Streamline Consulting Group LLC v. Legacy Carbon LLC dba Hawaiian Legacy Carbon et al
Filing
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ORDER DENYING MOTION FOR RECONSIDERATION re 37 - Signed by JUDGE SUSAN OKI MOLLWAY on 3/16/2016. (emt, )CERTIFICATE OF SERVICEParticipants registered to receive electronic notifications received this document electronically at the e-mail address listed on the Notice of Electronic Filing (NEF). Participants not registered to receive electronic notifications were served by first class mail on the date of this docket entry
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF HAWAII
STREAMLINE CONSULTING GROUP
LLC,
)
)
)
Plaintiff,
)
)
vs.
)
)
LEGACY CARBON LLC, dba
)
HAWAIIAN LEGACY CARBON;
)
)
HAWAIIAN LEGACY REFORESTATION )
INITIATIVE, dba HAWAIIAN
)
LEGACY HARDWOODS, dba
)
HAWAIIAN LEGACY FORESTS, dba, )
LEGACY FORESTS, dba LEGACY
)
TREES;
)
)
HLH LLC, aka HAWAIIAN LEGACY )
HARDWOODS, LLC;
)
)
LEGACY HARDWOODS, INC., aka
)
HAWAIIAN LEGACY HARDWOODS,
)
INC,;
)
)
LEGACY HOLDINGS LLC, aka
)
HAWAIIAN LEGACY HOLDINGS,
)
LLC;
)
)
JEFFREY DUNSTER; and
)
)
JOHN DOES,
)
)
Defendants.
)
_____________________________ )
CIVIL NO. 15-00318 SOM/KSC
ORDER DENYING MOTION FOR
RECONSIDERATION
ORDER DENYING MOTION FOR RECONSIDERATION
I.
INTRODUCTION.
On January 27, 2016, the court determined that claims
arising under the Services Agreement and/or the Non-Circumvention
Agreement are subject to mandatory arbitration.
Before sending
any party to arbitration, the court stated that it would
determine which parties are subject to the arbitration agreement.
The court stayed this action, except with respect to the issue of
which parties are subject to the arbitration agreement.
The
court also denied Defendants’ motion to dismiss and request for
sanctions.
See ECF No. 36.
On February 10, 2016, Defendants moved for partial
reconsideration of the court’s interlocutory order.
37.
See ECF No.
The sole argument raised in the reconsideration motion
pertains to the court’s determination that claims arising under
the Non-Circumvention Agreement are subject to arbitration.
ECF No. 37-1, PageID # 483.
See
The court denies the motion for
reconsideration.
II.
RECONSIDERATION STANDARD.
Defendants seek reconsideration of an interlocutory
order.
That is, Defendants seek reconsideration of an order that
compelled arbitration of claims, but expressly left for
determination which Defendants had agreed to arbitrate the
claims.
The reconsideration motion is governed by Local Rule
60.1, which allows such motions based on “(a) Discovery of new
material facts not previously available; (b) Intervening change
in law; and (c) Manifest error of law or fact.”
“Mere
disagreement with a previous order is an insufficient basis for
reconsideration.”
White v. Sabatino, 424 F. Supp. 2d 1271, 1274
(D. Haw. 2006). “Whether or not to grant reconsideration is
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committed to the sound discretion of the court.”
Id. (internal
quotation marks omitted).
III.
ANALYSIS.
All parties agree that the arbitration clause contained
in the Services Agreement is valid and enforceable.
The
arbitration clause is broad, stating:
Any controversy or claim arising out of, or
relating to this agreement, or breach
thereof, which is not settled amicably by and
between the signatories within a period of 30
days shall be settled through binding
arbitration in accordance with the laws of
the defending state.
Id., PageID # 24; Prima Paint Corp. v. Flood & Conklin Mfg. Co.,
388 U.S. 395, 398 (1967) (stating that reference to “Any
controversy or claim arising out of or relating to this
Agreement” was part of “broad” arbitration clause).
This court
determined that the Non-Circumvention Agreement “related to” the
Services Agreement such that the arbitration clause applied to
breach of contract claims arising out of the Non-Circumvention
Agreement.
Defendants’ motion seeks reconsideration of that
determination based on new evidence and also argues that this
court committed a manifest error of fact.
The court is
unpersuaded.
To the extent the motion is based on new evidence in
support of its argument that the two contracts were not related,
the motion is denied.
“To support a motion for reconsideration
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based upon newly discovered evidence, the movant is obliged to
show not only that the evidence was newly discovered or unknown,
but also that it could not with reasonable diligence have
discovered and produced such evidence at the hearing.”
Oyama v.
Univ. of Haw., 2013 WL 3296567 (D. Haw. June 28, 2013); accord
Hagan v. U.S. Nat’l Bank, 2014 WL 5465321 (D. Haw. Oct. 27,
2014).
This court has denied motions seeking reconsideration of
orders based on evidence and/or legal arguments that the party
seeking reconsideration could have raised in connection with an
original motion.
Jan. 14, 2015).
See Barker v. Gottlieb, 2015 WL 181776 (D. Haw.
Because Defendants make no showing that the new
evidence was previously unavailable or was newly discovered, the
court disregards the new evidence, determining that it cannot
support the present motion for reconsideration.
Even if the court considered the additional evidence,
the court would not change its ruling.
The additional evidence
addresses the circumstances under which the Services Agreement,
the Non-Circumvention Agreement, and a third contract were
entered into.
However, the circumstances and the third contract
do not alter the unambiguous terms of the Services Agreement and
the Non-Circumvention Agreement.
Those unambiguous terms were
the underpinning of the ruling that Defendants now challenge.
Defendants additionally argue that, even without the
newly submitted evidence, the court committed a manifest error of
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fact when it determined that the Non-Circumvention Agreement
related to the Services Agreement, meaning that disputes under
the Non-Circumvention Agreement had to be arbitrated pursuant to
the Services Agreement.
Citing the Declaration of Jeffrey
Dunster, Defendants say that the “subject matter of the Services
Agreement was assisting [Legacy Carbon LLC] in the process of
obtaining carbon credit certification.”
# 405.
ECF No. 29-1, PageID
Defendants say that the “Services Agreement is not
related to the NCA [Non-Circumvention Agreement] . . . used . . .
solely to address the relationship between Hawaiian Legacy
Hardwoods, LLC and those who desired to act as a finder of
purchasers of Investment trees and Legacy Trees.”
Id.
Defendants contend that there is a question of fact as to whether
the Non-Circumvention Agreement “related to” the Services
Agreement.
The court disagrees.
The plain language of the Services Agreement indicates
that it is broader than Dunster represents.
Pursuant to the
Services Agreement, Streamline was not only to “assist in
implementing [Hawaiian Legacy Carbon’s] business plan” by
(1) coordinating and creating a retail program or plan to sell
carbon offset and water quality and trading credits, it was also
supposed to (2) introduce Hawaiian Legacy Carbon affiliates to
people or companies that raised capital or sold products;
(3) assist with retail strategies and grant proposals; and
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(4) include Streamline’s president’s biography in Hawaiian Legacy
Carbon and Hawaiian Legacy Hardwoods marketing documentation and
website.
ECF No. 1-1, PageID # 22.
The Non-Circumvention Agreement with Streamline, ECF
No. 1-2, contained a requirement that Hawaiian Legacy Hardwoods
not “circumvent, avoid, bypass, or obviate directly or
indirectly, the creation or pursuit of the Collaboration [defined
as the mutually beneficial business relationship that might
involve third parties] by entering into any direct or indirect
negotiations, communications, or transactions with, or by
soliciting or accepting any business or financing from or on
behalf of an Introduced Party.”
Id., PageID # 28.
The plain
language of the Non-Circumvention Agreement did not, as
Defendants argue, limit itself to the context in which Streamline
acted “as a finder of purchasers of Investment Trees and Legacy
Trees.”
Paragraph 32 of the Complaint alleges, “As part of
Streamline’s performance of services to the Dunster Entities
pursuant to the Services Agreement in 2014, Streamline assisted
the Dunster Entities in obtaining certification of the Dunster’s
Project for the Gold Standard Foundation (herein the ‘Gold
Standard’).”
ECF No. 1, PageID # 9.
Paragraph 33 of the
Complaint alleges, “The Gold Standard is an award-winning
certification standard for carbon mitigation projects, recognized
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internationally as the benchmark for quality in both the
compliance and voluntary carbon markets.”
# 10.
ECF No. 1, PageID
Paragraphs 35 to 37 of the Complaint allege that after
Streamline introduced Defendants to The Gold Standard, Defendants
refused to pay Streamline and instead began direct contact with
The Gold Standard.
Id.
The Complaint alleges that Defendants’
project is listed on The Gold Standard Registry as producing
10,000 carbon credits.
Id.
Count II of the Complaint asserts a
breach of the Non-Circumvention Agreement based on Defendants’
direct contact with The Gold Standard.
Consistent with the allegations in the Complaint, the
Declaration of Tiffany Potter indicates that the agreements were
intended to create and coordinate a retail program selling carbon
offsets and water quality credits, which included helping
Defendants to obtain The Gold Standard certification.
No. 22-1, PageID #s 316-17.
See ECF
In saying that the Services
Agreement relates only to the obtaining of carbon credit
certification, Defendants are asking this court to rely on
Dunster’s assertion to that effect even though Dunster’s
assertion flies in the face of contrary language in the Services
Agreement itself.
Services Agreement.
This court cannot ignore clear language in the
See State Farm Fire & Cas. Co. v. Pac.
Rent-All, Inc., 90 Haw. 315, 324, 978 P.2d 753, 762 (1999) (“the
parties’ disagreement as to the meaning of a contract or its
7
terms does not render clear language ambiguous”); see also
Hawaiian Ass'n of Seventh-Day Adventists v. Wong, 130 Haw. 36,
45, 305 P.3d 452, 461 (2013) (noting that parol evidence rule
precludes extrinsic evidence varying or contradicting unambiguous
and integrated contract).
Defendants demonstrate no manifest error of fact in
this court’s determination that the breach of the NonCircumvention Agreement claim “relates to” the Services
Agreement.
As the court noted in its order,
The Services Agreement, executed after
the Non-Circumvention Agreement, provides
that Streamline shall provide “strategic
introductions for [Legacy Carbon dba Hawaiian
Legacy Carbon] affiliates for the purposes of
raising capital or selling product (e.g.
carbon offsets, RFID tags, etc.” ECF No. 11, PageID # 22. The use of the word
“affiliates” indicates that the parties
contemplated that Streamline would introduce
companies related to Legacy Carbon dba
Hawaiian Legacy Carbon to third parties that
might raise capital or sell products.
Streamline alleges that Defendants, or Legacy
Carbon dba Hawaiian Legacy Carbon’s
“affiliates,” breached the Non-Circumvention
Agreement.
According to Streamline, it provided
introductions to key personnel at The Gold
Standard’s Cambridge office, thus
facilitating certification of Defendants’
project by The Gold Standard and greatly
increasing the marketability of Defendants’
carbon offset credits and products.
Defendants allegedly then began to interact
directly with The Gold Standard. See
Complaint ¶¶ 35-36, ECF No. 1, PageID # 10.
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The arbitration clause in the Servicing
Agreement covers all controversies and claims
“relating to” the Servicing Agreement. The
alleged breach of the Non-Circumvention
Agreement “relat[es] to” the Servicing
Agreement. Thus, the arbitration clause
applies to the claims arising out of the
alleged breach of the Non-Circumvention
Agreement.
ECF No. 36, PageID # 468-69.
On this motion for reconsideration,
Defendants do not demonstrate that the Non-Circumvention
Agreement was unrelated to the Services Agreement.
Even if the Non-Circumvention Agreement relates to a
separate “Finders Fee Agreement,” as argued by Defendants in the
reconsideration motion, Defendants do not demonstrate that the
Non-Circumvention Agreement does not also “relate to” the
Services Agreement.
IV.
CONCLUSION.
The court denies the motion for reconsideration.
IT IS SO ORDERED.
DATED: Honolulu, Hawaii, March 16, 2016.
/s/ Susan Oki Mollway
Susan Oki Mollway
United States District Judge
Streamline Consulting Group v. Legacy Carbon LLC, et al., Civ. No. 15-00318
SOM/KSC; ORDER DENYING MOTION FOR RECONSIDERATION
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