Underground Vaults & Storage, Inc. v. Cintas Corporation et al

Filing 77

MEMORANDUM AND ORDER granting in part and denying in part 53 Defendants' Motion for Summary Judgment.. The motion is granted with respect to plaintiffs tortious interference and unjust enrichment claims, on which claims defendants are awarded judgment. The motion is otherwise denied. It is further ordered that the 75 Plaintif's Motion for Oral Argument on defendants' motion for summary judgment is denied. Signed by District Judge John W. Lungstrum on 7/22/2013. (ses)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF KANSAS

UNDERGROUND VAULTS &
STORAGE, INC.,

)
)
)
Plaintiff,
)
)
v.
)
)
CINTAS CORPORATION and
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CINTAS #2,
)
)
Defendants.
)
)
_______________________________________)

Case No. 11-1067-JWL

MEMORANDUM AND ORDER
This diversity action presently comes before the Court on defendants’ motion for
summary judgment (Doc. # 53). For the reasons set forth below, the motion is granted
in part and denied in part. The motion is granted with respect to plaintiff’s tortious
interference and unjust enrichment claims, on which claims defendants are awarded
judgment. The motion is otherwise denied. In addition, because the Court believes that
this matter may be resolved on the parties’ written submissions, which included a surreply by each party, the Court also denies plaintiff’s motion for oral argument on the
summary judgment motion (Doc. # 75).

I.

Background

The parties have stipulated to the following facts: In November 2009, The

Boeing Company (“Boeing”) issued a request for proposal (“RFP”) for the storage,
security, retrieval, and transportation of certain Boeing documents. Boeing issued the
RFP to plaintiff Underground Vaults & Storage, Inc. (“UVS”), defendants Cintas
Corporation and Cintas #2 (collectively “Cintas”), and other companies. In January
2010, Cintas submitted a response to the RFP that described that UVS would provide the
storage component for the project (at UVS’s facility in Hutchinson, Kansas). In July
2010, Boeing selected Cintas as the winning bidder, and Boeing and Cintas executed a
written agreement. In November 2010, Cintas notified UVS that UVS was longer being
considered for the provision of the storage component of the Boeing-Cintas contract.
UVS alleges that it entered into a joint venture with Cintas to obtain and perform
the Boeing contract and that Cintas improperly denied it the opportunity to provide the
storage component for the Boeing contract. UVS seeks a declaration of the existence of
the joint venture, and it asserts state-law claims under Kansas law for breach of the joint
venture agreement, breach of fiduciary duty, tortious interference, and unjust enrichment.
Cintas moves for summary judgment on all claims.

II.

Summary Judgment Standard

The Court applies the following standards in considering a motion for summary
judgment. Summary judgment is appropriate if the moving party demonstrates that there
is “no genuine dispute as to any material fact” and that it is “entitled to a judgment as a
matter of law.” Fed. R. Civ. P. 56(a). In applying this standard, the Court views the
2

evidence and all reasonable inferences therefrom in the light most favorable to the
nonmoving party. Burke v. Utah Transit Auth. & Local 382, 462 F.3d 1253, 1258 (10th
Cir. 2006). An issue of fact is “genuine” if “the evidence allows a reasonable jury to
resolve the issue either way.” Haynes v. Level 3 Communications, LLC, 456 F.3d 1215,
1219 (10th Cir. 2006). A fact is “material” when “it is essential to the proper disposition
of the claim.” Id.
The moving party bears the initial burden of demonstrating an absence of a
genuine issue of material fact and entitlement to judgment as a matter of law. Thom v.
Bristol-Myers Squibb Co., 353 F.3d 848, 851 (10th Cir. 2003) (citing Celotex Corp. v.
Catrett, 477 U.S. 317, 322-23 (1986)). In attempting to meet that standard, a movant
that does not bear the ultimate burden of persuasion at trial need not negate the other
party’s claim; rather, the movant need simply point out to the court a lack of evidence
for the other party on an essential element of that party’s claim. Id. (citing Celotex, 477
U.S. at 325).
If the movant carries this initial burden, the nonmovant may not simply rest upon
the pleadings but must “bring forward specific facts showing a genuine issue for trial as
to those dispositive matters for which he or she carries the burden of proof.” Garrison
v. Gambro, Inc., 428 F.3d 933, 935 (10th Cir. 2005). To accomplish this, sufficient
evidence pertinent to the material issue “must be identified by reference to an affidavit,
a deposition transcript, or a specific exhibit incorporated therein.” Diaz v. Paul J.
Kennedy Law Firm, 289 F.3d 671, 675 (10th Cir. 2002).
3

Finally, the Court notes that summary judgment is not a “disfavored procedural
shortcut;” rather, it is an important procedure “designed to secure the just, speedy and
inexpensive determination of every action.” Celotex, 477 U.S. at 327 (quoting Fed. R.
Civ. P. 1).

III.

Existence of a Joint Venture

Cintas seeks summary judgment on UVS’s claim for a declaration that a joint
venture existed between the parties for the purpose of obtaining and performing the
Boeing contract. In Modern Air Conditioning, Inc. v. Cinderella Homes, Inc., 226 Kan.
70 (1979), the Kansas Supreme Court summarized Kansas law on this issue as follows:
In sum, cases indicate that a joint venture is an association of two
or more persons or corporations to carry out a single business enterprise
for profit; it may be found in the mutual acts and conduct of the parties.
Among the acts or conduct which are indicative of a joint venture, but no
single one of which is controlling in the determination, are: (1) the joint
ownership and control of property; (2) the sharing of expenses, profits and
losses, and having and exercising some voice in determining the division
of the net earnings; (3) a community of control over and active
participation in the management and direction of the business enterprise;
(4) the intention of the parties, express or implied; and (5) the fixing of
salaries by joint agreement.
See id. at 76. The supreme court also noted its prior statement that “joint ventures and
partnerships are so similar in nature that they are governed by the same rules of law.”
See id. (citing Neighbors Constr. Co. v. J.R. Seal-Wells Constr. Co., 219 Kan. 283, 285
(1976)).
The Tenth Circuit has applied these factors from Modern Air Conditioning in at
4

least two published cases in recent years. See Meyer v. Christie, 634 F.3d 1152, 1158-59
(10th Cir. 2011); Terra Venture, Inc. v. JDN Real Estate-Overland Park, L.P., 443 F.3d
1240, 1245-46 (10th Cir. 2006). In Terra Venture, in which the Tenth Circuit affirmed
the district court’s summary judgment in favor of the defendant, the court agreed with
the district court that the parties had not intended to form a joint venture. See Terra
Venture, 443 F.3d at 1246. With respect to the five applicable factors, the court noted
that plaintiff could not satisfy the first, second, third, or fifth factor; and that with respect
to the parties’ intentions, although they had agreed to hold themselves out to the public
as a joint venture, “they made no other substantive step to form this relationship.” See
id. at 1245-46.
In Meyer, on the other hand, the Tenth Circuit, in upholding a jury verdict in favor
of the plaintiff, rejected an argument that the evidence of a joint venture in that case was
insufficient as a matter of law. See Meyer, 634 F.3d at 1158-59. The court first noted
that, as stated in Modern Air Conditioning, “these five factors are not exclusive or
outcome-determinative.” See id. at 1158 (citing Modern Air Conditioning, 226 Kan. at
76). The court then distinguished Terra Venture and reasoned as follows:
Moreover, the evidence regarding these factors is much stronger in the
instant case than in Terra Venture. In Terra Venture, the only evidence
suggesting the parties intended to form a joint venture was their agreement
that they would refer to their project as a joint venture in press releases.
In this case, by contrast, the evidence was that the parties agreed they
would in fact form a joint venture, not just that they would refer to their
project as such. The evidence also indicated that Plaintiffs and Defendants
informed not just the public but also their employees and attorneys that
they were jointly working on the project. Furthermore, although it is
5

undisputed the parties did not actually share expenses, profits, and losses,
the evidence introduced at trial was that they agreed they would share
future profits and losses and would “true-up” expenses when the
corporation paperwork had been completed. And finally, there was
evidence of at least some joint control over the project based on the
parties’ consultation with each other as equals on various aspects of the
project, particularly in their negotiations with city officials.
See id. at 1158-59 (citations omitted).
Cintas argues that an application of the five-factor test compels the conclusion as
a matter of law that no joint venture existed here. Cintas argues that the first, second,
third, and fifth factors are not met here, and that there is little evidence that the parties
intended to form a joint venture. In particular, Cintas notes that the draft written
agreement it provided to UVS in December 2009 and the draft agreements exchanged
by the parties in July 2010 all contained provisions stating that the parties were
independent contractors and that the agreement would not create a partnership.
The Court agrees that UVS has failed to offer evidence at this stage to satisfy the
first and fifth factors—the parties did not jointly own and control any particular property,
and no salaries were fixed by joint agreement. The second factor is also not met here.
There is no evidence that the parties shared expenses relating to the bid. UVS argues
that the parties generally shared revenues from the project, but there is no evidence of
any intent to share profits from the Boeing contract. The only evidence is that the
Boeing contract (if obtained) would be with Cintas, and Cintas would then pay UVS a
fixed rate for its services. Thus, there is no evidence that UVS would share any profits
from the Boeing contract generally or any of the risk of losses.
6

The Court cannot agree with Cintas, however, that there is no evidence weighing
in favor of UVS on the third factor. The evidence, viewed in UVS’s favor, shows that
the storage component, which UVS would provide, was a significant part of the Boeing
project; that UVS drafted portions of the bid that related to its provision of the storage
component; that Cintas invited UVS’s comments on drafts of the bid; and that UVS
participated in the live presentation of the bid to Boeing. Boeing even invited UVS to
participate in the negotiation of the final contract. Thus, there is evidence showing that
UVS and Cintas did share some amount of control over the bid, and that UVS did
actively participate in the submission of the bid and was intended to participate in the
fulfillment of the Boeing contract.
UVS has also submitted evidence suggesting an intent by the parties to form a
joint venture or partnership. UVS’s president, Lee Spence, testified that on December
11, 2009, at a meeting of potential bidders in Wichita, Kansas, Don Byers of Cintas
asked about the possibility of Cintas and UVS “working together partnering” on the
project. Mr. Byers testified that he asked Mr. Spence “if it would make sense . . . to team
together on this particular opportunity.” A timeline created by Mr. Byers states that he
asked Mr. Spence “if we could partner on the proposal.” In a number of documents and
e-mails, both within Cintas and between the parties, Mr. Byers and other Cintas
personnel referred to the parties as “partners” or referred to their relationship as a
“partnership”. Cintas argues that such uses of the word “partner” do not necessarily
mean that the speaker or writer intended the word in its legal sense. If, however, the
7

evidence is viewed in UVS’s favor, as it must be at summary judgment, the repeated use
of “partner” and “partnership” by Cintas to describe the relationship must be given at
least some weight as indicative of an intent to form a partnership or joint venture. One
Boeing representative also testified that “it appeared to Boeing that it was going to be
a partnership” involving Cintas and UVS.
The bid submitted to Boeing in response to the RFP also provides some evidence
that Cintas and UVS were engaged in something more than a simple contractorsubcontractor relationship. The parties agree that Boeing required a single party to be
designated as the prime contractor for the project and that they intended Cintas to fill that
role. The introductory section of the bid, however, after stating that Cintas would
“prime” the opportunity, stated that Cintas and UVS were “team[ing] together” to deliver
a “comprehensive solution,” with each providing certain services. The bid consistently
included information for both Cintas and UVS in response to requests for information.
For instance, the bid provided an answer for both Cintas and UVS in response to a
request for “your” strengths, strategies, and capabilities. Nor did the bid expressly state
that UVS was a mere subcontractor. The list of key management personnel included
UVS personnel, and in response to a question whether that management team would
include leased employees or subcontractors, the bid included answers for both Cintas and
UVS, without reference to UVS as a subcontractor. Other than the initial designation of
Cintas as the “prime”, the bid as a whole appeared to be a joint submission of Cintas and
UVS.
8

One might argue that such a joint bid might as easily have been submitted by the
parties with the intention that the parties would nevertheless engage in a normal
contractor-subcontractor relationship, which would be defined by a separate agreement
between the parties. There is evidence to the contrary, however. In an e-mail dated
December 16, 2009, Mr. Byers of Cintas sent his counterpart at UVS, Pam Blaylock, a
proposed agreement for the parties, which Mr. Byers called Cintas’s “standard
Partnership agreement.” As noted above, this proposed agreement contained language
stating that the agreement did not create a partnership between Cintas and the vendor
executing the agreement. In the e-mail, however, Mr. Byers stated: “I’m not even sure
if the partnership agreement is the correct one for this type of partnership arrangement
. . . .” Thus, there is some evidence that Mr. Byers and Cintas viewed its relationship
with UVS as different from Cintas’s standard vendor relationship. Cintas stresses the
fact that the parties’ draft agreements contained independent contractor provisions, but,
as UVS points out, the parties did not execute any such agreement. Mr. Spence testified
that UVS did not agree to Cintas’s proposed agreements in part because UVS was not
merely a vendor or independent contractor.
The Court concludes that this evidence is sufficient to create a question of fact for
trial concerning the existence of a joint venture between the parties. The evidence
discussed makes this case more like Meyer than Terra Venture. There is evidence here
of joint participation in the project before UVS was removed and of numerous instances
in which the parties called their relationship a partnership, and the bid to Boeing
9

provides further evidence of an equal relationship. Thus, unlike Terra Ventures, and as
in Meyer, there is evidence in this case of an intent to form a joint venture going beyond
a mere agreement to refer to the relationship as a joint venture or partnership. The Court
therefore cannot say as a matter of law that no joint venture existed; a question of fact
remains on that issue, and the Court therefore denies Cintas’s motion for summary
judgment on UVS’s declaratory judgment claim.1

IV.

Breach of Contract
A.

Existence of a Joint Venture

In seeking summary judgment on UVS’s claim for breach of contract, Cintas first
argues that there could be no breach because no joint venture existed. Because a
question of fact remains on that latter issue, Cintas is not entitled to summary judgment
on the contract claim on this basis.

1

The parties dispute whether UVS must establish the existence of the joint venture
by clear and convincing evidence. Cintas cites to statements that the existence of a
fiduciary relationship must be established by clear and convincing evidence under
Kansas law. See, e.g., Rajala v. Allied Corp., 919 F.2d 610, 615-16 (10th Cir. 1990).
In neither Terra Ventures nor Meyer, however, did the Tenth Circuit apply such a
standard in determining whether there was sufficient evidence of the existence of a joint
venture. Nor did the Kansas Supreme Court apply such a standard in Modern Air
Conditioning, even though it did apply the standard in considering punitive damages
later in the opinion. See 226 Kan. at 79. Thus, the Court is not persuaded that the
Kansas Supreme Court would require that the existence of a joint venture be established
by clear and convincing evidence. Moreover, even if such a standard did apply here, the
Court would conclude that the standard has been met, in light of Cintas’s references to
the relationship as a partnership, including Mr. Byers’s e-mail distinguishing the
relationship with UVS from Cintas’s other standard vendor relationships.
10

B.

Statute of Frauds

Cintas next argues that the Kansas statute of frauds bars enforcement of the
alleged joint venture agreement because it could not be performed within one year of its
making. See K.S.A. § 33-106. In response, plaintiff argues that joint venture and
partnership agreements are exempt from compliance with the statute of frauds, based on
the following statement by the Tenth Circuit: “Kansas courts have repeatedly held that
‘the statute of frauds and kindred statutes have no application’ to partnership
transactions, even when these transactions involve real property.” See Meyer, 634 F.3d
1152, 1159 (10th Cir. 2011) (quoting Goodrich v. Wilson, 106 Kan. 452 (1920)). The
Court rejects this argument, as it is persuaded that this pronouncement of Kansas law in
Meyer is properly limited to situations involving the sale of real property.
Meyer involved the sale of real estate, and the Tenth Circuit began its analysis in
Meyer by noting the “general rule” that “a joint adventure in the purchase and sale of real
estate is not within the statute of frauds.” See id. (quoting Shoemake v. Davis, 146 Kan.
909, 914 (1937)). The court then noted the Kansas Supreme Court’s conclusion in two
cases that partnership agreements involving the sale of real estate are not subject to the
statute of frauds. See id. at 1159-60 (citing Potucek v. Blair, 176 Kan. 263, 266 (1954),
and Crawford v. Forrester, 108 Kan. 222, 223-24 (1921)). The Tenth Circuit concluded
as followed:
Kansas courts have repeatedly affirmed this holding and reasoning,
see, e.g., Potucek []; Shoemake [], and we see no reason to depart from it
under the circumstances of this case. Although the statute of frauds would
11

apply to a land purchase agreement as between the seller and the purchaser
of the property, it does not effect [sic] the relationship between the parties
to the joint venture agreement or their obligations under that agreement.
See id. at 1160. Thus, in Meyer the Tenth Circuit reaffirmed the general rule under
Kansas law that the statute of frauds does not apply to a partnership agreement involving
the purchase of real estate, and any broader statement of the law must be considered
dictum. Moreover, it does not appear that the Kansas Supreme Court has held that all
partnership agreements, for any purpose, are exempt from compliance with the statute
of frauds; to the contrary, the references by the Kansas Supreme Court to the statute’s
non-applicability to partnership agreements have been in the context of purchases or
leases of real estate interests. See, e.g., Goben v. Barry, 234 Kan. 721, 728 (1984)
(stating the “well-settled” rule that the statute “is inapplicable to an oral partnership
agreement to engage in the business of procuring oil and gas leases despite the fact that
the Statute of Frauds applies to the leases themselves”); Potucek, 176 Kan. at 266 (cited
in Meyer); Shoemake, 146 Kan. at 914 (general rule quoted in Meyer); Crawford, 108
Kan. at 223-24 (cited in Meyer) (“The contract was not affected by the statute of frauds,
because it dealt with the personal relations of joint adventurers, and not with the sale of
real estate.”); Goodrich, 106 Kan. at 455-56 (cited in Meyer).
Finally, the Kansas Supreme Court’s rationale that the Tenth Circuit recognized
in Meyer—that a partnership agreement involving the future purchase of real estate is
not an agreement for the purchase of real estate but rather is an agreement defining the
relationship of the partners—would not apply to contracts that cannot be performed
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within one year, as partners may define their relationship as lasting a specific period of
time.2
Other courts have made this same distinction. In Yonofsky v. Wernick, 362 F.
Supp. 1005 (S.D.N.Y. 1973), the court noted that general pronouncements in New York
law about the inapplicability of the statute of frauds to joint ventures had been based on
two rationales: that for joint ventures intending to purchase real estate, the joint venture
agreement is not actually for the purchase of that real estate; and that a joint venture may
be for a particular purpose, with an agreement terminable at will, which agreement
therefore may be performed within a year. See id. at 1026-27. Thus, the court concluded
that other joint venture agreements would fall within the statute of frauds, such as if the
joint venture agreement itself was for the sale of real estate from one joint venturer to
another, of if the agreement was for a specific duration longer than one year. See id.
The Second Circuit cited Yonofsky in similarly concluding that, despite the general
pronouncements in New York law of the non-applicability of the statute to joint venture

2

The history of Meyer supports this limitation of the Tenth Circuit’s holding.
Before the district court, the defendants argued that the joint venture agreement was not
enforceable under the statute of frauds because it could not be performed within one
year, but the district court concluded that the undisputed facts did not establish that the
contract could not be performed within a year; thus, the district court addressed the
merits of that argument, while including a footnote distinguishing partnership
agreements involving the procurement of oil and gas leases, as in Goben and Potucek.
See Meyer v. Christie, 2009 WL 331634, at *4 & n.2 (D. Kan. Feb. 10, 2009). On
appeal to the Tenth Circuit, the defendant did not raise this issue concerning the statute’s
one-year provision, and thus the Tenth Circuit had no reason to consider the applicability
of that provision.
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agreements, there was no reason not to apply the unambiguous language of the statute
of frauds, which must therefore apply to and bar enforcement of an oral joint venture
agreement with a term longer than one year. See Ebker v. Tan Jay Int’l, Ltd., 739 F.2d
812, 827-28 (2d Cir. 1984); see also Pemberton v. Ladue Realty & Constr. Co., 244
S.W.2d 62 (Mo. 1951) (statute of frauds applies to partnership agreements that cannot
be performed within one year).
This Court similarly concludes that there is no reason to exempt partnership or
joint venture agreements from compliance with statute of fraud’s requirement of a
writing for contracts that cannot be performed within one year, as such an exemption
would contravene the unambiguous language of the statute. The Court further concludes
that the Kansas Supreme Court would so hold.3
Thus, in the present case, pursuant to the statute of frauds, a signed writing is
required if the alleged oral joint venture agreement was an agreement not to be
performed within one year of its making. See K.S.A. § 33-106. Cintas argues that UVS
has alleged a joint venture for the purpose of obtaining and performing a seven-year

3

As UVS notes, in Butler National Service Corp. v. Navegante Group, Inc., 2011
WL 4452505 (D. Kan. Sept. 26, 2011), this Court, citing Meyer and Goben, stated as a
general rule that “under Kansas law, the statute of frauds does not apply to the
relationship between joint venturers. See id. at *3. In Butler, however, the plaintiff did
not challenge this statement of the general rule by the defendants, instead arguing that
no joint venture existed, and thus the Court had no occasion to consider this distinction
between agreements involving the future purchase of real estate and agreements that
cannot be performed within one year in the context of joint ventures. Consideration of
that distinction in this case compels the Court’s conclusion that the statute of frauds may
apply here.
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contract with Boeing. In the testimony cited by Cintas, however, UVS’s representatives
did not testify that the joint venture agreement itself had a seven-year term; rather, they
testified that the agreement was to perform the Boeing contract, which they agreed had
a seven-year term. That distinction is critical, as the Boeing contract had termination
provisions that allowed for its termination before the expiration of the seven-year term.4
Under Kansas law, the statute of frauds “covers only those contracts whose performance
cannot possibly be completed within a year.” See Nutt v. Knutson, 245 Kan. 162, 164
(1989) (quoting Augusta Bank & Trust v. Broomfield, 231 Kan. 52, 59 (1982)). Thus,
an agreement that is terminable at the will of either party is “clearly susceptible of
performance within a year and is outside the statute of frauds.” See id. In this case,
Cintas had the power to terminate its contract with Boeing during 2010; thus, the joint
venture agreement with the purpose of performing that Boeing contract might have been
performed completely within one year of its making. Indeed, the Kansas Supreme Court
addressed this very situation in Johnston v. Bowersock, 62 Kan. 148 (1900), which
similarly involved an oral agreement lasting as long as a contract continued between the
defendant and a third party—which contract had a 99-year term. See id. at156. The
Kansas Supreme Court held that because the third-party contract allowed for termination
for a contingency that could have arisen within one year, the oral agreement might have
been performed within a year—however remote the contingency—and therefore the oral

4

For instance, Cintas could terminate its contract with Boeing with 30-days’
notice “for convenience.”
15

agreement was not within the contemplation of the statute of frauds. See id. at 156-61.
For the same reason here, the Court concludes that the alleged oral joint venture
agreement between UVS and Cintas might have been performed completely within one
year of its making, and thus that the agreement is not subject to the requirements of the
statute of frauds. Accordingly, the Court rejects this basis for summary judgment on
UVS’s claim for breach of contract.5
C.

Indefiniteness

Cintas also argues that it is entitled to summary judgment on the claim for breach
of contract because the alleged joint venture agreement did not contain all essential terms
and thus was too indefinite to be enforced. Cintas describes the alleged agreement as a
mere agreement to make a contract in the future, which “is not binding unless all the
essential terms and conditions are agreed upon and nothing essential to complete it is left
to future negotiations.” See Phillips & Easton Supply Co. v. Eleanor Int’l, Inc., 212 Kan.
730, 734 (1973). Cintas relies on the following rule of Kansas law: “Only reasonable
certainty is required in a purported contract, but where the purported contract is so vague
and indefinite that the intentions of the parties cannot be ascertained, it is
unenforceable.” See Mohr v. State Bank of Stanley, 244 Kan. 555, 573 (1989) (citing
Jack Richards Aircraft Sales, Inc. v. Vaughn, 203 Kan. 967, 971 (1969)). Cintas notes
that the parties eventually exchanged lengthy draft written agreements containing many

5

In light of this conclusion, the Court need not address UVS’s argument that the
RFP response satisfied the requirements of the statute of frauds.
16

terms that were not discussed before Cintas submitted the bid to Boeing, by which time
UVS alleges that the joint venture had been formed.
The Court rejects this argument at this summary judgment stage of the litigation.
Viewing the evidence in UVS’s favor, the parties had agreed that they would be partners
in attempting to obtain the Boeing contract and in performing that contract; that UVS
would provide the service of storing the Boeing documents; and that Cintas would pay
UVS for that service at a fixed rate, as demonstrated by the rate set forth in the bid to
Boeing. Thus, the essence of the joint venture had been fixed by agreement, and the
intentions of the parties relating to that joint venture could be ascertained. The fact that
particular details remained and were discussed later does not render the joint venture
agreement fatally indefinite, as only “reasonable certainty” is required. Cintas has not
provided any authority suggesting that such an agreement is too indefinite—let alone any
authority involving joint venture agreements, which by their nature may be formed in a
more informal manner than other contracts. The Court concludes that Cintas is not
entitled to summary judgment on this basis.

V.

Breach of Fiduciary Duty

Cintas moves for summary judgment on UVS’s claim for breach of fiduciary duty
on the sole ground that because no joint venture existed, it had no fiduciary duty to UVS.
The Court has ruled that a question of fact remains with respect to the existence of the
joint venture; therefore, UVS’s claim for breach of fiduciary duty survives as well, and
17

Cintas’s motion is denied with respect to that claim.

VI.

Tortious Interference
A.

Scope of the Claim

The parties dispute the proper scope of UVS’s tortious interference claim. In
Count IV of its amended complaint, UVS alleged that Cintas tortiously interfered with
the prospective economic relationship between Boeing on one hand and the alleged
partnership/joint venture between UVS and Cintas on the other hand. Accordingly,
Cintas addressed that specific claim in its original brief in support of its motion for
summary judgment. In response, however, UVS argued that its claim was not so limited
and that it had preserved in the pretrial order a tortious interference claim based on
interference with the relationship between Boeing and UVS. Cintas objects to such an
amendment of UVS’s claim as pleaded.
The Court concludes that UVS’s claim, as presently defined by the pretrial order,
is based on a relationship between Boeing and UVS (as opposed to between Boeing and
the joint venture).

In the section of the pretrial order setting forth the parties’

contentions, neither party addressed the details of UVS’s tortious interference claim. In
the section setting forth the elements of the claims, the pretrial order stated that UVS
asserts that it must prove an economic expectation of UVS; and that Cintas asserts that
UVS must prove interference with the economic relationship between Boeing and the
alleged joint venture. The pretrial order thus merely noted different elements as asserted
18

by the parties. Cintas did not include within the pretrial order any language preserving
an objection to UVS’s claim on the basis that it constituted an untimely amendment of
the latest complaint. It was incumbent upon Cintas to make the Court aware of any such
objection at that time, so that the Magistrate Judge or the undersigned could rule on that
objection, and Cintas failed to do so at that time. Accordingly, UVS’s statement of its
claim in the pretrial order prevails, and UVS has asserted and preserved a tortious
interference claim based on a relationship between Boeing and UVS. Similarly, UVS
is deemed to have abandoned, by failing to include it in the pretrial order, any tortious
interference claim based on a relationship between Boeing and the alleged joint venture
between the parties.
B.

Merits of the Claim

In its reply brief, Cintas attacks the merits of UVS’s surviving claim, as that claim
was explained by UVS in its response brief. The parties then addressed those merits in
sur-reply briefs. Accordingly, Cintas’s motion for summary judgment on UVS’s tortious
interference claim is ripe for ruling.
The Kansas Supreme Court has recognized the following elements for a claim of
tortious interference with a prospective business advantage:
(1) the existence of a business relationship or expectancy with the
probability of future economic benefit to the plaintiff; (2) knowledge of
the relationship or expectancy by the defendant; (3) that, except for the
conduct of the defendant, plaintiff was reasonably certain to have
continued the relationship or realized the expectancy; (4) intentional
misconduct by defendant; and (5) damages suffered by plaintiff as a direct
or proximate result of defendant’s misconduct.
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See Noller v. GMC Truck and Coach Div., Gen. Motors Corp., 244 Kan. 612, 619-20
(1989) (internal quotation omitted). The supreme court has also applied the statement
of this tort from Section 766B of the Restatement, see id., which provides as follows:
One who intentionally and improperly interferes with another’s
prospective contractual relation (except a contract to marry) is subject to
liability to the other for the pecuniary harm resulting from loss of the
benefits of the relation, whether the interference consists of
(a) inducing or otherwise causing a third person not to enter into
or continue the prospective relation or
(b)
preventing the other from acquiring or continuing the
prospective relation.
See Restatement (Second) of Torts § 766B (quoted in Noller).
In its response brief, UVS argued that Cintas tortiously interfered with UVS’s
prospective contractual relation with Boeing in two respects: first, by eliminating UVS
as a potential bidder for the Boeing contract “by inducing UVS to partner with it;”
second, by making false and misleading statements to Boeing about cost issues with
UVS, which caused Boeing to approve transferring the storage component away from
UVS. The Court addresses those two distinct claims in turn.
First, with respect to UVS’s failure to submit its own bid, UVS has failed to argue
or offer evidence that Cintas, prior to the submission of its bid, induced or otherwise
caused Boeing, the third party, not to accept or consider a bid from UVS. Rather, UVS
argues that Cintas interfered by inducing UVS to enter into the joint venture. Thus,
UVS’s claim is governed by prong (b) of Restatement Section 766B, which in this case

20

would require interference consisting of Cintas’s “preventing” UVS from submitting the
bid.
Cintas argues that any conduct by which it persuaded UVS not to submit its own
bid falls short of “prevention” of UVS as required by the Restatement. Cintas relies on
the opinion in Braun v. Promise Regional Medical Center-Hutchinson, Inc., 2011 WL
6304119 (D. Kan. Dec. 16, 2011). In Braun, Judge Rogers of this court held that this
“prevention” standard in Section 766B requires a hindrance to the third-party contract
and thus requires more than mere persuasion. See id. at *8. Accordingly, Judge Rogers
dismissed a tortious interference claim based on the allegation that the defendant had
insisted that the plaintiff refuse an offer of employment from a third party because
defendant was in the process of working out an arrangement with the plaintiff. See id.
at *2, 8. In response to this argument by Cintas, UVS has not addressed Braun, either
to distinguish the case or to argue that it was wrongly decided.
The Court agrees with the reasoning of Judge Rogers in Braun. Section 766B
allows for a tortious interference claim based on merely “inducing” the third party,
which could arguably include acts of persuasion, but it requires “prevention” of the
plaintiff, which distinction suggests a more rigorous standard for conduct directed to the
plaintiff. The Court also agrees with Judge Rogers that the ordinary meaning of
“prevention” requires something more in the nature of an actual hindrance beyond mere
persuasion. It is also telling that a comment to a companion section to Section 766B
contains the following explanation:
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One may be prevented from performing his contract in numerous ways.
Thus he may be physically restrained or intimidated or be excluded from
the place where the contract must be performed or be deprived of the
necessary equipment or labor.
See Restatement (Second) of Torts § 766A.
UVS has not provided evidence of any conduct by Cintas with respect to UVS’s
submission of its own bid other than evidence of Cintas’s discussion of and agreement
to a joint venture relating to the submission of a bid to Boeing from both parties. UVS
has not cited any authority suggesting that such conduct may constitute “prevention”
under Section 766B or otherwise constitute actionable interference under Kansas law.
The Court concludes that such conduct is not sufficient as a matter law. Accordingly,
summary judgment is appropriate on UVS’s first claim of tortious interference relating
to its submission of a bid to Boeing.
The Court also concludes that Cintas is entitled to summary judgment on UVS’s
second claim relating to conduct by Cintas after Boeing awarded the bid and entered into
a contract with Cintas. The Court agrees with Cintas that UVS had no prospective
contractual or business relationship with Boeing at that time. The undisputed evidence
reveals that UVS knew that the bid was submitted by Cintas as the prime contractor and
that the resulting contract would be between Boeing and Cintas. UVS was not a party
to that contract, and any expected benefit would therefore have come in the form of
payments from Cintas. UVS may feel—and indeed has alleged—that Cintas was not
free to take the storage work elsewhere; that does not mean, however, that Cintas

22

wrongfully interfered with a business relationship between Boeing and UVS. UVS has
not cited any authority suggesting that it may nevertheless maintain a tortious
interference claim under these facts.6 Accordingly, Cintas’s motion for summary
judgment on UVS’s tortious interference claim is granted with respect to the entire claim
as asserted by UVS.

VII.

Unjust Enrichment

Cintas seeks summary judgment on UVS’s claim for unjust enrichment under
Kanas law. The Kansas Supreme Court has identified the following elements for such
a claim:
(1) a benefit conferred upon the defendant by the plaintiff; (2) an
appreciation or knowledge of the benefit by the defendant; and (3) the
acceptance or retention by the defendant of the benefit under such
circumstances as to make it inequitable for the defendant to retain the
benefit without payment of its value.
See J.W. Thompson Co. v. Welles Prods. Corp., 243 Kan. 503, 512 (1988) (citing 12
Williston on Contracts § 1479 (3d ed. 1970)); see also PIK-Civil 4th § 124.17 (“Where
a party furnishes goods or performs services for another and has a reasonable expectation

6

For example, UVS has not argued (or provided pertinent evidence) that it was a
third-party beneficiary of the Boeing-Cintas contract and that such a relationship is
sufficient to maintain a tortious interference claim. Indeed, UVS has not asserted a claim
for tortious interference with an existing contract, but instead has asserted only a claim
for interference with a business expectation. In the context of the storage of these
Boeing documents, there is no evidence that UVS had any expectation of business or a
contract with Boeing.
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of being compensated, the one benefitted is responsible for paying the reasonable worth
of the goods provided or services rendered.”). UVS claims that its assistance to Cintas
on the bid to Boeing, which ultimately resulted in a contract with Boeing, constitutes a
benefit conferred to Cintas for which payment should be made to UVS.
The Court may quickly dispose of three of Cintas’s arguments for summary
judgment on this claim. First, Cintas argues that UVS has not properly pleaded this
claim; the time for that argument has passed, however, as the pretrial order now governs
UVS’s claims. Second, Cintas argues that UVS should be barred from any recovery on
this equitable claim under the doctrine of unclean hands, based on UVS’s conduct in
doing work on its own bid to Boeing and in changing its prices for the work; it is clear,
however, that a question of fact remains on any such affirmative defense, on which
Cintas bears the burden of proof. Third, Cintas argues that UVS offered only minimal
assistance at most on the bid to Boeing; the Court concludes, however, that a question
of fact remains concerning whether UVS in fact provided any benefit to Cintas in the
form of assistance on the bid.
Cintas’s most compelling argument for summary judgment on this claim is that
UVS has failed to provide any evidence of the value of the benefit that it conferred and
that Cintas received. Cintas points out that UVS has not offered any expert opinion or
other evidence from which that value could be determined. Cintas argues that UVS’s
apparent attempt to recover all of Cintas’s profits from the Boeing contract is improper
because those profits do not represent the value of the benefit allegedly conferred, that
24

is, UVS’s assistance (as opposed to the contract itself, which was conferred by Boeing,
not by UVS).
In response to this argument, UVS argues that it is entitled to seek UVS’s profits
as a measure of the value of the benefit it conferred on Cintas. UVS has not cited to any
evidence, however, concerning the value of that benefit, whether measured by Cintas’s
profits or in some other way. Thus, UVS has not met its burden on summary judgment
to provide evidence in support of its claim. In response to Cintas’s argument that there
was no evidence of the value of the benefit allegedly conferred, UVS was obligated to
provide such evidence. UVS’s extra-evidentiary reference to Cintas’s profits is not
sufficient, as UVS has not shown through evidence that those profits are known or may
be calculated with sufficient certainty to allow for determination by some means other
than mere speculation. Certainly, the Court would not allow this claim to go to the jury
without some evidence concerning those profits that UVS seeks to disgorge; in the same
way, the Court cannot allow the claim to survive summary judgment in the absence of
such evidence. Because UVS has not submitted evidence to support the claim for
damages for unjust enrichment, summary judgment is granted on the claim.7

7

Even if UVS had provided evidence establishing Cintas’s profits with sufficient
certainty, the Court is not convinced that such evidence would preclude summary
judgment on this claim, as such evidence might relate to the value of Cintas’s contract
with Boeing, but it would not necessarily provide any evidence of the value of the
specific benefit conferred by UVS—UVS’s assistance with the bid. UVS has not
provided any authority supporting such a disgorgement of profits from Cintas under
these facts. Indeed, the citation from PIK above points to the proper measure of
(continued...)
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VIII. Punitive Damages
Cintas seeks summary judgment on UVS’s claim for punitive damages.8 Cintas
argues that UVS’s damages arise out of the alleged breach of the joint venture agreement
and that UVS has not asserted an independent tort resulting in additional injury, as
required for recovery of punitive damages under Kansas law. See Osgood v. State Farm
Mut. Auto. Ins. Co., 848 F.2d 141, 143 (10th Cir. 1988) (applying Kansas law).
Cintas has been awarded judgment on UVS’s tortious interference claim, but
UVS’s claim for breach of fiduciary duty remains. In Modern Air Conditioning, the
Kansas Supreme Court noted the rule that an award of punitive damages must be
supported by an independent tort. See 226 Kan. at 79. After concluding that there was
no such independent tort in that case, however, the supreme court stated as follows: “We
have not overlooked [the plaintiff’s] contention that [the defendant] breached its
fiduciary duty . . ., and that breach of a fiduciary duty may in some circumstances give
rise to a claim for punitive damages.” See id. (citation omitted). The court then rejected
the punitive damage claim on its merits. See id. Thus, in Modern Air Conditioning, the
Kansas Supreme Court indicated that a claim for breach of fiduciary duty can support
a claim for punitive damages (requiring the court’s consideration of the merits of that

7

(...continued)

damages—the reasonable worth of the services provided—concerning which UVS has
provided no evidence.
8

Cintas also sought summary judgment on any claim by UVS for attorney fees,
but as UVS concedes and the pretrial order confirms, UVS does not assert such a claim.
26

claim), notwithstanding the general rule requiring an independent tort.
The Court thus concludes that the Kansas Supreme Court would likely rule that
UVS may base its claim for punitive damages on its claim for breach of fiduciary duty.
Cintas has not provided any authority suggesting that such a claim is insufficient under
the general rule in this context. Accordingly, the Court denies Cintas’s motion for
summary judgment on UVS’s claim for punitive damages.

IT IS THEREFORE ORDERED BY THE COURT THAT defendants’ motion
for summary judgment (Doc. # 53) is granted in part and denied in part. The motion
is granted with respect to plaintiff’s tortious interference and unjust enrichment claims,
on which claims defendants are awarded judgment. The motion is otherwise denied.

IT IS FURTHER ORDERED BY THE COURT THAT plaintiff’s motion for oral
argument on defendants’ motion for summary judgment (Doc. # 75) is denied.

IT IS SO ORDERED.

Dated this 22nd day of July, 2013, in Kansas City, Kansas.

s/ John W. Lungstrum
John W. Lungstrum
United States District Judge

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