Opinion
No. 3333–04.
2010-08-24
LAFARGE BUILDING MATERIALS, INC., Plaintiff, v. POZAMENT CORPORATION, Defendant.
Tarshis, Catania, Liberth, Mahon & Milligram, PLLC, (Joseph A. Catania, Jr. and Hobart J. Simpson, of counsel), Newburgh, for Plaintiff. Pattison, Sampson, Ginsberg & Griffin, P.C., (Michael E. Ginsberg, of counsel), Troy, for Defendant.
Tarshis, Catania, Liberth, Mahon & Milligram, PLLC, (Joseph A. Catania, Jr. and Hobart J. Simpson, of counsel), Newburgh, for Plaintiff. Pattison, Sampson, Ginsberg & Griffin, P.C., (Michael E. Ginsberg, of counsel), Troy, for Defendant.
RICHARD M. PLATKIN, J.
Plaintiff Lafarge Building Materials, Inc. (“Lafarge”) moves pursuant to CPLR 3212 for summary judgment on its claim for breach of contract, the sole cause of action asserted in its complaint. Lafarge also moves for dismissal of the two counterclaims asserted by defendant Pozament Corporation (“Pozament”), which allege breach of contract and tortious interference with contract. Pozament opposes Lafarge's motion for summary judgment, contending that material issues of fact preclude the grant of judgment as a matter of law, and cross-moves for summary judgment on its counterclaims.
BACKGROUND
In or about the summer of 2001, Lafarge North America (“Lafarge NA”) acquired Blue Circle. This acquisition included a cement manufacturing plant in Ravena, New York (“the Ravena Plant” or “the Plant”). Lafarge operates the Plant as a subsidiary of Lafarge NA.
Defendant Pozament is a manager and broker of coal fly ash, and it served as the fly ash manager and supplier to the Ravena Plant under Blue Circle's ownership. Fly ash is a by-product of coal-generated power production. Among other things, fly ash can be used as a raw ingredient in the manufacture of cement, in which it serves as a source of aluminum oxide.
Shortly after acquiring the Ravena Plant, Lafarge decided to replace bauxite, which had been the primary source of aluminum oxide in Blue Circle's manufacturing process, with coal fly ash, a far more cost-effective substitute. Accordingly, beginning in February 2002, the parties entered into negotiations for Pozament to supply the Ravena Plant with fly ash. Lafarge was represented in these negotiations by Matthew Cardmone and Alain Canuel; Leo Palmateer, a vice president of Pozament, served as defendant's lead negotiator.
As a result of these negotiations, the parties executed a Service Agreement dated June 3, 2002 (“the Service Agreement” or “the Agreement”). Pursuant to the Service Agreement, Pozament agreed to pay Lafarge a “tipping fee” to accept deliveries of fly ash. Thus, rather than purchasing bauxite, the Service Agreement allowed Lafarge to be paid a recycling fee for accepting fly ash.
The Service Agreement begins by reciting that Pozament's fly ash, which is described in the Service Agreement as a “by-product”, is used by Lafarge in its cement manufacturing process. Pursuant to the Agreement, Lafarge agreed “to sell its recycling services” and Pozament agreed “to buy the recycling services” on the terms and conditions established therein.
Pursuant to the Agreement, Pozament agreed to pay Lafarge $7.00 per short ton of fly ash for up to 90,000 tons annually and $7.50 for each short ton thereafter. Pozament was to supply Lafarge with a minimum of 1,150 metric tons of fly ash per week. In addition to fixing a minimum quantity, the Agreement provided Pozament with a qualified right to be the exclusive supplier of fly ash to Lafarge during the term of the Agreement. Specifically, the Agreement provides, in pertinent part:
Based on the latest forecast provided by Lafarge to Pozament, as specified below, Pozament will coordinate with Lafarge's plant personnel to assure that the plant will not run out of flyash. Should Pozament be unable to meet the forecast requirements, Pozament shall notify Lafarge within 24 hours of the receipt of the latest forecast. Pozament shall be the exclusive supplier of flyash to Lafarge for the term of this Agreement. Should Pozament be unable to meet the forecast, and for the duration of such inability, Lafarge shall have the right to source additional flyash from alternate sources, excluded those referenced above, unless authorized by Pozament, allowing Pozament the first right of refusal to manage the material from the alternate sources. (emphasis added).
Relatedly, the Agreement obliged Lafarge to provide to Pozament the following fly-ash consumption forecasts to Pozament: “yearly forecast (to be revised quarterly); 3 month forecast (to be revised monthly); and 7 day forecast (to be revised daily)”.
The fly ash delivered to Lafarge by Pozament under the Agreement was required to meet certain quality specifications, including a maximum carbon content of twelve percent (12%) and a moisture content of less than one-half of one percent (0.5%).
The Agreement took effect on June 1, 2002 and was scheduled to remain in effect until June 30, 2004. However, the Agreement provided for a right of cancellation upon the other party's continuing default for thirty (30) or more days and authorized Lafarge to terminate the Agreement upon sixty (60) days notice if Pozament was unable to supply fly ash of the required quality.
Pursuant to the Service Agreement, Pozament began delivering fly ash to the Ravena Plant in June 2002. Lafarge claims that by late 2002, Pozament had experienced difficulties in supplying the Plant with sufficient quantities of fly ash. According to Lafarge, this issue had become a significant concern because of its desire to increase its utilization of fly ash and to effect a corresponding reduction in its purchases of bauxite. Despite Palmateer's efforts to source additional fly ash throughout 2002 and into early 2003, Lafarge claims that Pozament was unable to secure sufficient quantities of compliant ash to meet its demand.
By early 2003, Chris Collins, a purchasing manager for Lafarge, contacted Jeffrey Fair, the fly ash project manager for Lafarge NA, regarding the Plant's shortfall. At the request of Collins, Fair spoke to Terry Watson of Pozzi–Tech, Inc. (“Pozzi–Tech”) a competitor to Pozament. Watson ultimately advised Fair that Pozzi–Tech was in a position to be a supplemental supplier of fly ash to the Ravena Plant.
Meanwhile, Palmateer continued in his efforts to locate additional sources of fly ash for Pozament, but had difficulty sourcing additional quantities within the quality and price specifications established in the Agreement. As a result of Pozament's inability to meet Lafarge's increasing demand for fly ash, Lafarge allegedly was required to use bauxite as a supplement and/or accept deliveries of non-compliant fly ash from Pozament.
In April 2003, Collins contacted Terry Watson of Pozzi–Tech, seeking to secure a back-up supplier of fly ash. On April 21, 2003, Lafarge allegedly received a small test delivery of fly ash from Public Service Electric & Gas (“PSE & G”), a fly-ash producing utility that contracted with Pozzi–Tech for recycling services. Six days later, Lafarge claims to have received its first production load of fly ash from PSE & G.
At a meeting held on April 30, 2003 among Collins, Palmateer and Watson, information concerning the sourcing of the Pozzi–Tech fly ash was disclosed to Pozament. Following that meeting, Watson claims to have contacted PSE & G to discuss the possibility of involving Pozament in the management of its fly ash. However, Lafarge contends that Pozament failed to contact PSE & G or otherwise take steps to secure a role as manager of its alternate supply of fly ash. Pozament disputes this contention, but recognizes that PSE & G was unwilling to involve it in its fly ash management.
Lafarge subsequently entered into a Fly Ash Supply Agreement with Pozzi–Tech on May 3, 2003 (“Supplemental Agreement”). This Agreement provided that Lafarge would accept deliveries of fly ash through Pozzi–Tech on an “as needed basis”. Lafarge claims that under its agreements with Pozament and Pozzi–Tech, it took delivery of all of the fly ash Pozament was able and willing to deliver to the Ravena Plant within the price and quality specifications established by the Service Agreement, and it accepted delivery of fly ash through Pozzi–Tech only if Pozament was unable to meet its demand. Unlike the Service Agreement, which provides for Lafarge to be paid for accepting fly ash, the Supplemental Agreement with Pozzi–Tech required Lafarge to pay $9 per ton for fly ash.
Meanwhile, Pozament continued to supply fly ash to the Ravena Plant, but as of May 2003, it stopped remitting the tipping fee to Lafarge required under the Service Agreement. However, Lafarge claims that it did not learn of the non-payment until October 2003, explaining that the payments from Pozament were sent to the Michigan office of the plaintiff corporation. Upon learning that the tipping fee had not been paid since April 2003, Collins wrote several letters to Palmeteer demanding payment. In response, Palmateer claimed that he had advised Lafarge in or about April 2003 that Pozament would no longer pay the tipping fee based on Lafarge's alleged breaches of its exclusive rights under the Agreement.
Following correspondence back and forth between the parties, legal counsel for Lafarge wrote to Pozament's president, Roderick McNeil, on January 26, 2004 regarding Pozament's failure to pay the tipping fee. Pozament responded through counsel on January 30, 2004, stating that “since April of 2003, fly ash was provided [to Lafarge] under a new arrangement designed to meet the changing needs of the Ravena plant.... Our client's position is that flyash continues to be delivered to the plant without obligation of a tip' fee ... [and that Pozament] will continue such deliveries without obligation for a tip' fee unless notified to stop.”
On February 27, 2004, Lafarge notified Pozament that it must discontinue fly ash deliveries to the Plant due to its breach of the Service Agreement's requirement for payment of a tipping fee. Lafarge claims that by this time, the total amount of unpaid tipping fees owed by Pozament to Lafarge was $764,080.12.
In connection with its direction to Pozament to discontinue deliveries of fly ash, Lafarge entered into discussions with Dynergy Danskammer, LLC (“Dynergy”), another fly ash producing utility. When these discussions began, Dynergy had a contract with Pozament to dispose of its fly ash. However, this agreement expired on February 28, 2004, and Lafarge began receiving deliveries of fly ash directly from Dynergy on March 1, 2004.
This action was commenced by Lafarge in June 2004. The amended complaint asserts a single cause of action against Pozament: a claim for $764,080.12 in unpaid tipping fees pursuant to the Service Agreement, plus pre-judgment interest. In its answer, Pozament asserts two counterclaims against Lafarge seeking damages for: (1) Lafarge's alleged breach of the Service Agreement by obtaining fly ash from alternate sources without providing Pozament with its right of first refusal to manage such sources; and (2) Lafarge's alleged tortious interference with the Dynergy contract.
Following extensive and protracted discovery, the instant motions followed. Oral argument was held on June 25, 2010, and this Decision & Order follows.
ANALYSIS
Summary judgment is a drastic remedy and should only be granted if there are no material issues of disputed fact (Sillman v. Twentieth–Century Fox Film Corp., 3 N.Y.2d 395 [1957] ). In evaluating a motion for summary judgment, a court should simply determine whether material issues of disputed fact preclude the grant of judgment as a matter of law (S.J. Capelin Assoc. v. Globe Mfg Corp., 34 N.Y.2d 338 [1974] ). The party moving for summary judgment has the initial burden of coming forward with admissible evidence to support the motion, so as to warrant the Court directing judgment in movant's favor; the burden then shifts to the opposing party to demonstrate, by admissible evidence, the existence of any factual issue requiring a trial ( see Zuckerman v. City of New York, 49 N.Y.2d 557 [1980] ).
A. Lafarge's Claim
To succeed in establishing its claim that Pozament breached the Service Agreement, Lafarge must establish four elements: (1) formation of a valid contract between the parties; (2) Pozament's breach of the Agreement; (3) performance of the Agreement by Lafarge; and (4) damages resulting from the breach ( see Clearmont Prop., LLC v. Eisner, 58 AD3d 1052 [3d Dept 2009] ). There is no dispute that the Service Agreement constitutes a valid and binding contract between the parties. Further, Pozament does not dispute that it has refused to pay Lafarge the tipping fee established in the Service Agreement for accepting deliveries of fly ash on and after April 2003, thereby causing plaintiff to sustain monetary damages. Thus, the pivotal issue is whether Lafarge performed its obligations under the Agreement in all material respects.
1. Forecasting
Pozament begins with the contention that Lafarge failed to provide the consumption forecasts called for under the Service Agreement. In addition to allegedly establishing Lafarge's non-performance of its obligations under the Agreement, Pozament uses this contention as a springboard for three other arguments. First, Pozament contends that since the Agreement only obliged Pozament to meet Lafarge's forecasted needs, and not its actual demand, there never was a shortfall in supply under the Agreement. Second, insofar as there was a supply shortfall, Lafarge's failure to provide advance forecasts allegedly frustrated or prevented Pozament from sourcing sufficient quantities of fly ash. Finally, since Pozament's inability to meet Lafarge's forecasted demand allegedly was a condition precedent to Lafarge obtaining fly ash from other sources and Lafarge failed to provide said forecasts, Lafarge's use of other fly ash suppliers constituted a breach of the exclusivity clause.
Schedule A of the Service Agreement, which establishes the quantity of fly ash to be provided by Pozament and is the source of Pozament's claimed right of exclusivity, refers to forecasting in several places. Thus, Pozament's duty to ensure that the Ravena Plant receives sufficient quantities of fly ash is to be “[b]ased on the latest forecast provided by Lafarge to Pozament.” Further, “[s]hould Pozament be unable to meet the forecast requirements, Pozament shall notify Lafarge within 24 hours of the receipt of the latest forecast.” And the exception to Pozament's right of exclusivity also refers to forecasting: “Should Pozament be unable to meet the forecast, and for the duration of such inability, Lafarge shall have the right to source additional flyash from alternate sources ...,” subject to Pozament's right of first refusal.
In support of its contentions regarding Lafarge's failure to provide the consumption forecasts called for in the Agreement, Pozament relies upon the affidavit of Leo Palmateer, who avers: “Lafarge had never provided Pozament with yearly, three-month or seven-day forecasts” (Palmateer Aff. ¶ 11). Moreover, Lafarge's responses to Pozament's Interrogatories, Nos. 40 through 43 implicitly confirms this, reciting only that “[d]aily consumption forecasts were provided”. Pozament further relies upon the deposition testimony of Alain Canuel, who explained that Lafarge's ultimate goal was to replace the Plant's use of bauxite with fly ash over time. As this would necessarily require Pozament to increase its supply of fly ash, the parties included the forecasting language to, among other things, ensure that Pozament was aware of the Plant's expected needs.
In response, Lafarge also relies upon the deposition transcript of Alain Canuel, wherein Canuel claims to have advised Palmateer during contract negotiations that Lafarge intended to increase its demand for fly ash over the term of the Service Agreement. Further, Palmateer testified in his deposition that Pozament actively was looking for additional sources of fly ash throughout the term of the Agreement, particularly in late 2002 and early 2003, in order to meet Lafarge's increasing demand. And Chris Collins, the purchasing manager for the Ravena Plant, explains that the parties relied upon extensive oral communications and interactions with respect to forecasting:
I had conversations with [Palmateer] about Lafarge's anticipated fly ash requirements and how many tons Pozament could deliver. I told Palmateer that Lafarge's fly ash needs would be increasing. Palmateer was provided with estimates of how much fly ash Lafarge would require. These conversations took place practically on a daily basis. Mr. Palmateer and I continually discussed whether Pozament would be able to deliver sufficient amounts of fly ash to meet the Ravena Plant's needs. In addition, Palmateer had an office at the Ravena Plant. He had daily access to and contact with plant personnel regarding how much fly ash the plant required.
In his deposition, Palmateer acknowledged that the parties relied upon verbal communications between Pozament, which had an office located at the Ravena Plant, and Lafarge personnel:
The management of this entire system was ... done through a series of verbal communications between us and ... control room personnel at the Ravena facility. I would make inquiries as to the available storage capacity at the facility; I would make inquires as to the goals and desires of the plant for a given day. And I would also have an understanding of [what is] going on at the various utilities that [Pozament] was servicing.... Combining all that information I had, we would make some determination on how much material we would likely bring up here ... on a given day.
Palmateer did, however, go on to state that the foregoing process was directed generally at meeting the Plant's daily requirements and that Pozament did not have sufficient information regarding the Plant's longer term needs. However, Palmateer was unable to identify with particularity any complaints made by Pozament to Lafarge during the term of the Agreement regarding the absence of written forecasts.
In interpreting the Service Agreement, the Court must be “guided by basic principles of contract interpretation which instruct that a contract should be construed to give effect to the parties' intent as gleaned from the four corners of the document itself, provided that its terms are clear and unambiguous (Elmira Teachers' Assn. v. Elmira City School Dist., 53 AD3d 757 [3d Dept 2008] ), “[A] contract should be interpreted according to its plain and ordinary meaning and in such a manner as to give effect to all of its provisions” ( id.; see TAG 380, LLC v. ComMet 380, Inc., 10 NY3d 507 [2008] ). In so doing, it is “important to read the document as a whole to ensure that excessive emphasis is not placed upon particular words or phrases” (South Rd. Assoc., LLC v. International Bus. Machs. Corp., 4 NY3d 272, 277 [2005] ).
Reading the language of the Service Agreement as a whole and giving effect to all its provisions, the Court is not persuaded by Pozament's contention that its supply obligations under the Agreement were limited to meeting Lafarge's forecasted needs. While the Service Agreement establishes the parties' mutual intention for Pozament to serve as the exclusive supplier of fly ash to the Ravena Plant, it further recognizes Lafarge's legitimate and overarching purpose in entering into the Agreement: to ensure “that the plant will not run out of flyash”. And while the language of the Agreement does contemplate that an inability on the part of Pozament to meet the Plant's demand would be disclosed from the consumption forecasts, Pozament's construction of the Agreement as conditioning or limiting its supply obligations to fulfilling the forecasts would leave Lafarge without the ability to procure necessary quantities of fly ash, either from Pozament or alternate sources, in the event of unforecasted shortfalls.
Thus, Pozament's construction of the Agreement places undue emphasis on the consumption forecasts, which are merely a tool for ensuring the Plant's actual demand for fly ash was met, and inappropriately disregards the evident purpose of the Agreement: actually keeping the Plant supplied with fly ash. In reaching this conclusion, the Court is mindful of its duty to “examine the entire contract and consider the relation of the parties and the circumstances under which [the Service Agreement] was executed. Particular words should be considered, not as if isolated from the context, but in the light of the obligation as a whole and the intention of the parties as manifested thereby” (Atwater & Co. v. Panama R.R. Co., 246 N.Y. 519, 524 [1927], quoted in Currier, McCabe & Assocs. v. Maher, 2010 N.Y. Slip Op 6134 [3d Dept] ).
Nor is the Court persuaded by Pozament's argument that Lafarge's right to obtain fly ash from other sources in the event of a shortfall was conditioned upon an inability by Pozament to meet the consumption forecasts. A condition precedent is “an act or event, other than a lapse of time, which, unless the condition is excused, must occur before a duty to perform a promise in the agreement arises” (Oppenheimer & Co. v. Oppenheim, Appel, Dixon & Co., 86 N.Y.2d 685, 689 [1995] [internal quotations and citations omitted] ). “Express conditions must be literally performed; substantial performance will not suffice” (MHR Capital Partners LP v. Presstek, Inc., 12 NY3d 640, 645 [2009] ). “Whether a condition precedent exists under the terms of a contract is a matter of law for the court to decide” (Mullany v. Munchkin Enters., Ltd., 69 AD3d 1271, 1274 [3d Dept 2010] ).
The Court sees no basis here to depart from the general rule of contract law “that a contractual duty ordinarily will not be construed as a condition precedent absent clear language showing that the parties intended to make it a condition” (Unigard Sec. Ins. Co. v. North Riv. Ins. Co., 79 N.Y.2d 576, 581 [1992] ). The literal language of the Agreement does not compel such a conclusion, and for the reasons stated above, such a construction of the Agreement runs counter to its evident purpose ( cf. Mullany v. Munchkin Enters., Ltd., 69 AD3d 1271 [3d Dept 2010] ). Accordingly, the Court construes the requirement of consumption forecasts as a duty, not a condition.
Further, Pozament has failed to provide proof in admissible form that Lafarge's failure to provide the forecasts frustrated its ability to perform under the Agreement or represented an unexcused material breach. “[A] party to a contract cannot rely on the failure of another to perform when he has frustrated or prevented the performance” (Hidden Meadows Dev. Co. v. Parmelee's Forest Prods., 289 A.D.2d 642, 644 [3d Dept 2001] ). While there is no dispute that Lafarge failed to comply with its duty to provide yearly, quarterly and weekly forecasts, the record shows that Pozament was aware that Lafarge would be requiring increasing quantities of fly ash over the term of the Agreement due to the cost savings associated with replacing its use of bauxite with fly ash. In fact, Pozament was actively seeking to procure additional sources of fly ash to meet Lafarge's increasing demand, but was unable to do so within the price and quality specifications established under the Agreement. There is nothing in the record to even suggest that compliance with the forecasting provisions would have altered this result.
Further, as Palmateer acknowledges, he communicated with the Lafarge personnel responsible for operating the Plant regarding fly ash consumption on a daily basis. And despite Lafarge having failed to ever provide Pozament with written forecasts during the term of the Agreement, Pozament never raised a formal objection, sought to compel Lafarge to provide forecasts or otherwise declared Lafarge to be in default of its forecasting obligation. Indeed, Palmateer was unable to identify any specific contemporaneous communication or complaint to Lafarge regarding lack of forecasts.
And even if Lafarge were in material breach of its duty to provide consumption forecasts, it would not excuse Pozament's failure to pay Lafarge the prescribed tipping fee. Under settled election-of-remedies principles, when one party to a contract feels that the other contracting party has materially breached its agreement, the non-breaching party may either stop performance and assume the contract is voided, or it may continue its performance and sue for damages; under no circumstances may the non-breaching party stop its own performance while continuing to take advantage of the contract's benefits ( Marathon Enters. v. Schroter GmbH & Co., 2003 U.S. Dist LEXIS 2274 [SDNY 2003], aff'd 95 Fed App 364 [2d Cir2004]; see Albany Med. Coll. v. Lobel, 296 A.D.2d 701 [3d Dept 2002]; Melnitzky v. Sotheby Parke Bernet, 300 A.D.2d 201 [1st Dept 2002] ). Here, despite Lafarge's failure to ever provide written forecasts, Pozament continued to perform under the Agreement by delivering loads of fly ash to Lafarge for recycling. Having elected to continue obtaining the benefits of Lafarge's recycling services with knowledge of the alleged breach, Pozament cannot defeat Lafage's corresponding contractual right to be paid for these services by belatedly relying upon a claimed breach that existed from the outset of the Agreement.
Finally, the Court notes that Pozament's counterclaim against Lafarge for breach of the Service Agreement is based solely upon the exclusivity and right-of-first-refusal clauses of the Agreement, and Pozament does not assert an affirmative claim for damages based on Lafarge's failure to provide the consumption forecasts.
2. Exclusivity/Right of First Refusal
Next, Pozament contends that by accepting deliveries of fly ash from PSE & G and Dynergy, Lafarge breached the exclusivity clause of the Agreement, which provides that “Pozament shall be the exclusive supplier of flyash to Lafarge for the term of this Agreement.” While recognizing that the Agreement provided Lafarge a limited right to procure fly ash from alternate sources, Pozament argues that Lafarge failed to respect its contractual “right of [first] refusal to manage the material from the alternate sources.”
In support of its claim that Lafarge breached the exclusivity and right of first refusal clauses, Pozament begins with Lafarge's admission that it received almost 1,000 tons of fly ash from PSE & G, procured from Pozzi–Tech, before taking any steps to accord Pozament its preemptive right. Pozament further argues that the deliveries of fly ash from this alternate source in April 2003 were far more extensive than Lafarge admits, though it fails to support this contention with proof in admissible form.
Pozament relies solely upon an unauthenticated spreadsheet attached to an affirmation of counsel.
By mid April 2003, after Pozament learned that a competitor, Pozzi–Tech, was delivering fly ash to the Plant, Palamateer complained to Lafarge that it was in breach of the exclusivity clause and had not accorded Pozament its promised right of first refusal. By letter dated April 23, 2003, Pozament requested that Lafarge advise potential sources of fly ash that management of the process would be under the direction of Pozament.
On April 30, 2003, Lafarge set up a meeting with Pozament and Pozzi–Tech to discuss the prospect of Pozament managing fly ash deliveries from PSE & G. At this meeting, Collins claimed to have advised representatives of Pozament and Pozzi–Tech that Lafarge needed a temporary back-up supply of fly ash due to Pozament's shortfall, and the two fly-ash managers needed to work out between themselves what their relationship would be. Pozament does not dispute this characterization of the meeting, but claims that Lafarge never advised it of the specific terms of its alternate sourcing arrangement with Pozzi–Tech. Nonetheless, on May 2, 2003, Pozament sent a proposed letter agreement to Pozzi–Tech offering to manage fly ash from PSE & G. By the following day, PSE & G declined to enter into a business relationship with Pozament.
On May 3, 2003, Lafarge entered into a supplemental Fly Ash Supply Agreement (“Supplemental Agreement”) with Pozzi–Tech. The Supplemental Agreement provides that Pozzi–Tech would be “a back-up supplier of fly ash to supplement [Lafarge's] current supplier.”
Apart from the deliveries of fly ash that Lafarge received from PSE & G/Pozzi–Tech prior to May 3, 2003, when PSE & G declined to enter into business relations with Pozament, the parties' fundamental disagreement concerns the interpretation of the right of first refusal set forth in the Agreement. It is Pozament's contention that under its “first right of refusal to manage fly ash from the alternate sources,” Lafarge was precluded from obtaining fly ash from an alternate source, such as PSE & G, if the source refused to allow Pozament to participate in its management. On the other hand, Lafarge argues that the right of first refusal was far more limited, merely requiring Lafarge to give Pozament the opportunity to manage the alternate source before accepting deliveries of fly ash. Under this interpretation, if the alternate source refused to allow Pozament to manage its fly ash, Lafarge was free to procure fly ash directly from the alternate source without Pozament's participation.
In support of its interpretation of the Agreement, Pozament relies upon cases interpreting rights of first refusal given with respect to the sale of property. As a general matter, such “a right of first refusal merely provides that before an owner sells, it will first give the other party a chance to buy” (LIN Broadcasting Corp. v. Metromedia, Inc., 74 N.Y.2d 54 [1989] ). Thus, a right of first refusal ordinarily represents “a restriction on the power of one party to sell without first making an offer of purchase to the other party upon the happening of a contingency: the owner's decision to sell to a third party” ( id.; see Whiteface Resort Holdings, LLC v. McCutchen, 53 AD3d 1106, 1107 [3d Dept 2008] ).
The Court does not find Pozament's reliance on this line of authority to be persuasive as applied to the unique right of first refusal at issue here. The evident purpose of the provision allowing Lafarge to procure fly ash from alternate sources-an exception to the right of exclusivity-was to ensure that the Plant would have an adequate supply of fly ash, even in situations where Pozament was unable to meet its demand for compliant material. This right was not unconditional, however, as Lafarge “allow[ed] Pozament the first right of refusal to manage the material from the alternate sources.” Unlike the preemptive right given by a seller of property, which serves to condition or limit only the seller's own performance and does not depend upon the actions of third parties, Pozament's ability to successfully avail itself of this preemptive right necessarily was dependent upon the willingness of alternate sources to enter into business relations with Pozament.
Thus, under Pozament's interpretation of the preemptive right, if an alternate source was unwilling to do business with Pozament or was precluded from doing so by virtue of exclusive contractual arrangements with other fly ash managers, the Plant would be left without fly ash. As a result, Lafarge's “right to source additional flyash from alternate sources” would be defeated, and Pozament's preemptive right would be transformed into a veto power over the Plant's fly ash supply. This construction of the Agreement would frustrate a fundamental object of the Agreement and the exception to Pozament's exclusivity established therein: keeping the Plant supplied with fly ash. Under the circumstances, it seems clear that the preemptive right was limited, as Lafarge contends, to providing Pozament with an opportunity to manage the alternate source.
Nonetheless, the Court does agree with Pozament that Lafarge was precluded from obtaining fly ash from an alternate source without first giving Pozament notice of its intention to do so and a reasonable opportunity to seek to enter into a management relationship with the alternate source. The record establishes that this process belatedly was completed with respect to Pozzi–Tech on or about May 3, 2003, after PSE & G declined to allow Pozament to manage its fly ash. Accordingly, the Court concludes that Lafarge violated Pozament's right of first refusal by accepting deliveries of fly ash from PSE & G prior to such date.
The issue then becomes whether this violation rises to the level of a material breach of the Agreement. “[A] party's obligation to perform under a contract is only excused where the other party's breach of the contract is so substantial that it defeats the object of the parties in making the contract” (Robert Cohn Assoc., Inc. v. Kosich, 63 AD3d 1388, 1389 [3d Dept 2009] [internal quotations omitted] ). “Under New York law, for a breach of a contract to be material, it must go to the root of the agreement between the parties” (Frank Felix Assocs. v. Austin Drugs, 111 F3d 284, 289 [2d Cir1997] [internal quotations omitted] ). Whether a given set of facts constitute a material breach of a contract is question of law to be decided by the Court.
The Court concludes that Lafarge's procurement of limited quantities of fly ash from PSE & G before it gave Pozament the opportunity to exercise its preemptive right was not so substantial as to defeat the purpose of the entire Agreement. There is no dispute that Lafarge procured this fly ash from PSE & G during a period when Pozament was unable to meet the Plant's demand.
Indeed, it would have made no economic sense for Lafarge to have done otherwise, since it was being paid to accept deliveries of fly ash from Pozament, whereas it was required to pay PSEG and/or Pozzi–Tech for supplemental supplies of fly ash. Thus, even accepting Pozament's contention that Lafarge's promise of exclusivity was central to its bargain, the Court is not persuaded that Pozament was deprived of a core benefit of the Agreement as a whole, especially given the brief period of breach when measured against the overall term of the Agreement and Lafarge's prompt measures to cure the breach when brought to its attention.
Although Pozament may have been able to source additional fly ash at a higher price or a lower quality, nothing in the Agreement required Lafarge to make price or quality concessions before pursuing alternate sources.
Pozament asserts that Lafarge acted in bad faith, but its proof fails to substantiate this contention. Indeed, given the small number of companies capable of supplying or managing fly ash, as well as the fact that Pozament had a representative on site at the Plant, the notion that Lafarge attempted to conceal its activities from Pozament is highly implausible.
In its complaint, Pozament also alleges a breach of the exclusivity agreement as a result of Lafarge's actions in: (1) soliciting supplies of fly ash from Dynergy during the term of the Agreement; and (2) acquiring fly ash from Dynergy commencing on March 1, 2004. In making Pozament its exclusive “supplier”, the Agreement did not prohibit Lafarge from entering into discussions and negotiations with alternate sources. And since the Agreement was terminated by Lafarge on February 27, 2004 due to Pozament's material breach-its failure to pay more than $750,000 in tipping fees-Lafarge could not have breached the Agreement by accepting deliveries of fly ash from Dynergy on and after March 1, 2004.
Based on the foregoing, the Court concludes that while Lafarge substantially complied with the exclusivity clause and the right of first refusal, its receipt of fly ash from PSE & G throughout April 2003 and until May 3, 2003 constitute a breach of the Agreement. Accordingly, while any damages that may be recovered by Pozament on its first counterclaim would represent an offset against Lafarge's recovery, these breaches did not discharge Pozment from its obligation to pay Lafarge the tipping fee established in the Agreement or otherwise defeat Lafarge's right to maintain its claim against Pozament for breach of the Agreement.
Finally, the Court rejects Pozament's contention that the foregoing conduct on the part of Lafarge constitutes an anticipatory repudiation of the Agreement within the meaning of UCC § 2–610. Even if Lafarge's conduct amounted to a repudiation of the Agreement, which it did not, Pozament would have been entitled to suspend its performance under the Agreement or it could have continued its own performance while waiting a commercially reasonable time for Lafarge to perform. But Pozament could not obtain the benefits of the Agreement-the fly-ash recycling services provided by Lafarge-while denying Lafarge the payments its promised for accepting such deliveries. One cannot “at the same time treat the contract as broken and as subsisting. One course of action excludes the other” (Strasbourger v. Leerburger, 233 N.Y. 55 [1922] ).
The Court notes that under these principles and those set forth supra, even if Lafarge's breach of the exclusivity clause rose to the level of a material breach, it would not alter the Court's ultimate conclusions. By continuing to perform under the Agreement and obtaining the benefits of Lafarge's recycling services with knowledge of the alleged material breaches of the exclusivity and right-of-first-refusal provisions, Pozament made a binding election of remedies that forecloses it from now seeking to deny Lafarge payment for its services on account of said breach.
3. Modification of Agreement, Waiver & Estoppel
In addition to claiming that Lafarge materially breached the Agreement by failing to provide consumption forecasts and by violating its exclusive right to supply the Plant with fly ash, Pozament argues that it was relieved of the obligation to pay tipping fees under principles of contract modification, waiver and estoppel.
In his affidavit, Leo Palmatter offers the following averments in support of these contentions:
22. Upon Lafarge's refusal to honor Pozament's exclusivity rights and right of first refusal regarding management of fly ash from alternate sources, and such breach, Pozament ceased making payments of tipping fees.....
23. Thereafter, Pozament sent numerous correspondence to Lafarge addressing such issue which demonstrate that after such breach the parties were not operating pursuant to the subject Service Agreement. Such correspondence was sent on July 9, 2003, August 4, 2003 and November 6, 2003.
24. The fact that the parties were no longer operating pursuant to the Subject Service agreement was confirmed by Kurt Gerdes of Lafarge. (internal citations omitted).
The first letter referred to in the Palmateer affidavit-a July 9, 2003 letter to Kurt D. Gerdes, the Regional Alternate Materials Manager for Lafarge, from Roderick C. McNeil, the president of Pozament-expressed Pozament's desire to continue doing business with Lafarge, while recognizing that “there have been certain significant changes in the Ravena coal fly ash supply and use market dynamic, as well as some recent missteps regarding its management.” McNeil further stated that the Service Agreement was “out-of-balance to current conditions: Ravena's quantity of coal fly ash has dramatically increased above what was indicated by Lafarge, management of alternate supplies of coal fly ash has occurred in a manner which is inconsistent to that which was intended, and the quality specifications and pricing structure have changed.” “As such, we have been operating, to a certain extent, outside the agreement for the past couple of months.”
This correspondence referred back to a letter sent by Gerdes to McNeil on June 30, 2003, in which Lafarge proposed “an addendum to such current contract to reestablish the management and pricing issues.” Under Lafarge's proposal, Pozament's exclusivity rights would be reinforced, while the quality, quantity and pricing specifications of the Agreement would be adjusted. Notably, all three options proposed by Lafarge on June 30, 2003 contemplated its continued receipt of a tipping fee for accepting deliveries of fly ash.
The second letter cited in the Palmateer affidavit-a letter from McNeil to Gerdes, dated August 4, 2003–proposed a revised plan for managing the supply of fly ash for the Ravena Plant. Under Pozament's proposal, Lafarge would have taken “a more supervisory role”, with Pozament providing additional coordination activities.
This correspondence had been preceded by a letter from Palmateer to Gerdes, dated July 24, 2003, which referred to the parties' efforts to work together to improve the supply of fly ash to the Plant “at the same economics”. The correspondence went on to refer to a longer-term effort to modify the quantity and price specifications of the Service Agreement, “which would result in a similar total compensation as that which was desired by Lafarge in the existing agreement” but provide Lafarge with significantly greater quantities of fly ash.
While not referred to in the Palmateer affidavit, Pozament also submits an email from Gerdes to McNeil, dated September 5, 2003. This communication, sent in response to an email from McNeil inquiring about Lafarge's reaction to the August 4, 2003 proposals, states: “I agree that your efforts have smoothed out the supply of ash. Rather than change the process, I'd be in favor of keeping things as they are for now, too many other fish to fry.”
In his deposition, Gerdes explained that Lafarge had viewed Pozament operating outside the Agreement with respect to the quantity and quality of fly ash supplied by Pozament, and Pozament viewed Lafarge operating outside of the exclusivity provisions of the Agreement.
The third letter cited in Palmateer's affidavit, dated November 6, 2003, was sent by Palmateer to Collins, a purchasing manager for Lafarge. In this correspondence, Palmateer reiterated his desire to work with Lafarge to resolve their differences in a mutually agreeable manner. Apparently responding to Lafarge's contention that “Pozament is acting unilaterally' by withholding payment”, Palmateer argued that this assertion
does not accurately reflect nor take into account that which has occurred during the past several months. Discussion and correspondence regarding the issue of our two parties working outside the Agreement ... date back to approximately April 2003. During April and thereafter, I personally informed you that, among other things, Lafarge's use of alternate coal ash vendors was outside the terms and intent of the [Service Agreement]. I conveyed to you that we would not be in a position to honor only portions of the agreement (i.e.,-the tipping fee) while other specified provisions of the agreement were being disregarded and/or modified.
Pozament and Lafarge have been operating outside the agreement in terms of supply quality, method, pricing, obligations and rights for in excess of six months.... The demand for payment at this late juncture for material, which was supplied outside the agreement without contractual obligation and under alternate terms, is inequitable and unreasonable.... This letter serves to re-confirm that coal ash deliveries were made ... and continue to be made outside the terms of the agreement and at no tipping fee unless otherwise agreed to by the parties.
While Palmateer's correspondence refers to conversations that he allegedly had with Collins in or about April 2003, in which he claims to have stated that Pozament would not pay the tipping fee established in the Agreement, neither Palmateer's affidavit nor his deposition testimony confirm this unsworn assertion. During his deposition, Palmateer testified at length regarding Lafarge's alleged breaches of the exclusivity agreement and Pozament's right of first refusal to manage alternate sources of fly ash. However, when questioned regarding discussions with Lafarge concerning the tipping fee, Palmateer either lacked a specific recollection or adverted generally to conversations with Collins regarding Lafarge's alleged breaches of the Agreement.
Palmateer does refer to a conversation with Collins in which he said that “Lafarge is in violation of the contract and [Pozament] will not sit and honor certain provisions of the contract that they are directly violating; suggesting an opportunity to cure .... that was the substance of the conversation from my end.” However, this testimony stops short of confirming Palmateer's unsworn assertion in the November 6, 2003 letter that he communicated to Collins that Pozament would no longer pay the tipping fee for deliveries of fly ash.
In its submissions, Lafarge does not dispute the authenticity of the written communications cited above, but disagrees with Pozament's characterization and interpretation of the writings. Lafarge further submits proof that its personnel who were involved in these discussions did not learn of Pozament's failure to pay the tipping fee until October 2003, when Collins was advised of the same by Lafarge's account receivables department, which is located in the company's Michigan office. In his affidavit, Collins states that upon learning of Pozament's failure to pay tipping fees pursuant to the Agreement, he and others within Lafarge immediately sent letters to Palmateer demanding payment. Collins further avers that neither Palmateer nor anyone else from Pozament ever advised him that Pozament would deliver fly ash without an obligation to pay the tipping fee set forth in the Agreement. He further testified that Lafarge never agreed to accept fly ash deliveries from Pozament without the payment of said fee.
With respect to Pozament's claim that the Agreement was modified, it acknowledges, as it must, that the foregoing writings do not evidence such a modification. Rather, Pozament relies upon an alleged oral modification. However, pursuant to Article 13.4 of the Agreement, “[a]ny amendments or modifications to this Agreement must be in writing and signed by both parties to be binding.”
“Where, as here, a contract includes a clause prohibiting oral modification, it generally “cannot be changed by an executory agreement unless such executory agreement is in writing and signed by the party against whom enforcement ... is sought” (General Obligations Law § 15–301[1] ).
However, the statutory requirement of a writing may be avoided by proof of either partial performance of an oral agreement to modify a written contract, which must be unequivocally referable to the oral modification, or equitable estoppel, based upon conduct which is not otherwise ... compatible with the agreement as written. The Court of Appeals has articulated that it is not sufficient that the conduct of the parties indisputably evidences a mutual departure from the written agreement if such conduct does not satisfy these rules.
(Phoenix Corp. v. U.W. Marx, Inc., 64 AD3d 967, 968 [3d Dept 2009] [internal quotations and citations omitted] ). To be “unequivocally referable” to the alleged oral modification, “the actions alone must be unintelligible or at least extraordinary' explainable only with reference to the oral agreement” (Anostario v. Vicinanzo, 59 N.Y.2d 662, 664 [1983] ).
Here, Pozament has failed to demonstrate any partial performance on its part that is unequivocally referable to the alleged oral modification ( see McCormick v. Bechtol, 68 AD3d 1376, 1379 [3d Dept 2009] ). Certainly, Pozament's actions in continuing to deliver fly ash to the Plant are explainable by reference to the unmodified Agreement, rather than any alleged oral modification. Further, Pozament's failure or refusal to remit the tipping fees to Lafarge is plausibly explained by Pozament's (erroneous) view that Lafarge's breach of the exclusivity clause and right of first refusal relieved it of any obligation to pay the tipping fee. Further, the documentary evidence relied upon by Pozament consists largely of self-serving statements regarding the parties “operating outside the agreement” in unspecified ways, which plausibly is explained by Gerdes as referring to Lafarge's position that Pozament was not meeting the quality and quantity specifications of the Agreement and Pozament's position that Lafarge was in violation of the exclusivity clause and the right of first refusal requirements. Accordingly, Pozament has failed to demonstrate a cognizable oral modification of the Agreement.
Indeed, even as late as July 24, 2003–months after Palmateer allegedly informed Collins that Pozament would no longer pay a tipping fee-Palmateer's correspondence to Lafarge refers to proposed modifications to the “existing agreement” between the parties and recognizes that Lafarge is entitled to receive compensation for receiving deliveries of fly ash under the Agreement.
Nor has Pozament demonstrated that Lafarge waived its right under the Agreement to receive compensation for recycling fly ash delivered by Pozament. Waiver is the voluntary and intentional relinquishment of a known right ( see Nassau Trust Co. v. Montrose Concrete Prods. Corp., 56 N.Y.2d 175, 184 [1982] ). “Waiver may arise by either an express agreement or by such conduct or a failure to act as to evince an intent not to claim the purported advantage” (Hadden v. Consolidated Edison Co. of NY, 45 N.Y.2d 466, 469 [1978] ). But a waiver “is not created by negligence, oversight, or thoughtlessness, and cannot be inferred from mere silence” (Peck v. Peck, 232 A.D.2d 540, 540 [2d Dept 1996] ). Rather, there must be proof that there was “a voluntary and intentional relinquishment of a known and otherwise enforceable right” ( id.). Further, waiver “should not be lightly presumed and must be based on a clear manifestation of intent to relinquish a contractual protection” (Team Mktg. USA Corp. v. Power Pact, LLC, 41 AD3d 939, 941–942 [3d Dept 2007] ).
There is nothing in the record to support Pozament's contention that Lafarge, through its words or actions, clearly manifested an intention to relinquish its right to be paid a tipping fee. Pozament has failed to come forward with proof in admissible form establishing its contention that Palmateer notified Collins in April 2003 that Pozament would no longer pay tipping fees. And Lafarge has established, without contradiction, that its employees and agents who dealt with Pozament did not learn of the unpaid tipping fees until October 2003. At that point, the record shows that Lafarge aggressively pursued its claim for payment and, when those efforts proved unsuccessful, terminated the contract on the basis of Pozament's material breach. And, as explained previously, the correspondence relied upon by Pozament fails to clearly manifest an intention on the part of Lafarge to waive its right to receive payment for receiving shipments of fly ash.
Finally, for the reasons set forth above, Pozament is unable to point to a representation by Lafarge regarding the tipping fees, whether through words or conduct, upon which it reasonably relied. As such, there can be no estoppel.
4. Conclusion
For the reasons set forth above, the Court concludes that Lafarge has demonstrated an entitlement to judgment as a matter of law on its claim that Pozament breached the Service Agreement by failing to pay tipping fees from the period from April 2003 through February 2004.
The Court has considered Pozament's remaining contentions, including its allegation that Lafarge breached the implied covenant of good faith and fair dealing and that it failed to mitigate its damages, but finds them unavailing.
B. Pozament's Counterclaims
1. Breach of Contract
For its first counterclaim, Pozament alleges that Lafarge breached the Service Agreement by obtaining fly ash from alternate sources without providing Pozament its right of first refusal to manage such sources. For the reasons set forth above, the Court concludes that Pozament has established as a matter of law that Lafarge breached this provision by accepting deliveries of fly ash from PSE & G and/or Pozzi–Tech beginning in April 2003 and continuing through May 3, 2003. However, as stated above, the deliveries of fly ash received from PSE & G and/or Pozzi–Tech after May 3, 2003 and deliveries of fly ash from Dynergy following termination of the Agreement do not constitute a breach. Pozament has further established that it was not in material breach of the Agreement at the time of Lafarge's breach.
Although Pozament stopped paying tipping fees for fly ash delivered in April 2003, as Lafarge's counsel explained at oral argument, the tipping fee for these deliveries was not invoiced and did not become due until the following month.
The issue then becomes one of damages. To succeed on its counterclaim for breach of the Agreement, Pozament must demonstrate that it sustained damages proximately caused by Lafarge's failure to give it an earlier opportunity to manage fly ash from PSE & G. It is apparent that Pozament is unable to discharge this burden.
The theory of damages put forward by Pozament is based on the profits that it would have earned had it been permitted to manage the fly ash from PSE & G, taking into account such factors as the costs of material, transportation, and tipping fees ( see Pozament's Memorandum of Law, at 28–29).
While this measure of damages might have been appropriate if the right of first refusal were interpreted in the manner advocated for by Pozament, it is not sustainable under the interpretation advanced by Lafarge and adopted by the Court, which merely gave Pozament the first opportunity to manage the alternate source, subject to the willingness of the alternate source to enter into such a business relationship with Pozament.
Pozament's brief indicates its intention to retain an expert to compute damages according to this theory if the case were permitted to go to trial.
Moreover, as Pozament was unable to meet Lafarge's demand for fly ash at this time, Pozament cannot plausibly maintain that Lafarge's breach denied it the opportunity to deliver additional quantities of compliant fly ash to the Plant. And, as stated above, Lafarge was under no obligation to accept non-compliant fly ash under the Agreement.
Further, in light of PSE & G's clear unwillingness to allow Pozament to manage its fly ash, Pozament cannot show that any an earlier opportunity to exercise its preemptive right would have resulted in any benefit.
Under the circumstances, the Court concludes that while Pozament has demonstrated that Lafarge breached the Agreement, its counterclaim must fail due to its inability to demonstrate that it sustained monetary damages proximately caused by said breach.
2. Tortious Interference With Contract
For its second counterclaim, Pozament alleges that Lafarge tortiously interfered with its contractual relationship with Dynergy. The contract between Pozament and Dynergy had a term of 18 months, commencing on September 1, 2002. The contract further provided that “[b]oth parties agree to discuss continuation of said agreement no less than three (3) months prior to its expiration and such continuation may be accomplished by the mutual written consent of the parties.”
To succeed on its claim for tortious interference with contract, Pozament must demonstrate the existence of a valid contract with Dynergy, Lafarge's knowledge of that contract, Lafarge's intentional and improper procuring of a breach of the contract, and damages sustained by Pozament as a result thereof (White Plains Coat & Apron Co., Inc. v. Cintas Corp., 8 NY3d 422, 426 [2007] ). For the reasons that follow, the Court concludes that Pozament cannot establish its claim for tortious interference.
Pozament has failed to demonstrate an actionable breach of its contract with Dynergy. Pozament claims that Dynergy breached this contract by failing to discuss continuation of the contract no less than three months prior to its expiration. However, it is well established that a statement in an existing agreement that the parties will negotiate in good faith to renew or extend such agreement is nothing more than a mere “agreement to agree”, which is not enforceable (Yan's Video, Inc. v. Hong Kong TV Video Programs, 133 A.D.2d 575 [1st Dept 1987]; see Joseph Martin, Jr., Delicatessen v. Schumacher, 52 N.Y.2d 105 [1981];Del Castillo v. Bayley Seton Hosp., 232 A.D.2d 602 [2d Dept 1996] ). “Since there is no showing of a [breach of a] valid enforceable contract between [Pozament and Dynergy], the claim of tortious interference with that contract' is also unsupportable” ( Joseph Martin, supra ).
In reaching this conclusion, the Court rejects Pozament's reliance on American Broadcasting Cos. v. Wolf (52 N.Y.2d 394 [1981] ), decided by the Court of Appeals shortly after Joseph Martin, supra. In American Broadcasting, the contract contained a good faith negotiation and first refusal clause that effectively required Wolf to engage in exclusive good faith negotiations with ABC for a forty-five day period, and if the parties failed to agree, there would be a second forty-five day period during which time Wolf could negotiate, but not sign, with third parties. ABC further obtained a right of first refusal with respect to any offer received by Wolf during the three months following thereafter, and Wolf agreed to enter into a contract with ABC on the terms offered by the third party ( id. at 397–398). This intricate and definite contractual arrangement goes well beyond the provision at issue here, which merely required Dynergy to “discuss” continuation of its contract with Pozament ( see Candid Productions, Inc. v. International Skating Union, 530 F Supp 1330 [SDNY 1982] ).
Given the nature of the contract between Pozament and Dynergy, the Court concludes that Pozament's claim is more appropriately analyzed under the rubric of tortious interference with prospective advantage. Such a claim requires a demonstration that Lafarge's conduct was criminal, purely malicious or independently tortious (Carvel Corp. v. Noonan, 3 NY3d 182, 189–190 [2004] ). Pozament does not allege, much less demonstrate, any such wrongful means on the part of Lafarge.
Accordingly, the Court concludes that Pozament's claim for tortious interference with the Dynergy contract must be dismissed.
And even if Pozament could demonstrate that Dynergy breached an enforceable provision of its contract, Pozament failed to come forward with proof that Lafarge actually procured the breach; at most, Pozament has shown that Lafarge may have had discussions with Dynergy concerning a business relationship following termination of the Dynergy/Pozament contract. To succeed, Pozament would have to show that Lafarge actually and intentionally induced Dynergy to refrain from discussing a continuation of the contract. And, of course, Pozament would have to demonstrate damages caused by said breach. Given that Dynergy was under no duty to continue to do business with Pozament on and after March 1, 2004, it is unclear how Pozament could discharge that burden.
CONCLUSION
Based on the foregoing, the Court concludes that Lafarge is entitled to judgment on its complaint, and Pozament's counterclaims and affirmative defenses must be dismissed. The Court has considered the remaining arguments and contentions raised by the parties and finds them to be without merit or unnecessary to the disposition of this application. Accordingly, it is
ORDERED that Lafarge's motion for summary judgment is granted in accordance with the foregoing; and it is further
ORDERED that November 1, 2003 is hereby established a reasonable intermediate date for the calculation of pre-judgment interest;
ORDERED that Pozament's motion for summary judgment is denied; and it is further
ORDERED that Lafarge shall settle judgment accordingly.