Opinion
1:99CV00959, 1:00CV00319.
July 2, 2003.
MEMORANDUM OPINION
Before this Court is Plaintiff's and Third-Party Defendants' Motion to Amend Judgment Pursuant to Fed.R.Civ.P. 52(b) and 59(e) [Document #79] as filed on October 7, 2002 in case number 1:99CV00959. Plaintiff and Third-Party Defendants (hereinafter collectively referred to as "Plaintiff," unless otherwise noted) filed their Motion to Amend Judgment with respect to an Order and Judgment, along with Finding of Facts and Conclusions of Law, entered by this Court on September 23, 2002 [Document #78]. The Court's Order and Judgment was entered following a bench trial on the issues raised by the consolidation of case numbers 1:99CV00959 and 1:00CV00319. ACS Enterprise Solutions, Inc. and Logan Services, Inc., as Defendants and Third-Party Plaintiff's (hereinafter collectively referred to as "Defendants," unless otherwise noted) filed a Brief in Opposition to Plaintiff's Motion to Amend Judgment [Document #84]. After Plaintiff filed a Reply to Defendants' Brief in Opposition to Plaintiff's Motion to Amend Judgment [Document #86], the Court held a hearing on Plaintiff's Motion on December 16, 2002. For the reasons stated herein, Plaintiff's Motion to Amend Judgment is Denied in part to the extent that Plaintiff requests that the Court amend the substantive Finding of Facts and Conclusions of Law reached by the Court in its September 23, 2002 Order and Judgment. However, for the reasons stated herein, Plaintiff's Motion to Amend Judgment is Granted in part to the extent that both parties request that the Court establish a schedule for the parties to comply with the Court's September 23, 2002 Order and Judgment.
I. FACTUAL AND PROCEDURAL BACKGROUND
Plaintiff in both its motion and argument at the hearing asserted that the Court's September 23, 2002 Order and Judgment should be amended to reflect a different conclusion than that reached by the Court with respect to what the parties' obligations and rights were pursuant to the Cross License and Management Agreement ("CLMA") executed by the parties or their representative on or around May 1, 1992. Plaintiff offered the following background information in support of this assertion:
1. After a three-day bench trial, the Court correctly found that each of Defendants, ACS Enterprise Solutions, Inc.'s and Logan Services, Inc.'s Counterclaims and Third Party Claims were unsupported, and the Court dismissed the same.
2. After dismissing Defendants' claims, the Court ordered that Logan Systems "is . . . not relieved of its obligation to continue to abide by the terms of the CLMA, particularly with respect to honoring ACS' right to exercise its option to purchase the Logan Systems' business. . . ."
3. The Court further ordered that ACS could exercise the option to purchase under Section 4.2(iii) of the CLMA, and that (in the event that ACS did exercise the option) Logan Systems must cooperate in finalizing the sale under the terms of the CLMA.
4. The Court further found that ACS was the "prevailing party" for the purposes of assessing costs under Fed.R.Civ.P. 54(d).
The full text for this reference begins on page 36 of the September 23, 2002 Order and Judgment and reads as follows:
Finally with respect to Logan Systems' demand for a Declaratory Judgment in case number 1:99CV959, for the reasons stated herein, the Court again concludes as a matter of law that ACS did not breach the CLMA in any respect as asserted by Logan Systems. The Court further finds and concludes as a matter of law that Logan Systems is therefore not relieved of its obligations to continue to abide by the terms of the CLMA, particularly, with respect to honoring ACS's rights to exercise its option to purchase the Logan Systems' business pursuant to Sections 4.2(iii) and 1.10(c) of the CLMA.
Missing from Plaintiff's brief restatement of the case is the fact that the entire matter came before the Court pursuant to two separate civil actions for declaratory judgment relief filed by Plaintiff. Plaintiff's first civil action, with the case number 1:99CV00959, was filed on September 28, 1999, and the second case, with the case number 1:OOCV00319, was filed on March 30, 2000. It is important to note that both of these civil actions were filed by Plaintiff prior to March 31, 2000, which meant that the CLMA was still in effect at the time of the filing of Plaintiff's civil actions for declaratory judgment relief. In each case Plaintiff asked the Court to determine whether Plaintiff was relieved of its obligations to perform under the CLMA. Plaintiff had alleged that it was so relieved because of purported acts of breach of the CLMA by Defendants.
Specifically, Plaintiff argues that the Court's ultimate decision with respect to the rights of the parties under the CLMA was in error because the only relief Defendants ever requested, during the trial and in their Proposed Findings of Facts and Conclusions of Law, was a request for damages. Plaintiff therefore contends that it was inappropriate for the Court to grant Defendants the right to eventually exercise their option to purchase the Logan Systems' business because neither party pled for specific performance of the CLMA. Plaintiff further contends this was an issue that was not tried by a consent of the parties. The Court will now address the issues raised by Plaintiff's Motion to Amend the Court's Order and Judgment of September 23, 2002.
II. STANDARD OF REVIEW
As previously stated, Plaintiff or Logan Systems filed a Motion to Amend the Court's Order and Judgment entered on September 23, 2002. "There are three circumstances in which the district court can grant a Rule 59(e) motion: `(1) to accommodate an intervening change in controlling law; (2) to account for new evidence not available at trial; or (3) to correct a clear error of law or prevent manifest injustice.'"United States, ex rel. Becker v. Westinghouse Savannah River Company, 305 F.3d 284, 290 (4th Cir. 2002) (quoting Pac. Ins. Co. v. Am. Nat'l Fire Ins. Co., 148 F.3d 396, 403 (4th Cir. 1998)). "Mere disagreement does not support a Rule 59(e) motion." Id. (quoting Hutchinson v. Staton, 994 F.2d 1076, 1082 (4th Cir. 1993)).
III. DISCUSSION
As in Becker v. Westinghouse Savannah River, Plaintiff in this instance does not point to an intervening change in the controlling law or any newly discovered evidence that would justify altering or amending the Court's previously entered September 23, 2002 Order and Judgment. Plaintiff claims, however, that the imposition of the Court's Order and Judgment at this time would amount to either clear error of law or a manifest injustice to Plaintiff. Notwithstanding Plaintiff's argument, the Court must disagree with Plaintiff's assertion of error of law or a manifest injustice occurring from the imposition of the Court's Order and Judgment. Instead, the Court's prior Order and Judgment reached perhaps the only logical result that could have been derived in response to Plaintiff's demand for declaratory judgment relief in the two cases before the Court. At trial, the Court was presented with facts and evidence which revealed that both Plaintiff and Defendants had asserted that the other had directly breached specific elements of the CLMA. Both Plaintiff and Defendants also contended that each had engaged in further conduct that was tortuous in nature. For these reasons, Plaintiff, on the one hand, asserted that it was entitled to completely withdraw from any obligations it had under the CLMA. Defendants, on the other hand, having already provided Plaintiff with notice of their intent to exercise the option to purchase the Logan Systems' business, argued that Plaintiff's conduct allowed Defendants to exercise the option to purchase under provisions of the CLMA that were more favorable to Defendants, particularly with respect to the price at which Defendants could exercise the option to purchase the Logan Systems' business. Specifically, Defendants asserted that Plaintiff's alleged acts amounted to a material breach of the CLMA which constituted a "termination event" as defined within Sections 1.32(i), 4.2(ii) and 10.1 of the CLMA. One of Defendants' principal contentions was that Plaintiff's failure to provide due diligence information with respect to all of the Logan Systems' business was a material breach and thus a termination event under the CLMA. Responding to Plaintiff's declaratory judgment actions, this Court's Order and Judgment concluded that Plaintiff was responsible for providing adequate due diligence information to Defendants, but, that Plaintiff's failure to fully comply with due diligence was not a material breach of the CLMA so as to constitute a termination event.
It is not necessary for the Court to engage in a full discussion of the various terms and provisions of the CLMA because reference can be made to the Court's original Order and Judgment entered on September 23, 2002, for a more detailed discussion of the terminology of the CLMA and its application to the parties and its relationship to the Court's ultimate decision.
On the other hand, the Court also found that Defendants had not engaged in any conduct that would have relieved Plaintiff of its obligations under the CLMA. The Court therefore concluded that Defendants retained the option to decide whether or not they would exercise the option to purchase once they had sufficient due diligence information about all of the Logan Systems' business. The Court's Order and Judgment, however, did not directly indicate when this decision was to be made nor did the Court indicate when a sale of the Logan Systems' business to Defendants should take place in the event Defendants exercised the option to purchase as set out in the CLMA. It is significant to note that the Court did not and could not reach the conclusion Plaintiff requested which was for the Court to find as a fact and conclude as a matter of law that the parties' rights and obligations under the CLMA had expired.
Instead, based upon its substantial Finding of Facts, the next step for the Court was to provide Defendants with the relief they were entitled to under the CLMA as provided within Fed.R.Civ.P. 54(c). The available relief in this instance was to order the Plaintiff to provide Defendants with sufficient due diligence information in order to allow Defendants to determine if they would exercise the option to purchase the Logan Systems' business. Plaintiff argues that Defendants did not request this relief but rather Defendants requested an award of damages. Nevertheless, "Rule 54(c) allows a party to receive the relief to which he `is entitled, even if the party has not demanded such relief in his pleadings.'" Atlantic Purchasers. Inc. v. Aircraft Sales. Inc., 705 F.2d 712, 721 (4th Cir. 1983) (Bryan, J., dissenting) (quoting Fed.R.Civ.P. 54(c)). In this instance, the Court granted the relief that was the subject of Plaintiff's declaratory judgment action and its prayer for relief. The collateral effect of that response was to acknowledge the rights and obligations of Defendants as well. Plaintiff seems to complain now that the Court went too far in providing a response that afforded relief that Defendants did not specifically request. The Court's Order and Judgment provided the relief that was appropriate for both parties under the terms of the CLMA. It was in this vein that the application of Rule 54(c) provides the appropriate basis for the Court's September 23, 2002 Order and Judgment. Likewise, the Fourth Circuit has "liberally construed this provision `leaving no question that it is the court's duty to grant whatever relief is appropriate in the case on the basis of the facts proved.'" Id. (quoting Robinson v. Lorillard Corp., 444 F.2d 791, 803 (4th Cir. 1971)). The Court's September 23, 2002 Order and Judgment concluded that Plaintiff was not relieved of its obligations under the CLMA and Defendants were not precluded in any way from exercising the option to purchase the Logan Systems' business pursuant to the applicable terms of the CLMA.
Plaintiff, however, proffers the case of Pinkley. Inc. v. City of Frederick, Maryland, 191 F.3d 394 (4th Cir. 1999), as authority for its argument that the Court erred in awarding a remedy that Defendants had not specifically demanded in their pleading, their demand for relief, or in their Proposed Finding of Facts and Conclusions of Law submitted to the Court. Having reviewed Pinkley, the Court finds that Plaintiff's reliance upon Pinkley is not totally applicable to the facts of this case. The decision of the district court in Pinkley was reversed to the extent that the district court decided on its own initiative to invoke supplemental jurisdiction to add a state claim that had not been pled by either of the parties. ThePinkley district court relied upon Fed.R.Civ.P. 15(b) in finding that a state law claim of conversion had been put before the court through evidence produced at trial by the parties. However, the Fourth Circuit Court of Appeals in Pinkley decided that the trial court erroneously relied upon Rule 15(b). The Fourth Circuit instead ruled that Fed.R.Civ.P. 54(c) governed the situation involved in Pinkley.
Even so, under the facts of Pinkley, the Fourth Circuit decided that Rule 54(c) would not support the district court's decision that a state law claim for conversion had been de facto tried by the parties. The Fourth Circuit's ruling was based primarily on the fact that the award of damages to plaintiff in that instance inflicted unfair prejudice on the defendants in Pinkley. Pinkley is distinguishable here because, unlike the district court in Pinkley, this Court did not add or create a claim for relief that was outside the scope of the pleadings and Plaintiff's prayer for relief in its declaratory judgment actions. As previously stated, Plaintiff requested on two separate occasions that the Court determine whether Plaintiff, because of actions by Defendants, in exercising the option and or in changing the closing date, was excused from its obligations under the CLMA. The basis of the Court's ruling in its September 23, 2002 Order and Judgment was that Plaintiff's offer of proof and the evidence as a whole did not substantiate such a finding. Instead, the Court found that Defendants did not breach the CLMA in any respect by either exercising the option under the CLMA or by changing the closing date until they obtained sufficient due diligence information from Plaintiff in order to close the transaction. The Court therefore concluded that Plaintiff was not excused of its obligations under the CLMA that were in effect at the time that Plaintiff initiated both of its declaratory judgment actions.
The collateral effect of the Court's ruling resulted in a determination that Defendants had not been deprived of any of their benefits which they were entitled to under the CLMA. In particular, Defendants had the right under the CLMA to receive "full and unencumbered access" to all books, records, premises, employees and assets of every kind for the purpose of conducting due diligence. Defendants were therefore entitled to have access to the financial information of all aspects of the Logan Systems' business to the extent that it would provide sufficient information for Defendants, as a part of due diligence, to effectively decide whether to ultimately exercise the option to purchase. This was true even though the Court also found that Logan Systems' creation of the new business entities, Logan Operating Systems and Sanders Operating Systems, did not constitute a material breach of the CLMA. The Court's ultimate response to Plaintiff's declaratory judgment actions supported the Court's finding that Defendants were the prevailing party. As such, Fed.R.Civ.P. 54(c) required the Court to give Defendants, as the prevailing party, the relief they were entitled to receive with respect to their right to receive due diligence information and to choose whether or not they would exercise the option to purchase under the applicable terms of the CLMA. This is what the Court did and no more. The fact that this is a different result than Plaintiff expected does not mean that the Court's Finding of Facts and Conclusions of Law with respect to Plaintiff's continued obligation under the CLMA created a claim for relief that was outside the scope of the parties' pleadings.
Failing in that argument, Plaintiff next argues that the Court's authority to grant the relief as set out in its September 23, 2002 Order and Judgment was further limited by Rule 54(c) to the extent that the directives of the Order and Judgment were unfair and prejudicial to Plaintiff. Plaintiff contends that requiring it to provide due diligence information to Defendants and perhaps be subjected to selling the Logan Systems' business to Defendants at this time will be unfairly prejudicial because it changed its operations in reliance upon its belief that the only relief sought by Defendants was damages. The Court acknowledges that Rule 54(c) is not without its limits as substantial prejudice to an opposing party may defeat relief under Rule 54(c). Atlantic Purchasers. Inc., 705 F.2d at 721 (Bryan, J., dissenting). Although the Court recognizes the limitations of use of Rule 54(c) to the extent that it may result in unfair prejudice, the Court's conclusion that Plaintiff was not relieved of its obligations under the CLMA did not go beyond the declaratory relief which had been requested by Plaintiff. For the reasons previously discussed, the Court, therefore, finds no merit in Plaintiff's claim that the effects of the Court's September 23, 2002 Order and Judgment were unfair and prejudicial to Plaintiff.
The Court also finds there is no merit to Plaintiff's claim of being surprised by the Court's Order and Judgment interpreting the rights of the parties. Plaintiff could have easily anticipated such relief being available to Defendants. Furthermore, even if the Court accepts Plaintiff's argument that Defendants sought a recovery solely for damages, Defendants' request for damages must be viewed in the context of the underpinnings of Defendants' damage calculations. At the time that Plaintiff filed its declaratory judgment actions, Defendants had already given notice of their intention to exercise the option to purchase the Logan Systems' business pursuant to the CLMA. Absent Plaintiff's decision not to make available full due diligence with respect to the total financial status of the Logan Systems' business, particularly as it concerned Logan Operating Systems and Sanders Operating Systems, Defendants would have been able to exercise the option to purchase the Logan Systems' business in accordance with Sections 4.2(iii) and 1.10(c) of the CLMA.
Even without a showing of a breach of the CLMA by Plaintiff, Defendants would have been able to rely upon Sections 4.2(iii) and 1.10(c) to determine the option price for the purchase of the Logan Systems' business. Defendants established their damage request partially in reliance on these same sections of the CLMA. Defendants, however, made the erroneous assumption that their calculations of damages could be determined using Section 1.10(c) based upon the profits of Logan Systems, and not those of Defendants' subsidiary, Logan Services, as Section 1.10(c) clearly indicates. Using Section 1.10(c), Defendants argued that their damages would consist of a multiple of five (5) times whatever profits Logan Systems had earned during a prior four-year annualized period of operation of the business pursuant to the CLMA. Defendants' method of calculating their damages or the option price, based upon the earings of Logan Systems, was not proper under the CLMA. Nevertheless, the Court finds it significant that the underlying assumption of Defendants' damage request was their belief that their damages should consist of a multiple of five times whatever profits Logan Systems would have earned because Defendants could have earned the same base profits if Defendants had been able to exercise the option to purchase. As noted, Defendants made the erroneous assumption in their damage request that Section 1.10(c) allowed them to rely on the profits of Logan Systems in determining their damage calculations. This was not correct. Of course, the results would not be quite as favorable, and more costly, to Defendants if they used Logan Systems' profits to determine the option price. The whole point, however, is the fact that even though Defendants made an erroneous calculation of their damages, it is clear that Defendants had never expressed any intention not to exercise the option to purchase the Logan Systems' business. Unless Plaintiff had been able to establish a material breach of the CLMA by Defendants, Defendants would be able to exercise their option to purchase the Logan Systems' business consistent with the appropriate provisions of the CLMA. Therefore, the Court's September 23, 2002 Order and Judgment, which concluded that Defendants still had the right to pursue the option to purchase consistent with the appropriate provisions of the CLMA, should not have come as a surprise to Plaintiff.
ACS erroneously attempted to use the total sum of the earnings of Logan Systems as the base point for calculating its purported damages. Defendants then sought to multiply this result by a multiple of 5 purportedly pursuant to Section 1.10(c) of the CLMA. The CLMA, however, expressed the determination of the option price on the basis of using the 5 times multiple of the average annualized profits of Logan Services, a subsidiary of Defendants, and not the average annualized profits of Logan Systems. Defendants cannot be afforded complete relief at this time because of the Court's finding that even in terms of a proper application of Section 1.10(c) of the CLMA, Defendants failed in their own evidence to produce actual evidence as to what this sum would be. At best, the Court allowed the testimony of Jim Dufner to be used as an estimate of what Logan Services' annualized profits would be consistent with the requirements of Section 1.10(c) of the CLMA. As the Court previously noted in its Conclusions of Law number 15, based upon an annualized profit for Logan Services of $434,163.00, if ACS chooses to exercise the option, then they would be able to do so at a CLMA determined option price of $2,170,815.
The only other limiting principle to Rule 54(c)'s mandate that a party receive the relief he is entitled to is that a remedy that is not desired by any of the parties should not be forced upon them. Minyard Enterprises, Inc. v. Southeastern Chemical Solvent Company, 184 F.3d 373, 386 n. 14 (4th Cir. 1999). This additional limitation on the operation of Rule 54(c) can be ruled out in this instance because Defendants are in fact requesting the relief that the Court found logically extended from its Finding of Facts and Conclusions of Law in the September 23, 2002 Order and Judgment. In addition, there has never been a disclaimer, waiver or withdrawal by Defendants of the right to exercise the option to purchase extended by the CLMA. There was nothing about Defendants' actions which suggested that Defendants ever intended to back away from exercising the option to purchase. Plaintiff, however, attempts to read Defendants' election to proceed under a different provision of Section 4.2 for purposes of exercising the option to purchase as a total retraction of their notice of intent to exercise the option. The Court, however, finds that there was nothing about Defendants' actions taken pursuant to provisions of the CLMA, whether under Section 4.2(iii) or Section 4.2(ii), which would suggest that Defendants had retracted their notice of intent to exercise the option to purchase the Logan Systems' business or that they were not interested in pursuing their option to purchase. In fact, Defendants merely shifted the basis of their option based upon their belief that Plaintiff had engaged in a "termination event" by not making full due diligence available to Defendants. Defendants deemed Plaintiff's failure as allowing Defendants to move from exercising the option pursuant to Section 4.2(iii) of the CLMA and instead to invoke the option to purchase pursuant to Section 4.2(ii) of the CLMA. Section 4.2(ii) of the CLMA would have entitled Defendants to purchase the Logan Systems' business under the provision that provided for an option price of $50,000.00 upon the occurrence of a "termination event." Defendants' attempt to proceed under this section was just a different manner of calculating the option price than the method set out for exercising the option to purchase pursuant to Sections 4.2(iii) and 1.10(c) of the CLMA. Notwithstanding Plaintiff's argument to the contrary, the Court found in its original Order and Judgment that Defendants still had the right to exercise the option pursuant to Sections 4.2(iii) and 1.10(c) of the CLMA. Because there was no retraction, waiver, or disclaimer of the option to purchase by Defendants, Plaintiff, therefore, was not relieved of its obligations under the CLMA.
Defendants' attempt to exercise the option pursuant to Section 4.2(ii) rather than their initial reliance on Section 4.2(iii) provides a clear indication that Defendants were not making a wholesale retraction of the option to purchase the Logan Systems' business. This is particularly true when viewed in conjunction with the actual Retraction Section of the CLMA contained in Section 4.4. Section 4.4 provides that "[a]t any time prior to a Final Closing, Sub (meaning Logan Services or Defendants) may retract its exercise of its option pursuant to 4.2, whereupon this Agreement shall terminate unless otherwise agreed to by the parties." This was never done by Defendants. Defendants initially believed that Plaintiff had committed a "termination event," which would then have allowed them to switch the basis for exercising their option to purchase from Section 4.2(iii) to Section 4.2(ii).
The Court did, however, determine that Defendants would not be able to exercise the option pursuant to Section 4.2(ii) based upon a "termination event" as defined in Section 1.32(i) of the CLMA.
In summary, in responding to Plaintiff's request for declaratory judgment, the essence of the Court's Finding of Facts, Conclusions of Law, and Order and Judgment, was that while the Court found that Plaintiff did not engage in a material breach constituting a termination event under the CLMA, Plaintiff was not relieved of its obligations to perform under the CLMA. This is particularly true based upon the Court's additional finding that Defendants were entitled to receive due diligence information about all of the Logan Systems' business after it had given notice of their intent to exercise the option to purchase the Logan Systems' business on December 6, 1999, well before the final expiration of the CLMA on March 31, 2000. The Court further found that Defendants were not deprived of this right by Plaintiff's allegations that Defendants had breached the CLMA by exercising the option or by changing the closing date until it had sufficient due diligence information to decide whether to exercise the option to purchase. Pursuant to Rule 54(c), the Court therefore granted Defendants the relief which they were entitled to receive. Therefore, Plaintiff's motion requesting the Court to alter or amend this portion of its September 23, 2002 Order and Judgment must be denied.
Plaintiff additionally asserts that the Declaratory Judgment Act, 28 U.S.C. § 2202, prevents the Court from granting any relief in addition to a declaratory judgment without reasonable notice and hearing to the adverse party. Plaintiff argues that by declaring whether or not Plaintiff was relieved of its obligations under the CLMA, the Court did something more than answer the very question that Plaintiff sought in requesting declaratory judgment relief. Prior to the issuance of this decision, the Court has not done anymore than to describe what the parties' rights were under the CLMA at the time Plaintiff initiated the various lawsuits filed in this case. The Court also has not previously set any time frame for Plaintiff's compliance with the due diligence Defendants are entitled to receive nor has the Court set a Final Closing date. The Court's September 23, 2002 Order and Judgment only determined what the parties' rights were under the CLMA as Plaintiff's declaratory judgment actions had requested. In doing so, the Court determined that Plaintiff was not relieved of its obligation under the CLMA nor were Defendants deprived of their rights to exercise the option to purchase the Logan Systems' business pursuant to Sections 4.2(iii) and 1.10(c). Although the outcome was different from Plaintiff's expectation, the Court provided the very relief Plaintiff requested which was to determine what the parties' rights were under the CLMA. As such, the Court did not impose an alternative disposition nor additional relief which, pursuant to 28 U.S.C. § 2202, would have warranted notice and an additional hearing before the Court entered its Order and Judgment on September 23, 2002.
Plaintiff relies upon 28 U.S.C. § 2202 of the Declaratory Judgment Act which provides as follows: "Further necessary or proper relief based on a declaratory judgment or decree may be granted, after reasonable notice and hearing, against any adverse party whose rights have been determined by such judgment." 28 U.S.C. § 2202.
In its Motion to Amend Judgment, Plaintiff also questions the Court's previous determination that Defendants were the prevailing party for the purpose of assessing costs that might be imposed. Indeed, the Court found Defendants to be the prevailing party. This decision was reached on the basis that with respect to Plaintiff's declaratory judgment actions, the Court found that Plaintiff was not relieved of its obligations under the CLMA. Plaintiff, however, suggests that Defendants should not be the prevailing party at least with respect to the claims Defendants asserted individually against Michael Smith, Craig Sanders, and Logan Operating Systems because the Court dismissed Defendants' claims. There is no dispute that Defendants did not prevail in their claims against the individual parties. The Court, however, did not intend to express any judgment which may hold the individual parties, Craig Sanders, Michael Smith or even Logan Operating Systems, liable for any costs that might be imposed. All of the evidence at trial indicated that whatever actual work they performed was done for the primary benefit of Logan Systems. Craig Sanders, Michael Smith, and Logan Operating Systems shall therefore not bear any responsibility for any costs that may be assessed, if any, in response to Defendants' motion for costs. Based upon the Court's ruling with respect to Plaintiff's declaratory judgment action, the Court previously determined that as between Logan Systems and Defendants, Defendants are the prevailing party for purposes of payment of costs, if any, that may be considered by the Court. Plaintiff has not presented any evidence or argument which would warrant a different conclusion. Therefore, it remains the conclusion of this Court that Defendants are the prevailing party which may present a Bill of Costs for the Court's consideration of any costs that may be imposed against Logan Systems. For all of the reasons stated above, Plaintiff's Motion to Amend Judgment [Document #79] with respect to the substantive Finding of Facts and Conclusions of Law that formed the basis of the Court's September 23, 2002 Order and Judgment is DENIED.
Both parties, however, further suggest that the Court did not include either a compliance schedule for the completion of due diligence or the setting of a Final Closing date. The Court agrees that this was not done. At the parties' request, Plaintiff's Motion to Amend Judgment will be GRANTED to the extent that the Court will set compliance dates for the parties to complete their obligations under the CLMA, including the setting of a Final Closing Date.
The Court will therefore order that Plaintiff shall fully provide any and all due diligence information requested by Defendants specifically concerning the financial status and business operations of Logan Systems, Logan Operating Systems and Sanders Operating Systems. This information is to be provided in order that Defendants will have sufficient information to effectively decide whether or not it will exercise its option to purchase the Logan Systems' business pursuant to Sections 4.2(iii) and 1.10(c) of the CLMA. The Court will further order that Defendants shall provide a specific request for the due diligence information it is seeking within 20 days of the entry of this Order. It is also ordered that Plaintiff, thereafter, shall comply with the due diligence information requested by Defendants within 40 days after a specific request for due diligence is made by Defendants. Within 20 days of receipt of this information, Defendants shall notify Plaintiff of Defendants' decision as to whether or not Defendants will exercise the option to purchase the Logan Systems' business pursuant to Sections 4.2(iii) and 1.10(c) of the CLMA. However, the option to purchase will be deemed to have expired if it is not timely exercised consistent with time requirements set out in the Court's Amended Order and Judgment. If, however, Defendants choose to exercise the option to purchase the Logan Systems' business, pursuant to Sections 4.2(iii) and 1.10(c) of the CLMA, then the Final Closing shall occur no later than 120 days from the date of the entry of the Court's Memorandum Opinion and Amended Order and Judgment.
An Amended Order and Judgment consistent with this Memorandum Opinion shall be filed contemporaneously herewith.