Eber-NDC, LLC v Star Indus., Inc.

[*1] Eber-NDC, LLC v Star Indus., Inc. 2006 NY Slip Op 51948(U) [13 Misc 3d 1222(A)] Decided on August 8, 2006 Supreme Court, Monroe County Fisher, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. As corrected in part through October 27, 2006; it will not be published in the printed Official Reports.

Decided on August 8, 2006
Supreme Court, Monroe County

Eber-NDC, LLC, Plaintiff, .

against

Star Industries, Inc., Defendant. STAR INDUSTRIES, INC. and BLACK PRINCE DISTILLERY, INC., Plaintiffs, EBER-NDC, LLC, Defendant.



Star Industries, Inc. and Black Prince Distillery, Inc., Plaintiffs,

against

Eber-NDC, LLC, Defendant.



2005/07137

Kenneth R. Fisher, J.

This is a motion for summary judgment dismissing the complaint, the first cause of action for breach of an oral contract on the ground of the Statute of Frauds, and the rest on the merits. Eber's contention, drawn from Anostario v. Vincinanzo, 59 NY2d 662 (1983), that part performance takes the case out of the Statute of Frauds was authoritatively laid to rest in Messner Vetore Bergor McNamee Schmetterer EURO RSCG, Inc., 93 NY2d 229, 234 n.6 (1999)(Anostario was "wholly grounded upon General Obligations Law §5-703," and "we have not in fact adopted th[e] proposition" that there is " a parallel judicially-created part performance exception to [GOL] §5-701'")(quoting id., 150 F.3d 194, 195 n.1 (2d Cir.)(certifying question)). No one suggests that GOL §5-703 is applicable here. Inasmuch as §5-701(a)(1) governs this case, Eber's attempted invocation of a part performance exception is without merit. Belotz v. Jefferies & Co., Inc., 213 F.3d 625, 2000 WL 665564 (2d Cir. 2000)(table)("New York Court of Appeals has firmly stated that there is no such exception"); Stephen Pevner, Inc. v. Ensler, 309 [*2]AD2d 722 (1st Dept. 2003); Valentino v. Davis, 270 AD2d 635, 637-38 (3d Dept. 2000).

Accordingly, the motion for summary judgment dismissing the first cause of action is granted (See discussion below rejecting Eber-NDC's argument that defendant should be estopped from asserting the statue of frauds).

That leaves Eber's alternative theories of promissory estoppel and unjust enrichment. I have already opined that the Court of Appeals has yet to recognize a cause of action based on promissory estoppel as set forth in the Restatement (Second) of Contracts §90, see LAHR Constr. Corp. v. J. Kozel & Sons, 168 Misc 2d 759, 762-63 & n.2 (Sup. Ct. Monroe Co. 1996), and that it is not for a trial court "to first declare the applicability of a new legal theory to a class of cases," id. 168 Misc 2d at 765. But, as the parties' briefs on this motion reveal, there are a wealth of appellate level cases which presuppose that such a cause of action is available in this state. Cyberchron Corporation v. Calldata Systems Dev., Inc., 47 F.3d 39, 44-46 (2d Cir. 1995); Clifford R. Gray, Inc. v. LeChase Construction Services, LLC, __ AD3d __, 2006 WL 2013913 (3d Dept. July 20, 2006)(at p.*3); Bunkoff General Contractors, Inc. v. Dunham Electric, Inc., 300 AD2d 976, 977-78 (3d Dept. 2002); Ripple's of Clearview, Inc. v. Lett avre Associates, 88 AD2d 120, 122-23 (2d Dept. 1982); Swerdloff v. Mobil Oil Corp., 74 AD2d 258, 261 & n.* (2d Dept. 1980). Star does not on this motion advance a contention that a promissory estoppel claim is not recognized in this state. Accordingly, the following assumes, without deciding, the availability of a promissory estoppel claim of the Restatement (Second) of Contracts §90 variety.

In support of its motion, Star shows that the claimed promise, i.e., that Star assured Eber that it would not terminate Eber-NDC's Metro NY distributorship before Eber "was able to recoup its [$3 million warehouse] investment in developing a network for marketing and distributing Star's brands in Metro New York," Complaint ¶25, was not made or heard in so many words by anyone deposed so far. Eber-NDC relies on Lester Eber's deposition testimony in which he was asked whether ¶25 of the complaint was "a true statement," to which Eber replied, "Yes." Lester Eber Transcript at 172, lines 13-22. See Eber-NDC's Memorandum of Law in Opposition, at 10. But that conclusory testimony was not the end of the matter. Immediately thereafter, the following exchange occurred:

Q. Now who from Star promised Eber this?

A.It would have to be Martin Silver or Phillis Valenti.

Q.And what exactly did Martin Silver or Phillis Valenti say that causes you to make this allegation? [*3]

A.That they appreciated the substantial investment we were making and that it would pay off in the kind of profits that we would make from their line.

Q.And when did one or either of them say that to you?

A.I don't remember. It was on-going during our discussions.

Q.But you heard it?

A.Yes.

Q.From one or both of them?

A.I can't remember which or both, yes.

Lester Eber Transcript, at 172-73. Eber-NDC also relies on the deposition testimony of John Ryan in which he stated the following:

Q.Who told you that if Eber did these things [i.e., "made investments in these various things, expansion of the sales force, upgrading of the warehouse, securing additional office space,"] Star would give Eber exclusive distribution rights for a period of time that would allow Eber to recover it's investment? Who told you that?

A.I don't know if anybody told it to me in those exact words, but it was believed that if we did these improvements and we did these upgrades that we would, I think something along the lines enter into a long, healthy relationship with them.

John Ryan Transcript at 163 (bracketed material quoted from pp. 161-62). Ryan, however, acknowledged that he didn't hear anyone from Star make this promise, but that he was told of it by Lester Eber. Id. at 164-65. Eber-NDC does not suggest that there was anything more to the "promise" than what is contained in the quoted deposition excerpts, and it is Eber-NDC which would presumably have knowledge of Star's putative promise and be expected to bring it out when laying bare its proof on this motion. Accordingly, the analysis will proceed without regard to Eber-NDC's concern that it be given more time for discovery on the issue. Forest Medical Professional Condominium v. Taburzi, 214 AD2d 962, 963 (4th Dept. 1995)("fail[ing] to show that facts pertaining to that issue are within the exclusive knowledge of defendants"). [*4]

Eber-NDC invokes a theory of promissory estoppel in two aspects, first in its third cause of action contained in its own complaint, and second in an effort to preclude or estop Star from interposing the Statute of Frauds defense to Eber-NDC's first cause of action for breach of an oral contract. As stated in Swerdloff, the former theory comes under the general rubric of Restatement (Second) of Contracts §90, and the second argument is brought under the rubric of the Restatement (Second) of Contracts §139. Unlike in the §90 context, the Court of Appeals has explicitly recognized the permissible use of promissory estoppel in the service of avoiding the Statute of Frauds as contemplated by §139. D & N Boening, Inc. v. Kirsch Beverages, Inc., 63 NY2d 449, 458 (1984)(considering on the merits and rejecting such a promissory estoppel argument under §139 of the Restatement (Second) of Contracts), aff'ing, 99 AD2d 522, 523-24 (2d Dept. 1984); American Bartenders School, Inc. v. 105 Madision Company, 59 NY2d 716, 718 (1983); Jonestown Place Corp. v. 153 West 33rd Street Corp., 53 NY2d 847, 849 (1981). In these cases, not Jonestown Place Corp. (see discussion, below), and especially American Bartender's School, Inc. v. 105 Madision Company, supra, the question arose whether "[t]he circumstances set forth by plaintiff . . . rise to a level of unconscionability warranting the application of equitable estoppel." Id., 59 NY2d at 718.[FN1] See also, Melwani v. Jain, 281 AD2d 276, 277 (1st Dept. 2001); James v. Western New York Computing Systems, Inc., 273 AD2d 853, 855 (4th Dept. 2000); Tutak v. Tutak, 123 AD2d 758, 760 (2d Dept. 1986); Swerdloff, 74 AD2d at 263. The question of unconscionability does not arise in the §90 context, and therefore is not an element of a §90 variety promissory estoppel claim. Clifford R. Gray, Inc. v. LeChase Construction Services, LLC, __ AD3d at __, 2006 WL 2013913, at *3 (3d Dept. July 20, 2006); Bunkoff General Contractors, Inc. v. Dunham Electric, Inc., 300 AD2d at 978 (articulating the elements of a §90 type promissory estoppel claim without reference to any element of unconscionability); Ripple's of Clearview, Inc. v. LeHavre Associates, 88 AD2d at 122-23 (same); Swerdloff 74 AD2d at 261. The federal cases interpreting New York law and holding that an element of unconscionablity only applies when promissory estoppel is asserted to preclude the application of the Statute of Frauds are collected in Cyberchron Corp. v. Calldata Systems Development, Inc., 47 F.3d at 44.

The parties have briefed the case as if the element of unconscionabilty applies to the third cause of action in Eber-[*5]NDC's complaint. To the extent that promissory estoppel is invoked by Eber-NDC for the purpose of defeating Star's interposition of the Statute of Frauds as a defense to the first cause of action, I find that summary judgment should be awarded to Star because Eber-NDC raises no issue of fact whether the circumstances are so egregious as to render unconscionable the assertion of the Statute of Frauds. Compare D & N Boening, Inc. v. Kirsch Beverages, Inc., supra, 99 AD2d at 524 (no fact question presented - the parties enjoyed a long relationship), and American Bartender's School, Inc. v. 105 Madision Company, supra, with, Budman Distributors, Inc. v. Labbat Importers, Inc., 91 AD2d 838, 839 (4th Dept. 1982)(the question of unconscionability "should not be determined on the pleadings, but should await a full determination of the facts upon the trial")("relying upon the defendant's promises, the plaintiff expended substantial sums in connection with the contract which otherwise would not have had to expend, . . . [including] purchas[ing] vans and trailers and leas[ing] warehouse space to comply with the contract"). See also, Ackerman v. Landes, 112 AD2d 1081, 1083-84 (2d Dept. 1985). Here, Eber-NDC admits that the sales force it hired to service the Star relationship has not been laid off following termination of the distributorship, and it fails to show that the warehouse and other improvements it claims it made in reliance on Star's promise now lies idle or underused. In particular, Eber-NDC fails to support its argument, made in its memorandum (at p. 11), with data establishing that it now does not have enough volume to defray the costs of what it claims was an expansion erected by reason of its anticipation of a lengthy exclusive distributorship with Star. Ryan's conclusory testimony on the point is unavailing to Eber-NDC. With the exception of the length of the parties' relationship, the case is similar in this respect to D & N Boening, Inc. v. Kirsch Beverages, Inc., supra, 99 AD2d at 524, aff'd, 63 NY2d at 458 (last sentence).

Moreover, quite apart from the question of unconscionability, there is a substantial question whether New York law has now progressed to the point that, for cases of this kind, it refuses to recognize the rule of the Restatement (Second) of Contracts §139. Some cases hold that, just as Eber-NDC cannot avoid the Statute of Frauds by reference to part performance even if the part performance is shown to be unequivocally referable to the alleged oral agreement (see discussion, above), it cannot "circumvent . . . [that result] by asserting an independent' promissory estoppel claim." Jeremey's Ale House Also, Inc. v. The Joslyn Luchnick Irrevocable Trust, 22 AD3d 6, 20-21 (1st Dept. 2005)(Gonzales and Williams, dissenting on a point not reached by the majority)(quoting Jonestown Place [*6]Corp., 53 NY2d at 849). In other words, the combined effect of the Messner Vetere Berger MacNamee decision, when considered with Jonestown Place Corp. v. 153 West 33rd Street Corp., supra, is to effectively abrogate Budman Distributors, Inc. v. Labbat Importers, Inc., 91 AD2d 838, 839 (4th Dept. 1982), and other appellate division decisions (cited in the text), to the extent that they would permit a judicially created promissory estoppel exception to the Statute of Frauds, thereby permitting a cause of action for breach of an oral contract otherwise violating the Statute.[FN2] The Restatement (Second) of Contracts recognizes that "[p]art performance not amounting to full performance on one side does not in general take a contract out of the one-year provision," but insists that "[r]estitution is available in such cases, and [the] doctrine of estoppel . . . may be applicable," id. §130 comment e (citing §139), although the use of the term "restitution" is less apt in this context, see A.L.I., Restatement (Third) of Restitution and Unjust Enrichment §31 comment c (Tent. Draft No.3, 2004); id. Reporter's Note; id. Chap. 4, Topic #2, Introductory Note. But Messner Vetore Bergor McNamee Schmetterer EURO RSCG, Inc., supra, and Jonestown Place Corp. v. 153 West 33rd Street Corp., establish that the rule on the availability of estoppel is otherwise in New York, at least in cases like this one in which the reliance interest asserted by the plaintiff to invoke estoppel principles in avoidance of the Statute of Frauds is the same part performance relied on to avoid the Statute under the part performance doctrine. The cases in this state, cited above, which recognize the rule of §139 (albeit with the criterion of unconscionability) are incompatible with the combined rule of Messner Vetere Berger MacNamee and Jonestown Place Corp. If there is no judicially created part performance exception to the Statute of Frauds, Messner Vetere Berger MacNamee, there is no reason to believe that there is a judicially created promissory estoppel exception available to "circumvent" the non-availability of a part performance exception in cases in which the circumstances pled to support an estoppel are the same as pled to support part performance. Jonestown Place Corp. Accordingly, the motion for summary judgment dismissing the first cause of action is not thwarted by Eber-NDC's effort to plead promissory estoppel in avoidance of the Statute of Frauds.

Summary judgment is not warranted, however, dismissing Eber-[*7]NDC's third cause of action insofar as it states a promissory estoppel claim of the Restatement (Second) of Contracts §90 variety. Prior to Messner Vetore Bergor McNamee Schmetterer EURO RSCG, Inc., supra, the Appellate Divisions decided a number of cases (as alluded to above) in which it was held that the question of unconscionability "should not be determined on the pleadings, but should await a full determination of the facts upon the trial." Budman Distributors, Inc. v. Labbat Importers, Inc., 91 AD2d at 839. See also, Zucerini v. Ziff-Davis Media, Inc., 306 AD2d at 405; Ackerman v. Landes, 112 AD2d at 1083-84. Although these decisions may now be abrogated as discussed above, they nevertheless provide guidance on the issue whether summary judgment should be granted dismissing the Third Cause of Action for promissory estoppel. If there was a question of fact of unconscionability in Budman Distributors, Inc., supra, on the facts there presented, then most certainly there is an issue fact presented on a §90 variety promissory estoppel claim (which has no element of unconscionability) by the circumstances pled by Eber-NDC in this case. Id. 91 AD2d at 838-39 ("relying upon the defendant's promises, the plaintiff expended substantial sums in connection with the contract which otherwise would not have had to expend, . . . [including] purchas[ing] vans and trailers and leas[ing] warehouse space to comply with the contract").[FN3] Whether Star's representations to Eber-NDC were insufficiently specific, as Star contends on this motion, involves a question of fact for the jury under appropriate jury instructions. Accordingly, the motion to dismiss the Third Cause of Action on summary judgment is denied.

That leaves for consideration the unjust enrichment claim. Again there are two lines of cases seemingly incompatible with each other on the crucial issue which divides the parties, i.e., whether defendant benefitted from plaintiff's actions and whether it is even necessary for plaintiff to prove that defendant benefitted when suing only for its reliance interest in the bargain. One line holds as follows: "The essence of such a cause of action is that one party is in possession of money or property that rightly belongs to another." Clifford R. Gray, Inc. v. [*8]LeChase Construction Services, LLC, __ AD3d at __ (2006 WL 2013913, at *4)(emphasis supplied). Here as in Clifford R. Gray, Inc., "plaintiff's submissions on the parties' competing motions for summary judgment make only conclusory allegations that defendants benefitted . . . [from Eber-NDC's preparation for entry into an exclusive distributorship arrangement with Star], and plaintiff asserts no facts suggesting that defendant is in possession of money or property belonging to plaintiff." Id. (reversing and granting the motion for summary judgment dismissing the action for unjust enrichment). Under this line, Star would seem entitled to summary judgment on the unjust enrichment claim. See also, Absher Constr. Corp. v. Colin, 233 AD2d 279, 280 (2d Dept. 1996)("there is nothing in the record, other than the plaintiff's conclusory assertions, to support its claim that the defendants derived any benefit from the plaintiff's work")(citing Paramount Film Distrib. Corp. v. State of New York, 30 NY2d 415, 422, amended, 31 NY2d 678); Landcom, Inc. v. Galen-Lyons Joint Landfill Commission, 259 AD2d 967, 968 (4th Dept. 1999)(same). Not surprisingly, Star relies in large measure on cases in this vein.

But the Court of Appeals has held that plaintiff may recover its reliance interest, " including expenditures made in preparation for performance or in performance,'" even if the plaintiff conferred no benefit on defendant, and "regardless of the enforceability of the original agreement." Farash v. Sykes Datatronics, Inc., 59 NY2d 500, 504, 505 (1983)(quoting Restatement (Second) of Contracts §349). See also, Abrams v. Unity Mutual Life Ins. Co., 237 F.3d 862, 864-65 (7th Cir. 2001); Needel v. Flaum, 248 AD2d 957, 959 (4th Dept. 1998); Mirchel v. RMJ Securities Corp., 205 AD2d 388, 390-91 (1st Dept. 1994); Waldman v. Englishtown Sportswear, Ltd, 92 AD2d 833, 836 (1st Dept. 1983). There is an effort to reconcile the two lines of cases without regard to the issue of defendant's "benefit," Birnbaum v. Airborne Freight corp., 183 Misc 2d 100 (Sup. Ct. Monroe Co. 1999)(analyzing the particular nature of the promise in light of the circumstances allegedly inducing reliance), but I do not think that reconciliation is possible if the issue is whether defendant benefitted, as the cases in the former line emphasize: either plaintiff can recover its reliance interest in an appropriate case without showing that defendant benefitted, or not. The great weight of authority is that such a plaintiff may recover. United States v. Behan, 110 U.S. 338, 344 (1883); Farash v. Sykes Datatronics, supra, and its progeny; and cases collected at Restatement (Third) of Restitution and Unjust Enrichment §31, and illus. 1. (tentative draft #3, 2004).

The question is whether plaintiff can show that the unjust enrichment claim is sufficiently distinct from the barred contract claim, Abrams v. Unity Mutual Life Ins. Co., 237 F.3d at [*9]865, to escape the familiar rule that unjust enrichment claims merely "contingent on proof of the oral contract" must be dismissed along with the contract claims barred by the Statute of Frauds. Mirchel v. RMJ Securities Corp., 205 AD2d at 391; Waldman v. Englishtown Sportswear, Ltd, 92 AD2d at 836. Cf., Tallini v. Business Air, Inc., 148 AD2d 828, 830-31 (3d Dept. 1989). Here, plaintiff's complaint is ambiguous with respect to whether it seeks recovery of the value of services it performed getting its warehouse and staff ready for performance of the Star exclusive distributorship, or the value of the expected benefits likely to be obtained by performance on both sides of the putative bargain, or both. The latter theory depends upon proof of the unenforceable bargain, and therefore is not properly pled if sought by the language of the Second Cause of Action. Waldman v. Englishtown Sportswear, Ltd, 92 AD2d at 836. But the former theory, which also is plainly implied from the Complaint (at ¶21) and stressed in Eber-NDC's Affidavits and Memorandum of Law in Opposition (at 11, 14-15), clearly is permitted by the cases cited above. Accordingly, the motion for summary judgment dismissing the Second Cause of Action is denied to the extent it seeks restitution of Eber-NDC's reliance interest for the services rendered in anticipation of the putative contract. While Star alleges that what Eber-NDC did, it would have done anyway and for the latter's own economic benefit,[FN4] Star did not establish as a matter of law in its initial moving papers that all of what Eber-NDC did in anticipation of an alleged expected long term relationship was not in reliance on the asserted promise. In any event, a question of fact on the issue is presented on this record, even if it is assumed that Star met its initial burden on this issue in its moving papers.

The motion to strike the defenses to the counterclaim for non-payment and for judgment up to the amount that is indisputably owed, predicated as it is on the non-viability of any of Eber-NDC's causes of action, is denied in view of the disposition of Star's motion for summary judgment dismissing the complaint. Bendat v. Premier Broadcast Group, Inc., 175 AD2d 536, 538-39 (3d Dept. 1991); Telemark, Inc. v. C & R Farms, Inc., 115 AD2d 966, 967 (4th Dept. 1985).

The motion for summary judgment dismissing the declaratory judgment cause of action is granted on the basis of Lester Eber's own testimony and Star's prima facie showing of the lack of any contractual, statutory, or regulatory basis for the purchase-back claim. An industry custom, if it exists (and Eber-NDC's own nuanced deposition testimony retreated from the bald assertion [*10]that it exists in the form originally pled), cannot supply a contract term, duty, or obligation otherwise nonexistent. Laub v. Bolar Pharmaceutical, Inc., 117 AD2d 586 (2d Dept. 1986)("record before us fails to show written memoranda, either signed or unsigned, which would satisfy the Statute of Frauds for the purpose of permitting parol evidence as to the custom and practice of the trade"). See also, Best Brands Beverage, Inc. v. Falstaff Brewing Corporation, 842 F.2d 578, 590 (2d Cir. 1987)("evidence regarding industry practice and custom may have been potentially relevant to ascertain the meaning of indefinite terms, or to supply missing terms, in a pre-existing agreement, but it cannot be used as a substitute for proof of actual agreement on the several, specific terms alleged")(emphasis supplied). Eber conceded in his deposition that he had no agreement with Star on the subject. In any event, Eber's generalizations on the subject of industry custom in his deposition testimony do not meet the standard for admissibility, and are insufficient to establish the same even if it could surmount the "substitute for proof" prohibition.

As well stated:

As to customs and usages, it has been said that custom is such usage as has acquired the force of law. 17 C. J. 446; Walls v. Bailey, 49 NY 464, 10 Am. Rep. 407. It is that length of usage which has become law. 1 Bouvier, Law Dict. [Rawle's 3d Rev.] 742. The essential elements of a custom or usage are: 'It must be ancient, certain, uniform, compulsory, consistent, general, continued, notorious, reasonable, and not in contravention of law or public policy, and acquiesced in.' 17 C. J. 449. I also find that 'a custom must be compulsory and not left with each one's option to obey it.' 17 C. J. 453. Further, 'it must be acquiesced in by all the persons acting within the scope of its operations.' 17 C. J. 467. In the case of Sipperly v. Stewart, 50 Barb. 62, the court, at page 68, said: 'A custom, in order to become a part of a contract, must be so far established and so far known to the parties, that it must be supposed that their contract was made in reference to it. For this purpose the custom must be established, and not casual, uniform and not varying, general and not personal, and known to the parties.' Again, in the case of **14 Rickerson v. Hartford Fire Insurance Co., 149 NY 307, at page 316, 43 N.E. 856, 859, the court said: 'Usage is a matter of fact, not of opinion, and must be shown by those who have observed the method of transacting the particular kind of business as conducted by themselves and others.' Also, in the case of McDonald v. Acker, Merrall & Condit Co., 192 App. Div. 123, at page 126, 182 NY S. 607, 609, the court said: 'A general custom is established only by proof of instances and not by characterization or generalizations made by witnesses.'



[*11]Gerseta Corporation v. Silk Ass'n of America, 220 App. Div. 293, 222 (1st Dept. 1927). See also, Reuters Ltd. v. Dow Jones Telerate, Inc., 231 AD2d 337, 343-44 (1st Dept. 1997)("One who seeks to use trade usage to define language or annex a term to a contract must show either that the other party to the contract is actually aware of the usage, or that the existence of the usage in the business to which the transaction relates is so notorious that a person of ordinary prudence in the exercise of reasonable care would be aware of it."); Belasco Theatre Corp. v. Jelin Productions, 270 App. Div. 202, 206 (1st Dept. 1945)("A custom or usage, if it is to be read into a contract to ascertain the intention of the parties, must fix a definite standard by proof establishing that it was general, uniform and unvarying.")

CONCLUSION

By reason of the foregoing, Star's motion for summary judgment dismissing Eber-NDC's complaint, and its affirmative defenses to the counter-claims, is granted in part and denied in part as specified above.

SO ORDERED.

______________________

KENNETH R. FISHER

JUSTICE SUPREME COURT

DATED:August 8, 2006

Rochester, New York Footnotes

Footnote 1: Section 139 of the Restatement employs a multi-factor test in this context not necessarily geared to the question whether it would be unconscionable to enforce the Statute of Frauds.



Footnote 2: Striking out the affirmative defense would only preclude the breach of contract claim, and leave untouched plaintiff's reliance remedies pled in the second and third causes of action. See Grimes v. Kaplan, 305 AD2d 1024 (4th Dept. 2003)).

Footnote 3: This result is not at variance with the treatment of the unconscionability question above, because in this context the applicable rule of reliance damages only would permit a compartmentalization of those services and efforts allocable only to Star's representations to Eber-NDC, on the one hand, and those services and efforts Eber-NDC has profitably made use of since termination, on the other, which therefore cannot factor into Eber-NDC's reliance interest in the anticipated Star relationship.

Footnote 4: As alluded to above, there is some testimony in the record attesting to this at least in part.