Werner v. Xerox Corp.

Facts

The Plaintiffs, John a Werner ("Mr. Werner") and W&D Services Inc. (the "Plaintiffs"), had a business relationship with the Defendant, Xerox Corp. (the "Defendant"). Mr. Werner was a consulting engineer with vast experience in the design and manufacture of special metal working machinery. The Defendant was looking for a better way to produce metal rollers, so the Defendant's agent Frank Wolf ("Mr. Wolf"), approached the Plaintiffs and requested that they try to develop a machine to manufacture the necessary rollers. The Plaintiffs developed a machine that could produce the rollers, but not to the Defendant's exact specifications. Nonetheless, in November 1978, the Defendant issued a purchase order for one of the Plaintiffs' machines. In both March 1979 and November 1979, the Defendant ordered one more machine. The Plaintiffs delivered all three machines to the Defendant for installation. The district court found that Mr. Wolf offered to make the Plaintiffs the principal offload producer of the Defendant's roller. This would allow the Defendant to sell small quantities of rollers without revamping its in-house machines. • The district court found that Mr. Wolf told Mr. Werner that "if they were 'smart' they would build a machine for themselves and run off parts for Xerox". Additionally, Mr. Wolf also said, in November 1978, after touring a facility Mr. Werner leased with Don and Gene Verhein to produce the parts "producing parts would be a 'nice little business' to get into, and one that would 'really pay.' " However, Mr. Werner testified that Mr. Wolf's manager visited the same facility in July 1979, and said that the Plaintiffs would never produce parts there. This comment took Mr. Werner by surprise. Mr. Wolf then reassured Mr. Werner and said his manager did not know what he was talking about and that he would still be an off load supplier. The Defendant eventually terminated the parties' relationship and opened its own facility for offload production. The Plaintiffs sued the Defendant for breach of con¬tract, promis¬sory estoppel, and deceit. The trial court awarded the Plaintiffs damages on the theory of promissory es¬toppel, but only up until the time Mr. Wolf's supervisor made his comments.