Exclusion of Non-Exclusivity Clause Supports Exclusive Contractual Relationship

In a recent unpublished decision from the Ninth Circuit Court of Appeals (Global BTG, LLC v. National Air Cargo, Inc., 2015 U.S. Dist. LEXIS 70386), the Court affirmed a jury verdict finding an exclusive contractual relationship in the absence of any express exclusivity contractual provision.  Although lacking any express exclusivity, the Court found the extrinsic evidence of intentionally omitting a non-exclusivity provision, the type of business relationship, and industry norms sufficient to support the verdict.

In July 2010, the parties entered into a Letter of Intent (LOI) for financing several commercial airplanes.  Less than a year later, Global brought suit for breach of the LOI.  The jury found in favor of Global and awarded $8 million in damages.

On appeal, National sought review of partial summary judgment, the denial of judgment as a matter of law, and the denial of a motion for a new trial, among other things.  National’s main argument on appeal was that the facts did not support a finding of exclusivity.  National argued that the lack of an exclusivity provision – or silence as to the matter – could not amount to an exclusive contractual relationship.  The Court disagreed.  Despite the lack of an exclusivity provision, the language of the LOI created an exclusive relationship.  The LOI was for the purchase, lease and finance of eight specific aircraft.  That relationship between two parties, for the specific goods identified, could only have been exclusive.

Providing more weight to Global’s argument was the intentionally omission a non-exclusive provision during the parties’ negotiations.  Global presented this fact to the jury, along with the fact that a non-exclusive relationship was impractical to its business, and other industry norms.   Because the jury could have reasonably found an exclusive relationship, the Court affirmed the trial court’s ruling on summary judgment and refused to reverse the jury verdict or grant a new trial.