Opinion
Civil Action No. 99-3040, Section "T"(5).
July 10, 2000.
ORDER AND REASONS
Before the Court are three separate motions, namely, a "Motion to Amend Judgment or In The Alternative Motion For Relief From Judgment" filed on behalf of defendants, Team Ace Joint Venture, Team Contracting, Inc., and American Construction and Energy, Inc. (collectively, "Team Ace"), a "Motion to Dismiss Defendants' Counterclaim" filed on behalf of plaintiff/defendant, in counter claim, Commercial Capital Holding Corporation ("Commercial Capital"), and finally, a "Motion For The Entry of A Rule 54(b) Final Judgment" filed on behalf of plaintiff, Commercial Capital. These matters came before the Court for hearing on Wednesday, July 5, 2000. Oral argument was waived by the parties and the Court took these motions under submission on the briefs only. The Court, having studied the legal memoranda filed by the parties, the evidence submitted, as well as the applicable law and jurisprudence, is fully advised in the premises and ready to rule.
I. BACKGROUND:
Team Ace entered into a contract with the Housing Authority of New Orleans ("HANO") for construction work at several housing developments in New Orleans. Team Ace, as general contractor, then entered into three subcontracting agreements with SIMS Enterprises, Inc. ("SIMS") to perform various obligations in the Team Ace prime contract with HANO. SIMS in turn entered into a "factoring agreement" with the plaintiff, Commercial Capital, wherein SIMS assigned certain receivables from its Team Ace Subcontract Agreements to Commercial Capital in return for money paid to SIMS.
Before Commercial Capital would advance funds to SIMS, Commercial Capital would present Team Ace with a copy of SIMS' payment request in order to ascertain whether or not Team Ace would approve the requests, or whether or not it had any claims of set off or defenses. Team Ace would then execute the "Invoice Acknowledgment Agreement" wherein Team Ace would acknowledge that the invoice presented would be paid and specifically waived any right of setoff, defense, counterclaim, or recoupments against SIMS in connection with that invoice. Commercial Capital also required SIMS sign the "Invoice Acknowledgment Agreement" acknowledging that payment of the invoice must be made to Commercial Capital. This was done and invoices paid by Team Ace to Commercial Capital until May 14, 1999, when Team Ace refused payment based upon failure of SIMS to comply with conditions of its contract with Team Ace. As a result, Commercial Capital filed this suit on October 6, 1999, contending that Team Ace owed $1,000,207.76 to date, all of which represented the face amount of invoices approved by Team Ace and accompanied by an "Invoice Acknowledgment Agreement".
Following the filing of the above captioned matter, Team Ace filed suit in the Circuit Court for Baltimore City, Maryland, on October 8, 1999, seeking a declaratory judgment relating to the rights and liabilities of the parties with respect to the Subcontract Agreements and the Commercial Capital assignment. Specifically, Team Ace alleges that it is not obligated to make payments to SIMS under the Subcontract Agreements until it has received satisfactory certificates and releases. As a result, Team Ace filed a Motion to Dismiss, or in the alternative, to Stay All Proceedings in this suit. The motion was denied by this Court in December 1999. In response, Team Ace filed an Answer and Counterclaim.
Team Ace alleged in its Counterclaim that Commercial Capital tortiously interfered with the Subcontract Agreements between Team Ace and SIMS by: (i) directing SIMS not to perform work or otherwise directed SIMS' work in violation of the terms and conditions of the agreement; (ii) directing SIMS to submit invoices to Team Ace for work that was not performed; and, (iii) colluding with SIMS to the detriment of Team Ace by commanding SIMS not to perform work after SIMS had already invoiced Team Ace for the work. As a result of this alleged collusion and interference, Team Ace seeks damages caused by the delays.
Commercial Capital filed a Motion for Summary Judgment which this Court granted on June 2, 2000. It is this Judgment which defendants seek to have amended or rescinded in the Motion to Amend Judgment, or in the alternative, Motion for Relief from Judgment. Further, despite this Court granting the summary judgment on the main demand, the Counterclaim remained a viable cause of action. As such, Commercial Capital now seeks a dismissal of the Counterclaim based on a failure to state a claim upon which relief may be granted.
II. MOTION TO AMEND JUDGMENT OR IN THE ALTERNATIVE MOTION FOR RELIEF FROM JUDGMENT:
A. Arguments of the Respective Parties:
Team Ace contends that an issue of fact exists regarding when payment is due under the Invoice Acknowledgment Agreement. The four corners of the document do not provide for when payment is due and the evidence submitted is contradictory. Mark Byouk, a principal of Commercial Capital, stated by affidavit that an oral condition was placed on the Invoice Acknowledgment Agreement whereby payment was to be made within ninety (90) days of execution of the Invoice Acknowledgment Agreement. Team Ace however disputes this, which is evidenced by the affidavit of Rick Arnold, who stated that at no time was he informed of or agree to a ninety (90) day payment provision. As such, Team Ace submits that as material issues of fact are in dispute as to when payment was due under the Invoice Acknowledgment Agreement, denial of the plaintiffs motion for summary judgment is warranted. Commercial Capital however argues that Team Ace is merely reiterating arguments previously made which were rejected by this Court. Team Ace's argument regarding payment is merely a defense which Team Ace clearly waived by signing the Invoice Acknowledgment Agreement.
B. Law and the Court's Analysis:
Under Rule 59 of the Federal Rules of Civil Procedure, a district court enjoys considerable discretion in granting or denying a motion for new trial. First Commonwealth Corp. v. Hibernia Nat. Bank of New Orleans, 891 F. Supp. 290 (E.D.La. 1995), amended 896 F. Supp. 634, affirmed 85 F.3d 622. There are three grounds upon which a Court may grant a Rule 59 motion for reconsideration or to alter or amend the judgment: (1) intervening change in the controlling law has occurred, (2) evidence not previously available becomes available, or (3) it is necessary to correct clear error of law or prevent manifest injustice. Database America, Inc. v. Bellsouth Advertising Pub. Corp., 825 F. Supp. 1216 (D.N.J. 1993).
Moreover, Rule 60(b) of the Federal Rules of Civil Procedure sets forth the requirements for relief from a judgment or order as follows:
(b) Mistakes; Inadvertence; Excusable Neglect; Newly Discovered Evidence; Fraud, etc. On motion and upon such terms as are just, the court may relieve a party or a party's legal representative from a final judgment, order, or proceeding for the following reasons:
(1) mistake, inadvertence, surprise, or excusable neglect;
(2) newly discovered evidence which by due diligence could not have been discovered in time to move for a new trial under Rule 59(b);
(3) fraud (whether heretofore denominated intrinsic or extrinsic), misrepresentation, or other misconduct of an adverse party;
(4) the judgment is void;
(5) the judgment has been satisfied, released, or discharged, or a prior judgment upon which it is based has been reversed or otherwise vacated, or it is no longer equitable that the judgment should have prospective application; or
(6) any other reason justifying relief from the operation of the judgment.
The motion shall be made within a reasonable time, and for reasons (1), (2), and (3) not more than one year after the judgment, order, or proceeding was entered or taken.
In an opinion by Judge Morey Sear of this Court, he set forth the following guidelines for applying this rule:
Rule 60(b) "must be equitably and liberally applied to achieve substantial justice." Blois v. Friday, 612 F.2d 938 (5th Cir. 1980). Accord, Laguna Royalty Co. v. Marsh, 350 F.2d 817, 823 (5th Cir. 1965). This rule, which allows the trial court to reopen a case, is:
most liberally applied to default judgments; its main application is to those cases in which the true merits of a case might never be considered because of technical error, or fraud or concealment by the opposing party, or the court's inability to consider fresh evidence. (Citations omitted.) The purpose of the motion is to permit the trial judge to reconsider such matters so that he can correct obvious errors or injustices and so perhaps obviate the laborious process of appeal. Weighing against the grant of a 60(b) motion is the desirability of finality in judgments. This is particularly true where the reopening of a judgment could unfairly prejudice the opposing party. (Citation omitted). But even without such prejudice, the desirability of orderliness and predictability in the judicial process speaks for caution in the reopening of judgments. These are matters that are addressed to the sound discretion of the trial court, and its ruling. will be reversed on appeal only upon a showing of abuse of discretion. (Citations omitted).Swift Chemical Co. v. Usamex Fertilizers, 490 F. Supp. 1343, 1349-1350 (E.D. La. 1980), affirmed 646 F.2d 1121 (5th Cir. 1981), rehearing denied 650 F.2d 282 (5th Cir. 1981) (quoting Fackelman v. Bell, 564 F.2d 734, 735-36 (5th Cir. 1977)).
Having reviewed the record, the law and the memoranda submitted by the parties, this Court finds that the defendants have failed to establish any of the aforementioned grounds for new trial or in the alternative to amend the judgment. The motion merely reiterates and reurges arguments previously made, which this Court found unpersuasive. Accordingly, said motion is denied.
III. MOTION TO DISMISS DEFENDANTS' COUNTERCLAIM:
A. Arguments of the Respective Parties:
Commercial Capital seeks a dismissal of defendants' counterclaim pursuant to Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief may be granted. Commercial Capital contends that the counterclaim asserts a claim for "tortious interference with contract", a cause of action not recognized in Louisiana as pled. The law provides such a claim in very limited circumstances. In 9 to 5 Fashions, Inc. v. Spurney, 538 So.2d 228 (La. 1989) the Supreme Court recognized "a corporate officer's duty to refrain from intentional and unjustified interference with a contractual relation between his employer and a third person." Furthermore, the Fifth Circuit Court of Appeals addressed a tortious interference claim in America's Favorite Chicken v. Cajun Enterprises, Inc., 130 F.3d 180 (5th Cir. 1997). In that case, a Popeye's chicken franchiser sued a franchisee for unpaid franchise royalties due under the franchise agreement between them. The franchisee third partied two other companies, who were not parties to the franchise contract, alleging that they had interfered with the contract by engaging in a scheme to inflate prices of products required under the franchise agreement. The Fifth Circuit dismissed the claims against these third parties holding "[u]nder the present facts, [defendant's] tortious interference claim against [third party defendants] does not fall within the narrow parameters set forth by the Louisiana Supreme Court in 9 to 5 Fashions . . ." Id. In this counterclaim, Team Ace alleges that a corporation interfered with a contract between two other parties, neither of which was his employer. As such, Commercial Capital argues that this does not fall within the narrow confines of the Spurney exception and the counterclaim should be dismissed.
Team Ace contends that Louisiana jurisprudence has expanded a cause of action for tortious interference beyond the corporate officer. In Cowen v. Steiner, 689 So.2d 516 (La.App. 3rd Cir. 1997), the Third Circuit Court of Appeals ruled that Spurney did not limit an action for tortious interference with contractual relations solely to cases involving a corporate officer and therefore held the medical director of the defendant hospital liable for tortious interference with contract. As such, Team Ace argues that while Commercial Capital and its principle, Mark Byouk, are not corporate officers of SIMS, such a relationship is not a requirement for stating a claim for tortious interference of a business contract.
B. Law and the Court's Analysis:
A motion to dismiss pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure ("FRCP") "is viewed with disfavor and is rarely granted."Lowery v. Texas AM University System, 117 F.3d 242, 247 (5th Cir. 1997); Kaiser Aluminum Chem. Sales v. Avondale Shipyards, 677 F.2d 1045, 1050 (5th Cir. 1982). The complaint must be liberally construed in favor of the plaintiff, and all facts pleaded in the original complaint must be taken as true. Campbell v. Wells Fargo Bank, 781 F.2d 440, 442 (5th Cir. 1980). A district court may not dismiss a complaint under FRCP 12(b)(6) "unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 101-102, 2 L.Ed.2d 80 (1957); Blackburn v. Marshall, 42 F.3d 925, 931 (5th Cir. 1995). The Fifth Circuit defines this strict standard as, "[t]he question therefore is whether in the light most favorable to the plaintiff and with every doubt resolved in his behalf, the complaint states any valid claim for relief." Lowrey, 117 F.3d at 247, citing 5 Charles A. Wright Arthur R. Miller, Federal Practice and Procedure, § 1357, at 601 (1969).
While the Supreme Court recognized a cause of action in the case of 9 to 5 Fashions against a corporate officer, the Court made clear that:
[i]t is not our intention, however, to adopt whole and undigested the fully expanded common law doctrine of interference with contract, consisting of "a rather broad and undefined tort in which no specific conduct is proscribed and in which liability turns on the purpose for which the defendant acts, with the indistinct notion that the purposes must be considered improper in some undefined way."9 to 5 Fashions, supra.
Our Court and various Louisiana courts of appeal have uniformly recognized the narrowness of Louisiana's tortious interference action. (Citations omitted). Even Louisiana appellate courts purporting to "expand" the cause of action have done so within the limited confines of the 9 to 5 Fashions decision.America's Favorite, supra.
Team Ace relied heavily on the Cowen case in support of its argument that Louisiana does recognize a cause of action as alleged herein. However, it is the finding of this Court that not only was the judgment of the Third Circuit Court of Appeal in the Cowen case reversed by the Supreme Court at 701 So.2d 140 (La. 1997), but also, even if this was good law, a simple reading of the Third Circuit's ruling shows that the case is inapplicable to the case at hand. The Third Circuit reasoned:
we see no valid reason to shield Dr. Stiener from a lawsuit for which a corporate officer would be held amenable, simply because Dr. Steiner was not, in title, a corporate officer. We reach this conclusion because of the corporate context of the allegations and because it appears from the pleadings that Dr. Stiener had the power or influence that a corporate officer might have. We see no reason to relieve him of the accountability for his use of such influence and power in the corporate context simply because he did not have the title.Id. In the case at hand, the allegations contained within the counterclaim do not allege that Commercial Capital had power or influence over SIMS in the way that one of its corporate officers would have. Therefore, it is the opinion of this Court that, in the light most favorable to Team Ace and with every doubt resolved in its behalf, the allegations contained within the counterclaim simply do not fit within the narrowly defined exceptions of Spurney and thus fail to state a claim upon which relief may be granted.
IV. MOTION FOR THE ENTRY OF A RULE 54(b) FINAL JUDGMENT:
In light of the rulings of this Court denying the Motion to Amend Judgment and granting the Motion to Dismiss the Counterclaim, all claims are disposed of and this Motion is hereby rendered moot.
Accordingly,
IT IS ORDERED that the Motion to Amend Judgment, or in the alternative, Motion for Relief from Judgment filed on behalf of the defendants, Team Ace Joint Venture, Team Contracting, inc., and American Construction and Energy, Inc., be and the same is hereby DENIED.
IT IS FURTHER ORDERED that the Motion to Dismiss Defendants' Counterclaim filed on behalf of plaintiff/defendant-in-counterclaim, Commercial Capital Holding Corporation, be and the same is hereby GRANTED.
IT IS FURTHER ORDERED that the Motion for Entry of a Rule 54(b) Final Judgment filed on behalf of plaintiff, Commercial Capital Holding Corporation, be and the same is hereby rendered MOOT.