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REPORTED IN THE COURT OF SPECIAL APPEALS OF MARYLAND No. 1517 September Term, 2009

MEMC ELECTRONIC MATERIALS, INC., ET AL.

v.

BP SOLAR INTERNATIONAL, INC.

Eyler, James R., Kehoe, Kenney, III, James A. (Retired, specially assigned), JJ. Opinion by Eyler, James R., J.

Filed: December 3, 2010

MEMC Electronic Materials, Inc. and MEMC Pasadena, Inc. (collectively referred to as "MEMC" or "appellant") appeal from a judgment entered by the Circuit Court for Frederick County, after a jury verdict awarding damages for breach of contract to BP Solar International, Inc. ("BP Solar" or "appellee").1 Prior to 2004, pursuant to a longstanding relationship, appellant supplied appellee with silicon powder for use in manufacturing solar panels at its Frederick, Maryland facility. Seeking to continue that relationship, the parties exchanged e-mails in 2004 concerning a long-term supply contract to run through 2007. After shipping nearly 224 metric tons (MT) of silicon powder in 2005, appellant discontinued its shipments. Consequently, on April 30, 2007, appellee filed suit charging appellant with breach of contract. Prior to trial, appellee filed four amended complaints.2 At trial, appellee contended that the e-mail exchanges and the parties' previous course of dealing and performance created a three-year contract, requiring appellant to ship its output of silicon powder to appellee, with a minimum of 150 MT per year. Appellant's primary contention was that there was no meeting of the minds between the parties and, therefore, no contract. After an extensive two-week trial, the jury determined that the parties did form

Appellee has filed a cross appeal, challenging the court's dismissal of its negligent misrepresentation claim, the court's refusal to admit certain evidence, and the court's admission of certain testimony by appellant's expert witness. Because the cross appeal was conditional, and we affirm the judgment, there is no need to reach the cross appeal issues. The original and amended complaints contained other counts, but they are not relevant to the issues before us.
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an agreement, and returned a verdict in favor of appellee in the amount of $8,849,447 as partial cover damages for appellant's discontinued performance. Perceiving no reversible error, we shall affirm. Factual and Procedural Background Appellee, a manufacturer of solar energy products, makes photovoltaic panels (also known as solar panels) that are used to convert sunlight into electricity. Appellant is in the business of selling wafers, polysilicon, and other silicon raw feedstock. In 1996, appellee purchased silicon powder from appellant, previously a waste by-product of appellant's polysilicon production process, in order to determine whether the silicon powder, inexpensive at the time, could be used to lower manufacturing costs. Silicon powder proved useful in reducing costs, and it created a competitive advantage for appellee. Consequently, in 1997, the parties entered into a written, one and a half page sales agreement for the purchase of silicon powder for a two-year period running from April 1, 1997, through March 30, 1999. The agreement required appellant to supply appellee with four MT of silicon powder per month at a price of $3.00 per kilogram. Over the two-year period, appellee sent purchase orders confirming quantity, price, shipping, and other details, and appellant sent the appropriate invoices. In March 1998, the parties extended this agreement through December 31, 2000. The extension increased the amount of silicon powder to ten MT per month at a price of $3.25 per kilogram, beginning January 1, 1999, and continuing through the end of the contract. Again, confirming purchase orders and subsequent invoices were issued.
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Between 2001 and 2004, the parties entered into less formal documented arrangements. These supply agreements were generally consummated through and documented by e-mail exchanges.3 Each time, after agreement, the parties would follow the usual sequence of purchase orders, invoices, and contractual performance. Ultimately, anticipating imminent shortages in the market for silicon feedstock supplies, appellee recognized a need to secure long term contracts for the supply of silicon powder. As a result, Pat Barron, appellee's Frederick warehouse manager, was authorized to arrange a long term supply contract with appellant. Herein lies the dispute. It is uncontested that several e-mails were exchanged between August 4, 2004, and November 9, 2004, concerning a long term supply contract between the parties. A printed copy of each e-mail was admitted into evidence. The primary dispute concerns the legal significance of those e-mails. On August 4, 2004, Mr. Barron e-mailed Sanjeev Lahoti, appellant's product manager, requesting a "quotation (e-mail is fine) for 300 MT of powder per year for calendar years 2005 through 2007. Upon receipt, BP Solar will forward our purchase agreement for these quantities." Mr. Lahoti's September 17 response stated: After reviewing our options we want to commit 150MT of

In August 2000, the parties reached an agreement for the 2001 calendar year via faxes and e-mails. In January 2002, appellee, through its Treasurer, Ron Turcot, sent an e-mail to appellant's product manager, Sanjeev Lahoti, advising its intent to place a purchase order for 144 MT of silicon powder for 2002, and seeking a price of $3.25 per kilogram. Lahoti, on behalf of appellant, agreed to the shipment of 144 MT at $3.25 per kilogram, and requested that appellee send the appropriate purchase order.
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powder per year for the next 3 years. The pricing for 2005 would be $3.50/kg. Pricing for 2006 and 2007 would be negotiated in October of the previous year. MEMC would offer to BP any additional quantity available for the following year at th[at] time. Thereafter, on September 27, 2004, Mr. Barron and Mr. Lahoti discussed, via telephone, the arrangement or contemplated arrangement between the parties. In an email later the same day to Bill Poulin, plant manager at BP Solar's Frederick plant, on which Mr. Lahoti was copied, Mr. Barron described this conversation as follows: I had a phone conversation with Sanjeev this morning clarifing [sic] the MEMC proposal below. Sanjeev indicates that the 150MT is essentially the minimum available for each calendar year 2005-2007. Since this is scrap material for MEMC, their engineering staff has been tasked with improving yield and this is their target based on current levels of production. Sanjeev anticipates the available quantity of powder will be larger (especially in 2005) but did not want to quote a figure higher than their budgeted targets. He has confirmed BP Solar's "right of first refusal" for all quantities of powder they produce. Pricing can be negotiated during MEMC's visit in October. (Emphasis in original). In his responsive e-mail the following day, Mr. Lahoti stated, "I agree with Pat's comments below. I look forward to meeting you and Pat during our visit." Two weeks later, on October 13, 2004, Mr. Barron e-mailed Mr. Lahoti asking for confirmation on price. The e-mail stated: I hope MEMC felt as poitive [sic] about our meeting as we did. As a follow up, you mentioned that you felt you could do better on the pricing of the powder going forward. If you would please send me something in writing, I can begin
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moving things on this end in terms of a purchase agreement. As stated earlier, BP Solar will commit to taking all quantities available in 2005 and would like to have a right of first refusal in 2006-2007. On November 9, 2004, Mr. Barron e-mailed Mr. Lahoti concerning purchase orders for the 2005 and 2006 shipments of silicon powder. He stated: BP Solar has submitted to MEMC our purchase orders #22692 and #22693 for silicon powder to cover calendar years 2005 and 2006. We are not limiting the quantities we would purchase as we will take all the powder that is available under our agreement of right-of-first-refusal (see below). However, I had to put a quantity on the purchase order so I used the same volume that we have been receiving this year. Again, we will take whatever quantities you have available and adjust the PO accordingly. We would also like to give MEMC a purchase order for our 2007 requirements. Does that work for you? Following this series of e-mail conversations, appellant shipped nearly 224 MT of silicon powder during 2005. The last shipment occurred on December 30, 2005. In late February 2006, appellee contacted appellant because it had not received any shipments since December. Upon inquiry, appellee was informed that appellant was experimenting with ways to recycle its silicon powder in its process, and therefore, it had only minimal excess powder. In essence, appellant advised appellee that it should not rely on further shipments. Accordingly, appellee filed suit, seeking damages for breach of a contract allegedly formed through the parties' e-mail exchange. Prior to trial, appellant moved for summary judgment, arguing that as a matter of law, the parties had never reached the clear meeting of the minds necessary to form a
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contract. The motion was denied. Appellant argued then and throughout the trial that appellee had changed its position, during the pleading and discovery process, as to the terms of the alleged contract. During the trial, appellant continued its stance that the emails did not evidence a meeting of the minds. At the close of appellee's case, and at the close of all evidence, appellant moved for judgment, reasserting its argument that appellee could not make up its own mind regarding the terms of the alleged contract and could not prove a clear meeting of the minds. These motions were also denied. After a two-week trial, the jury found that the parties entered into a contract by which appellant was obligated to supply appellee with silicon powder for the years 200507. The jury further found that appellant breached this contract. Consequently, it awarded damages in the amount of $8,849,447 as partial cover damages that resulted from appellant's failure to supply appellee with silicon powder in 2007. Additional facts will be incorporated as necessary to complete our discussion. Questions Presented Appellant presents a number of issues for our review, which we condense and restate as follows:4

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Appellant originally presented the questions for our review as follows: 1) Whether the trial court abused its discretion when it enabled BP to conceal from the jury BP's changes of position and inconsistent statements by (a) excluding from evidence inconsistent factual assertions in BP's prior complaints; (b) precluding cross-examination of BP Solar's most important witness concerning inconsistent deposition testimony; and (c) in response to a clarifying question from the jury, instructing the jury inconsistently with BP's oft-repeated claim that it was pursuing an output contract.
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1) Whether appellant preserved for review its challenge to the sufficiency of the writings under the Statute of Frauds and, if so, whether the printed copies of the e-mails are sufficient to satisfy the Statute. 2) Whether the trial court abused its discretion and whether appellant was prejudiced by court rulings (a) admitting into evidence the prior sworn testimony of Sanjeev Lahoti regarding an alleged corporate practice of appellant of selling polysilicon products to third parties on the spot market, notwithstanding prior contractual obligations; (b) excluding from evidence appellee's original and first, second, and third amended complaints; (c) initially precluding use of Mr. Barron's original deposition testimony, as distinguished from errata pages, during his cross-examination, but later allowing its use during appellant's case in chief; and (d) responding to a question from the jury during deliberations, which allowed the jury to determine if the parties entered into a general contract, rather than requiring the jury to determine if the parties entered into an output contract. 3) Whether the trial court abused its discretion in admitting the expert testimony of Richard Winegarner, and whether such testimony was sufficient to support the jury's damages award. Contentions 1. Appellant's Contentions

2) Whether any writing, sufficient under the Statute of Frauds, supported BP's claim to the third year of its alleged three-year contract. 3) Whether there was sufficient evidence to support the jury's damages award, based on expert opinions concerning "reasonable price" that were speculative, at variance with the Maryland Uniform Commercial Code, and premised on a contract theory that the jury was permitted to disregard. 4) Whether the trial court abused its discretion by allowing introduction of certain evidence as "routine practice" under Maryland Rule 5-406, where the "practice" was not relevant to any issue in the case.
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With respect to the Statute of Frauds issue, question 1, appellant contends that the Statute of Frauds was not satisfied with respect to the year 2007.5 To that point, appellant argues that there were no writings sufficient to indicate a contract for sale for 2007 because the parties' exchanges never advanced beyond negotiations. Appellant notes that appellee did not send any purchase orders to appellant for the year 2007 that could serve to satisfy the merchant's exception to the Statute.6 With respect to question 2, appellant contends that the trial court erred in a number of rulings. In that respect, appellant argues that (1) the admission of Mr. Lahoti's testimony from another case was unduly prejudicial and lacked probative value as irrelevant "routine practice" evidence; (2) appellee's superseded complaints were admissible as statements of a party opponent; (3) the court's delayed allowance of appellant to play excerpts from Mr. Barron's deposition testimony could not cure the prejudicial effect of the court's initial refusal during live cross-examination; and (4) the trial court improperly responded to a question from the jury during deliberations, which allowed the jury to find a contract different from that alleged in the fourth amended complaint, an output contract, which was defended against at trial. Finally, with respect to question 3, appellant contends that the court erred with Appellant's arguments are limited to the year 2007, presumably because the jury awarded damages for that year only. In general, Commercial Law Section 2-201(1) of the Maryland Uniform Commercial Code ("MD UCC") requires a writing signed by the party against whom enforcement is sought. Between merchants, the requirement can be satisfied by a writing from the other party to the transaction. See Discussion I.B., infra.
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respect to Mr. Winegarner's testimony. Appellant argues that Mr. Winegarner lacked the qualifications, methodology, and factual basis necessary to provide expert testimony. Appellant further argues that Mr. Winegarner's opinions pertaining to the reasonable price of silicon powder did not provide the jury with sufficient evidence to support a damages verdict because his opinions were not tied to "time of delivery." Lastly, appellant argues that Mr. Winegarner's opinions regarding reasonable price were tied to an alleged output contract and, therefore, left the jury without any factual basis for assessing damages for breach of a contract in general. 2. Appellee's Contentions Preliminarily, appellee argues that appellant failed to preserve for review its argument concerning the Statute of Frauds and the merchants' exception because it neglected to argue this point in its motions for judgment at the close of appellee's case and at the close of all the evidence. In the event the issue is preserved, appellee argues that, collectively, the printed e-mails satisfied the Statute and/or the merchants' exception, and that the parties' demonstrated intent to negotiate prices for subsequent years did not render the contract unenforceable. With respect to the court's rulings challenged in question 2, appellee argues that the court did not abuse its discretion. Appellee further argues that, even if the court erred in any of these respects, such errors were not sufficiently prejudicial as to constitute reversible error. Finally, with respect to Mr. Winegarner's expert testimony, appellee argues that
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appellant failed to preserve this issue for appeal. Nevertheless, assuming the issue is preserved, appellee contends that Mr. Winegarner is an undisputed expert in polysilicon, that his opinions were indeed grounded on an adequate factual basis, and that his opinions provided sufficient factual basis to enable the jury to determine the reasonable price for silicon under a three-year agreement. Discussion 1. Challenge to Sufficiency of Writings Under the Statute of Frauds A. Preservation of Issue for Appeal In seeking reversal of the trial court's judgment, appellant argues that the parties attempted to negotiate an agreement for 2007 but never reached agreement. Consequently, there was not and could not be a confirmatory writing that would satisfy the merchants' exception because there was no agreement to confirm. Appellant notes that appellee never sent a purchase order for silicon powder for 2007, as it did for the years 2005 and 2006. Preliminarily, appellee responds by arguing that appellant failed to preserve this challenge for review by neglecting to argue this specific point in its two motions for judgment. Appellant presents its arguments in the abstract and does not tie them to a particular ruling by the court. We assume, as does appellee, that the alleged basis for error is the denial of appellant's motions for judgment, pursuant to Maryland Rule 2-519, on the ground that the Statute was not satisfied. A motion for judgment must "state with particularity all reasons why the motion should be granted." Maryland Rule 2-519(a). In
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that respect, it is well-settled that "[f]ailure to state a reason [why the motion for judgment should be granted] serves to withdraw the issue from appellate review." Kent Vill. Assocs. Joint Venture v. Smith, 104 Md. App. 507, 517 (1995); see also Laubach v. Franklin Square Hosp., 79 Md. App. 203, 208 (1989) ("[I]n order to preserve an issue for appellate review, the moving party must have, in to [sic] making the motion either at the close of the plaintiff's case or after all the evidence, stated with particularity all reasons why the motion should be granted.") (Internal quotations omitted). With respect to the breach of contract count, appellant argued in support of its first motion that (1) there was no definitive offer and acceptance because Mr. Lahoti's e-mail dated September 28, 2004 merely served to confirm Mr. Barron's understanding of the negotiations, and (2) appellee's breach of contract claim was barred by a one-year statute of limitations provision included in the parties' 1997 supply agreement. In support of its renewed motion at the close of all the evidence, appellant incorporated its earlier arguments and, in addition, argued that because the alleged contract did not include a price, a damage award could only be supported by testimony regarding a reasonable price at the time of delivery pursuant to

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