Opinion
Civil Action No. 03-0278 Section "K" (1).
May 31, 2005
Before the Court is defendant's Motion For Partial Summary Judgment (Rec.Doc.102). After reviewing the record, the memoranda, the relevant law and having heard oral argument on April 27, 2005, the Court DENIES defendant's motion.
BACKGROUND
This case arises out of a software distribution contract dispute. Defendant Great Plains Software, Inc. ("Great Plains") is the developer, owner, and licensor of accounting and financial management software for use on microcomputers. Great Plains' software is licensed and distributed through various authorized resellers, such as plaintiffs Legier and Materne, APAC, and Automation, Inc. (collectively "LM"), who are called "Partners" or Value Added Resellers ("VARs"). Great Plains enters into a standard contractual agreement, the Partner Agreement Without Selling Option ("PA"), with all of its resellers. The standard agreement does not provide Partners with exclusive rights and is terminable at will upon thirty days notice. However, Great Plains and LM supplemented their Partner Agreement with a First Amendment to Partner Agreement, a sui generis document that provided for a five year term and exclusive rights to LM (the "Amendment"), and a right to renew the agreement for five years by providing a 60 day written notice prior to the effective date of the contract Plaintiffs filed suit January 28, 2003, alleging breach of contract (Rec.Doc.1). Plaintiffs' First Supplemental and Amended Complaint (Rec. Doc. 75) alleges several more claims toward which this motion for summary judgment is directed.
The issues before the Court are 1) the effective date of the contract; 2) whether the contract was timely renewed; 3) whether the Amendment is severable from the Partnership Agreement; 4) whether the defendant waived its right to written notice of plaintiff's intention to renew; 5) whether a new contract was formed under La. Civ. Code 1927, and if so, whether it was for an indefinite term; 6) whether defendant is estopped from claiming non-renewal; 7) whether there was fraud, conspiracy, and a right to reuse software under paragraph 23 of the PA. Defendant is granted summary judgment as to tortious interference with contract and punitive damages, as plaintiffs have conceded these are no longer before the Court.
The facts as presented by plaintiffs and defendant create substantial questions as to the intent of the parties and whether the parties' words belie their actions. Thus, overall, there exists genuine issues of material fact as to each of plaintiffs' allegations. Below are the facts as set forth by the parties which the Court deems particularly pertinent; then, the Court will consider each individual claim.
Defendant's Statement of Facts
Defendant contends that plaintiffs did not timely renew the contract and also knew the contract was not renewed for several reasons. Charles LeMaire, shareholder of LM and director of its IT department, was informed the contract was not renewed in early January 2000. See deft's Exhibit 5; pages 23-27, Lemarie's depo. On September 19, 2000, Mr. Legier was informed of defendant's understanding that the contract was not renewed. See deft's Exhibit 17, email from Randy Russell to Bill Legier. Russell asked for a fax of the renewal letter which Mr. Legier did not produce. See deft's Ex. 11. Furthermore, starting in July, 2000, plaintiffs' IT work in the New Orleans area was being handled by 121 Micro's separate agreement with Great Plains. In January of 2001, LM and 121 Micro parted ways and executed a Termination Agreement on January 12, 2001. See Deft's Exhibit 18. As part of the termination agreement, Mr. Russell agreed to "arrange to reestablish [LM's] Great Plains dealership and software licenses." See deft's Exhibit 19. In late February/early March, 2001 after the 121 Micro merger was rescinded, plaintiffs contacted defendant who informed them that its prior agreement had terminated and it would have to re-apply for a new agreement. See deft's Exhibit 21 and 22. Plaintiffs did not re-apply. See deft's Opp.
On June 1, 2000, defendant executed a standard VAR agreement with AIM Technology, which authorized AIM to re-sell defendant's products in the New Orleans market. Defendant states that Mr. Legier testified in early 2000 that LM stopped getting routine sales leads from GP that it had received in the past ( See deft's Exhibit 2, at 104) and plaintiffs were aware that other VARs were authorized in the New Orleans market. See deft's Exhibit 11 at 339-340. Also, at some point in June or July of 2000, plaintiffs received the Annual Product Fee Invoice for the Dynamics C/S+ software which stated the $1,500 fee is "due by July 15, 2000" and "is a requirement for you to continue your active authorization."
Defendant emphasizes a conversation which took place on January 5, 2000 between Mr. Legier and plaintiffs' attorney, Ray Areaux, who drafted the contract, during which the contract as issue was discussed. Defendant argues Ray Areaux's handwritten notation "1/30" made next to paragraph 22 shows, at the very least, that plaintiffs had some question as to whether the contracted terminated on this date and, thus, could have ascertained this fact.
Plaintiffs' Statement of Facts
As to the January 5th 2000 telephone conversation, plaintiffs state that during the time of the conversation, Mr. Areaux testified that he did not know what the notation signified; nor did he know when the agreement began. See p's Exhibit 2, Areaux's depo. Furthermore, other important events were occurring in the office, i.e., the possible purchase of the IT department, which made the attorney's assistance necessary. As to LeMaire being informed about the non-renewal of the contract, plaintiffs allege defendant knew or expected LeMaire would not tell Mr. Legier; furthermore, Mr. LeMarie never told Mr. Legier of defendant's understanding of the non-renewal of the contract. Furthermore, defendant representatives questioned whether Mr. Legier should be told or whether they should just "play dumb." See deft's Exhibit 4. Plaintiffs point out that although defendant's in house lawyer testified that all GP partners must have a written agreement to be a partner, GP did not execute a new contract with plaintiffs but continued to conduct business with them. See p's Exhibit 7, Ralph Mehnart-Meland Deposition at 32. As to the purchase of 121 Micro, plaintiffs state that after LeMaire quit, the plaintiffs invested substantial sums to continue their IT department, including the purchase of 121 Micro. Plaintiffs urge that had the LeMaire purchase taken place there would have been no need to expend funds to purchase 121. As to the plaintiffs' knowledge that it knew AIM Technology had a PA with defendant, plaintiffs argue other VARs had been improperly selling into LM's exclusive market since 1995. Plaintiffs argue that defendant continued to acknowledge that LM was a partner at least through March 2001, when it advised the plaintiff the partnership status ended in August 2000, two months after LeMaire/AIM agreement with defendant. As to the September 19th 2000 email from Mr. Russell to Mr. Legier, plaintiffs point to another email dated October 30, 2000, from Joe Carroll of GP suggesting the existence of an exclusive arrangement. See p's Exhibit 9. Plaintiffs also point to the email of John Walsh on March 9, 2001 in which defendant advised Mr. Legier that his "partner agreement lapsed in August [2000]," without expressly stating the contract was not renewed. See P's exhibit 12. In response on March 13th, 2001, Mr. Legier wrote: "that agreement is in effect until 2005 unless terminated earlier per the provisions of the Agreement as amended. There have been no terminating events and the agreement is in full force and effect. . . ." See P's Exhibit 13. Thereafter, Joe Carroll of GP wrote to other GP employees on March 29, 2001: "We need to find out if the exclusive partner agreement signed in 1995 is legally binding today. . . ." See P's Exhibit 14.
The email states: "Sorry I have not gotten back to you sooner. Larry, Paula and I have spoken and we will curtail immediate plans to add new partners in New Orleans based on the agreement you have. We will work with you to figure out what we will do moving forward."
Plaintiffs contest that Mr. Legier stated LM "stopped" getting routine sales leads from defendant. Instead, plaintiffs show Mr. Legier stated the following: "We were not getting the leads from Great Plains that we were before." See Exhibit 11, Legier depo. at 14.
LEGAL STANDARD
Summary judgment should be granted "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). "Where the record taken as a whole could not lead a rational trier of fact to find for the non-moving party, there is no genuine issue for trial." Matsushita Electric Industrial Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). Substantive law determines the materiality of facts, and "[o]nly disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).
The moving party "bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of [the record] . . . which it believes demonstrate the absence of a genuine issue of material fact." Celotex Corp v. Catrett, 477 U.S. 317, 323 (1986). Once the movant meets this burden, the burden shifts to the non-movant "to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Id. at 322. "[M]ere allegations or denials" will not defeat a well-supported motion for summary judgment. Fed.R.Civ.P. 56(e). Rather, the non-movant must come forward with "specific facts" that establish an issue for trial. Id.
When deciding a motion for summary judgment, the Court must avoid a "trial on affidavits. Credibility determinations, the weighing of the evidence, and the drawing of legitimate inferences from the facts" are tasks for the trier-of-fact. Anderson, 477 U.S. at 255. To that end, the Court must resolve disputes over material facts in the non-movant's favor. "The party opposing a motion for summary judgment, with evidence competent under Rule 56, is to be believed." Leonard v. Dixie Well Service Supply, Inc., 828 F.2d 291, 294 (5th Cir. 1987).
ANALYSIS
As the United States Court of Appeals for the Fifth Circuit has stated:
Under Louisiana law, the interpretation of an unambiguous contract is an issue of law for the court. See Rutgers, State Univ. v. Martin Woodlands Gas Co., 974 F.2d 659, 661 (5th Cir. 1992). "When the words of the contract are clear and explicit and lead to no absurd consequences, no further interpretation may be made in search of the parties' intent." La. Civ. Code Ann. art. 2046 (West 1995). In addition, a contract provision is not ambiguous where only one of two competing interpretations is reasonable or merely because one party can create a dispute in hindsight. See Lloyds of London v. Transcontinental Gas Pipe Line Corp., 101 F.3d 425, 429 (5th Cir. 1996); Rutgers, 974 F.2d at 662. This court has stated that when the contract is not ambiguous, it has no authority to reach beyond the four corners of the document. See Huggs, Inc. v. LPC Energy, Inc., 889 F.2d 649, 653 (5th Cir. 1989). On the other hand, a contract is ambiguous, under Louisiana law, "when it is uncertain as to the parties' intentions and susceptible to more than one reasonable meaning under the circumstances and after applying established rules of construction." See Lloyds of London, 101 F.3d at 429. Under these rules of construction, "[e]ach provision of a contract must be interpreted in light of the other provisions so that each is given the meaning suggested by the contract as a whole." La. Civ. Code Ann. art. 2050 (West 1987). Contract provisions susceptible to different meanings should be interpreted "to avoid neutralizing or ignoring any of them or treating them as surplusage," Lambert v. Maryland Cas. Co., 418 So.2d 553, 559-60 (La. 1982), and "to preserve validity [of the contract]," Gibbs Constr. Co. v. Thomas, 500 So.2d 764, 769 (La. 1987). Louisiana courts will not interpret a contract in a way that leads to unreasonable consequences or inequitable or absurd results even when the words used in the contract are fairly explicit. See Makofsky v. Cunningham, 576 F.2d 1223, 1229 (5th Cir. 1978). "A doubtful provision must be interpreted in light of the nature of the contract, equity, usages, the conduct of the parties before and after the formation of the contract, and of other contracts of a like nature between the same parties." La. Civ. Code Ann. art. 2053 (West 1987). Texas Eastern Transmission Corp. v. Amerada Hess Corp., 145 F.3d 737, 741-42 (5th Cir. 1998) In addition, La. Civ. Code art. 2049 provides, "A provision susceptible of different meanings must be interpreted with a meaning that renders it effective and not with one that renders it ineffective."
The Court finds again that the effective date of the Partnership Agreement and the Amendment was 1/30/95, for the reasons stated in the Minute Entry dated June 30, 2004 (Rec. Doc. 82). New evidence presented by plaintiffs, i.e., that negotiations were still ongoing and the testimony of GP's employee Ms. Larson, does not alter the interpretation of the contract as unambiguous; nor does it lead to absurd consequences. In addition, the Court finds the Partnership Agreement and the Amendment are to be regarded as one contract. The Amendment is named "The First Amendment To Partner Agreement." The first page of the Amendment reads: "In consideration of mutual agreements, obligations, and covenants of the parties, the parties amend the Agreement as follows. . . ." Furthermore, throughout the Amendment, there are several provisions which serve to delete and substitute specific provisions in the PA, thus, creating the effect of one contract. This is clearly an amendment to the partner agreement and not a new contract.
Thus, the Court finds, as a matter of law, the contract commenced on 1/30/95 to be effective for five years; the contract required plaintiffs to forward written notice to defendant at least 60 days prior to the expiration of the initial term, 1/30/00. Because plaintiffs concede it did not mail its renewal notice until December 28, 1999, plaintiffs did not timely renew their contract. The Court will now address plaintiffs' individual claims and defendant's motion for summary judgment as to each of these claims.
The Court notes defendant argues it never received written notice from plaintiffs.
1. BREACH OF CONTRACT
Defendant argues the contract could not be breached as it had not been renewed. Defendant disagrees with plaintiffs that there was an automatic renewal of the contract for a term of five years. Defendant further argues that no new contract was formed under La. Civ. Code Art. 1927. Defendant's alternative argument is that if a new contract was formed, it would be for an unspecified duration which could be terminated at the will of either party.
WAIVER
The law regarding plaintiffs' argument is as follows. Waiver is the "intentional relinquishment of a known right, power, or privilege." Steptoe v. Masco Construction Co., Inc., 643 So.2d 1213 (La. 8/18/94). Waiver occurs when there is first an existing right and knowledge of that right's existence. Id. A party may then waive that right through: (1) "an actual intention to relinquish it," or (2) "conduct so inconsistent with the intent to enforce the right as to induce a reasonable belief that it has been relinquished." Id. The party asserting waiver bears the burden of proof on the issue. F.D.I.C. v. Duffy, 47 F.3d 146, 150 (5th Cir. 1995); see also, Taita Chemical Co. v. Westlake Styrene Corp., 246 F.3d 377, 388 (5th Cir. 2001). If the trier of fact determines defendant did not waive the renewal notification, then the contract at issue terminates under its own terms. See Southern Ventures Corp. v. Texaco, Inc., 372 So.2d 1228, 1231 (La. 1979) (finding that plaintiffs failed to show an implied or express agreement that there was a renewal of the lease; therefore, lease terminated under its own terms; thus, this Court contemplated that an implied or express agreement could have renewed the lease); Maddox v. Keen, 756 So.2d 1279 (La.App. 2 Cir. 4/7/00) (finding that under the facts the insurer did not waive the cancellation of its policy; noting the difference between waiver and estoppel). FORMATION OF NEW CONTRACT UNDER LA. CIV. CODE ART. 1927
Neither plaintiffs nor defendant provide law regarding waiver; however, this is essentially plaintiffs' argument under its breach of contract claim that "GP had every intention to renew the agreement." See p's Opp. at 20. Taita Chemical Co. v. Westlake Styrene Corp., 246 F.3d 377 (5th Cir. 2001) (applying both waiver and estoppel), see also, Maddox v. Keen, 756 So.2d 1279, 1283 (La.App. 2 Cir. 4/7/00) (same).
A party claiming the existence of a contract has the burden of proving the contract existed. Pennington Construction., Inc. v. RA Eagle Corp., 652 So.2d 637 (La.App. 1 Cir. 3/3/95). "The law has long been clear that in order to find that there was an agreement between the parties and have consent pursuant to La.C.C. art. 1927, the court must find that there was a meeting of the minds of the parties." Al J. Philips, Jr. v. Berner, 789 So.2d 41, 45 (La.App. 4 Cir. 5/16/01). "`Where testimony clearly establishes that minds of both parties to contract did not meet touching primary matters involved, consent was absent and contract is invalid.'" Blann v. Aldige, 712 So.2d 1052, 1053 (La.App. 5 Cir. 5/27/98). Furthermore, "whether the parties intended to and did enter into a contract is generally an issue of fact." Turner Marine Fleeting, Inc. v. Quality Fab and Mechanical, Inc., 2002 WL 31819199 (E.D.La.) ( citing Trinity Carton Company, Inc. v. Falstaff Brewing Corp., 767 F.2d 184, 190-191 (5th Cir. 1985).
The Court finds there is an genuine issue of material fact as to 1) whether defendant waived its right to rely on the non-renewal of plaintiff; 2) whether a new agreement was formed after 1/30/00 under La. Civ. Code 1927; and 3) whether a breach occurred thereafter. Under the contract, plaintiffs were required to submit a renewal to the defendant without defendant providing any consent thereafter. Plaintiffs argue they forwarded a renewal; defendant argues it did not receive it. Plaintiffs argue that all partners had to have a written agreement and the only one existing was the contract at issue; that defendant did not execute a new contract; finally, that defendant continued to operate with plaintiffs. There is a question whether defendant informed plaintiffs directly or in a sufficient matter that it did not believe the contract was renewed when it continued business operations with them. The Court views these as material fact issues which preclude the issuance of summary judgment as to plaintiffs' breach of contract claim pursuant to both waiver and the formation of a new contract under La. Civ. Code Art. 1927.
Effect of Jury's Finding
If the fact finder concludes defendant waived the right to rely on plaintiffs' failure to renew, the PA/Amendment signed by the parties will govern. In other words, the PA/Amendment is regarded as renewed for an additional five years, unless terminated for any reason under the contract by either party. If there was no waiver, the PA/Amendment expired on its own terms, on January 30, 2000. If the fact finder determines a new contract was formed under La. Civ. Code 1927, then the trier of fact determines the terms of the contract, including its duration, based upon the intent of the parties. If the trier of fact determines the new contract was one for an unspecified duration, termination of the contract will be governed by La. Civ. Code article 2024. This article applies to any type of contract. Finkle v. Majik Market, 628 So.2d 259, 262 (5th Cir. 1993).
La. Civ. Code Art. 2024: "A contract of unspecified duration may be terminated at the will of either party by giving notice, reasonable in time and form, to the other party."
2. ESTOPPEL
Defendant argues that under the facts of the case estoppel cannot apply because plaintiffs had actual knowledge of the non-renewal of the contract. "Estoppel has three elements: (1) A representation by conduct or work; (2) Justifiable reliance thereon; and (3) A change of position to one's detriment because of the reliance." Taita Chemical Co. v. Westlake Styrene Corp., 246 F.3d 377, 389 (5th Cir. 2001) ( citing John Bailey Contractor v. State Dep't of Transp. Dev., 439 So.2d 1055, 1059 (La. 1983)). "Equitable estoppel is disfavored and should only be applied as needed to avoid injustice." Taita, 246 F.3d at 389. "The doctrine, in proper circumstances, will prevent a party `from taking a position contrary to his prior acts, admissions, representations, or silence.'" Id. (citation omitted). Furthermore, "A party having the means readily and conveniently available to determine the true facts, but who fails to do so, cannot claim estoppel." Id. The party invoking estoppel bears the burden of proving facts upon which it is founded. Robbins Tire Rubber Co., Inc. v. Winnfield Retread Inc., 577 So.2d 1189, 1191 (La.App. 2 Cir. 1981).
It is true that plaintiffs could have picked up the phone and contacted defendant to ask about the renewal of the contract; however, based on the evidence provided by plaintiffs, they create a genuine issue of material fact that they were under the impression a contract had been renewed and thus had no reason to believe ascertaining any facts were necessary. The Court agrees with defendant that the September 19, 2000 email correspondence between Mr. Legier and Mr. Russell provided sufficient notice to Mr. Legier that the contract may not have been renewed. At this particular point in time, plaintiffs had the "means readily and conveniently available to determine the true facts." However, plaintiffs produced an email from a GP employee, dated October 30, 2000, which raises a question as to whether plaintiffs should have had reason to believe the contract was not renewed and could have relied upon the email to believe the contract was in fact renewed. Furthermore, a subsequent internal email, dated March 29, 2001, between GP employees raise further questions of fact in the Court's mind as to the estoppel argument. Based on the whole evidence, defendant's argument that it should be granted summary judgment on plaintiffs' estoppel argument is denied. If the fact finder concludes estoppel applies, the effect of this finding is the same as the analysis provided on waiver.
Given the circumstances of this case, the Court is not convinced that plaintiffs' ascertainment of knowledge relating to termination more than six months after the renewal date precludes arguing estoppel. However, the Court will require in limine briefing from counsel regarding whether a subsequent ascertainment of knowledge vitiates the estoppel argument at a certain point in time — in the event the trier of fact finds estoppel applies.
3. FRAUD
For reasons asserted by defendant in the estoppel and wavier claims, defendant argues that under the facts of the case, there can be no showing of fraud.
FRAUD UNDER LA. CIV. CODE 2315
To recover on a charge of delictual fraud pursuant to Civil Code article 2315, plaintiff must prove; (1) a misrepresentation of a material fact, (2) made with the intent to deceive, and (3) causing justifiable reliance with resultant injury. See Newport, 6 F.3d at 1068 ( citing Abell v. Potomac Ins. Co., 858 F.2d 1104, 1131 n. 33 (5th Cir. 1988) vacated on other grounds, 109 S. Ct. 3236 (1989)). Further, to find fraud from silence or suppression of the truth, there must exist a duty to speak or disclose information. Greene v. Gulf Coast Bank, 593 So.2d 630, 632 (La. 1992). The determination of whether such a duty exists is a question of law. Harris v. Pizza Hut of Louisiana, Inc., 455 So. 2d 1364, 1370 (La. 1984).
The Court will first determine the "duty" element of 2315. Plaintiffs argue Bunge Corp. v. Gatx Corp., 557 So.2d 1376 (La. 1990) establishes a duty to disclose information on the part of defendant. The case involves the owner of a storage tank alleging redhibition, express/implied warranty, and fraud against the contractor who built the tank. The court focuses mainly on the duty of manufacturers, vendors, and lessors of real and personal property arising out of defective conditions of which a vendor or lessor had knowledge at the time of transaction. Id. at 1382-83. The Court provides the following discussion:
It has long been held that the duty to disclose exists where the parties stand in some confidential or fiduciary relation to one another, such as that of principal and agent or executor and beneficiary of an estate. Contracts, such as those of suretyship or guaranty, can also impose such a duty. More recently, courts have tended to impose a duty when the circumstances are such that the failure to disclose would violate a standard requiring conformity to what the ordinary ethical person would have disclosed. The existence of this duty is a legal question. Relevant factors include whether the obligation is being imposed on a seller, who is more likely to be required to disclose; the importance of the fact not disclosed; the relationship of the parties; and the nature of the fact not disclosed.Id. As defendant's argue, the execution of the contract was self-executing; both plaintiffs and defendant were parties to the contract; and defendant had no obligation under the contract to notify plaintiffs of the expiration of the contract or whether it received plaintiffs' renewal letter. This was not a case where defendant had "superior knowledge" such as that of a vendor, lessor, or manufacturer. Thus, it would be a stretch for the Court to find a duty to disclose under the rubric of 2315 and the facts in Bunge Corp., supra. See also, In Re: Ford Motor Co. Vehicle Paint Litigation, 1997 WL 539665 (E.D.La.) (recognizing Louisiana Supreme Court's broad language regarding duty to disclose, however, case involved class action of owners against Ford Motor company for latent paint defect in cars).
However, even if the Louisiana Supreme Court provided a broad enough sweep to impose a duty to disclose on the defendant in this case, this is unnecessary, as plaintiffs provide enough evidence to present a question for the Court as to whether fraud arose from more than silence, such as affirmative misrepresentations made by the defendant, such as, defendant's continued operations with plaintiffs. With that in mind, LM provides sufficient evidence to raise a question as to whether (1) a misrepresentation of a material fact occurred, i.e., that the contract was not renewed; (2) made with the intent to deceive, and (3) causing justifiable reliance with resultant injury. See also, Berk-Cohen Associates v. Orkin Exterminating Co., 2004 WL 1237990 (E.D.La.). In this case, the owner of large apartment complex sued Orkin Exterminating Co. for breach of contract and delictual fraud. Defendant argued there was not evidence that it made any affirmative misrepresentation with the intent to deceive and its silence could not have constituted dilectual fraud because it had no duty to speak. Id. at *3. The court found there was more than silence which constituted defendant's fraud, such as affirmative misrepresentations and fraudulent statements made. Id. at *4.
CONTRACTUAL FRAUD
To recover under La. Civ. Code art. 1953, plaintiffs must demonstrate the existence of a contract. See Pedalino v. Pitre, 431 So. 2d 20, 21 (La.App. 1 Cir. 1983) (Article 1953 pertains only to parties to a contract). As there is an issue of material fact regarding this issue, plaintiffs must then show, first, that defendant misrepresented or suppressed the truth with the intention of either gaining an unjust advantage or causing plaintiffs to suffer a loss, and second, that this misrepresentation or suppression of the truth caused actual or probable damages to plaintiffs. See Newport Ltd. v. Sears, Roebuck Co., 6 F.3d 1058, 1067 (5th Cir. 1993), cert. denied, 114 S. Ct. 2710 (1994). Fraud is not actionable where the plaintiffs "could have ascertained the truth without difficulty, inconvenience, or special skill. Civ. Code Art. 1953. See also, Johnson v. CHL Enterprises v. Yamaha Motor Co., 115 F.Supp.2d 723, 730 (5th Cir. 2000). "Intent to defraud and loss or damage are two essential elements to constitute legal fraud." Boudreaux v. Jeff, 884 So. 2d 665, 672 (La.App. 1 Cir. 9/17/04).
Because there is a genuine issue of material fact as to whether some kind of contract existed after 1/30/00, the Court will assume that one exists for the purpose of analyzing contractual fraud. There is enough evidence to create a genuine issue of material fact regarding misrepresentation or suppression of the truth in order to gain an unjust advantage or causing probable damages — continuing to do business with plaintiffs without having the exclusive rights granted to plaintiffs. There is enough evidence to create a genuine issue of fact towards plaintiffs' argument that they were under the impression of an ongoing relationship and renewal since defendant did not issue a new contract and continued business with plaintiffs. Considering the overall evidence there are questions of material fact regarding contractual fraud; thus, summary judgment as to this claim must be denied.
4. CONSPIRACY
Plaintiffs allege in their petition that defendant and Charles LeMaire conspired against plaintiffs to commit fraud. Defendant argues there was no intentional tort or underlying fraud claim that could arise from the discussions between defendant and LeMaire concerning the non-renewal of the Agreement. Defendant argues that because it had no right to renew the agreement, it could not conspire with LeMaire not to renew it.
Under La. Civ. Code art. 2324, "[h]e who conspires with another person to commit an intentional or willful act is answerable, in solido, with that person, for the damage caused by such act." LSA-C.C. art. 2324(A). The actionable element in a claim under this Article is not the conspiracy itself, but rather the tort which the conspirators agreed to perpetrate and which they actually commit in whole or in part. Ross v. Conoco, Inc., 828 So.2d 546, 552 (La. 10/15/02). To establish a conspiracy, plaintiffs are required to provide evidence of the requisite agreement between the parties. Guidry v. Bank of LaPlace, 661 So.2d 124, 131 (La.App. 1 Cir. 2/14/97). Stated otherwise, Article 2324(A) requires a meeting of the minds or collusion between the parties for the purpose of committing wrongdoing. Id. Evidence of such a conspiracy can be by "actual knowledge of both parties or overt actions with another, or can be inferred from the knowledge of the alleged co-conspirator of the impropriety of the actions taken by the other co-conspirator." Stephens v. Bail Enforcement of La., 690 So.2d 124, 131 (La.App. 1 Cir. 2/14/97). If a conspiracy is conceived and executed, and a private injury results, the one so injured has a right of action against all of the conspirators. Strahan v. State Through Dep't of Agric. and Forestry, 645 So.2d 1162, 1165 (La.App. 1 Cir. 8/25/94).
Charles LeMaire and two other LM employees in early January 2000 were negotiating with LM to purchase the Business Information Technology Section (BITS) of LM. Plaintiffs allege on January 7, 2000 LeMaire faxed a copy of the PA to GP and had discussions with GP regarding whether the Agreement had been renewed. On January 20, 2000 LeMaire terminated his employment with plaintiffs. On June 1, 2000 plaintiffs allege defendant and LeMaire entered into a Partner Agreement authorizing LeMaire's new company, AIM Technologies, Inc., to sell Great Plains product in plaintiffs' exclusive territory. See First Supplemental and Amended Petition. Plaintiffs claim when defendant granted LeMaire this PA, they were still operating as a partner and defendant knew that LeMaire had been or would be breaching his non-compete agreement by selling into the New Orleans market. Because proof of conspiracy can be "inferred" from the knowledge of an alleged co-conspirator, whom plaintiffs allege is GP, of the impropriety of actions taken by the other co-conspirator, whom plaintiffs allege is LeMaire, plaintiffs argue that the issue must be sent to the trier of fact.
The Court finds there is enough evidence to raise a question of material fact as to the underlying tort of fraud and a conspiracy between Mr. LeMaire and defendant. Plaintiffs have provided enough evidence that a trier of fact could determine that Mr. Legier was under the impression of believing the contract had been renewed. Furthermore, Mr. LeMaire testified that at the time he was director and employee of LM, he did not pass on the information he received regarding non-renewal to Mr. Legier. See d's Exhibit 5, page 27. Mr. LeMaire did he tell anyone else at LM of this information. See d's Exhibit 5, page 30. These facts, along with the evidence on the whole, provide a question of material fact as to whether a conspiracy existed with the underlying tort as fraud.
5. USE OF SOFTWARE
The PA provides at paragraph 23 that:
Upon any termination of this Agreement, partners shall have the right and license to continue the Not for Resale Software for its own internal purposes and to support those customers who purchased a license to software through partner.
The context of the dispute surrounding this provision is as follows. On February 15, 2001, Mr. Legier became aware that LM would have to cease using the GP software it was using for its own, internal bookkeeping because, in light of the Termination Agreement, LM no longer could use 121 Micro's license for the software and had to obtain its own. On July 20, 2001, plaintiffs reached an agreement with defendant to purchase new software and to make payments retroactive to January 12, 2001, the effective date of LM's Termination Agreement with 121 Micro, which was confirmed in writing. Plaintiffs subsequently purchased the software. Plaintiffs contend that at no time did it waive any rights with respect to defendant's alleged wrongdoing in insisting that plaintiffs make such payments, as plaintiffs contend they were not required to purchase the software. Defendant argues this particular provision fails to set forth a specified duration for this continuing obligation; thus, by operation of law, under La. Civ. Code art. 2024, it is one for "unspecified duration" and terminable at will by either party upon reasonable notice. Defendant bases its argument upon Equitable Petroleum Corp. v. Central Transmission, Inc., 431 So.2d 1084, 1086 (La.App. 2 Cir. 1983) in which the Court examined Par. 3.3 of a 1977 sales agreement. This paragraph provided: "On termination of this contract, Seller shall have the exclusive right to use all Buyer's facilities necessary for Seller to market its gas and Buyer agrees to do nothing to disturb or interfere with Seller's use thereof." When the contract had terminated, seller attempted to invoke its rights under Par. 3.3. Id. The trial judge ruled that Par.3.3. of the 1977 contract "was an agreement for an indefinite period which could be terminated at the will of either party upon the giving of reasonable notice." Id. The appellate court agreed that Para. 3.3 of the 1977 agreement constituted a valid contract for an indefinite period of time.
The Court must deny defendant's argument because there has been no determination by the trier of fact that there was a termination of the PA/Amendment at the time the above events took place. The provision clearly states "Upon any termination of this Agreement. . . ." However, if the trier of fact determines the PA/Amendment was terminated when plaintiffs purchased the software, the Court agrees with defendant's argument. It is difficult to conceive that plaintiffs' rights provided in this provision were to continue in perpetuity. Furthermore, the holding in Equitable Petroleum is convincing and plaintiffs have failed to provide any legal basis otherwise. Thus, if the trier of fact finds the Partner Agreement/Amendment was terminated, the Court finds the use of software was an agreement for an indefinite period which is terminable at will upon reasonable notice by either party. The defendant must show it provided reasonable notice to terminate the provision in para. 23. Thus, for the reasons stated, defendant's summary judgment as to the use of software must be denied.
Accordingly,
IT IS ORDERED that Defendant's Partial Motion for Partial Summary Judgment (Rec.Doc. 102) is DENIED. IT IS FURTHER ORDERED that Defendant's Partial Motion for Partial Summary Judgment (Rec.Doc. 102) is GRANTED as to plaintiffs' tortious interference of contract and punitive damages claims.