USCA1 Opinion

[NOT FOR PUBLICATION]

United States Court of Appeals

For the First Circuit
____________________

No. 96-1888

GRAPHICS SUPPLY, INC.,

Plaintiff, Appellant,

v.

POLYCHROME CORPORATION, ET AL.,

Defendants, Appellees.
____________________

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF PUERTO RICO

[Hon. Juan M. Perez-Gimenez, U.S. District Judge]

___________________
____________________

Before

Torruella, Chief Judge,

___________
Coffin, Senior Circuit Judge,
____________________
and Stahl, Circuit Judge.
_____________

____________________

Francisco M. Troncoso for appellant.

_____________________
Carlos M. Sanchez La Costa with whom
__________________________
was on brief for appellees.

____________________

June 23, 1997

___________________

Pedro J. Santa-Sanchez
______________________

COFFIN,

nature

of

Senior Circuit Judge.

_____________________

the

relationship

between

This

two

appeal concerns

corporate

the

entities.

Appellant

Graphics

Supply

contends

principal/dealer relationship existed

Corporation,

which

was

impaired

an

exclusive

between it and

Polychrome

by

that

Polychrome's

allegedly in violation of Puerto Rico's Dealer Act.

court granted summary judgment for Polychrome.

actions,

The district

We affirm.

FACTS
_____

The two parties in the instant appeal are a manufacturer of

lithographic supplies, Polychrome Corporation ("Polychrome"), and

a Puerto Rico dealer of these supplies, Graphics Supply, Inc.

("Graphics").

Graphics contends that an exclusive dealer

relationship existed between the two entities, and that

Polychrome took a series of actions that impaired the

relationship, thereby violating Puerto Rico's Law 75, "the

Dealer's Act,"

10 L.R.P.A. 278.

We review the pertinent facts

in the light most favorable to Graphics.

See Grenier v. Cyanamid

___ _______
________

Plastics, Inc., 70 F.3d 667, 671 (1st Cir. 1995).

______________

Graphics has served as a dealer for Polychrome in the Puerto

Rico market since 1975.

On January 1, 1989, a new Dealer

Agreement was executed between the two (the "Dealer Agreement"),

defining their arrangement as a standard dealer relationship.

While Graphics initially protested signing this new Agreement,

contending that it wished to continue the exclusive relationship

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it maintained existed between the two, Graphics eventually

capitulated, at least partially in response to a letter from

Polychrome's vice president for legal affairs, Barbara Cane,

indicating that the two companies had never had an exclusive

relationship and that Graphics' failure to sign the standard

dealership agreement might result in a termination of the

relationship altogether.1

Graphics asserted that it was assured

by individuals at Polychrome that an exclusive relationship would

continue to exist, the new Agreement notwithstanding; Polychrome

disagrees with this assertion.

However, as of April 26, 1996,

Graphics concedes that this is a non-exclusive agreement, and

does not contend there were private assurances.

The dealings between the two companies apparently

deteriorated over the following years, with Graphics contending

that Polychrome improperly approached clients directly, and that

Polychrome failed to keep Graphics adequately supplied, leading

to losses by Graphics.

Graphics eventually filed suit against

Polychrome, alleging violation of the Puerto Rico Dealer's Act,

breach of contract, and tortious interference with the

____________________

Graphics cites

as support

for its contention

exclusive relationship had previously

that an

existed a 1980 letter from

James M. Graves, executive vice president of Polychrome, to Peter

Javier, president of Graphics.
substance of a
stated

meeting between

that Polychrome

distributors in

would

This letter (which confirmed

Graves and Javier
not

actively

Puerto Rico, and that

pursue

that the

York)

additional

Polychrome could continue

to sell its products to another Puerto Rico company.

however, state

in New

the

relationship between the

It did not,
two would

exclusive.

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contractual relationship between Graphics and two of its

be

employees.

The district court initially granted Polychrome's Motion for

Summary Judgment on four of the six counts brought by Graphics,2

but refused to grant summary judgment on the remaining two

counts, stating that there was a genuine issue of material fact

on Count IV, and that Count VI could not be dismissed where Count

IV survived.3

However, the district court, on Polychrome's

motion for reconsideration, with little explanation for its

actions, subsequently granted summary judgment on these counts as

well.

This appeal by Graphics followed.

DISCUSSION
__________

1.

Standard of Review.
__________________

Our review of the district court's grant of summary judgment

is de novo.
__ ____

See Hachikian v. FDIC, 96 F.3d 502, 504 (1st Cir.

___ _________
____

____________________

These four counts

interference

by

relationship

with

interference by
through a series
Polychrome by

Polychrome
two

Law

75 by

with

Count I: tortious

Graphics'

contractual

of

its employees;

Count

Polychrome

with Graphics'

business

of actions; Count III:

selling its

customers in Puerto Rico;

of

were as follows:

negotiating

tortious

operations

violation of Law 75

products directly
and Count V:

II:

to several

violation

with potential

by

of its

by Polychrome

distributors

in the

Dominican Republic.

Count

contract
Count

IV

alleged

by purposely

VI alleged

failing

that
to

that Polychrome

submitted by Graphics to Polychrome.

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Polychrome

breached

supply ordered
failed

to honor

their

merchandise;

debit notes

1996).

We may affirm on the grounds cited by the district court,

or on any independently sufficient ground.

See Garside v. Osco

___ _______
____

Drugs, Inc., 895 F.2d 46, 49 (1st Cir. 1990).

___________

Graphics appeals three issues:

first, the district court's

determination that a non-exclusive relationship existed between

Polychrome and Graphics;4 second, the grant of summary judgment

on Count IV; and finally, the grant of summary judgment on Count

VI.

We address each in turn.

2.

Nature of the Dealer Agreement.

______________________________

As noted above, Graphics contends that the district court

erred in concluding that the parties did not have an exclusive

relationship.

Our starting point in reviewing this determination

must be the language of the Dealer Agreement between Graphics and

Polychrome, as it is well established that the interpretation of

such a contract under Puerto Rico law is limited to the terms of

the Agreement, barring ambiguities in those terms or apparent

inconsistency with the contracting parties' intent.

See Borschow
___ ________

Hosp. & Medical v. Cesar Castillo, 96 F.3d 10, 15 (1st Cir.

_______________

______________

1996); see also Vulcan Tools of Puerto Rico v. Makita USA, Inc.,
___ ____ ___________________________
________________

23 F.3d 564, 567 (1st Cir. 1994); Marina Ind. Inc. v. Brown
________________
_____

____________________

4
V;

Graphics

Polychrome,

on

casts this issue as an appeal on Counts III &

the

other

relating to Counts II and III.

hand,

addresses

this issue

as

The district court, for its part,

primarily addressed this issue in its discussion of Count III.

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Boveri Corp., 114 P.R. Offic. Trans. 64, 72 (1983).

____________

Indeed

Article 1233 of the Puerto Rico Civil Code provides:

If the terms of a contract are clear and leave no

doubt as to the intentions of the contracting
parties, the literal sense of its stipulations
shall be observed.

If the words should appear

contrary to the evident intention of the

contracting parties, the intention shall prevail.
31 L.R.P.A.

3471 (1991).

The 1989 Dealer Agreement between Graphics and Polychrome states

in section 1, "Purpose of Agreement":

The purpose of this Agreement is to set forth the

relationship of Polychrome and dealer and to
reduce to writing their entire Agreement.
Polychrome agrees to sell to dealer, on a
____
non-exclusive basis, such of the Polychrome
___________________
Products of the Printing Division (Polychrome

Products) that from time to time Polychrome may

elect to make available to the Dealer (emphasis
added).

The language of the Agreement unambiguously states that the

relationship established is a non-exclusive one.

Furthermore,

the Agreement stipulates that it constitutes the full Agreement

between the parties.

See Borschow, 96 F.3d at 16 (integration

___ ________

clause nullifies any other oral or written understandings reached

between the two parties).5

In addition to these terms, the

____________________

We

note that

the conduct

egregious than that alleged here.

whether Polychrome ever made
exclusive

In Borschow,
________

explicitly assured the dealer

Borschow was
________

much more

Here, there is a dispute as to

representations to Graphics that an

relationship between

contemplated.

in

the two
the

was either

intended or

manufacturer's representative

that an exclusive relationship was

intended,

notwithstanding

contract between

the

the

two, and

sent the dealer a document to

Medical v. Cesar Castillo, 96
_______
_______________
However,

even

in that

non-exclusive

language

the representative
that effect.

the

the

subsequently

See Borschow Hosp. &

___ ________________

F.3d 10, 12-13

situation,

in

court

(1st Cir.
adhered

1996).
to

the

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Agreement contains other terms indicating that a non-exclusive

relationship is contemplated.

For example, it explicitly

reserves to Polychrome the right to sell directly to any class of

customers and to appoint other dealers.

Graphics offers several theories as to why we should

disregard the Dealer Agreement's clear terms and find instead

that an exclusive relationship existed: the company alleges that

an earlier, 1980 agreement established an exclusive arrangement;

it claims that the new Agreement was signed under duress; and

most importantly, it alleges that the non-exclusive agreement was

either altered or replaced by a new one reflected in a January 1,

1992 letter from a Polychrome official to Graphics.

We note at the outset that much of the information upon

which Graphics hangs its hat is patently inadmissible since the

language of the Agreement is clear.

See Borschow, 96 F.3d at

___ ________

15-16 (Puerto Rico Civil Code and parol evidence rule both

preclude reference to extrinsic evidence where contract terms are

clear).

It is therefore unnecessary to dwell on these

allegations; however, we choose to dispose of them briefly.6

The January 1, 1992 letter, which Graphics suggests is

either a novation or a substitution of an exclusive Agreement for

the non-exclusive one created by the Dealer Agreement, does not

____________________

language of the contract and found that the relationship

the two was a non-exclusive one.

The

parties'

intent

between

See id.
___ __

is

not

an issue

evidence has

been presented suggesting that

an exclusive

relationship other than

serving statements to this effect.

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here,

as

no

Polychrome intended

Graphics' obviously

self-

support Graphics' position.7

The letter nowhere says that it

establishes an exclusive relationship.

Graphics contends that,

because the letter sets out the terms of compensation Graphics

was to receive for accounts pursued directly by Polychrome, it

establishes that an exclusive relationship already existed

between the two.

In fact, the letter merely specifies

compensation rates for services to be rendered by Graphics to

accounts pursued directly by Polychrome, in exact accordance with

the terms stipulated in the Dealer Agreement,

7.8

Under Law 75, where the conduct of the parties indicates an

intent to continue operating according to the terms of an

Agreement, this Agreement remains in continuing force between

____________________

Paragraph six of the letter states as follows:

6.

Graphics Supply and Polychrome will prepare a

joint target account list* [sic] (film and plates)

____________________
of accounts
In

$50,000 or larger

situations

acceptable
pursue

to

in annual

where competitive
Graphics

the business

volume.

prices

are not

Supply, Polychrome

on

a direct

basis.

will
Where

Polychrome direct business is obtained, Polychrome

will compensate Graphics
account
equipment

volume.

Supply based upon annual

This

maintenance

compensation

and

emergency

is

for

inventory

fulfillment services (emphasis in original).

Section 7 of the Dealer Agreement states as follows:

It is agreed that the execution of this Agreement shall

not limit
any

in anyway

Polychrome

[sic] Polychrome's right

Products

directly

to

any

to sell
class

of

customers,

in any

geographical

location.

Polychrome, at its discretion, may

Dealer for

services performed

However,

elect to compensate

by Dealer for

accounts

sold directly to Polychrome.

The

letter states:

"This compensation

is for

equipment

maintenance and emergency inventory fulfillment services."

-8-

them, despite any expiration date contained in the Agreement.9

See Gemco Latinoamerica, Inc. v. Seiko Time Corp., 623 F. Supp.

___ _________________________
________________

912, 918 (D.P.R. 1985).

We discern nothing in the record

indicating that the parties intended anything other than to

continue the relationship as set out in the Dealer Agreement.

Graphics contends that the 1992 letter reveals a new exclusive

relationship, formed because Polychrome wished Graphics to

transfer to it business that Graphics handled for a competitor;

in return for doing so, Graphics alleges that Polychrome agreed

to reappoint Graphics as its sole distributor within Puerto Rico.

In order for an Agreement to be novated, either the new agreement

must expressly declare that it replaces the old agreement, or the

old and the new agreements must be incompatible in all points.

See id. at 919 (citing Article 1158 of the Civil Code of Puerto
___ __

Rico, 31 L.R.P.A.

3242).

However, as noted above, the letter

mirrors the terms of the continuing non-exclusive Dealer

Agreement.

Additionally, it defies credulity to view the letter

as a replacement for the five page extremely detailed non-

exclusive Agreement of January 1, 1989, impliedly -- but without

explicitly saying so -- instituting an exclusive dealership.

Furthermore, it is logically impossible for Graphics to be

"reappointed" to a status which the prior Agreement did not

____________________

We

note that

this

also counters

Graphics' assertion

that the non-exclusive Dealer Agreement had expired.

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confer.

The letter is therefore neither a novation nor the

substitution of an exclusive relationship for the existing one.10

The district court summarily dismissed the duress claim,

stating that Graphics had failed to provide sufficient evidence

to support it.

Our review of the record supports this

conclusion, as the only evidence presented was Javier's statement

to this effect in his Declaration.

As for the purported 1980

Agreement (as reflected in the 1980 Graves letter, see supra note
___ _____

1), even were this to be seen as an exclusive relationship, which

we doubt, it is clearly superseded by the 1989 non-exclusive

Dealer Agreement.

3. Summary Judgment on Count IV.

____________________________

Count IV alleged that Polychrome breached the Dealer

Agreement by purposefully failing to supply merchandise ordered

by Graphics.

Law 75 specifically provides that "when the

principal or grantor unjustifiably refuses or fails to fill the

order for merchandise sent to him by the dealer in reasonable

amounts and within a reasonable time," this shall be presumed to

____________________

it

10

We

was

not

also note that the novation theory may be waived as

presented

below.

See
___

Teamsters, Chauffeurs,
_______________________

Warehousemen & Helpers Union, Local No. 59 v.

___________________________________________

Superline Transp.
_________________

Co., 953 F.3d 17, 21 (1st Cir. 1992).

___

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have impaired the relationship, in contravention of the law.

10

L.R.P.A.

278a-1(b)(3) (1991).11

The district court, in its April 1, 1996 Opinion and Order,

originally denied summary judgment on Count IV, saying there was

a genuine issue of material fact regarding Graphics' allegation

that Polychrome had breached the Dealer Agreement by purposely

failing to supply ordered merchandise.

However, in its April 25,

1996 Order, the court stated only that it found that Polychrome

was entitled to judgment as a matter of law on all counts

(including Count IV) on the ground that Graphics had not provided

any evidence suggesting the existence of any issues of material

fact.

The court therefore issued an order on that same day

dismissing the complaint, and later denied Graphics' motion for

reconsideration.

We note again that in the summary judgment context, the

party seeking to avoid summary disposition must bring forth

specific, material facts showing a genuine issue for trial.

See
___

Garside, 895 F.2d at 48 (a fact is material if it could

_______

potentially affect the suit's outcome); see also Nat'l

___ ____ _____

Amusements, Inc. v. Town of Dedham, 43 F.3d 731, 735 (1st Cir.

________________
______________

1995) (an issue concerning such a fact is genuine if a reasonable

factfinder, examining all the evidence and drawing all reasonable

____________________

11

Law

agreements;

75
the

agreement between

applies
central

to both
focus

is

two parties have

non-exclusive
whether

the

been breached.

and exclusive
terms
See
___

of

an

Vulcan
______

Tools v. Makita USA, Inc., 23 F.3d 564, 569 (1st Cir. 1994).
_____
________________

-11-

inferences helpful to the party resisting summary judgment could

resolve the dispute in this party's favor).

Graphics' complaint listed two items of support for its

allegation of unfilled orders:

first, that Polychrome failed to

supply Graphics with lithographic film for more than nine months

(para 36); and second, that Polychrome failed to supply Graphics

with all the merchandise it had ordered, including lithographic

plates, and to supply Graphics on time with ordered merchandise.

These failures, Graphics maintains, establish that Polychrome

intentionally impaired the relationship.

Graphics' president,

Peter Javier, notes in his Declaration several occasions on which

orders were shipped via air freight rather than via the normal

methods; he maintains this expedited shipping was utilized by

Polychrome because it was not filling orders in a timely manner.

Polychrome counters by referring to a 1994 sworn statement

(the Colon declaration) indicating that the delays Graphics

experienced were due to a number of factors, none of which was

motivated by an intent to not fully supply Graphics.

These

included problems arising from special pricing accorded to

Graphics (which slowed the approval process), and lack of

inventory available for shipment due to the shutdown and

renovation of one of Polychrome's plants.

Indeed, Polychrome

points to the air shipments as evidence of its attempt to keep

Graphics as fully supplied as possible in the circumstances.

Graphics makes no effort to refute the detailed explanations

in the Colon declaration.

We are left with no evidence that the

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alleged delays were unjustifiable.

Moreover, many of the

documents submitted by the parties that bear on this issue and

might elucidate it are in Spanish, without English

translations.12

Where the existing record is inconclusive, it is

the appellant who must bear the brunt of the insufficient record

on appeal.

See Donovan v. Ritchie, 68 F.3d 14, 17 (1st Cir.

___ _______
_______

1995); see also Real v. Hogan, 828 F.2d 58, 60 (1st Cir. 1987).
___ ____ ____
_____

We are therefore compelled to affirm the district court's

dismissal of this claim, as without further assistance, we are

unable to discern support for Graphics' position in the record.

4. Count VI: Jurisdictional Minimum.

_________________________________

Graphics' original Count VI was a claim for debit notes

allegedly due in the amount of $9,500 (see Para 41 of Amended

___

Complaint).

On appeal, Graphics maintains that the allegation

contained in Count VI was that Polychrome refused to honor debit

notes and intentionally and maliciously withheld sums of money

due to Graphics, specifically $5,522.46 in commissions for

services provided to accounts to which Polychrome had sold

directly.13

However, there is no mention in the original Count

____________________

12

Furthermore,

the

district

court

supplied

minimal

reasoning for its volte face on this issue.

13
differ
Graphics

This amount is undisputed by the parties, although they

as to when payment
alleges that

whereas Polychrome says

for this amount

the check

was issued

it was paid

was actually issued.

on March

3, 1995,

on December 19, 1994.

The

photocopy of the check contained in the record bears the date "03
03 95."

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VI of allegedly withheld commissions.

We have repeatedly noted

that, absent extraordinary circumstances, a legal theory not

raised squarely in the lower court cannot be broached for the

first time on appeal.

See Superline, 953 F.3d at 21.

___ _________

However,

whether this claim is seen as for $9,500 in debit notes or

$5,522.46 in withheld commissions, the amount falls below the

jurisdictional minimum, and we therefore affirm its dismissal on

this ground.

Affirmed.
________

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