarkson Co.'s remaining breach of con-
tract claims, and we conclude that they too are without merit. The evi-
dence Clarkson Co. presented at trial did not prove any breach of
contract.

                    8
with the district court that Clarkson Co.'s SCUTPA claim is barred
for lack of evidence of harm to any public interest.

SCUTPA is primarily intended "to control and eliminate `the large
scale use of unfair and deceptive trade practices within the State of
South Carolina.'" Noack Ents., Inc. v. Country Corner Interiors of
Hilton Head Island, Inc., 351 S.E.2d 347, 349 (S.C. Ct. App. 1986)
(quoting Note, Consumer Protection and the Proposed "South Caro-
lina Unfair Trade Practices Act," 22 S.C. L. Rev. 767, 787 (1970)).
Thus, a plaintiff may not recover under SCUTPA unless the defen-
dant's allegedly wrongful conduct implicates some public interest. Id.
at 350.

          While every private dispute doubtless has remote public
          ramifications, these cannot be held to satisfy the element of
          injury to the public interest which is a prerequisite to any
          recovery under [SCUTPA]. Were the rule otherwise, every
          ordinary commercial dispute would become a candidate for
          the extraordinary remedies provided by the Act.

Omni Outdoor Advertising, Inc. v. Columbia Outdoor Advertising,
Inc., 974 F.2d 502, 507-08 (4th Cir. 1992).

Here, Clarkson Co. has alleged no harm to the citizenry of South
Carolina at large. Its claim relates only to its private business relation-
ship with Jenn-Air. Clarkson Co. claims to be wearing the mantle of
other distributors harmed by the termination of the two-step system,
but there is no evidence that any of those distributors are South Caro-
lina citizens. Nor did Clarkson Co. come forward with any evidence
that elimination of the two-step system led to higher prices for kitchen
appliances within South Carolina. "South Carolina courts have consis-
tently rejected speculative claims of adverse public impact and
required evidentiary proof of such effects." Omni Outdoor
Advertising, 974 F.2d at 507. The district court noted, and we are
inclined to agree, that if elimination of the two-step system did any-
thing, it reduced prices and improved product availability. Clarkson
Co. did not meet its burden of coming forward with sufficient evi-
dence of adverse public impact.

                     9
V.

The district court is affirmed.

AFFIRMED

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