Segal Wholesale, Inc. v. United States Drug Service

United Drug Service (UDS) (plaintiff), a convenience-store wholesaler, entered into an agreement with Segal Wholesale, Inc. (Segal) (defendant), a tobacco wholesaler, for UDS to sell goods to Segal. The parties did not dispute that they agreed on a price, but they disputed the details of the agreement. Segal claimed that it agreed to pay UDS two cents below the competitor’s best price. UDS claimed that this price only applied to the initial shipment of goods. Nevertheless, the parties did business for two years with Segal’s representatives placing weekly orders that UDS would process and deliver, and Segal would pay the higher price. When Segal got a better offer from another tobacco wholesaler, Segal stopped doing business with UDS. UDS filed suit against Segal for breach of contract, alleging that Segal had failed to pay for the final shipment. Segal counterclaimed, alleging that UDS had overcharged it for the goods in breach of an oral agreement between the parties. At trial, UDS presented evidence that Segal had not rendered payment on the final shipment and a page from a sales invoice showing in writing a memorialization of the agreement that detailed the prices UDS charged. Segal did not refute this. Instead, Segal put on evidence to show that at the parties’ initial meeting, they agreed to the lower sale price and that UDS deviated from that agreement by overcharging Segal for two years. The jury returned a verdict for UDS, awarding it the amount due for the final shipment plus attorney’s fees and interest, but it deadlocked on Segal’s counterclaim. The trial court eventually dismissed Segal’s counterclaim on statute-of-frauds grounds. Segal appealed and argued that its claim was not barred by the statute of frauds. UDS argued on appeal that Segal’s claim was legally barred by the statute of frauds and the parol-evidence rule.