Technology v . Moore CV-02-146-M 05/23/03
UNITED STATES DISTRICT COURT
DISTRICT OF NEW HAMPSHIRE
Technology Planning Int’l., LLC
and Richard Piller,
Plaintiffs
v. Civil N o . 02-146-M
Opinion N o . 2003 DNH 085
Moore North America, Inc.
and Raymond Hartman,
Defendants,
O R D E R
This litigation arises out of the parties’ inability to
successfully come to terms on TPI’s proposed purchase of Moore’s
Document Automation Systems business in Dover, New Hampshire (the
“DAS facility”). Pending before the court are Moore’s motion for
summary judgment, Hartman’s motion for summary judgment, and
TPI’s motion for leave to file a surreply, in which it also seeks
relief under Rule 56(f).
Standard of Review
When ruling on a party’s motion for summary judgment, the
court must “view the entire record in the light most hospitable
to the party opposing summary judgment, indulging all reasonable
inferences in that party’s favor.” Griggs-Ryan v . Smith, 904
F.2d 1 1 2 , 115 (1st Cir. 1990). Summary judgment is appropriate
when the record reveals “no genuine issue as to any material fact
and . . . the moving party is entitled to a judgment as a matter
of law.” Fed. R. Civ. P. 56(c). In this context, “a fact is
‘material’ if it potentially affects the outcome of the suit and
a dispute over it is ‘genuine’ if the parties’ positions on the
issue are supported by conflicting evidence.” Intern’l Ass’n of
Machinists and Aerospace Workers v . Winship Green Nursing Center,
103 F.3d 196, 199-200 (1st Cir. 1996) (citations omitted).
The key, then, to defeating a properly supported motion for
summary judgment is the non-movant’s ability to support its
claims concerning disputed material facts with evidence that
conflicts with that proffered by the moving party. See generally
Fed. R. Civ. P. 56(e). Consequently, while a reviewing court
must take into account all appropriately documented facts, it may
ignore bald assertions, unsupported conclusions, and mere
speculation, see Serapion v . Martinez, 119 F.3d 9 8 2 , 987 (1st
Cir. 1997), as well as those allegations which have been
“conclusively contradicted by [the non-moving party’s]
2
concessions or otherwise,” Chongris v . Board of Appeals, 811 F.2d
3 6 , 37 (1st Cir. 1987).
Discussion
I. Moore’s Motion for Summary Judgment.
TPI’s amended complaint sets forth three claims against
Moore: breach of contract - failure to negotiate in good faith
(count 1 ) ; breach of contract - violation of standstill period
(count 2 ) ; and negligent misrepresentation (count 3 ) . Moore
moves for summary judgment as to each count. TPI objects.
A. Count One - Breach of Contract.
In count one of its amended complaint, TPI alleges that
Moore breached its obligation under the parties’ Letter Agreement
to “negotiate in good faith to arrive at a mutually acceptable
Definitive Agreement for approval, execution and delivery on the
earliest reasonably practicable date.” Exhibit 1 to Hartman’s
memorandum, Letter Agreement, P t . 2 , para. B . In support of its
motion for summary judgment, Moore says: (1) the provision
obligating the parties to “negotiate in good faith” is so vague
as to be unenforceable; and (2) to the extent it is an
3
enforceable agreement, the undisputed material facts establish
that Moore did not breach that agreement.
In an effort to demonstrate its entitlement to judgment as a
matter of law, Moore adopts a traditional approach and relies
upon various documents generated during the course of the
parties’ negotiations, affidavits of individuals with personal
knowledge of those negotiations, and legal precedent from this
and other jurisdictions. While TPI objects, its memorandum in
opposition to summary judgment is remarkable for its lack of even
a single citation to authority pertinent to its substantive
claims, as well as the lack of any discussion regarding the
essential elements of those claims. Instead, TPI relies entirely
upon the testimony of its principal, Richard Piller, and the
affidavits of other persons with knowledge of the parties’
negotiations.1
1
In fairness, TPI’s memorandum does include citations to
authority with regard to the summary judgment standard of review.
It also contains a lengthy discussion of the law applicable to
the court’s exercise of diversity subject matter jurisdiction.
Specifically, TPI devotes substantial attention to a discussion
of the jurisdictional damages requirement of 28 U.S.C. § 1332.
It i s , however, unclear why TPI has chosen to focus on that
issue, as neither defendant has asserted that this court lacks
subject matter jurisdiction over TPI’s claims. To be sure,
Hartman says that TPI cannot, as a matter of law, establish
4
In Howtek , Inc. v . Relisys, 958 F. Supp. 46 (D.N.H. 1997),
this court (DiClerico, J.) addressed the enforceability of
“agreements to negotiate.”
New Hampshire law, which governs the manufacturing
agreement between [the parties], is silent as to the
enforceability of agreements to negotiate. The modern
view, and the view endorsed by most scholars, is that
agreements to negotiate in good faith, unlike mere
“agreements to agree,” are not unenforceable as a
matter of law.
Id. at 48 (citations omitted). The court went on to observe
that, “the critical inquiry in evaluating the enforceability of
an express or implied agreement to negotiate in good faith is
whether the standard against which the parties’ good-faith
negotiations are to be measured is sufficiently certain to
comport with the applicable body of contract law.”
Id. In this
case, however, unlike Howtek, the parties have no historical
manufacturing or purchasing relationship. Accordingly, it is not
possible to identify any “discernable standards” that govern the
parties’ conduct (or their expectations), in light of their prior
dealings. TPI does not argue otherwise.
“damages” as an essential element of its tort claims (because it
claims TPI has been fully indemnified for its alleged losses),
but that, of course, is an entirely different issue.
5
Unfortunately, because TPI’s memorandum in opposition to
summary judgment consists essentially of a recitation of
statements from various affidavits, it is difficult to understand
exactly what “evidence” supports which essential elements of the
various counts in its complaint. But, generally speaking, TPI
claims that, at all material times, it remained ready and willing
to come to terms on the conditions of the purchase and sale of
the DAS facility; it “made numerous efforts to close the
transaction” (whatever that may actually mean); it filed this
suit simply “to force [Moore] to continue to negotiate”; and it
“offered to drop [the] suit if [Moore] would complete the
[purchase and sale agreement] and close.” Second Affidavit of
Richard Piller, at paras. 2 3 , 2 5 . In response to those efforts,
TPI says i t :
and it[s] counsel were systematically stonewalled by
[Moore] which changed counsel responsible for
negotiating the agreement no less than three times
during the latter half of February, 2002.
Rather than “negotiate in good faith to arrive at a
mutually acceptable [purchase and sale agreement] for
approval, execution and delivery on the earliest
reasonably practicable date,” as required by the
“Binding Provisions” [of the Letter Agreement],
[Moore], and its seemingly never ending succession of
counsel responsible for negotiating the agreement,
caused more that six (6) drafts of the [purchase and
6
sale agreement to be prepared], requiring Plaintiff to
expend unnecessary, duplicative professional fees and
costing Plaintiff wasteful due diligence as it tried
continuously to complete a [purchase and sale
agreement] and close the transaction.
Amended complaint at paras. 42-43 (emphasis supplied).
Notwithstanding the foregoing, TPI has failed to point to
any evidence supportive of its claim that Moore breached the
terms of the Letter Agreement by failing to negotiate in good
faith. Nor has it provided any developed argument (or legal
authority supporting the proposition) that merely causing several
drafts of a proposed purchase and sale agreement to be prepared
can, without more, constitute a breach of the obligation to
negotiate in good faith. Plainly, the mere fact that the parties
were unable to agree is not evidence of Moore’s bad faith.
Instead, TPI must point to more, such a s , for example, evidence
that Moore “went through the motions of negotiation as an
elaborate pretense with no sincere desire to reach an agreement
if possible.” NLRB v . Reed & Prince Mfg. Co., 205 F.2d 1 3 1 , 134
(1st Cir. 1953). See also Appeal of Franklin Educ. Ass’n.,
136
N.H. 3 3 2 , 335 (1992) (noting that, under New Hampshire labor law,
7
“good faith” negotiation involves meeting at reasonable times and
places in an effort to reach agreement).
B. Count Two - Violation of “Standstill” Provision.
In count two of its amended complaint, TPI alleges that
Moore violated the “standstill” provisions of the parties’
January 3 0 , 2002, Letter Agreement. Specifically, TPI claims:
In the “Binding Provisions” of the Letter Agreement,
TPI and [Moore] agreed that there would be a
“Standstill Period” during which “Prospective Seller
will not enter into any discussion or any agreement
with any party regarding the transactions contemplated
by this letter prior to the earlier of (a) February 2 2 ,
2002” as extended to March 2 7 , 2002 by agreement of the
parties.
In spite of the “Binding Provisions” of the Letter
Agreement, Plaintiff contends that [Moore] and its
senior management failed to observe the “Standstill
Period” by negotiating with “Door #2,” an investment
group led by M r . Wendell Smith.
Amended complaint at paras. 47-48.
In support of its motion for summary judgment, Moore says it
fully honored its commitment to deal only with TPI during the
standstill period:
8
From January 30th through at least the end of March
[when TPI filed suit], Moore engaged in no substantive
discussions with any party other than TPI concerning
the proposed sale of the DAS Facility. To the extent
that Moore had any contact with third parties regarding
the sale of the DAS Facility, such contact was limited
to informing those entities that negotiations with TPI
were ongoing.
Moore’s memorandum at 1 3 . Those claims are supported by the
affidavits of various Moore employees who had been involved in
negotiations with TPI. They are also supported by the affidavit
of Paul Rauscher, President of EMT International, Inc., one of
the other potential purchasers of the DAS Facility. In his
affidavit, M r . Rauscher testifies that:
After investigating the assets and operations at the
DAS Facility, EMT submitted to Moore, on January 2 4 ,
2001, a preliminary letter proposal outlining the terms
and conditions upon which EMT would be willing to
purchase the DAS Facility . . . . On January 3 0 , 2002,
I was informed by M r . Ray Hartman of Moore that EMT’s
purchase proposal had not been selected, that Moore had
entered into a letter of intent agreement with another,
unidentified proposed purchaser, and that Moore planned
to negotiate the final terms of and complete the
proposed sale of the DAS Facility to that other entity.
Mr. Hartman thanked me for our offer, and indicated
that if the deal with the other purchaser did not
close, Moore would reconsider EMT’s offer if we were
still interested.
9
Exhibit 2 to Moore’s memorandum, Rauscher affidavit at paras. 3-
4. See also Exhibit F to Hartman’s memorandum, affidavit of
Robert Brown at paras. 4-5 (another potential purchaser of the
DAS facility, specifically denying that Hartman or any other
representative of Moore ever contacted him after his group’s
offer to purchase the DAS facility was rejected in favor of
TPI’s).
In response, TPI does not provide any affidavit of Wendell
Smith, the party with whom Moore allegedly negotiated in
violation of the standstill agreement. Nor does it point to any
other evidence of Moore’s alleged violation of that provision.
Instead, it falls back upon speculation and conjecture.
On or about the 1st of February, right after signing
and returning the Letter Agreement, I was informed by
Hartman that Wendell Smith, whom I do not know, was
offering $4 million for the facility. I got the
distinct impression from this information that Hartman
was acting in violation of the standstill agreement
embodied in the January 30th Letter [Agreement].
Hartman made it very clear that should our deal not
close or if [Moore] thought that there was any chance
of our deal not closing he would push the sale to M r .
Smith.
10
Exhibit 1 to plaintiff’s memorandum, Piller affidavit at para. 31
(emphasis supplied). Again, more is necessary to defeat a
properly supported motion for summary judgment. See, e.g.,
Serapion, 119 F.3d at 987. And, parenthetically, it probably
bears noting that Moore did not violate the standstill agreement
i f , as alleged by T P I , its employee/agent, Hartman, simply said
that “should our deal not close,” he was prepared to go back to
one of the parties who, along with T P I , originally proposed to
purchase the DAS facility.
C. Count Three - Negligent Misrepresentation.
In count three of its amended complaint, TPI alleges that it
was damaged by Moore’s negligent misrepresentation of material
facts. Specifically, it claims that Moore lead it to believe
that, if the parties’ deal actually closed, TPI would be
purchasing the DAS facility as a “going concern.” But, “[a]fter
repeated inquiries and in depth due diligence, Plaintiff
discovered that the business was not being run as a going concern
and that orders were not being accepted in the ordinary course.”
Amended complaint at para. 60. 2 TPI also claims that Hartman had
2
As an aside, the court notes that TPI’s pleadings and
filings are replete with references to the parties’ alleged
11
specifically instructed sales personnel to stop accepting new
purchase orders. Id. at para. 5 9 .
Under New Hampshire common law, “[t]he essential elements of
negligent misrepresentation are a negligent misrepresentation by
the defendant of a material fact and justifiable reliance by the
plaintiff.” Ingaharro v . Blanchette, 122 N.H. 5 4 , 57 (1982)
(citing Tober’s, Inc. v . Portsmouth Housing Auth.,
116 N.H. 6 6 0 ,
663 (1976)). Importantly, however, “mere proof of breach of
promise, whether or not the promise is a contractual term, will
not support an action for misrepresentation. Otherwise every
contract action would automatically acquire a tandem count in
tort, and the tort claim would render nugatory any contractual
agreement that the DAS facility would be sold as a “going
concern.” Interestingly, however, Piller obviously recognized
that the Letter Agreement did not include any reference to such a
provision. Accordingly, after executing that document, Piller
wrote to his attorney: “I have just signed the letter of intent
from Moore North America. I have attached a copy for your
records. Missing from this document is any phrase that states
“ON GOING BUSINESS” or similar statement. S o , I have attached a
letter to M r . Sullivan that states that we are working under the
assumption that the business being purchase[d] is be[ing] run as
an ongoing business . . ..” Exhibit Q to Hartman’s memorandum.
TPI has not, however, produced a copy of the letter referenced by
Piller and allegedly sent to Sullivan, nor has it identified any
other evidence which might suggest that there was a “meeting of
the minds” on the “going concern” issue, or even what was meant
by that phrase.
12
limitation on liability.” Hydraform Prods. Corp. v . American
Steel & Alum. Corp., 127 N.H. 1 8 7 , 200 (1985) (citations
omitted).
In support of its motion for summary judgment, Moore points
to language in the parties’ “Confidentiality Agreement,” which it
says precludes TPI’s negligence claim as a matter of law. That
Confidentiality Agreement, which the parties executed on January
1 4 , 2002, provides, among other things, that:
Seller makes no representations or warranties, express
or implied, as to the quality, accuracy and
completeness of the Confidential Information disclosed
hereunder. Seller, its officers, directors and
employees shall have no liability whatsoever with
respect to the use of or reliance upon the Confidential
Information by [TPI].
Except for the matters specifically agreed to in the
Agreement, [TPI] and [Moore] agree and it is the intent
of the parties that, unless and until a definitive
written agreement between [Moore] and [TPI] with
respect to any transaction contemplated hereunder has
been signed and delivered, neither [Moore] [n]or [TPI]
will be under any legal obligation or have any
liability of any kind whatsoever to any party with
respect to such a transaction by virtue of this or any
written or oral expression made by any director,
officer, employee, agent, advisor or any other
representative of any of them with respect to such
transaction.
13
This Agreement constitutes the entire agreement and
understanding between the parties as to Confidential
Information related to the Business and supercedes all
prior or contemporaneous communications, negotiations,
representations or agreements between the parties with
respect thereto. No representations have been made by
either of the parties except as are specifically set
forth herein.
Exhibit 4-A to Moore’s memorandum, Confidentiality Agreement at
paras. 4 , 9-10 (emphasis supplied). Subsequently, on January 3 0 ,
2002, the parties executed the Letter Agreement. As noted above,
however, they never finalized the terms of the purchase and sale
and, therefore, never executed a definitive purchase and sale
agreement.
Moore claims that the provisions of the Confidentiality
Agreement quoted above are valid, supported by adequate
consideration, and enforceable against the parties. It also says
that, as a matter of law, those provisions preclude TPI from
pursuing its negligent misrepresentation claim. TPI does not
contest the enforceability of those provisions nor does it deny
that, generally speaking, the provisions of the Confidentiality
Agreement were intended to (and do in fact) bar precisely the
14
sort of negligent oral misrepresentation claim it now advances.
TPI does, however, contest the application of those provisions to
its current claims against Moore.
Specifically, TPI says that the provisions set forth in the
Confidentiality Agreement were only binding until the parties’
executed a “definitive agreement . . . with respect to any
transaction contemplated hereunder.” Confidentiality Agreement,
at para. 9. See plaintiff’s memorandum at 8-9. And, says T P I ,
the parties executed just such a “definitive agreement” when they
signed the January 30th Letter Agreement. Consequently, TPI
asserts that the bar to imposing liability on Moore and its
officers for alleged negligent misrepresentations erected by the
Confidentiality Agreement was lifted when the parties signed the
Letter Agreement.
While clever, TPI’s argument lacks substance. The
Confidentiality Agreement plainly states that neither party shall
have any liability (at least for non-intentional conduct) arising
out of or in connection with written or oral representations made
during their ongoing negotiations for the purchase and sale of
15
the DAS facility unless and until a “definitive written agreement
between [Moore] and [TPI] with respect to any transaction
contemplated hereunder has been signed and delivered.” Id. at
para. 9. And, the “transaction contemplated” by the
Confidentiality Agreement is defined in the document’s preamble
as “the sale by [Moore] of its Document Automation Systems
contract manufacturing business.”
Id. Plainly, then, what is
contemplated by the phrase “definitive written agreement” is a
binding purchase and sale agreement relating to the DAS facility.
See, e.g., Exhibit 2 to TPI’s memorandum (document n o . 8 3 ) ,
second affidavit of Richard Piller at para. 24 (referring to the
“purchase & sale agreement” as the “definitive agreement”).
TPI’s arguments to the contrary, particularly in light of
Piller’s own references to the purchase and sale agreement as the
“definitive agreement,” are unavailing, as is its claim that the
provisions of the Confidentiality Agreement were nullified upon
execution of the Letter Agreement.
Moreover, even if TPI’s negligence claim were not barred by
the provisions of the Confidentiality Agreement, Moore would
still be entitled to judgment as a matter of law. First, as
16
discussed more fully below, TPI has provided no evidentiary
support for its conclusory claim that Hartman (or any other Moore
employee) undermined the value of the DAS facility by instructing
sales personnel to stop accepting new purchase orders. Second,
nothing in the record evidence suggests that, during the period
of time at issue in this case, the DAS facility was being
operated as anything other than a “going concern.” See, e.g.,
Exhibit J to Hartman’s memorandum, affidavit of Christopher Maher
(the controller for the DAS facility), at para. 4(c) (detailing
the net sales figures for each month between January and August
of 2002). In response, TPI has not pointed to any record
evidence supportive of its claim regarding a fifty percent sales
decline purposefully induced by Moore. And, to the extent that
there even was a decline in sales volume, it could have been
caused by any number of economic factors entirely unrelated to
Moore’s alleged instructions to its employees “not to push for
new sales.” Amended complaint at para. 5 9 .
Finally, the record reveals that TPI was well aware of
Moore’s concerns regarding liability that it might incur if it
accepted new orders that could not be fulfilled if the proposed
17
sale of the DAS facility to TPI fell through and Moore was
forced, instead, to close i t . To the extent that Moore’s conduct
in that regard might be viewed as a failure to operate the DAS
facility as a “going concern” (again, ignoring for the moment
that there is no evidence that the parties ever actually agreed
that the DAS facility would be sold as a “going concern” o r , even
if they did, that they agreed what that phrase would actually
mean in terms of day-to-day operations of the facility), TPI has
not pointed to any evidence suggesting that it was unaware of
Moore’s concerns or that it was in the dark as to the added level
of scrutiny that Moore employees undertook before accepting new
orders (in particular, those that could not be fulfilled if the
DAS facility had to be closed, as was ultimately the case). See,
e.g., Exhibit R to Hartman’s memorandum, letter from TPI’s
counsel to Moore’s counsel (acknowledging that TPI was “cognizant
that Moore may wish to limit its potential liability by not
accepting purchase orders for equipment, which it will not be
able to produce.”); Exhibit S to Hartman’s memorandum, letter
from TPI’s counsel to Moore’s counsel (“As I indicated in my
letter of February 20th, my client is sensitive to [Moore’s] wish
18
to avoid, or limit, unnecessary risk [related to new purchase
orders].”).
Because TPI was well aware of Moore’s concerns about
limiting potential liability to customers for whom it might not
be able to complete sales orders (i.e., i f , as happened, it was
forced to close the DAS facility), TPI cannot plausibly claim
that it was “misled” by any “negligent misrepresentation” made by
Moore in that regard.
II. Hartman’s Motion for Summary Judgment.
TPI’s amended complaint sets forth two counts against
Hartman: tortious interference with contractual relations (count
four) and intentional interference with prospective contractual
relations (count five). Hartman moves for summary judgment as to
both counts. TPI objects.
In count four of its amended complaint, TPI alleges that
Hartman tortiously interfered with TPI’s contractual relationship
with Moore as follows:
19
When his investment advances were rebuffed, Hartman
wrongfully induced or caused [Moore] to breach its
Letter Agreement with the Plaintiff by violating the
Standstill Period provided for in the Letter Agreement,
by instructing sales personnel not to pursue sales and
by facilitating, generally, a fifty (50%) percent
decrease in DAS sales volume thereby rendering
completion of the Definitive Agreement impracticable.
Amended complaint at para. 59 (emphasis supplied).
The substance of TPI’s intentional interference with
prospective contractual relations claim against Hartman (count
five) is the same as that advanced in count four. Specifically,
TPI alleges that:
When his investment advances were rebuffed, Hartman
wrongfully, intentionally and improperly interfered
with the relationship between TPI and [Moore] by
violating the Standstill Period, provided for in the
Letter Agreement, by instructing sales personnel not to
pursue sales and by facilitating, generally, a fifty
(50%) percent decrease in DAS sales volume thereby
rendering completion of the Definitive Agreement
impracticable.
Plaintiff asserts that when Hartman’s investment
advances were rebuffed, he diligently pursued the
derailing of the transaction between TPI and [Moore] so
that h e , Hartman, could sell the facility to “Door #2
from which h e , Hartman, might receive a commission,
finder’s fee or other financial benefit.
20
Amended Complaint at paras. 79 and 81 (emphasis supplied).
Viewed logically, TPI’s claims would seem to make little
sense: if Hartman were truly interested in derailing TPI’s
efforts to acquire the DAS facility so that he could find another
buyer (and, allegedly, receive some sort of commission or
finder’s f e e ) , it would have been irrational for him to have
purposefully undermined the company’s sales - conduct that would,
quite obviously, have made it far more difficult to find another
willing purchaser and, at a minimum, would have drastically
reduced the amount such a purchaser would have been willing to
pay for the DAS facility. Few people interested in finding a
buyer for a business set fire to it before putting it on the
market. But, notwithstanding the apparent lack of a logical
theme to TPI’s claims, that alone is not a basis to grant
Hartman’s motion for summary judgment. Accordingly, the court
turns to a consideration of that motion on the merits.
As with its objection to Moore’s motion for summary
judgment, TPI’s objection to Hartman’s motion lacks any
discussion of the applicable law. And, perhaps more importantly,
21
it fails to point out how any of the affidavit testimony upon
which it relies relates to any one or more of the essential
elements of its claims against Hartman. Instead, TPI simply
declares its belief that there are genuine issues of material
fact, supporting that assertion with pages of block quotes from
various affidavits.
This court (Barbadoro, C.J.) recently discussed the
essential elements of both a claim for tortious interference with
contractual relations and one for intentional interference with
prospective contractual relations.
To prove a tortious interference with contractual
relations claim under New Hampshire law, [plaintiff]
must prove that: (1) it had a contractual relationship
with [a third party]; (2) [defendant] knew of the
contractual relationship; (3) [defendant] wrongfully
induced [the third party] to breach the contract; and
(4) [plaintiff’s] damages were proximately caused by
[defendant’s] interference. Roberts v . General Motors
Corp., 138 N.H. 5 3 2 , 539 (1994); Nat’l Employment Serv.
Corp., 145 N.H. at 162. “‘Only improper interference
is deemed tortious in New Hampshire.’” Id. (quoting
Roberts, 138 N.H. at 5 4 0 ) .
[Plaintiff] also claims that [defendant] interfered
with [plaintiff’s] prospective contractual relations by
wrongfully inducing [the third party] not to enter into
a long-term agreement. The elements of this tort are
22
described as follows: “One who, without a privilege to
do s o , induces or otherwise purposely causes a third
person not t o . . . enter into or continue a business
relation with another is liable to the other for the
harm caused thereby.” Baker, 121 N.H. at 644
(quotation omitted).
Alternative Systems Concepts, Inc. v . Synopsys, Inc., 229 F.
Supp. 2d 7 0 , 73-74 (D.N.H. 2002). See also Sheppard v . River
Valley Fitness,
2001 DNH 177 at 16-19 (D.N.H. Sept. 2 8 , 2001)
(discussing the law applicable to claims for intentional
interference with a prospective contractual relations, as well as
the exceptional circumstances under which an employee who acts
outside the scope of his or her employment and is motivated by
bad faith, personal ill-will, spite, hostility, or a deliberate
intent to harm the plaintiff, may be liable for his or her
conduct). 3
3
Because Hartman is entitled to judgment as a matter of
law on other grounds, the court need not address his claim that
he was, at all material times, acting within the scope of his
employment and, therefore, shielded from liability as to TPI’s
tort claims. That i s , because there is no evidence that Hartman
actually interfered with TPI’s prospective contractual
relationship with Moore, the court need not determine whether he
was acting outside the scope of his employment and motivated by
ill-will or spite toward TPI and/or its principal, Piller.
23
As noted above, the “evidence” upon which TPI relies in
support of its claims (and in opposition to Hartman’s motion for
summary judgment) consists almost entirely of speculation and
conjecture. For example, in response to an interrogatory seeking
a specific description of how Hartman “improperly interfered”
with any contractual relations between TPI and Moore, TPI
provided the following:
Hartman time and time again throughout this transaction
continued to brag that he had other offers and if TPI
did not get this deal done, he would open door number 2
the “Wendell Smith offer.” This action was in
violation of the standstill agreement.
Hartman interfered with ongoing business with AGFA by
placing several phone calls to AGFA management and to
the point of calling one of their purchasing managers
“Eddie the Weasel.”
Hartman continued to talk to Bob Brown his ex-boss at
Harris about doing the deal with himself/Hartman. This
action was in violation of the standstill agreement.
Hartman lied about his ability to in fact deliver the
Peak spare parts and equipment orders. Hartman knew
that this was a key part of the DAS business plan and
that it was needed to operate an ongoing business.
Hartman lied about his ability to in fact deliver the
Continuous Products LM 20 equipment orders. Hartman
knew that this was a key part of the DAS business plan
and that it was needed for the ongoing business.
24
Exhibit M to Hartman’s memorandum, TPI’s answers to Hartman’s
interrogatories (emphasis supplied).
In support of those claims, TPI relies almost exclusively on
the self-serving and largely speculative affidavit of its
president, Richard Piller. Notably, TPI has not produced an
affidavit from Bob Brown, the party with whom Hartman was
allegedly negotiating in violation of the standstill agreement.
Nor has it produced any evidence (in the form of an affidavit,
deposition testimony, etc.) from representatives of AGFA, which
might support its claim that Hartman placed “several phone calls
to AGFA management” (nor has it described how placing phone calls
to a customer might conceivably violate the standstill
agreement). Nor has it explained how Hartman’s alleged
“bragging” about his ability to sell the DAS facility to Wendell
Smith should the deal with TPI fall through constitutes
actionable conduct in violation of the standstill agreement -
plainly, if the deal with TPI did not materialize, Hartman was
not only free to seek other potential purchasers, it was his job
to do s o .
25
Hartman, on the other hand, has produced, among other
things, an affidavit of Bob Brown who, according to T P I , is one
of the parties’ with whom Hartman allegedly negotiated in
violation of the standstill agreement. M r . Brown testified:
During the period from January 3 0 , 2002 through April
2002, I did not initiate or otherwise engage, directly
or indirectly, in any communication with Raymond
Hartman regarding the DAS Facility. M r . Hartman did
not attempt to communicate with me during this time
period.
In late February or early March, by mutual agreement, I
had a meeting with Richard Piller. We discussed,
generally, M r . Piller’s efforts to negotiate a purchase
and sale agreement for the DAS facility with Moore.
During that conversation, I told M r . Piller that I had
not had any conversations with Ray Hartman after the
submittal of my group’s offer to purchase [which Moore
rejected], nor had M r . Hartman made any effort to
contact m e .
Exhibit F to Harman’s memorandum, affidavit of Robert Brown at
paras. 4-5 (emphasis supplied). 4 See also Exhibit G to Hartman’s
memorandum, Affidavit of Thomas Carroll. Thus, in light of the
record evidence, there appears to be no factual basis at all for
4
Among other things, that testimony (if credited as
true), coupled with a decided dearth of contrary evidence from
Piller and T P I , calls into question whether there was a good
faith basis for Piller to assert (in an affidavit and elsewhere
that Hartman had engaged in negotiations with Brown during the
standstill period.
26
TPI’s repeated claim that Hartman “violated the standstill
agreement” by conducting negotiations with M r . Brown or other
parties who had expressed an initial interest in purchasing the
DAS facility.
Nor is there any evidence to support TPI’s claim that
Hartman “instruct[ed] sales personnel not to pursue sales and
facilitat[ed], generally, a fifty (50%) percent decrease in DAS
sales volume.” Amended complaint at para. 7 9 . In support of
that particular claim, TPI points to the affidavit of Rebecca
Averill Loh, which provides:
On or about Saturday, February 23rd, 2002, I overheard
a telephone conversation between Piller and Hartman. I
recall being shocked by the change in Hartman’s
demeanor as he was irate and irrational seeming to me
like a person boxed in a corner trying to get out.
The telephone conversation covered myriad subjects
including the fact that Bill Ceccherini, the executive
in charge of day-to-day operations at DAS, had allowed
Piller to hear the following voicemail message:
Bill, this is Ray Hartman calling. Listen I am
traveling today and am with Sean Sullivan. Would
you give me a call please because we ought to take
these orders on a 1 by 1 basis and understanding
what we are coming up against in terms of risk
management and what the value [of these orders]
i s . I do not want to lose business for the buyer
but at the same time I need to know the exposure.
27
So let’s talk about this and please give me a
call.
Exhibit 4 to plaintiff’s memorandum, affidavit of Rebecca Averill
Loh at paras. 9-10. Parenthetically, it is unclear whether M s .
Loh has any personal knowledge of the contents of that particular
voicemail message, since it does not appear from the face of her
affidavit that she was actually permitted to listen to i t . See
Fed. R. Civ. P. 56(e). Nevertheless, even accepting her
testimony at face value, it does not support TPI’s claim.
TPI was aware that, in November of 2001, Moore publically
announced its intention to shut down the DAS facility due to
substantial financial problems that put it on the verge of
bankruptcy. See D-1 to Hartman’s memorandum, affidavit of Sean
Sullivan and attached copy of newspaper report of the planned
closing of the DAS facility. TPI also knew that, shortly after
it announced its plan to close the DAS facility, Moore began
notifying companies in the printing industry that it would
consider offers to purchase the DAS facility and the underlying
real estate (TPI and at least three other companies expressed
interest). And, as noted above, TPI knew of Moore’s concern that
28
it not accept sales orders that it could not fulfill (given the
fact that, if it could not sell the facility, it would have to be
shut down). See, e.g., Exhibit R to Hartman’s memorandum, Letter
from TPI’s counsel to Moore’s counsel (acknowledging that TPI was
“cognizant that Moore may wish to limit its potential liability
by not accepting purchase orders for equipment, which it will not
be able to produce.”).
Contrary to TPI’s suggestion, the telephone message left by
Hartman does not support its claim that he specifically
instructed sales personnel to stop accepting new orders. Rather,
it simply suggests that Hartman was (justifiably) concerned that
the DAS facility not accept orders it could not fulfill - a
concern which, as noted above, TPI knew Moore had. In fact,
Hartman’s message specifically states that he wanted the sales
staff to assess each individual order with that concern in mind;
it does not even remotely suggest that Hartman instructed them to
stop taking all new sales orders.
As to TPI’s claim that Hartman “lied” about his ability to
secure various sales contracts, the court need only make two
29
brief observations. First, TPI has failed to support those
claims with anything other than conclusory allegations. Second,
even assuming that Hartman did “lie” about his ability to
“deliver the Peak spare parts and equipment orders” and “his
ability to in fact deliver the Continuous Products LM 20
equipment orders,” TPI has failed to articulate how such
(alleged) conduct fits into its theory that Hartman tortiously
interfered with TPI’s relationship with Hartman’s employer,
Moore. The essence of TPI’s claims is that Hartman purposefully
devalued the DAS facility by directing sales staff to stop taking
incoming orders (and, although not part of TPI’s amended
complaint, that he violated the provisions of the standstill
agreement) - alleged conduct that is directly at odds with the
assertion that he repeatedly lied in an apparent effort to
suggest that the DAS facility had greater sales than it actually
did (and, at least implicitly, that it was worth more than it
actually w a s ) .
The court need not belabor the point. In response to
Hartman’s thorough (even methodical) motion for summary judgment,
TPI has failed to identify any genuine issues of material fact
30
that might deflect the entry of judgment as a matter of law in
favor of Hartman as to TPI’s tortious interference with
contractual relations claim (count four) or its intentional
interference with prospective contractual relations claim (count
five). Instead, it has opposed the granting of that relief
solely on the basis of speculative and conclusory affidavit
testimony (at least some of which does not appear to be based on
personal knowledge) and illogical, even self-contradictory,
theories of its own case.
III. TPI’s Motion to File a Surreply.
TPI’s motion for leave to file surreply (document n o . 88) is
denied. Among other deficiencies, that motion fails to comply
with local rule 7.1(c), relating to non-dispositive motions
(counsel for TPI incorrectly represents that such a motion is
dispositive in nature). See also L.R. 7.1(e)(3) (“Motions for
leave to file a surreply will only be granted under extraordinary
circumstances). TPI has failed to demonstrate that this case
presents “extraordinary circumstances” warranting the relief it
seeks. See generally Hartman’s objection (document n o . 8 9 ) .
31
To the extent that motion also seeks relief under Rule 56(f)
of the Federal Rules of Civil Procedure, it is likewise denied.
As was the case with TPI’s last Rule 56(f) motion, its current
motion fails to comply with the requirements of Rule 56(f). See
generally Mass. Sch. of Law at Andover, Inc. v . American Bar
Ass’n., 142 F.3d 2 6 , 44 (1st Cir. 1998); Resolution Trust Corp.
v . North Bridge Assoc., Inc.,
22 F.3d 1198, 1203 (1st Cir. 1994).
See also Technology Planning Int’l, LLC v . Moore North America,
Inc.,
2003 DNH 0 1 8 , at 3 (D.N.H. Jan. 2 4 , 2003) (denying an
earlier Rule 56(f) motion filed by TPI (but affording TPI
additional time within which to object to summary judgment) and
explaining the various essential elements of a properly supported
Rule 56(f) motion).
Moreover, since TPI has elected to file an objection and
supporting memorandum in response to defendants’ motions for
summary judgment, its efforts to obtain relief under Rule 56(f)
are untimely; having elected to “meet [defendants’] summary
judgment challenge head-on,” TPI cannot now seek to “fall back on
Rule 56(f) if its first effort is unsuccessful.” C.B. Trucking,
Inc. v . Waste Management, Inc., 137 F.3d 4 1 , 44 (1st Cir. 1998).
32
Conclusion
While the voluminous record in this case may contain hidden
morsels supportive of TPI’s claims, TPI has elected not to call
them to the court’s attention. And, the court is not inclined to
embark upon a search of that record in an effort to locate that
which TPI could have, but did not, identify. Nor is it inclined
to develop legal arguments that TPI could have, but did not,
advance and brief. See generally, Higgins v . New Balance
Athletic Shoe, Inc., 194 F.3d 2 5 2 , 260 (1st Cir. 1999) (“The
district court is free to disregard arguments that are not
adequately developed.”); Kauthar SDN BHD v . Sternberg,
149 F.3d
659, 668 (7th Cir. 1998) (“It is not the obligation of this court
to research and construct the legal arguments open to parties,
especially when they are represented by counsel.”).
Counsel is no doubt busy and anxious to practice in a manner
that is as efficient as possible. But, shifting research,
pleading, and briefing responsibilities to the court is not a
viable option. As Justice Scalia, then sitting on the Court of
Appeals for the District of Columbia Circuit, has observed:
33
The premise of our adversarial system is that appellate
courts do not sit as self-directed boards of legal
inquiry and research, but essentially as arbiters of
legal questions presented and argued by the parties
before them. Thus, Rule 28(a)(4) of the Federal Rules
of Appellate Procedure requires that the appellant’s
brief contain “the contentions of the appellant with
respect to the issues presented, and the reasons
therefor, with citations to the authorities, statutes
and parts of the record relied on.” Failure to enforce
this requirement will ultimately deprive us in
substantial measure of that assistance of counsel which
the system assumes - a deficiency that we can perhaps
supply by other means, but not without altering the
character of our institution. Of course not all legal
arguments bearing upon the issue in question will
always be identified by counsel, and we are not
precluded from supplementing the contentions of counsel
through our own deliberation and research. But where
counsel has made no attempt to address the issue, we
will not remedy the defect, especially where, as here,
“important questions of far-reaching significance” are
involved.
Carducci v . Regan, 714 F.2d 1 7 1 , 177 (D.C. Cir. 1983) (citations
omitted). The same principles apply with equal force at the
district court level.
For the reasons expressed in this opinion and for those set
forth in both Moore’s memorandum and its reply memorandum,
Moore’s motion for summary judgment (document n o . 45) is granted.
Hartman’s motion for summary judgment (document n o . 72) i s , for
the reasons discussed above, as well as those set forth in
34
Hartman’s memorandum, granted to the extent it seeks entry of
judgment as a matter of law in Hartman’s favor as to counts four
and five of TPI’s amended complaint. It i s , however, denied to
the extent Hartman seeks an award of attorneys’ fees. TPI’s
motion to file a surreply and for relief under Rule 56(f)
(document n o . 88) is denied.
SO ORDERED.
Steven J. McAuliffe
United States District Judge
May 2 3 , 2003
cc: William M . Richmond, Esq.
Daniel P. Luker, Esq.
Sigmund D. Schutz, Esq.
Arpiar G. Saunders, Jr., Esq.
35
