Opinion
Civil No. 2:02CV-0044J
March 25, 2004
Alan C. Bradshaw, Sean A. Monson, MANNING CURTIS BRADSHAW BEDNAR LLC, Salt Lake City, UT, for Defendant Micron Electronics, Inc. n/k/a Interland, Inc.
ORDER
On December 2 through December 4, 2003, and January 26, 2004, the instant matter came before the Court for a Fed.R.Civ.P. 16 Pretrial Hearing. After reviewing the written submissions of the parties and conducting a four-day hearing in which counsel were invited to present all arguments and evidence relevant to the claims for relief and damages in this matter, the Court finds that there is no genuine issue of material fact as to any of Plaintiff's claims, and MEI is entitled to judgment as a matter of law with respect to all of Plaintiff's claims in this action. Accordingly, for the reasons set forth herein, as well as at the Pretrial Hearing, the Court hereby dismisses the instant action with prejudice. On March 16, 2004 the Court also heard argument on Plaintiff's Objection to Proposed Order and having considered such argument, hereby enters its Order as follows:
I. UNDISPUTED FACTS
The following facts are without genuine dispute:
1. In approximately 1995, CableLink began providing cables to MEI for use in the manufacturing of personal computers. (January 22, 2004 Stipulated Pretrial Order at ¶ 3a).
2. In 1997, CableLink and MEI entered into a Master Purchase Agreement whereby CableLink agreed to sell computer cables to MEI for incorporation in personal computers marketed under the Micron name. Id. at ¶ 3b).
3. In March 1998, CableLink formed Synergy Systems, Inc. ("Synergy"). During certain periods, Synergy performed purchasing, inventory management, and sub-assembly work for MEI. (Stipulated Pretrial Order at ¶ 3d). Synergy was later merged into CableLink.
4. Synergy issued quotes to MEI for the purchasing, inventory management and sub-assembly work that Synergy provided to MEI,Id. at ¶ 3e).
5. After Synergy issued quotes to MEI for sub-assembly work, MEI issued purchase orders for the sub-assembly work that Synergy provided to MEI.Id. at ¶ 3f).
6. The Parties' relationship for sub-assembly work is evidenced by approximately 290 such MEI purchase orders. (See Appendix [DE 93] to MEI's Memorandum in Support of Motion to Dismiss or For Summary Judgment).
7. Among the terms and conditions of the purchase orders were the following:
Terms and Conditions: These terms and conditions control the purchase of goods and services set forth in the Purchase Order ("Order") and constitute the full and complete agreement between Buyer and Seller with respect thereto. . . . These Terms and Conditions may not be waived or modified except in writing by the Buyer.
Price and Delivery: Seller shall furnish the goods and services in accordance with the price and delivery terms stated herein. . . . Unless otherwise stated, the price terms contained herein include all costs or charges of any kind that will be paid by Buyer, and Buyer shall not be liable for any other costs or charges . . .
Acknowledgment and Acceptance: The issuance of this Order to Seller constitutes an offer expressly limited to the terms contained herein. Seller's acceptance is expressly made conditional on assent to the terms hereof
(See Exhibit "E" to MEI's November 3, 2003 Memorandum in Support of Motion to Dismiss or For Summary Judgment [DE 92], hereinafter "MEI's Second Motion for Summary Judgment").
8. After the sub-assembly work was quoted by Synergy, incorporated into a purchase order by MEI, and performed by Synergy, Synergy then invoiced MEI for the sub-assembly work in response to MEI's purchase orders. MEI then paid the Synergy invoices for sub-assembly work. (See, e.g., Transcript of December 3, 2003 Hearing (1:30 p.m.) at 27-30; Transcript of January 26, 2004 at 40).
9. MEI would not accept delivery of any sub-assembled product that was not reflected in an MEI purchase order. Accordingly, MEI would not pay for any product or service not reflected by such purchase orders. (See, e.g., Plaintiff's Opposition to MEI's Motion to Dismiss or For Summary Judgment [DE 102] at 3 (admitting that "MEI could not accept product without a purchase order")).
10. Plaintiff has not identified, and the record does not evidence, any specific sub-assembly work which was not the subject of a purchase order from MEI.
11. Purchasing, inventory management or sub-assembly services were provided to MEI for approximately two years. (Stipulated Pretrial Order at ¶ 3g).
12. While Synergy claims that the sub-assembly work was not profitable, it is undisputed that Synergy made a net profit on this work for the year 2000. (See Feb. 24, 2003 Expert Report of Mark Berrett at 5, attached as Exhibit "B" to MEI's Memorandum in Support of Motion in Limine to Exclude Testimony and Expert Report of Mark Berrett [DE 81]).
13. At some point after Plaintiff began performing the sub-assembly work, Plaintiff began asking MEI to enter into a master agreement that would provide for higher labor rates, inventory management fees and delivery charges that would make the sub-assembly work more profitable for Synergy. (See, e.g., MEI's Second Motion for Summary Judgment [DE 95], Statement of Undisputed Fact at ¶ 9 and Exhibits "D" and "K" thereto. See also Transcript of January 26, 2004 at 42-44 and Dep. Exhibit 25 referenced therein; Deposition of Gary Judd at 53).
14. Gary Judd and Lyle Jordan signed a document entitled "Vendor Agreement" which is dated February 1, 2001. (Stipulated Pretrial Order at ¶ 3h).
15. The Vendor Agreement provides for the higher labor rates, inventory management fees and delivery charges. (See Vendor Agreement, attached to MEI's First Motion for Summary Judgment [DE 45] as Exhibit "H").
16. The Vendor Agreement was proposed and drafted by Plaintiff's employee, Gary Judd. (Deposition of Gary Judd at 129-30, attached to MEI's Supplemental Brief Regarding Lack of Evidence of Fraudulent Intent [DE 108] as Exhibit "F."See also Judd Dep. at 113:20-23, attached as Exhibit "D" to MEI's Second Motion for Summary Judgment [DE 95]; January 26, 2004 Hearing Transcript at 52-53, 65).
17. Mr. Judd drafted the Vendor Agreement to include an integration clause. The integration clause drafted by Mr. Judd states:
This Agreement represents the entire understanding and agreement between [MEI] and Synergy with respect to the subject matter hereof and supercedes all other agreements, negotiations, understandings and representations if any made by and between [MEI] and Synergy.
(Vendor Agreement at ¶ 3d).
18. There were no outstanding agreements or understandings between Synergy and MEI regarding sub-assembly work that were not included in the Vendor Agreement. (MEI's First Motion for Summary Judgment, Statement of Undisputed Facts at ¶ 9. This fact was not disputed by Plaintiff in its Memorandum in Opposition to MEI's Motion for Partial Summary Judgment [DE 48]).
19. Plaintiff's Second Amended Complaint alleges Plaintiff's fraud claim, in pertinent part, as follows:
11. Before starting to perform the Work, CableLink and Synergy management told MEI that CableLink/Synergy (hereafter referred to as "CableLink") would perform the Work only if the proposed relationship permitted CableLink to make sufficient gross profit to permit it the opportunity to make a net profit.
12. MEI agreed to that condition, and further agreed to structure an agreement that would permit CableLink to realize a profit from its performance of the Work.
16. During the following two years, MEI repeatedly assured CableLink management that MEI would enter into a final, written agreement that would permit it to recoup the costs it had incurred, and would continue to incur, in performing the Work.
17. Those assurances induced CableLink to continue performing the Work for MEI; CableLink otherwise would have discontinued the Work shortly after beginning to perform it.
62. As more fully set forth above, MEI agreed and thereby represented to CableLink, that the term of the Vendor Agreement would be for three calendar years, enough time to allow CableLink to recoup its lost profits for the preceding two years.
63. MEI knew the representation was false and/or was reckless in making the representation without regard to its truth or falsity because MEI had already decided months before the Vendor Agreement was executed to sell its personal computer business and that it would not honor the Term and would never voluntarily compensate CableLink for the reasonable value of CableLink's Work.
64. MEI made the false representation and/or was reckless in making the representation without regard to its truth or falsity to induced CableLink to continue as provider of the Work until MEI no longer needed CableLink, in order to make MEI's personal computer business as attractive as possible to potential buyers.
65. EMI's [sic] representations did have the effect of inducing CableLink to continue in performing the Work and sign the Vendor Agreement, which was executed February 1, 2001.
66. CableLink relied on the Term in negotiating the Vendor Agreement and agreed to the other Vendor Agreement terms based on the three-year Term.
67. CableLink was unaware of MEI's decision to sell its personal computer business during the time the parties negotiated for, and then executed the Vendor Agreement and agreed to the other Vendor Agreement terms based on the three-year term.
68. CableLink acted reasonably in continuing to perform the Work and signing the Vendor Agreement.
69. CableLink was damaged when MEI terminated the Vendor Agreement in March, 2001 to the extent that CableLink was unable to recoup any of its losses it had sustained as MEI had repeatedly and fraudulently promised CableLink.
(Second Amended Complaint [DE 82] at ¶¶ 11-12, 12-17, 62-69).
20, Nick Kupcow was involved in negotiations for the Vendor Agreement up to the point that Gary Judd sent Mr. Kupcow a draft of a proposed Vendor Agreement at which point Tabb Compton handled the negotiations for the Vendor Agreement on behalf of MEI. (Judd Dep. At 89:4-25, 113:18-115:25; excerpt attached to MEI's Second Motion for Summary Judgment [DE 95] as Exhibit "D"). At the time the Vendor Agreement was negotiated and executed, Mr. Compton testified he had no knowledge that MEI intended to sell its personal computer division or otherwise exit the personal computer business, nor did he have any knowledge that MEI would cease ordering sub-assembly services from Plaintiff. (Compton Dep. at 56-57, attached to MEI's Second Motion for Summary Judgment [DE 95] as Exhibit "M." See also MEI's Second Motion for Summary Judgment [DE 95], Statement of Undisputed Fact at ¶ 17 (this assertion was not disputed by Plaintiff)).
21. Lyle Jordan, MEI's Division President for Worldwide Supply Chain Operations, executed the Vendor Agreement on February 1, 2001, on behalf of MEI. (Stipulated Pretrial Order at ¶ 3h).
22. At the time Mr. Jordan executed the Vendor Agreement, he testified he did not believe that the Vendor Agreement required MEI to purchase any goods or services from Plaintiff. (Deposition of Lyle Jordan at 48-50, 52, 85-88, 90, hereinafter "Jordan Dep."; excerpts attached to MEI's Supplemental Brief Regarding Lack of Evidence of Fraudulent Intent [DE 108] as Exhibit "B"). Instead, Mr. Jordan testified he understood the agreement to be a "business understanding agreement," designed to confirm labor rates, inventory management fees and delivery fees. Id.).
23. Prior to executing the Vendor Agreement, Mr. Jordan testified that he asked Mr. Compton and Mr. Trosclair "about the financial obligation and volume relating to the agreement. And they said there was none. That it was a business understanding agreement. And . . . I asked Kevin to initial it." (Deposition of Lyle Jordan at 48:7-23).
24. Mr. Trosclair testified he read the Vendor Agreement before speaking to Mr. Jordan. Upon reading the Agreement, Mr. Trosclair testified that he concluded that the Agreement did not obligate MEI to purchase any goods or services from Plaintiff. (Deposition of Kevin Trosclair at 18, 23, hereinafter "Trosclair Dep."; excerpts attached to MEI's Supplemental Brief Regarding Lack of Evidence of Fraudulent Intent [DE 108] as Exhibit "C").
25. MEI's legal department reviewed the Vendor Agreement prior to its execution. Specifically, MEI in-house attorney John Geering testified he reviewed the Vendor Agreement. Mr. Geering testified he determined that the Vendor Agreement did not require MEI to purchase any quantity of goods or services from Plaintiff. (Deposition of John Geering at 20-21; 30-31, hereinafter "Geering Dep."; excerpts attached to MEI's Supplemental Brief Regarding Lack of Fraudulent Intent [DE 108] as Exhibit "D").
26. Mr. Geering testified he discussed the Vendor Agreement with MEI's general counsel, Steve Arnold, and that Mr. Arnold gave Mr. Geering permission to initial and approve the Vendor Agreement only after Mr. Geering confirmed for Mr. Arnold that the Agreement did not obligate MEI to purchase any goods or services from Plaintiff. (Id.).
27. There is no evidence that at the time Mr. Jordan executed the Vendor Agreement he believed that MEI would cease using Plaintiff to perform sub-assembly services. In fact, Mr. Jordan testified that one of his objectives was to preserve the supply chain for any potential buyer.(See Jordan Dep. at 61-62).
28. In late March or early April, 2001, MEI began doing its sub-assembly work "in house," and thus ceased using Plaintiff to perform such services. (E.g., Plaintiff's Second Amended Complaint at ¶ 25).
29. Mr. Compton testified MEI moved the sub-assembly work in house because a poor economy and declining MEI sales resulted in MEI having idle production lines. Additionally, he testified that the availability of new PC chassis technology eliminated several of the chassis upon which Plaintiff had performed sub-assembly services. (January 23, 2003 Deposition of Tabb Compton at 34-35 hereinafter "Compton Dep.", excerpts attached to MEI's Supplemental Brief Regarding Lack of Fraudulent Intent [DE 108] as Exhibit "A").
30. MEI announced the sale of its personal computer division on March 23, 2001. MEI sold its personal computer business to Gores Technology Group LLC ("Gores") effective May 31, 2001. (Stipulated Pretrial Order at ¶ 3(j)).
31. Following MEI's sale of the PC division to Gores, CableLink continued providing cables to "Micron PC" (the new Gores' entity) pursuant to the Master Purchase Agreement for cables. Id. at 3(k)).
32. Cablelink stopped selling cables to Micron PC (the Gores' entity) in December 2001. (Id. at 3(1)).
II. CONCLUSIONS OF LAW
Based upon the foregoing undisputed facts, the Court makes the following conclusions of law:A. Counts I (Unjust Enrichment), II (Detrimental Reliance) and III (Estoppel) Fail as a Matter of Law
1. The Court finds that all sub-assembly work performed by Plaintiff prior to execution of the Vendor Agreement was performed pursuant to contracts between the parties, as evidenced by approximately 290 MEI purchase orders, as well as Synergy invoices based on same. It is undisputed that the sub-assembly work at issue was evidenced by quotes from Synergy, followed by purchase orders from MEI and then invoices from Synergy which were subsequently paid by MEI. It is also undisputed that MEI would not pay for any work that was not subject to a purchase order. To the extent that Plaintiff argues that the purchase orders were sometimes modified, this does not obviate the fact that the work at issue was nonetheless performed pursuant to express agreements (oral or written) between the parties, nor does it obviate the fact that Synergy invoiced MEI for this work and MEI paid those invoices.
2. Because the sub-assembly services prior to the Vendor Agreement were performed pursuant to express agreements between the parties, the Court finds that Plaintiff's equitable claims for unjust enrichment, detrimental reliance, and promissory estoppels fail as a matter of law. Such claims do not lie where, as here, the parties' relationship was governed by express contract. E.g., Wood v. Utah Farm Bureau Ins. Co., 19 P.3d 392, 396 (Ut., Ct., App. 2001) ("recovery under and unjust enrichment theory is available only when no enforceable written or oral contract exists"), Davies v. Olson, 746 P.2d 264, 268-69 (Ut. Ct. App. 1987) (recovery for value of services rendered is recovery under quantum meruit which "presupposes that no enforceable written or oral contract exists"); LaSalle Nat. Bank v. Metropolitan Life Ins. Co., 18 F.3d 1371, 1376 (7th Cir. 1994) ("The doctrine of promissory estoppel . . . has never been considered available when the parties have entered into a contract which is binding under contract law); Tiberi v. Cigna Corp., 89 F.3d 1423, 1432 (10th Cir. 1996) (promissory estoppel constitutes "contract implied in law where no contract exists in fact," thus doctrine is inapplicable where contract exists). In fact, Plaintiff conceded this well-settled rule of law by stating in argument that "It's black letter law that if you have a contract you can't have an unjust enrichment claim." Transcript of November 15, 2002 Hearing, Argument of Plaintiffs' Counsel at 22:13-22:24.
3. Accordingly, for the reasons set forth above, Plaintiff's claims in Counts I, II and III of the Second Amended Complaint fail to present a genuine issue of material fact for trial, and same are therefore dismissed with prejudice.
B. Count IV (Breach of Vendor Agreement) Fails as a Matter of Law
1. The Court finds that the Vendor Agreement is a fully integrated document.
2. The Vendor Agreement is not ambiguous. To the extent if any, that construction of the Agreement is required, the Court is cognizant of the fundamental principle of law that a writing must be construed against the drafter — i.e. Plaintiff, in this case.
3. The Court cannot find in the Vendor Agreement any obligation, express or implied, for MEI to purchase any goods or services from Plaintiff. Further, the Agreement cannot be construed to establish or require that Plaintiff be the exclusive provider of sub-assembly services to MEI. Instead, as Messrs. Jordan, Trosclair, Geering and Compton indicated, the Vendor Agreement appears to serve the purpose of establishing labor rates, inventory management fees and delivery charges that would apply to whatever sub-assembly work MEI chose to purchase, if any.
4. Plaintiff drafted the Vendor Agreement. Accordingly, Plaintiff had the opportunity to include in the Agreement (or at least propose) all terms, conditions, promises and representations that Plaintiff believed were material to the Agreement. It is not for the Court to award Plaintiff a contract that Plaintiff could not and did not obtain from MEI.
5. Based on all of the foregoing facts and circumstances, the Court holds that, as a matter of law, the Vendor Agreement cannot be construed as obligating MEI to purchase anything from Plaintiff. Accordingly, because the Vendor Agreement did not require MEI to purchase any quantity of goods or services from Plaintiff, MEI did not breach the Agreement when it ceased ordering sub-assembly services from Plaintiff E.g.,Gull Labs., Inc. v. Diagnostic Tech. Inc., 695 F. Supp. 1151, 1153 (D. Utah 1988). See also, e.g., Willard, Sutherland Co. v. United States, 262 U.S. 489, 493 (1923);Brooklyn Bagel Boys, Inc. v. Earthgrains Refrigerated Dough Prods., Inc., 212 F.3d 373, 378 (7th Cir. 2000).
6. Accordingly, for the reasons set forth above, as well as those argued by counsel for defendant in their written submissions and at the Pretrial Hearing, Plaintiff's breach of contract claim (Count IV) fails to present a genuine issue of material fact for trial, and same is therefore dismissed with prejudice.
C. Count V (Fraud) Fails as a Matter of Law
(i) Plaintiff Cannot Prove the Required Elements of its Fraud Claim
1. In order to sustain its fraud claim, Plaintiff must prove each of the following elements by clear and convincing evidence:
(a) A representation was made;
(b) concerning a presently existing material fact;
(c) which was false;
(d) which the representor either (i) knew to be false, or (ii) made recklessly, knowing that he had insufficient knowledge upon which to base such representation;
(e) for the purpose of inducing the other party to act upon it;
(f) that the other party, acting reasonably and in ignorance of its falsity;
(g) did in fact rely upon it;
(h) and was thereby induced to act;
(i) to his injury and damage.
Crookston v. Fire Ins. Exch. 817 P.2d 789, 800 (Ut. 1991) (citing Pace v. Parrish, 247 P.2d 273 (Ut. 1952)); accord Taylor v. Gasor, Inc., 607 P.2d 293, 294 (Ut. 1980) ("[F]raud is a wrong of such nature that it must be shown by clear and convincing proof and will not lie in mere suspicion or innuendo.").
2. Viewing the record evidence in the light most favorable to Plaintiff, the Court must conclude that there is no genuine issue of material fact regarding Plaintiff's fraud Count, as no reasonable jury could find for Plaintiff on this claim. It is undisputed that Plaintiff drafted the Vendor Agreement and represented that the Vendor Agreement accurately reflected all of the Parties' understandings and representations. It is also undisputed that Plaintiff had the opportunity to include in that Agreement (or at least propose) all terms, conditions, promises and representations that Plaintiff believed existed or were material to the Parties' understanding. Plaintiff did not include or propose any language requiring MEI to purchase any minimum quantity of goods, requiring that Plaintiff would be the exclusive provider of sub-assembly services, or otherwise requiring that MEI purchase any goods or services. Plaintiff also failed to include any language suggesting that the Vendor Agreement was structured to permit Synergy to "recoup" any alleged prior losses. Plaintiff did, however, insert a conspicuous clause in the Vendor Agreement stating that the Agreement constituted the entire agreement and understanding of the parties, and that it superceded any prior representations, understandings or agreements. Plaintiff then presented the Vendor Agreement to MEI for execution, and MEI executed this Agreement that Plaintiff proposed, drafted and claimed accurately represented the Parties' entire understanding. MEI then returned the Vendor Agreement to Plaintiff, who subsequently executed same. Plaintiff later claimed, through this lawsuit, that the Vendor Agreement Plaintiff drafted did not accurately represent the parties' understanding and representations — despite Plaintiff's inclusion in the Agreement of an express statement to the contrary — and that Plaintiff was therefore intentionally (or recklessly) deceived by MEI. Under these circumstances, no reasonable fact finder could infer that MEI defrauded Plaintiff under the clear and convincing evidence standard that governs the analysis of the fraud claim.
3. Plaintiff's fraud allegations assert that MEI promised Plaintiff that it would purchase sub-assembly work from Plaintiff for three years, and that MEI had a then present intention not to honor the alleged three year commitment. (See Second Amended Complaint at ¶ 62) ("MEI agreed and thereby represented to CableLink, that the term of the Vendor Agreement would be for three calendar years, enough time to allow CableLink to recoup its lost profits for the preceding two years"); id at ¶ 63 ("MEI knew the representation was false and/or was reckless in making the representation without regard to its truth or falsity because MEI had already decided months before the Vendor Agreement was executed to sell its personal computer business and that it would not honor the Term and would never voluntarily compensate CableLink for the reasonable value of CableLink's Work.")). Where, as here, a fraud claim is predicated upon an alleged promise to perform in the future, a plaintiff must generally prove that at the time the promisor made the promise, the promisor had a then present intention not to perform in the future. E.g., AndalexResources, Inc. v. Myers, 871 P.2d 1041, 1047 (Ut. Ct. App. 1994) ("A misrepresentation of intended future performance is not a `presently existing fact' upon which a claim for fraud can be based unless a plaintiff can prove that the representor, at the time of the representation, did not intend to perform the promise and made the representation for the purpose of deceiving the promisee.").
4. The record in this matter fails to demonstrate a triable issue of fact regarding the elements of either a fraudulent representation or fraudulent intent on the part of MEI. At the January 26, 2004 Hearing the Court directed Plaintiff to specify with particularity record evidence of the "who, what, when and where" of any alleged fraudulent misrepresentation. Despite being given numerous opportunities to do so, Plaintiff has been unable to identify evidence sufficient to create a triable issue of fact regarding any specific fraudulent representation made by any MEI employee. Plaintiff cannot identify any specific representation from any MEI personnel to the effect that MEI would obligate itself to purchase sub-assembly services from Plaintiff for three years.
5. MEI's execution of the Vendor Agreement did not constitute a representation that MEI was obligating itself to purchase any quantity of goods or services from Plaintiff, much less any quantity of good or services for a three year period. As noted above with respect to Plaintiff's breach of contract claim, as a matter of law, the Vendor Agreement does not require MEI to purchase anything, thus it cannot be construed as any representation to that effect. Accordingly, Plaintiff's fraud claim fails as a matter of law because no reasonable jury could conclude that MEI made a false representation of material fact to Plaintiff.
6. Perhaps more importantly, even if Plaintiff could identify a specific representation by MEI to the effect that MEI would obligate itself to purchase sub-assembly work from Synergy in order that Synergy could recoup alleged losses, Plaintiff cannot demonstrate that any such alleged commitment was made with a then present intention not to honor same. Plaintiff's theory of fraudulent intent is that MEI personnel allegedly promised to purchase sub-assembly services for three years so that Plaintiff could recoup its alleged losses, but that the alleged promisors knew when they made such promises that MEI would not purchase for three years because they knew that MEI intended to sell its PC business. (E.g., Second Amended Complaint at ¶ 62-63). The record, however, makes clear that none of the individuals who allegedly negotiated the Vendor Agreement with Plaintiff, or otherwise made alleged representations of "profitability" or "recouping" of alleged losses, knew or suspected that MEI was going to exit the PC business at the time such representations were allegedly made.
7. Moreover, the very premise of Plaintiff's theory regarding a fraudulent state of mind is flawed, as the record demonstrates that knowledge of the sale of the PC business cannot raise an inference of knowledge that Synergy's sub-assembly services would no longer be used. In fact, the record evidence regarding this issue runs contrary to Plaintiffs theory of intent, as Mr. Jordan indicated that his goal was to preserve the supply chain for any potential buyer. (Jordan Dep. at 61-62). Indeed, it is undisputed that MEI never intended to terminate PC production; instead, the goal was to sell a viable, going concern with the supply chain and material contracts being assigned to the purchaser. It is undisputed that Plaintiff continued to provide cables to the entity that purchased MEI's PC Division for at least six months after the sale closed, at which time Plaintiff elected to terminate that relationship. (See Stipulated Pretrial Order at ¶ 3k-l).
8. The testimony of the individuals who negotiated and or reviewed the Vendor Agreement on behalf of MEI also belies any inference of an intent to defraud, as the evidence shows that none of the individuals at MEI who negotiated or handled the Vendor Agreement interpreted that Agreement as obligating MEI to purchase any goods or services from Plaintiff. Even if Messrs. Compton, Jordan, Trosclair and Geering had been erroneous in their interpretation of the Agreement (which they were not), there is no evidence that these individuals did not in good faith interpret the Vendor Agreement as lacking any obligation to purchase, and there is no evidence that any of these individuals intended to deceive Plaintiff as to any such commitment. Further, given the inquiries made by Mr. Jordan prior to his execution of the Vendor Agreement, as well as the review of in-house legal counsel, no reasonable jury could find by clear and convincing evidence that MEI was reckless; i.e. that MEI made a representation knowing that it had insufficient knowledge upon which to base such representation. Thus, Plaintiffs fraud claim fails as a matter of law because no reasonable jury could find that MEI falsely represented that it would purchase sub-assembly services for three years, much less that such representation was made with knowledge that such statement was false, or with reckless disregard for its truth or falsity.
9. Moreover, no reasonable jury could find that Plaintiff reasonably relied upon any alleged representation by MEI. It is undisputed that Plaintiff drafted the Vendor Agreement and that Plaintiff represented therein that the Vendor Agreement contained the "entire understanding and agreement between [MEI] and Synergy" and that it "supercedes all other agreements, negotiations, understandings and representations." Under these circumstances, no reasonable jury could find by clear and convincing evidence that Plaintiff reasonably relied to its detriment on any alleged pre-Vendor Agreement representation on the part of MEI, nor can it support an inference that MEI intended for Plaintiff to rely, to Plaintiffs detriment, upon any alleged pre-Agreement representation.
10. The foregoing facts and circumstances would also bar any claim or argument that MEI is liable for any negligent misrepresentation.
11. To the extent that Plaintiff argues that its fraud claim is based on alleged vague representations made in 1999 and 2000 that the sub-assembly work would be `"profitable," the Court notes that Plaintiff cannot sustain such claim for several reasons. First, Count V of Plaintiff's Second Amended Complaint does not plead such allegations. Second, the Court notes that the alleged representations of "profitability" were too vague and uncertain to constitute an actionable promise, and that these alleged vague, uncertain promises of "profitability" provide no basis for measurement of any profits. Moreover, to the extent that Plaintiff's allegations are that MEI promised to enter into an agreement that would make sub-assembly work more profitable, MEI made good on such alleged promise by entering into the Vendor Agreement, as well as by consenting to the imposition of inventory management fees in the year 2000 (prior to the Vendor Agreement). Finally, Plaintiff has proffered no evidence from which a jury could conclude that any alleged representations of "profitability" or that Plaintiff would be allowed to "recoup its losses," were made with a then present intention not to perform such promises at the time such representations were allegedly made in 1999 and 2000. See, e.g.,Andalex Resources, Inc. v. Myers, 871 P.2d 1041, 1047 (Ut. Ct. App. 1994) ("A misrepresentation of intended future performance is not a `presently existing fact' upon which a claim for fraud can be based unless a plaintiff can prove that the representor, at the time of the representation, did not intend to perform the promise and made the representation for the purpose of deceiving the promisee."). As noted above, there is no evidence that anyone at MEI who made any representations to Plaintiff in 1999 and 2000 even knew that the PC division would be sold, much less that MET would cease using Synergy for sub-assembly services.
D. Plaintiffs "Lost Opportunity" Claim Fails Because it is Too Remote, Speculative and Tenuous
1. The Court notes and understands Plaintiff to have represented that its "Lost Opportunity" damage theory was not a separate claim for relief, but instead was a theory of damages related solely to Plaintiff's fraud claim. Nonetheless, the Court expressly finds that the Lost Opportunity claim is too speculative, tenuous and remote to permit any recovery by Plaintiff.
2. The Court notes that Cablelink did not have a contract with IBM. Although Plaintiff asserted that Airlink LLC — an entity in which CableLink owned a one-half interest — had a contract with IBM, it is now undisputed that this was not the case. Instead, the contractual relationship at the heart of Plaintiff's theory was between IBM and AirSpeed LLC — a company in which Plaintiff had no interest. Thus, Plaintiff now concedes that its lost IBM opportunity is based on the contingent circumstances that Plaintiff did business with (and was a member of) Airlink, that Airlink filled orders for AirSpeed, and that AirSpeed in turn filled orders for IBM.
3. Moreover, even AirSpeed's cable opportunities with IBM were speculative. AirSpeed's contract with IBM had no minimum quantity requirement and did not require IBM to purchase anything.
4. Further, Plaintiff's representation that Airlink turned down opportunities for additional IBM business is contrary to the record. In fact, IBM unequivocally testified that neither AirSpeed nor Airlink ever turned away any IBM business. (January 15, 2004 30(b)(6) Deposition of IBM at 24; attached to MEI's Supplemental Brief Regarding the Alleged Lost IBM Opportunity [DE 109] as Exhibit "B").
5. Additionally, any continuing opportunities through Airlink are also highly speculative because it is undisputed that Airlink LLC dissolved in early 2002, and that AirSpeed LLC ceased purchasing cables from Cablelink during this timeframe. Although Plaintiff attempts to blame MEI for the dissolution of Airlink, the Court finds that the record lacks evidence of any causal connection between MEI's alleged fraud and the dissolution of Cablelink. In fact, while Plaintiff identifies MEI's April, 2001 stop payment of a check as the basis for the Airlink dissolution nine months later, in early 2002, Plaintiff admits that the stop payment on the check is not part of Plaintiff's fraud claim and is not otherwise the basis of any cause of action in this case. (See, e.g., Transcript of January 26, 2004 at 34).
6. Plaintiff's theory must also be rejected because Plaintiff could not identify with any degree of specificity what resources MEI allegedly prevented Plaintiff from investing in any alleged opportunities with Airlink. For example, while Plaintiff argued that it lacked the capital to invest in Airlink, Plaintiff could not identify how much capital was required or sought for this purpose and was instead forced to speculate as to how much capital might have been needed. (See, e.g., Transcript of January 26, 2004 at 7-10).
7. Finally, to the extent there was any expectation of future business between Airlink and IBM, if any, Plaintiff conveyed its interest in any such expectation or asset to AirSpeed LLC. (See Airlink LLC Dissolution Agreement at ¶¶ 17-18, attached to MEI's Supplemental Brief Regarding the Alleged Lost IBM Opportunity [DE 109] as Exhibit "H").
8. For these reasons, the Court finds that Plaintiff's lost opportunity theory is too speculative, remote and tenuous a basis upon which to predicate any recovery. See e.g., Canyon Country Store v. Bracey, 781 P.2d 414, 419 (Utah 1989) ("tentative discussions about that possibility of future contracts are not adequate to establish the certainty with which lost profits must be shown");Howarth v. Ostergaard, 515 P.2d 442, 445 (Utah 1973) (rejecting lost opportunity theory very similar to that articulated by CableLink).
9. Finally, the Court also notes that, for the reasons stated by the Court at the Pretrial Hearing on December 2-3, 2004, Plaintiff's "unjust enrichment damages for fraud" theory seeking in excess of $128,000,000.00 is also far too remote and speculative to sustain any recovery. The Court further notes that such claim appears to be without basis in Utah law.
Accordingly, for the reasons set forth above, the Court finds that there is no genuine issue of material fact remaining for trial in this matter, and the Court therefore dismisses Plaintiff's Second Amended Complaint with prejudice.
Let Judgment be entered accordingly.