Openmethods, LLC v. Mediu, LLC
Filing
159
ORDER denying 150 Mediu's motion in limine and denying 153 OpenMethod's motion for reconsideration. Signed on 7/9/12 by Chief District Judge Fernando J. Gaitan, Jr. (Enss, Rhonda)
IN THE UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF MISSOURI
WESTERN DIVISION
OPENMETHODS, LLC,
)
)
)
) No. 10-761-CV-W-FJG
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)
)
)
Plaintiff,
v.
MEDIU, LLC,
Defendant.
ORDER
Currently pending before the Court is defendant Mediu LLC’s Motion in Limine to
Preclude Testimony (Doc. # 150) and OpenMethod’s Motion for Reconsideration (Doc.
# 153).
I. MOTION IN LIMINE
Defendant Mediu moves the Court for an Order precluding plaintiff from
introducing any witnesses, testimony or documents at trial that conflict with any of the
Requests for Admissions that Mediu served upon OpenMethods on June 30, 2011 and
which Mediu claims have been deemed admitted due to OpenMethods failure to
respond to these requests. Alternatively, Mediu asks the Court to preclude
OpenMethods from introducing any evidence in support of OpenMethod’s breach of
contract claim and/or damages resulting from events which occurred after January 1,
2010.
Fed.R.Civ.P. 36 states in part:
(a) Scope and Procedure.
(1) A party may serve on any other party a written request to admit, for
purposes of the pending action only, the truth of any matters within the
scope of Rule 26(b)(1) relating to:
(A) facts, the application of law to fact, or opinions about either; and
(B) the genuineness of any described documents.
...
(3) Time to Respond; Effect of Not Responding. A matter is admitted unless,
within 30 days after being served, the party to whom the request is directed
serves on the requesting party a written answer or objection addressed to the
matter and signed by the party or its attorney. A shorter or longer time for
responding may be stipulated to under Rule 29 or be ordered by the court.
(b) Effect of an Admission; Withdrawing or Amending It.
A matter admitted under this rule is conclusively established unless the
court, on motion, permits the admission to be withdrawn or amended.
Subject to Rule 16(e), the court may permit withdrawal or amendment if it
would promote the presentation of the merits of the action and if the court
is not persuaded that it would prejudice the requesting party in maintaining
or defending the action on the merits . . ..
Mediu states that it served nine requests for Admission on Open Methods on
June 30, 2011 and Open Methods failed to respond to these requests. Mediu states
that on August 8, 2011, it filed a notice, along with a copy of the admission requests
indicating that because they had not been answered, they were deemed admitted.
Three of the Requests for Admission deal with the issue of whether OpenMethods
breached the agreement with Mediu and also the agreement with Kris Garg. The other
six Requests for Admission relate to whether OpenMethods has paid Garg for services
performed in the months of July 2009 - December 2009.
In response, OpenMethods states that it has admitted to Requests for Admission
Nos. 8-13, which relate to the issue of payment to Garg. OpenMethods states that it
has not claimed that it paid Garg for the months of August 2009 through December
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20091. OpenMethods states that Requests for Admission Nos. 3, 6 and 7 relate to
ultimate legal conclusions to be determined by the Court and it is not appropriate for the
Court to deem these issues admitted. OpenMethods argues that “[w]hile a request for
admission may properly pertain to ‘the application of law to fact’, Fed.R.Civ.P. 36(a),
pure legal conclusions, or the truth of a legal conclusion, are out of bounds.” Aventure
Communications Tech.,L.L.C. v. MCI Communications Services, Inc., No. 5:07-CV4095-JEG-RAW, 2008 WL 4280371, *1 (N.D.Iowa Sept. 16, 2008). OpenMethods
states that the Court noted that there were disputed issues of fact regarding whether
OpenMethods’s responsibility to pay Garg was an implied term of the contract and if
OpenMethod’s breach of the contract was a material breach. OpenMethods argues that
these are clearly legal conclusions which should be determined by the Court.
The three requests for Admission which are at issue are:
Request No. 3: Admit that Open Methods was the first to breach the Agreement
between Open Methods and Mediu identified in Open Method’s First Amended
Complaint as Exhibit 1, including any extensions thereto.
Request No. 6: Admit that Open Methods has breached the Garg Agreement.
Request No. 7: Admit that Open Methods was the first to breach the Garg Agreement.
With regard to Request No. 3, Open Methods states that Mediu is asking it to
admit that there was an implied term in their Agreement that OpenMethods would pay
Garg. Open Methods states that it has repeatedly denied and contested that there was
an implied term in the Agreement.
1
The Court is unsure whether OpenMethods is claiming that it paid Garg for
services for the month of July 2009, as the Suggestions in Opposition only reference
August -December 2009. (OpenMethods’ Suggestions in Opposition, p. 2).
3
In Aventure Communications, the Court stated, “[t]he line between a request to
admit a pure legal conclusion and the application of law to fact can be murky because
the application of law to fact necessarily incorporates an admission as to what the law
is.” Id. at *1. In that case, three of the requests asked Verizon to agree that an FCC
report and order adopted a presumption and made certain holdings. The Court stated
“[t]o ask Verizon to admit the correctness of Aventure’s view of the legal significance of
an FCC ruling calls for admission of a legal conclusion.” Id. The Court finds that in
Requests Nos. 3, 6 and 7, Mediu is asking Open Methods to admit to legal conclusions
or the truth of legal conclusions, which is not permitted.
Alternatively, Mediu argues that OpenMethods is precluded from introducing any
evidence at trial, which dates after January 1, 2010. Mediu argues that in ruling on the
Summary Judgment motions, the Court found that Mediu had not intentionally interfered
with the contract or induced Garg to breach the contract between OpenMethods and
Garg. Mediu states it would be “counterintuitive for this Court to permit OM to recover
for any time Garg worked on the AT&T project after December of 2009 when Garg did
not have a contract with OM during that time and Garg was being paid directly by
Mediu.” (Mediu’s Motion in Limine, p. 6).
As the Court stated in ruling on the parties’ summary judgment motions, “it is
unclear exactly when Garg terminated his contract with OM.” Simply because the Court
concluded that OpenMethods could not prevail on their Tortious Interference claim,
does not mean that OpenMethods is prevented from presenting any evidence dated
after January 1, 2010. To the contrary, OpenMethods argues that Garg submitted time
entries into their system for work he performed in 2010. Because there are disputed
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issues of fact relating to when Garg terminated his contract, the Court hereby DENIES
Mediu’s Motion in Limine to Preclude Testimony (Doc. # 150).
II. OPENMETHODS’ MOTION FOR RECONSIDERATION
OpenMethods argues that there is a genuine issue of fact concerning the date
Kris Garg’s contract with OpenMethods was terminated. OpenMethods states that it is
asserting that Mediu induced and caused Garg to retroactively terminate his contract
with OpenMethods on May 25, 2010. Plaintiff argues that the “circumstances
surrounding the events on May 25, 2010, when plaintiff asserts Garg terminated his
contract, could lead a finder of fact to conclude that defendants had intentionally
interfered with plaintiff’s business expectancy.” (Plaintiff’s Motion for Reconsideration,
p. 2).
There is no specific rule which references Motions to Reconsider in the Federal
Rules of Civil Procedure. “However, the Eighth Circuit Court of Appeals has determined
that motions for reconsideration are nothing more than Rule 60(b) motions when
directed at non-final orders.” Wichmann v. Proctor & Gamble Manufacturing, No.
4:06CV1457 HEA, 2007 WL 735017, *1 (E.D.Mo. Mar. 8, 2007)(internal citations and
quotations omitted). Similarly, in In re Genetically Modified Rice Litigation, No.
4:06MD1811 CDP, 4:07CV416 CDP, 2008 WL 80663 (E.D.Mo. Jan. 7, 2008), the Court
stated:
In this circuit, motions for reconsideration are construed as Rule 60(b)
motions. Broadway v. Norris, 193 F.3d 987, 989 (8th Cir. 1999). Rule
60(b) motions should not be granted as a result of reargument of the
merits but must be based on the circumstances enumerated in the Rule.
Id. These circumstances include: mistake, inadvertence, surprise,
excusable neglect, newly discovered evidence that could not have been
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discovered with reasonable diligence, fraud, the judgment being void, and
satisfaction, release, or discharge of the judgment. Fed.R.Civ.P. 60(b). In
this Circuit, relief for judicial error under Rule 60(b)(1) - the section dealing
with mistake- is only available for judicial inadvertence. Lowry v.
McDonnell Douglas Corp., 211 F.3d 457, 460-61 (8th Cir. 2000).
Id. at *1.
The Court finds that OpenMethods is simply reiterating arguments which it made
in its Summary Judgment motion. As the Court noted in the Order, “It is unclear exactly
when Garg terminated his contract with OM. However, even if OM could show the
existence of a contract with Garg, the Court finds that it cannot establish the third or
fourth elements of this claim.” The third element of a tortious interference claim is
intentional interference by the defendant and the fourth element is absence of
justification. (March 22, 2012 Order, p. 8). So, even though there maybe a factual
dispute as to when the Garg contract was terminated, this cannot save OpenMethod’s
Tortious Interference claim, because they cannot meet the other two elements of this
claim. Accordingly, the Court finds no basis on which to reconsider its previous ruling
granting Mediu’s Motion for Summary Judgment on the Tortious Interference With
Business Expectancy claim.
OpenMethods also argues that a recent Missouri Court of Appeals case which is
factually similar to the instant case, dictates that this Court reconsider its ruling on the
summary judgment motions. OpenMethods states that in J.M. Neil & Associates, Inc. v.
Alexander Robert William, Inc., 362 S.W.3d 21 (Mo.App. Jan. 10, 2012), two companies
entered into a teaming agreement, where “ARW” served as the prime contractor on a
GSA contract and “JMN” served as a sub-contractor to ARW. The teaming agreement
also included a non-compete agreement, which prohibited ARW from attempting to
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coerce or influence JMN’s employees to remain with ARW upon termination of the
contract. Problems arose between the two companies and the contract was terminated.
On the termination date, John Haylock was the only JMN employee still working for
ARW. ARW’s owner, Martin Smith, realized that the agreement prohibited him from
hiring Haylock to continue working on the GSA contract or trying to influence Haylock to
stay. However, Smith told Haylock that if he wanted to continue working on the
contract, he would need to secure employment with another staffing company. Smith
then gave Haylock the names and phone numbers of four companies that Haylock
could contact. One of the companies, Nash Resources, Inc. (“NRI”), was owned by
Martin Smith’s mother, Mary Lou Nash. On the following day, Haylock called Nash, who
was in the office on a Saturday to take his call. She hired Haylock over the phone and
told him that she would work out a deal with Smith, so Haylock could return to the same
job the following Monday, at the same rate of pay. JMN then filed suit against ARW,
alleging breach of contract against ARW and Smith, tortious interference against Nash
Resources, Inc. and Mary Lou Nash and a conspiracy to breach and interfere with a
contract claim against ARW, NRI, Smith and Nash. A jury returned verdicts in favor of
JMN on all counts. The jury awarded compensatory and punitive damages. ARW and
NRI filed a motion for judgment notwithstanding the verdict asserting that JMN failed to
put forth sufficient evidence upon which the jury could have found that punitive
damages were appropriate. The trial court granted the motion and JMN filed an appeal.
On appeal, the Court found that in that case, Nash and Smith had attended a
meeting at GSA’s office that had also included all employees working on the contract.
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At the end of the meeting, Nash suggested to Smith that he terminate the teaming
agreement with JMN. Nash testified that Smith called her and informed her that
Haylock could not continue to work on the GSA contract unless he found employment
with another staffing agency. The Court found that this evidence “establishes that Nash
had knowledge of ARW’s non-compete agreement with JMN and knew Haylock had
been provided with a list of staffing agencies, one of which was her own company,
before she ever spoke with Haylock.” Id. at 25. The Court also found that the evidence
“further permits a reasonable inference that Smith and Nash conspired to hire Haylock
away from JMN so that he could continue to work on ARW’s GSA contract in violation of
the non-compete provisions of the teaming agreement.” Id. The Court found that the
evidence showed an “intentional wrongful act by ARW and NRI, who both knew their
actions were wrongful at the time. Moreover, it is likewise clear and convincing proof
that ARW and NRI recklessly disregarded JMN’s rights and interests.” Id. at 26. Thus,
the Court concluded that JMN had made a submissible case for punitive damages and
the trial court had erred in granting the motion for JNOV.
OpenMethods argues that in this case, there was a non-solicitation clause which
prohibited Mediu from hiring Garg after the end of the project. OpenMethods argues
that Berichon was aware of the clause and hired Garg despite this knowledge. Based
on the J.M. Neil case, OpenMethods argues that defendants were not justified in hiring
Garg in violation of the non-solicitation clause. However, as the Court discussed in the
Order ruling the motions for summary judgment, Mediu did not intentionally interfere
with the contract or induce Garg to breach the contract. Rather, it was Garg who first
reached out to Genesys and then to Mediu for assistance. The deposition testimony of
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Garg supports this conclusion. Additionally, this Court determined that if Garg left the
project because he was not receiving timely payment, this could have jeopardized
Mediu’s relationship with Genesys. The Court recognized that this was a very important
economic interest of Mediu’s to protect. Additionally, the Court noted that
OpenMethods has not offered any evidence that Mediu employed any improper means
in negotiating with Garg and in fact from emails which were attached as exhibits to the
summary judgment motions, Mediu told Garg that they could not put him under contract
until he had specifically informed OpenMethods that he had terminated his contract with
them and would not be extending it. Thus, the Court finds the J.M. Neil case to be
factually distinguishable from the case at bar and provides no basis for the Court to
reconsider its previous ruling on the summary judgment motions. Accordingly, the
Court hereby DENIES OpenMethods’ Motion for Reconsideration (Doc. # 153).
III. CONCLUSION
For the reasons stated above, the Court hereby DENIES Mediu’s Motion in
Limine (Doc. # 150) and DENIES OpenMethods’ Motion for Reconsideration (Doc. #
153).
S/ FERNANDO J. GAITAN, JR.
Fernando J. Gaitan, Jr.
Chief United States District Judge
Date: July 9, 2012
Kansas City, Missouri
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