Marous Brothers Construction, LLC et al v. Alabama State University et al

Filing 141

MEMORANDUM OPINION AND ORDER, it is CONSIDERED and ORDERED that: (1) Dft's 98 and 103 Motions for Summary Judgment be and the same are hereby GRANTED; (2) Dfts' 98 Motion for Fees and Costs Pursuant to the Alabama Litigation Accountab ility Act be and the same is hereby DENIED; (3) Dfts' 100 Motion for Summary Judgment be and the same is hereby DENIED; (4) Dfts' 132 and 135 Motions to Strike be and the same are hereby DENIED AS MOOT; (5) All of Plfs' claims are DISMISSED WITH PREJUDICE. Signed by Honorable Ira De Ment on 11/24/2008. (Attachments: # 1 Civil Appeals Checklist)(wcl, )

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IN THE UNITED STATES DISTRICT COURT FOR T H E MIDDLE DISTRICT OF ALABAMA N O R T H E R N DIVISION M A R O U S BROTHERS C O N S T R U C T IO N , LLC, et al., P l a i n t if f s , v. A L A B A M A STATE UNIVERSITY, e t al., D e f e n d a n ts . ) ) ) ) ) ) ) ) ) ) ) C A S E NO. 2:07-cv-384-ID (W O ) M E M O R A N D U M OPINION AND ORDER P la in tif f s Marous Brothers Construction ("MBC") and Gil Berry bring this action a g a in s t Alabama State University ("ASU"), W. Ken Upchurch, Percy Thomas, TCU C o n su ltin g Services ("TCU"), Joe A. Lee, and Elton N. Dean, Sr., alleging that Defendants b re a c h e d an implied contract and committed various torts in connection with a project to re n o v a te ASU dormitories. Defendants TCU, Upchurch, and Thomas have also filed a c o u n t e rc la im against Berry for defamation. This cause is before the Court on Defendants' M o tio n s for Summary Judgment (Docs. ## 98, 100, 103) and Defendants' Motions to Strike (D o c s. ## 132, 135). The Court has carefully considered all submissions in support of and in opposition to the motions and the relevant case law. The Court addresses each claim b e lo w . I . JURISDICTION AND VENUE T h e Court exercises subject matter jurisdiction over Plaintiff's claims pursuant to 28 U .S .C . 1332 (diversity). The parties contest neither personal jurisdiction nor venue, and th e Court finds an adequate factual basis for each. I I . SUMMARY JUDGMENT STANDARD U n d e r Rule 56(c) of the Federal Rules of Civil Procedure, summary judgment is a p p ro p ria te "if the pleadings, depositions, answers to interrogatories, and admissions on file, to g e th e r with the affidavits, if any, show that there is no genuine issue as to any material fact an d that the moving party is entitled to a judgment as a matter of law." Fed. R. Civ. P. 56(c). " A n issue of fact is `genuine' if the record as a whole could lead a reasonable trier of fact to f in d for the nonmoving party. An issue is `material' if it might affect the outcome of the c a se under the governing law." Redwing Carriers, Inc. v. Saraland Apartments, 94 F.3d 1 4 8 9 , 1496 (11th Cir. 1996) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1 9 8 6 )). "A genuine issue of material fact does not exist unless there is sufficient evidence f a v o rin g the nonmoving party for a reasonable jury to return a verdict in its favor." Chapman v . AI Transp., 229 F.3d 1012, 1023 (11th Cir. 2000) (en banc) (quoting Haves v. City of M ia m i, 52 F.3d 918, 921 (11th Cir. 1995) (internal quotation marks and citations omitted)). T h e party seeking summary judgment "always bears the initial responsibility of in f o rm in g the district court of the basis for its motion, and identifying those portions of `the p le a d in g s , depositions, answers to interrogatories, and admissions on file, together with the a f f id a v its , if any,' which it believes demonstrate the absence of a genuine issue of material f a ct." Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). The movant can meet this burden 2 b y presenting evidence showing there is no dispute of material fact, or by showing the n o n m o v in g party has failed to present evidence in support of some element of its case on w h ic h it bears the ultimate burden of proof. Id. at 322-23. O n c e the moving party has met its burden, Rule 56(e) "requires the nonmoving party to go beyond the pleadings and by [its] own affidavits, or by the `depositions, answers to in t e rr o g a to r ie s , and admissions on file,' designate `specific facts showing that there is a g e n u in e issue for trial.'" Id. at 324. To avoid summary judgment, the nonmoving party " m u s t do more than simply show that there is some metaphysical doubt as to the material f a cts ." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). On the o th e r hand, a court ruling on a motion for summary judgment must believe the evidence of th e nonmovant and must draw all justifiable inferences from the evidence in the nonmoving p a rty's favor. See, e.g., Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986); M c C o r m ic k v. City of Fort Lauderdale, 333 F.3d 1234, 1243 (11th Cir. 2003) (the evidence a n d all reasonable inferences from the evidence must be viewed in the light most favorable to the nonmovant). After the nonmoving party has responded to the motion for summary ju d g m e n t, the court must grant summary judgment if there is no genuine issue of material f a c t and the moving party is entitled to judgment as a matter of law. See Fed. R. Civ. P. 5 6 (c). I I I . FACTS T h e Court has carefully considered all deposition excerpts and documents submitted 3 in support of and in opposition to the motion. The submissions of the parties, viewed in the lig h t most favorable to the non-moving party, establish the following relevant facts: P la in tif f Gil Berry is the owner of Gil Berry and Associates ("GBA"), a consulting f irm based in Pennsylvania. P la in tif f Marous Brothers Construction, Inc. ("MBC") is an Ohio-based company that s p e c ia liz e s in historic renovations, the construction of multi-family residences, and h o s p ita lity-re la te d projects. Arne Goldman is the Director of Business for MBC. S tu d e n t Suites is a Missouri-based company that develops and finances new student h o u s in g for universities. Dick Davis is the Director of Development, Acquisition and F in a n c e for Student Suites. T C U Consulting Services, Inc. ("TCU") serves as the "owner's representative" for c o n s t ru c tio n projects at ASU, including the University's dormitory renovations. U p c h u rc h and Percy Thomas are principles of TCU. E lto n N. Dean is the Chairman of the ASU Board of Trustees. He has served in this c a p a c ity since 2005. Joe A. Lee is the President of ASU. He has served in this capacity s in c e 2001. B e rry became aware that ASU had a potential student housing project in the summer o f 2005. Berry contacted MBC and Student Suites regarding the project, and the three c o m p a n ie s decided to work together to present a proposal to ASU to renovate six dormitories an d construct a new student housing facility ("the ASU dormitory renovation project"). Ken 4 In July, 2005, Berry met with the ASU officials responsible for improving student h o u sin g . Subsequent to this meeting, ASU authorized GBA, Student Suites, and MBC to to u r its dormitories in order to prepare the proposal. O n September 20, 2005, GBA, MBC, and Student Suites presented their proposal to A S U for the dormitory renovation project. The proposal was presented to Dr. Leon Frazier, f o rm e r Vice President of Administrative Services at ASU, and several other ASU officials re s p o n s ib le for improving student housing at ASU. O n November 9, 2005, Berry and Davis sent a letter to the ASU Trustee Board. The le tte r enclosed a revised plan regarding the proposal to redevelop the student housing at A S U . It also requested that the Board pass a resolution drafted by Student Suites, GBA, and M B C "to allow our team to work with the Alabama State University Staff to further define th e exact scope of work along with the most attractive financing packages available." This d ra f t resolution, which was attached to a letter signed by Berry, stated: B E IT RESOLVED that the Board of Trustees designates Student Suites, Inc. a n d Gil Berry and Associates as its developer for the purpose of Designing, B u i ld in g Renovating, and Financing a proposed Student Housing R e d e v elo p m e n t Master Plan per the proposal submitted October 28, 2005. I t is mutually understood that if final agreement is not reached on more d e ta iled design and financing structures that this Resolution will become void w ith no expense to Alabama State University. (e m p h a s is added). According to Davis, both Berry and MBC knew of and consented to the d ra f t resolution being sent to ASU. O n November 15, 2005, the ASU Board of Trustees Property Committee approved 5 in principle for presentation to the full Board a proposed resolution that stated: th e Board of Trustees hereby authorizes the President of the University to e n g a g e Student Suites, Inc., and Gil Berry and Associates as developer for the p u rp o s e of developing a Student Housing Redevelopment master Plan for d e s ig n in g , building, renovating, and financing student housing on campus. It is mutually understood that if final agreement is not reached on more detailed d e sig n and financing structures that this Resolution will become void with no e x p en s e to Alabama State University. (e m p h a s is added). Both Berry and MBC received notice of this resolution. O n November 18, 2005, Goldman prepared a Letter of Intent to define the relationship b e tw e e n Student Suites, GBA, and MBC. The Letter of Intent designated Student Suites and G B A as "the developer" and MBC as "the Design/Builder." The Letter of Intent provided: 5) D u rin g various stages of the pre-construction phase of the Project, the D e sig n /B u ild e r shall present to the Developer a guaranteed maximum p ric e (GMP) for the hard construction cost for the Project. . . . The D e sig n /B u ild e r shall issue the GMP to coincide with the completion of th e ir schematic design work. If the Developer or Alabama State U n iv e rs ity elect to abandon the Project at that time for any reason, then th e Developer and/or Alabama State University will be responsible for p a yin g the Design/Builder only for pre-construction services rendered b y the Design/Builder up to the time that the GMP has been issued. . . If , after receiving the GMP, the Developer elects to proceed with the P r o je c t, the Design/Builder shall continue to provide pre-construction s e rv ic e s through the design development phase. . . . At the conclusion o f the design development phase, the Design/Builder shall issue a re v ise d GMP to the Developer . . . . If the Developer or Alabama State U n iv e rs ity elect to abandon the Project at this time for any reason, then th e Developer and/or Alabama State University shall promptly remit $ 1 1 5 ,8 0 0 .0 0 plus travel expenses as payment-in-full for prec o n s tru c tio n services . . . . 6) ... 6 8) If the Developer or Alabama State University elect to abandon the P r o je c t after the lump sum, fixed-fee contract amount has been d e te rm in e d by the Design/Builder and prior to construction for any re a so n , or if the Developer elects to select another entity for the c o n stru c tio n of the Project, then the Developer shall promptly remit p a ym e n t of $248,000.00 plus travel expenses to the Design/Builder for p re -c o n stru c tio n services rendered as payment-in-full. T h e Letter of Intent contained signature lines for Student Suites, GBA, and MBC. ASU was n o t an intended party to the Letter of Intent. Furthermore, the Letter of Intent was never s ig n e d by any party. D u rin g the winter and srping of 2006, MBC prepared a product that outlined the S c o p e of Work for the ASU dormitory renovation project. MBC gave copies of the Scope o f Work to Berry to distribute. A t a meeting on May 5, 2006, the ASU Board of Trustees agreed "to engage Student S u ites as the contractor to renovate six University residence Halls, and build one new suite style residence hall at Alabama State University." Sometime later, ASU decided not to build th e new residence hall and to only renovate the six dormitories. O n May 15, 2006, MBC sent an invoice to Student Suites and GBA in the amount of $ 2 9 7 ,5 0 0 .0 0 for "Part 1 Design Build & Preconstruction Services Rendered to Date" on the A S U dormitory renovation project. On May 23, 2006, GBA sent an invoice to ASU in the a m o u n t of $76,729.49 for "Part 1 Supervision of Design/Build Preconstruction Services." N e ith e r of these invoices were paid. A ls o in May 2005, Davis incorporated the entity "Student Suites Gil Berry Associates, 7 L L C " ("SSGBA") in the State of Alabama. On July 9, 2006, Davis emailed a draft " D e v e lo p m e n t Agreement" ("the Agreement"), which was the proposed contract between S S G B A and ASU for the dormitory renovation project. While MBC was identified in the d ra f t agreement, MBC was not a party to the agreement. The Development Agreement was re v is e d several times, but it was never signed. O n July 26, 2006, ASU notified Berry that it had engaged TCU to assist ASU by p e rf o rm in g due diligence in reviewing the Plaintiffs' proposal. ASU requested permission f o r TCU to review the Scope of Work prepared by MBC. Berry authorized TCU to review th e Scope of Work. On July 28, 2006, MBC sent an email to Berry stating the conditions u p o n the use of MBC's proprietary Scope of Work. The email stated: a ) . . . We have prepared our work product in good faith based upon our verbal a g re e m e n t with you and Richard Davis, knowing that as of this date, we have r e c e iv e d no compensation for our efforts. b ) We understand that you are close to signing your Development Agreement w ith Alabama State University, at which time we will execute our construction M a n a g e m e n t contract and receive compensation for the extensive prec o n s t ru c tio n services we have rendered on behalf of ASU and your d e v e lo p m e n t team; however, until that time, no one is authorized to use our w o rk product without our permission. (em p h asis added). O n July 28, 2006, TCU was retained by ASU to serve as the owner's representative. T C U reviewed the proposed development agreement and Scope of Work and communicated its questions and concerns with MBC. On August 16, 2006, ASU emailed Berry and Davis p ro p o s e d revisions to the Agreement. On August 18, 2006, Davis wrote a letter to President 8 L e e that stated that SSGBA's position was that certain proposed changes were "not a c ce p ta b le ." The changes which SSGBA would not accept were requiring SSGBA to be re sp o n s ib le for the fees and expenses of consultants or project managers hired by ASU, and d e la yin g the initial payment of four percent until the commencement of construction. O n September 19, 2006, ASU emailed Berry that President Lee wanted the d e v e lo p e r's fee provided in the Agreement to be reduced by $1 Million. On September 20, 2 0 0 6 , Berry sent ASU a letter that the developer's fee could not be reduced more than $ 6 0 0 ,0 0 0 . O n September 22, 2006, the ASU Board of Trustees met. At that meeting, President L e e recommended that the Board reject the Agreement proposed by SSGBA for the d o r m i t o ry renovation project. The Board approved President Lee's recommendation and c h o se not to engage SSGBA for the project. O n September 28, 2006, President Lee sent Berry a letter explaining his decision not to recommend GBA and Student Suites' proposal for the dormitory renovation project. O n October 3, 2006, Berry forwarded invoices for GBA, MBC and Student Suites to A S U . GBA's invoice was in the amount of $196,585.68, Student Suites' invoice was in the a m o u n t of $95,975.00, and MBC's invoice was in the amount of $454,777.00. ASU did not p a y these invoices. On October 23, 2006, ASU collected all documents from GBA, Student S u ite s , and MBC that were in its possession and returned them to Berry. P la in tif f s filed this action on May 3, 2007. 9 I V . DISCUSSION W h e n a federal court decides a state law claim it applies the choice of law rules of the ju ris d ic tio n in which it sits. Benchmark Med. Holdings, Inc. v. Rehab Solutions, LLC, 307 F . Supp. 2d 1249, 1258-59 (M.D. Ala. 2004) (Albritton, C.J.) (citing Boardman Petroleum, In c . v. Federated Mut. Ins. Co., 135 F.3d 750, 752 (11th Cir. 1998). In this case, the Court w i l l apply the law of the State of Alabama. See Cherokee Ins. Co. v. Sanches, 975 So. 2d 2 8 7 , 293 (Ala. 2007) (Alabama choice of law rules in contract claims require court to apply th e law of the state where the contract was formed); Twin City Fire Ins. Co. v. Colonial Life & Acc. Ins. Co., 124 F. Supp. 2d 1243, 1248 (M.D. Ala. 2000) (DeMent, J.) (Alabama choice o f law rules for tort claims require court to apply the law of the state where the harm o c c u rre d ). Moreover, all of the parties agree that Alabama law governs this case. A. M B C 's Claims M B C has voluntarily dismissed all of its claims except its quantum meruit claim. In o rd e r to succeed on a claim of quantum meruit, a plaintiff must show that (1) he provided a b e n e fit that was knowingly accepted, and (2) he had a reasonable expectation of being c o m p e n s a te d for those services. Mantiply v. Mantiply, 951 So. 2d 638, 656 (Ala. 2006). T h e Court finds that MBC did not have a reasonable expectation of being c o m p e n s a te d by ASU for the work it performed. In November 2005--well before MBC s ta rte d working to prepare the Scope of Work--the ASU Board of Trustees adopted a re s o lu tio n , which had been drafted and proposed to ASU by Student Suites and GBA, that 10 s ta te d "It is mutually understood that if final agreement is not reached on more detailed d e sig n and financing structures that this Resolution will become void with no expense to A la b a m a State University." (emphasis added). MBC does not dispute that it had notice of th is resolution and that no "final agreement" was ever reached. When presented with such a clear statement, a reasonable person would understand that any work performed attempting to obtain a contract, prior to reaching a "final agreement," would be performed at their own ris k if no final agreement was ever reached. Therefore, any expectation of compensation u n d e r these circumstances would be unreasonable. See Utah Foam Prods. v. Polytec, Inc., 5 8 4 So. 2d 1345, 1350-51 (Ala. 1991) (plaintiff contractors did not have reasonable ex p ec tation of compensation for work performed attempting to secure a contract). B. B er r y 's Claims1 1. C la im s Against ASU, Lee, and Dean Only a. B re a c h of Contract and Quantum Meruit Claims B erry has not presented this Court with any evidence of an express contract, therefore h is breach of contract claim fails to that extent. Furthermore, Berry's breach of implied c o n tra c t and quantum meruit claims fail for the same reasons that MBC's fail. See supra Part I V .A . b. Fraud The Court notes that Berry's briefs in opposition to summary judgment do not c ite any caselaw relevant to his claims. Moreover, Berry does not make any substantive a rg u m e n ts beyond repeating legal conclusions without any factual or legal support. 11 1 B e rry's Complaint includes a claim of fraud against Lee. However, Berry does not s p e c if y what statements or conduct on the part of Lee he believes were fraudulent. The a f f id a v it of Berry submitted in support of his opposition to summary judgment does not re f e re n c e any alleged fraudulent statements by Lee. Accordingly, Berry has not met his b u rd e n of proof, and Lee is entitled to summary judgment on this claim. 2. C la im s Against TCU, Upchurch, and Thomas a. F r a u d u l e n t Misrepresentation T o recover for a claim of fraudulent misrepresentation, the plaintiff must prove (1) a false representation (2) of a material fact (3) that the plaintiff reasonably relied on, (4) w h ic h was the proximate cause of damage sustained by the plaintiff. See Davis v. Sterne, A g e e and Leach, Inc., 965 So. 2d 1076, 1094 (Ala. 2007). In Count Three of Plaintiffs' A m e n d e d Complaint (Doc. # 59), Plaintiffs state that the allegedly false representation made b y TCU, Upchurch, and Thomas is "that they believed that the Plaintiffs' proposal was the b e st and most fair proposal and that ASU should move forward with the Plaintiffs' proposal im m e d iate ly." Furthermore, in his deposition, Berry admits that this statement is the sole b a s is for the fraudulent misrepresentation claim. B e rry states in his deposition that he had only one meeting with TCU, that the sta tem e n t was made to Goldman and not him, and that he never heard the alleged statement. A c c o rd in g ly, Berry has not presented this Court with sufficient evidence that a reasonable ju ry could find the statement was actually made. Furthermore, the statements Berry alleges 12 w ere false were not statements of fact, but rather statements of opinion, which can not form th e basis of a fraudulent misrepresentation claim. See Ray v. Montgomery, 399 So. 2d 230, 2 3 2 (Ala. 1980) (seller's claims that house was "a nice house" and "in good condition" were sta tem e n ts of opinion and not material fact); Lawson v. Cagle, 504 So. 2d 226, 227 (Ala. 1 9 8 7 ) (predictions as to events to occur in the future are generally regarded as statements of o p inion only). Moreover, Berry admitted in his deposition that these statements were s ta te m e n ts of opinion. When a plaintiff admits a statement is an opinion, he is unjustified a s a matter of law in relying on it as a material fact. See Jones v. McGuffin, 454 So. 2d 509, 5 1 2 (Ala. 1984). Lastly, Berry also admitted in his deposition that he did not rely on the alleg ed misrepresentations. Under these circumstances, the Court finds that Defendants are e n title d to summary judgment on Berry's fraudulent misrepresentation claim. In Berry's affidavit, he suddenly alleges an additional basis for his fraudulent m is re p re s e n ta tio n claim: "The crux of SSGBA's fraudulent claims is that TCU m is re p re se n te d that it had been hired by ASU to review SSGBA's work, and thereby o b tain e d copies of SSGBA's proprietary work, which it subsequently used to obtain $ 4 2 ,0 0 0 ,0 0 0 in funding, and to bill ASU in the approximate amount of $3,000,000." H o w e v e r, Berry clearly limited his fraudulent misrepresentation claim to the alleged m is re p re se n ta tio n by TCU "that they believed that the Plaintiffs' proposal was the best and m o s t fair proposal and that ASU should move forward with the Plaintiffs' proposal im m e d ia te ly." Berry so limited his claim in the Amended Complaint and his deposition. A 13 p la in tif f may not amend his complaint at summary judgment. See Gilmour v. Gates, M c D o n a ld and Co., 382 F.3d 1312, 1315 (11th Cir. 2004). Accordingly, this Court will not a d d re s s this untimely claim. b. T o r tio u s Interference With Contract In order to prove a claim of tortious interference with contract, the plaintiff must show (1 ) the existence of a contract or business relation; (2) the defendant's knowledge of the c o n tra c t or business relation; (3) intentional interference by the defendant with the contract o r business relation; (4) the absence of justification for the defendant's interference; and (5) d a m a g e to the plaintiff as a result of the interference. See Parsons v. Aaron, 849 So. 2d 932, 9 4 6 (Ala. 2002). A defendant is not liable for tortious interference with contract if that party is a " p a rtic ip a n t" to the contract or business relationship at issue. See Waddell & Reed, Inc. v. U n ite d Investors Life Ins. Co., 875 So. 2d 1143, 1157 (Ala. 2003). Such a justification is an a f f irm a tiv e defense, and the burden of proof is on the defendant. Parsons, 849 So. 2d at 946. T h e defendant does not have to be a party to the contract in order to be a "participant" and th u s shielded from liability. Waddell & Reed, 875 So. 2d at 1157. A "participant" is one w h o is involved in a business relationship arising from interwoven contractual arrangements th a t include the contract at issue. Id. If the participant has a legitimate economic interest in a n d a legitimate relationship to the contract, then the participant enjoys a privilege of b e c o m in g involved without being accused of interfering with the contract. Id. 14 B e rry has admitted, in the Amended Complaint and in his deposition, that TCU had a relationship with ASU as owner's representative on the dormitory restoration project. B e rry further admitted in his deposition that TCU had a right and obligation to review S S G B A 's proposal on behalf of ASU. This Court finds that TCU's relationship with ASU a s "owner's representative" on the dormitory restoration project makes them a "participant" in the business relationship between SSGBA and ASU. As such, they were not strangers to th e relationship and any alleged interference on their behalf would have been justified. T h e re f o re , Defendants are entitled to summary judgment on Berry's tortious interference w ith contract claim. 3. C la im s Against All Defendants a. C o n v e r sio n B erry does not present any facts or argument to support his conversion claim. In B e rry's affidavit, he claims that "SSGBA's proprietary work product" was wrongfully a p p ro p ria te d and used to acquire funding. However, Berry has not presented any evidence o r legal argument that ASU's issuance of Fee Revenue Bonds in 2006, or any other action ta k e n by Defendants, constituted a wrongful taking, an illegal assumption of ownership, an ille g a l use or misuse of another's property, or a wrongful detention or interference with a n o th e r' s property. See Crown Life Ins. Co. v. Smith, 657 So.2d 821, 823 (Ala. 1994). In d e e d , Berry even admits in his deposition that he has no evidence that Defendants used his w o rk product in the renovation of the ASU dormitories. Therefore, Defendants are entitled 15 to summary judgment on this claim. b. L o ss of Business Opportunity B erry claims that Defendants are liable for "loss of business opportunity." However, th is Court has found no case that identifies "loss of business opportunity" under Alabama law a s a cause of action (as opposed to a form of damages), and Berry certainly fails to identify s u c h a case. Regardless, Berry has not presented evidence that any business opportunity was a c tu a lly lost, or evidence that Defendants caused Berry to lose business. Accordingly, D e f e n d a n ts are entitled to summary judgment on this Claim. c. C iv il Conspiracy L iab ility for civil conspiracy rests upon the existence of an underlying wrong and if th e underlying wrong provides no cause of action, then neither does the conspiracy. Hooper v . Columbus Reg'l Healthcare Sys., 956 So. 2d 1135, 1141 (Ala. 2006). Therefore, because n o n e of Berry's underlying allegations have merit, neither does his civil conspiracy claim. 4. T C U 's Counterclaim D e f en d a n ts TCU, Upchurch, and Thomas have filed a counterclaim against Berry for d e f am a tio n . In order to establish a claim for defamation, TCU has the burden to prove: (1) a false and defamatory statement concerning TCU; (2) an unprivileged communication of th a t statement to a third party; (3) fault amounting at least to negligence on the part of Berry; a n d (4) either actionability of the statement irrespective of special harm or the existence of s p e c ia l harm caused by the publication of the statement. McCaig v. Talladega Pub. Co., 544 16 S o . 2d 875, 877 (Ala. 1989). TCU alleges that Berry told several individuals that TCU was u sin g "illegal" and "unethical" means to "steal" Berry's business from ASU. d e p o s itio n , Berry admitted that he did make these statements to these individuals. In determining whether Berry acted negligently in publishing the allegedly defamatory c o m m u n ic a tio n s to third parties, a court may take into account (a) the thoroughness of the ch ec k that a reasonable person would make before publishing the statement, (b) the nature o f the interests that Berry was seeking to promote in publishing the statement, and (3) the e x te n t of damage to which the statement exposed the plaintiff's reputation. Mead Corp. v. H ic k s, 448 So. 2d 308, 312 (Ala. 1984). W ith respect to the first factor, the Court finds that TCU has presented evidence that B e rry did not verify the veracity of his claims with the same thoroughness that a reasonable p e rs o n would use. Berry had no evidence that TCU used SSGBA's proprietary work product o n the dormitory restoration project, and he certainly had no evidence that TCU was using " ille g a l" means to get ASU to deny SSGBA the contract. Therefore, this factor weighs in T C U 's favor. T h e second factor is the nature of the interests that Berry was seeking to promote in m a k in g the statement. "Informing the public as to a matter of public concern is an important in te re st in a democracy; spreading of mere gossip is of less importance. . . . If there was no s u b s t a n tia l interest to protect in publishing the communication to these recipients, then a re a so n a b le person would be hesitant to publish the communication unless he had good reason In his 17 to believe that it was accurate." Restatement (Second) of Torts 580B cmt. h (2008). The C o u rt finds that Berry's statements to these individuals was self-serving and was not intended to protect a "substantial interest." Accordingly, this factor weighs in favor of TCU. T h e third factor is the extent of damage to which the statement exposed the plaintiff's re p u ta tio n . When weighing this factor, the Court may consider "Was the communication d e f am a to ry on its face? Would its defamatory connotation be known only to a few? How e x te n s iv e was the dissemination? How easily might the plaintiff protect his reputation by m e a n s at his own disposal?" Restatement (Second) of Torts 580B cmt. h (2008). Here, the d i s s e m in a tio n was extremely limited because Berry's statements were only made to a few i n d i v i d u a ls . Furthermore, no evidence has been presented to this Court that TCU's re p u ta tio n was damaged, or that it was ever in any danger of being damaged. Indeed, TCU d o e s not even allege that it has sustained any actual damage. Therefore, the Court finds that this factor weighs heavily in Berry's favor. A f te r weighing these factors, the Court finds that TCU has failed to meet its burden to show that Berry acted at least negligently in publishing the allegedly defamatory material. B e c au s e the Court makes this finding, it is unnecessary to analyze the other elements of d e f am a tio n . Consequently, TCU is not entitled to summary judgment on its defamation c o u n te rc la im . 5. T C U 's Motion for Fees and Costs T C U has moved this Court to award fees and costs against Berry pursuant to the 18 A la b a m a Litigation Accountability Act, which states: (a ) . . . [I]n any civil action commenced or appealed in any court of record in th is state, the court shall award, as part of its judgment and in addition to any o th e r costs otherwise assessed, reasonable attorneys' fees and costs against any a tto rn e y or party, or both, who has brought a civil action, or asserted a claim th e re in , or interposed a defense, that a court determines to be without su b sta n tial justification, either in whole or part; ... (c ) The court shall assess attorneys' fees and costs against any party or attorney if the court, upon the motion of any party or on its own motion, finds that an a tto rn e y or party brought an action or any part thereof, or asserted any claim o r defense therein, that is without substantial justification. A la . Code 12-19-272. The Court finds that TCU has failed to meet its burden to prove that B e rry brought claims that were "without substantial justification." See Sam v. Beaird, 685 S o . 2d 742, 745 (Ala. Civ. App. 1996) (no award under 12-19-272 where plaintiff's claims are not frivolous, or pursued in bad faith or with malicious intent). V . CONCLUSION A s stated above, this Court finds that Defendants are entitled to summary judgment w ith respect to all of Plaintiffs' claims. The Court also finds that TCU is not entitled to s u m m a r y judgment with respect to its counterclaims. F o r the reasons set forth above, it is CONSIDERED and ORDERED that (1) Defendants' Motions for Summary Judgment (Docs. ## 98, 103) be and the same a re hereby GRANTED. (2 ) Defendants' Motion for Fees and Costs Pursuant to the Alabama Litigation A c c o u n ta b ility Act (Doc. # 98) be and the same is hereby DENIED. 19 (3 ) Defendants' Motion for Summary Judgment (Doc. # 100) be and the same is h e re b y DENIED. (4 ) Defendants' Motions to Strike (Docs. ## 132, 135) be and the same are hereby D E N IE D AS MOOT. (5 ) A ll of Plaintiffs' claims are DISMISSED WITH PREJUDICE. D O N E this 24th day of November, 2008. /s/ Ira DeMent SENIOR UNITED STATES DISTRICT JUDGE 20

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