Reality Technology, Inc. v. Countertrade Products, Inc. et al

Filing 69

ORDER. Plaintiff's 53 Motion for Partial Summary Judgment Determination of Questions of Law is denied without prejudice. Plaintiff's 34 Motion for Declaratory Judgment is denied. By Judge Philip A. Brimmer on 8/4/11.(mnf, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Judge Philip A. Brimmer
Civil Action No. 10-cv-01791-PAB-KLM
REALITY TECHNOLOGY, INC., a Colorado Corporation,
Plaintiff,
v.
COUNTERTRADE PRODUCTS, INC., a Colorado Corporation,
JOE CALABRIA , an individual,
JOE BOGLINO, an individual, and
SHARON NORWELL, an individual,
Defendants.

ORDER

This matter is before the Court on plaintiff’s motions for declaratory judgment
[Docket No. 34] and partial summary judgment [Docket No. 53]. The motions are fully
briefed and ripe for disposition. In its summary judgment motion, plaintiff asks the
Court to find that the “teaming” agreement formed between plaintiff and defendant
CounterTrade Products, Inc. (“CounterTrade”) is illegal and unenforceable because it
violates federal procurement laws, which preempt common law contract principles.
Plaintiff also seeks rulings that defendants have unclean hands and illegally
participated in contracts under the Small Business Administration’s section 8(a)
program (“8(a) contracts”). Plaintiff seeks summary judgment on these issues even
though discovery had not begun in this case by the time briefing was completed. See

Docket No. 58 (lifting stay on discovery after Court’s ruling on motion to dismiss on May
31, 2011).
Plaintiff justifies the need for early summary judgment on the facial legality of the
teaming agreement by arguing that this issue supports its Racketeer Influenced and
Corrupt Organizations Act (“RICO”) and Colorado Organized Crime Control Act
(“COCCA”) claims. Plaintiff’s theory is that CounterTrade violated these statutes by
engaging in a “pattern of purposeful illegal conduct,” of which the allegedly illegal
teaming agreement was a component. See Docket No. 53 at 2. However, plaintiff has
not demonstrated how the facial legality of the teaming agreement is independently
material to its RICO and COCCA claims. Plaintiff does not allege that the teaming
agreement itself is a predicate act underlying either of these claims. See Docket No. 18
at 24-39 (alleging predicate acts for RICO and COCCA claims including extortion,
identity theft, mail fraud, wire fraud, financial institution fraud, interference with
commerce and extortion, forgery, criminal possession of a forged instrument, offering a
false document for recording, and identity theft). Although the legality of the contract is
relevant to the question of whether CounterTrade extorted plaintiff by inducing it to
enter into an illegal contract, plaintiff has not demonstrated why resolution of the facial
legality of the agreement should be independently determined at such an early stage. It
appears to the Court that resolution of the issues raised in plaintiff’s motion for
summary judgment would be more appropriate at a later date, in conjunction with
resolution of related issues material to plaintiff’s claims. As plaintiff stated in its motion
for reconsideration of the magistrate judge’s order staying discovery, “[o]nly by allowing
full discovery to proceed can the Court ensure that all factual information relating to the
2

parties’ relative positions is fully discovered and developed, in order to have a
meaningful hearing and determination of the Motion for Declaratory Judgment.”
See Docket No. 36 at 3. Accordingly, the Court will deny plaintiff’s motion for summary
judgment without prejudice as premature.
As defendants point out in their response to the motion for summary judgment,
plaintiff’s motion for declaratory judgment [Docket No. 34] addresses essentially the
same issues as its motion for partial summary judgment. See Docket No. 54 at 13-14
(“Reality has already conceded that discovery is necessary for this Court to make a
determination on Reality’s Motion for Declaratory Judgment seeking to declare the
Teaming Agreement ‘illegal’ which is seeking for all intents and purpose the same
argument presented in Reality’s Motion for Summary Judgment.”). Not only is this
motion premature, but it seeks relief plaintiff does not seek in its complaint. See Docket
No. 18 at 45-46. Therefore, the Court will deny plaintiff’s motion for declaratory
judgment.
The Court finds that genuine issues of material fact remain as to whether
defendants have unclean hands or illegally participated in § 8(a) contracts. See Docket
No. 54 at 3-4; Docket No. 54-1.
For the foregoing reasons, it is
ORDERED that plaintiff’s Motion for Partial Summary Judgment – Determination
of Questions of Law [Docket No. 53] is DENIED without prejudice. It is further
ORDERED that plaintiff’s Motion for Declaratory Judgment [Docket No. 34] is
DENIED.

3

DATED August 4, 2011.
BY THE COURT:

s/Philip A. Brimmer
PHILIP A. BRIMMER
United States District Judge

4