G.L.M. Security & Sound, Inc. v. Lojack Corporation
Filing
71
MEMORANDUM & ORDER: For the reasons set forth in the attached Memorandum & Order, LoJack's motion for summary judgment 60 as to GLM's claims for breach of contract, breach of the duty of good faith and fair dealing, and violati on of Massachusetts General Law 93A is GRANTED. LoJack's motion for summary judgment 60 is GRANTED as to its breach of contract claim and DENIED as to the remainder of its counterclaims. LoJack's motion to strike 62 is DENIED as moot. GLM's motion to amend 69 is DENIED. Ordered by Judge Pamela K. Chen on 9/19/2014. (Galeotti, Matthew)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
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G.L.M. SECURITY & SOUNDS INC.,
Plaintiff,
MEMORANDUM & ORDER
10-CV-4701 (PKC) (ARL)
-againstLOJACK CORP.,
Defendant.
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PAMELA K. CHEN, United States District Judge:
Plaintiff GLM Security & Sound, Inc. (“GLM”) brings this action against Defendant
LoJack Corp. (“LoJack”) in a case arising out of a dispute over an agreement to distribute car
security systems. Specifically, the parties dispute whether there was an oral modification1 to the
agreement regarding the price GLM was to pay for the car security systems it purchased from
LoJack. GLM contends that in discussions subsequent to the execution of the agreement, which
was fully integrated and permitted amendment only via written instrument, LoJack nevertheless
orally promised GLM that it would receive the “best price” at which LoJack offered its devices
to dealers, and that LoJack breached this “best price” agreement. LoJack denies that it ever
made such a promise, and thus no breach could have occurred. Many of the issues and facts
presented are in dispute, but LoJack’s motion for summary judgment ultimately turns on one
dispositive question: could a reasonable jury find the evidence sufficient to overcome the
1
Following submission of the parties’ papers relating to the instant motion for summary
judgment, GLM moved to amend its complaint to allege that the agreement that LoJack breached
was a separate, subsequent, and self-contained oral agreement, rather than an oral modification to
the existing written agreement. (Dkt. 69.) For purposes of the summary judgment motion, the
Court will refer to the GLM’s complaint as it currently exists, i.e., as alleging an “oral
modification,” and discusses GLM’s motion to amend separately infra at Discussion Section V.
1
presumption that the completely integrated written agreement, rather than the alleged subsequent
oral modification, should govern the conduct of the parties?
Because the Court resolves this question in the negative, it grants summary judgment in
favor of LoJack on GLM’s breach of contract claim. Further, because the remainder of GLM’s
claims are derivative of the alleged best price promise, they are likewise dismissed.
LoJack counterclaims that it is owed compensation for unpaid products and services it
provided to GLM, and that GLM contrived the complaint in the instant litigation to gain leverage
in negotiations over that debt. Having found no breach by LoJack, and it being undisputed that
GLM failed to pay for a substantial portion of the products it received from LoJack, LoJack’s
motion for summary judgment on its breach of contract counterclaim is granted. The remainder
of LoJack’s motion for summary judgment on its counterclaims are denied.
LoJack’s motion to strike is denied as moot. GLM’s motion to amend is denied because
the motion is unduly belated and would be futile in any event.
BACKGROUND
I.
Relevant Facts
The Court includes only those facts necessary to resolve this motion. The following are
either undisputed or presented in the light most favorable to GLM. 2
2
The Court construes any disputed facts in the light most favorable to GLM, as the nonmoving party, for purposes of LoJack’s summary judgment motion. See Adickes v. S.H. Kress &
Co., 398 U.S. 144, 157-59 (1970). However, where GLM either (i) admits or (ii) denies without
citing to admissible evidence certain of the facts asserted in LoJacks’s Local Rule 56.1 Statement
(Dkt. 60-2 (“Def. 56.1”)), the Court may deem any such facts undisputed. See Local Rules of the
United States District Courts for the Southern and Eastern Districts of New York 56.1(c)-(d); see
also Amnesty Am. v. Town of W. Hartford, 288 F.3d 467, 470 (2d Cir. 2002) (“Fed. R. Civ. P. 56
does not impose an obligation on a district court to perform an independent review of the record
to find proof of a factual dispute.”) (collecting cases). Standalone citations to “Def. 56.1” denote
that either the Court has deemed, based on GLM’s admission or otherwise, the factual
2
A. The Actors
GLM is a New York corporation that sells wholesale automobile electronics, including
car security systems, to automobile dealerships in New York City and Long Island. (Def. 56. 1
¶¶ 1-2.) At all times relevant to this litigation, Gary Tabackman (“Tabackman”) was GLM’s
president. (Id. ¶ 3.)
Defendant LoJack is a corporation that manufactures, distributes, and sells car security
systems in the auto industry. (Id. ¶ 7.) LoJack’s principal product, and the one at issue in the
instant litigation, is the Stolen Vehicle Recovery Unit (“SVRU” or “Unit”). (Id. ¶ 8.)
George Wafer (“Wafer”), a non-party to this litigation, was the owner of a company
named Vehicle Manufacturer Services (“VMS”). (Id. ¶ 10.) Wafer/VMS had a preexisting
business relationship with LoJack. (Id.)
B. The Distribution and Installation Agreement – Executed September 15, 2002
GLM and LoJack’s relationship began in June 2002 when Wafer approached GLM to
discuss the possibility of GLM becoming a distributor of LoJack products. (Id. ¶ 9.) Over the
next few months, GLM had discussions with LoJack regarding a potential deal. (Id. ¶ 14.)
Tabackman handled the negotiations on behalf of GLM (Id. ¶ 16); Joe Abely, then-President, and
Anthony DelGuercio, a regional manager, among others, were involved on behalf of LoJack.
(Id. ¶ 14; Dkt. 63-2 (“Pl. 56. 1”) ¶¶ 18, 185.) During the negotiations, Abely told Tabackman
that the initial $200 per unit price that GLM would pay for the Units was the best price currently
offered by LoJack to any of its distributors. (Id. ¶¶ 16-18.) Wafer and VMS provided the draft
agreement to GLM and LoJack, and acted as intermediary for the exchange of the parties’
proposition asserted undisputed. Such citations incorporate by reference any documents cited
therein. Where relevant, however, the Court may cite directly to such documents.
3
revisions to the draft. (Id. ¶ 15.) On September 15, 2012, LoJack and GLM entered into the
LoJack Distributorship and Installation Agreement (the “Distribution Agreement”). (Id. ¶ 19.)
Relevant to this litigation, the Distribution Agreement provided as follows:
1) GLM would “purchase LoJack Stolen Vehicle Recovery Units (“SVRUs”) from
LoJack and resell and install such SVRUs.” (Dkt. 60-3, Att. 4 (“Agr.”) p. 2);
2) the initial price of the SVRUs would be fixed at $200 each (Id. ¶ 6.1);
3) GLM would pay LoJack half of the price of the SVRUs within 30 days of
invoice and the balance within 60 days (Id.);
4) LoJack could terminate the Distribution Agreement with immediate effect if
GLM breached any provision of the Distribution Agreement (Id. ¶ 12.2);
5) either party could terminate the Distribution Agreement for no cause upon two
weeks’ written notice (Id. ¶ 12.3); and
6) in the event that either party terminated the Distribution Agreement without
cause, LoJack would credit GLM the price paid for any uninstalled SVRUs and
would pay a fee of $50 for any unit sold by LoJack within 180 days of the
termination of the agreement to a dealer in GLM’s market who became a LoJack
customer as a result of GLM’s efforts (Id. ¶ 12.5).
The Distribution Agreement also included the following critical provisions. Section 15 of the
Agreement, entitled “Waiver,” provided:
No waiver of any provision hereof shall be effective unless made in writing and
signed by the waiving party. The failure of either party to require the
performance or obligation of this Agreement, or the waiver of either party of any
breach of this Agreement, shall not prevent any subsequent enforcement of such
term or obligation or be deemed a waiver of any subsequent breach.
(Id. ¶ 15 (emphasis added).)
Section 17 of the Distribution Agreement set forth the integration clause:
This Agreement constitutes the entire agreement between the parties and
supersedes all prior agreements, whether written or oral, with respect to the
services to be provided by the Distributor [i.e., GLM] and all matters related
thereto.”
(Id. ¶ 17 (emphasis added).)
4
With respect to any future changes to the Distribution Agreement, Section 18 provided:
This Agreement may be amended or modified only by written instrument
signed by the Distributor and by a duly authorized Distributor3 of LoJack.
(Id. ¶ 18 (emphasis added).)
Tabackman understood when he signed the Distribution Agreement, and throughout the
length of the parties’ contractual relationship, that Section 6.1 of the Distribution Agreement
gave LoJack the right to change the price at any time. (Def. 56. 1 ¶ 29.)
C. The “Best Price” Promise & The Alleged Modification
At some point, GLM and LoJack had discussions about GLM being guaranteed LoJack’s
“best price” on the SVRUs. (Id. ¶ 32.) LoJack contends that any such discussions occurred prior
to the execution of the Distribution Agreement and were therefore nullified by the integration
clause contained therein. (Id. ¶¶ 30-33.) Indeed, LoJack provides persuasive evidence that its
account of the events is accurate, especially in light of the equivocal testimony regarding the
timeline presented by GLM. However, resolving factual disputes in the light most favorable to
the Plaintiff, as the Court must on a motion for summary judgment, the Court assumes these
discussions occurred after the Agreement was executed. (Pl. 56.1 ¶ 31.)
According to GLM, it was “in early October, after GLM had entered the Agreement with
LoJack that Mr. Wafer approached Mr. Tabackman to ask that GLM help LoJack to sign up
other distributors.” (Id. ¶ 194.) As GLM put it in its complaint, “[i]n an effort to secure
[GLM’s] help in signing up other LoJack Distributors throughout the country, George Wafer,
President of VMS, promised Gary Tabackman that [GLM] would receive the ‘best price’ from
LoJack. In addition, [sic] to the ‘best price,’ VMS promised to pay $2.00 of its commission
3
In the context of the Distribution Agreement, the Court takes this to mean
“representative” of LoJack.
5
received from LoJack to GLM for each LoJack unit that was purchased by a [d]istributor which
GLM helped to recruit.” (Dkt. 30 (“FAC”) ¶ 18; Def. 56.1 ¶ 30.) GLM now contends that
though Wafer was the one who made the offer, LoJack confirmed to Wafer that this was
acceptable. (Pl. 56.1 ¶ 30.) Drew Levy, GLM’s vice-president, understood, however, that GLM
had an arrangement with Wafer’s company, VMS, under which GLM would receive a
commission from VMS on any units sold by a distributor which GLM helped recruit. (Def. 56. 1
¶¶ 5, 33.)
The parties agree that there is no document that memorializes any “best price” promise.
(Def. 56.1 ¶ 34.)
D. VMS/LoJack Agreement
On October 1, 2002, Wafer and VMS entered into a separate written agreement with
LoJack that set forth the terms and conditions upon which VMS was required to recruit
distributors of LoJack products in exchange for compensation from LoJack (“VMS/LoJack
Agreement”). (Dkt. 60-3, Att. 6 (“VMS/LoJack Agr.”); Def. 56.1 ¶¶ 37-42.) The VMS/LoJack
Agreement does not refer to any promise by LoJack to compensate GLM in any way for assisting
VMS in recruiting distributors. (Id.) The VMS/LoJack Agreement contains an integration
clause and a provision requiring changes or modifications to be made in writing. (VMS/LoJack
Agr. ¶ 9.) The VMS/LoJack Agreement was amended twice in writing, as required by its terms;
neither amendment referred to any agreement by LoJack to compensate GLM in any way. (Def.
56.1 ¶ 41.)
E. 2005 – Correspondence Regarding Price
In or around September 2005, Tabackman began corresponding by electronic mail with
Abely about a proposed increase in the price LoJack charged GLM for the Units. (Id. ¶ 43.)
6
Tabackman requested that LoJack not increase GLM’s price. (Id. ¶ 44.) During approximately
six months of correspondence relating to the price increase, Tabackman never mentioned or
referred to any promise by LoJack to give GLM the “best price.” (Id. ¶ 45.) LoJack granted
Tabackman’s request, and did not increase GLM’s price. (Id. ¶ 46.)
F. Sales Incentive Program
Throughout the course of the GLM/LoJack relationship, there was a sales incentive
program, which involved payments to automobile dealerships by LoJack to be used to reward
dealership employees for selling LoJack Units to their customers. (Id. ¶ 68.) Prior to 2005,
GLM paid these incentives to the dealerships for which it was responsible by writing a check
directly to those dealerships. (Id. ¶ 69; Dkt. 60-3, Att. 1 (“Tabackman Tr.”) at 214-215).) In
2005, LoJack instituted a debit card program for paying the sales incentives, the program
description of which provided that all incentives not timely claimed by the dealerships
(“unclaimed incentives”) would be the property of LoJack. (Def. 56.1 ¶¶ 70-71.) There is a
dispute as to whether Tabackman understood that this would be the case or was told otherwise,4
but there is no dispute that LoJack’s written program description provides as such. (Pl. 56. 1 ¶¶
70-72; Dkt. 60-3, Att. 19 (“Rewards Policy”) at 1.) The policy specifically states, “[a]ll LoJack
Rewards VIN incentives must be claimed within 90 calendar days from the date of LoJack
equipment invoicing. All VIN incentives that expire are the property of LoJack Corporation.”
(Rewards Policy at 1.)
Sometime prior to 2006, GLM requested that LoJack pay GLM for unclaimed incentives.
(Def. 56. 1 ¶ 73.) LoJack refused this request as contrary to the Rewards Policy on or before
4
In his affidavit, Tabackman asserts that Elisa Rafaela, a LoJack representative, told him
that unclaimed incentive payments would be returned to GLM. (Dkt. 63-7 (“Tabackman Aff”) at
¶¶107-111.)
7
March 9, 2006. (Id. ¶ 74.) Thereafter, Tabackman, without protest, signed several documents
known as Price Change Notifications, or “PCNs,” each of which stated at the bottom that all
unclaimed incentives belonged to LoJack. (Id. ¶ 75.)
G. GLM’s Delinquent Payments
As previously discussed, pursuant to the Distribution Agreement, GLM was to pay one
half of the amount for products received from LoJack within “thirty days of invoice, and the
balance within sixty days of invoice.” (Agr. ¶ 6.1.) The Distribution Agreement also provided
that no waiver of any provision would be effective “unless made in writing and signed by the
parties[,]” and that “[t]he failure of either party to require the performance of any term or
obligation of [the] Agreement, or the waiver of either party of any breach of [the] Agreement,
shall not prevent any subsequent enforcement of such term or obligation or be deemed a waiver
of any subsequent breach.” (Id. ¶ 15.) LoJack never waived, in writing, GLM’s obligation to
make timely payments for the products and services it received, and LoJack requested on
numerous occasions that GLM bring its delinquent account current. (Def. 56.1 ¶ 81.)
Tabackman believed, however, that the practice GLM and LoJack had established
required that he pay outstanding invoices on 90 to 120 days terms. (Id. ¶ 82; Tabackman Tr. 9698.) At his deposition, Tabackman admitted that GLM would be in breach of the Distribution
Agreement if it fell more than 120 days behind in payments.
(Tabackman Tr. 130.)
Subsequently GLM admitted that it failed to pay numerous invoices that, as of October 2010,
were more than 120 days past due, and that at the time GLM filed this action on October 13,
2010, it owed LoJack more than $1,000,000. (Def. 56.1 ¶ 84.)
8
H. Both Parties Seek to Terminate the Distribution Agreement
On October 6, 2010, LoJack sent GLM a notice which showed that GLM had a balance
due of over $1,000,000, of which hundreds of thousands of dollars were more than 120 days past
due. (Id. ¶ 86.) The letter requested that GLM bring its account up to date. (Dkt. 60-3, Att. 27.)
In response, on October 12, 2010, GLM sent a letter to LoJack stating that it was providing twoweeks’ notice of termination under Section 12. 3 of the Distribution Agreement (no-cause
termination), which would take effect as of October 26, 2010. (Def. 56.1 ¶ 88.) On October 22,
2010, LoJack replied with a letter to Tabackman terminating the Distribution Agreement
pursuant to Section 12. 2 (for-cause) due to GLM’s material breach, namely GLM’s substantial
overdue balance for products ordered and received by GLM. (Id. ¶ 89.)
I. Post-Termination Obligations
Pursuant to Section 12. 5 of the Agreement, “[i]n the event that, after any termination of
this Agreement, other than by LoJack pursuant to section 12.2 [for-cause termination],
LoJack continues to make sales to [specified dealers that GLM recruited during the term of
Agreement], LoJack will pay [GLM] a fee of $50 per unit with respect to all SVRUs sold to such
dealer within 18-days of the termination of this Agreement.” (Def. 56.1 ¶ 78 (emphasis added).)
In other words, these payments were not due if LoJack terminated the Agreement for cause
pursuant to Section 12.2. (Id. ¶ 80.) GLM confirms that it received 91 invoices from LoJack
detailing the sums it owed LoJack and how far behind GLM was on each payment. (Id. ¶¶ 90180.)
II.
Procedural Posture
The claims remaining in this case are GLM’s claims for (1) breach of contract, (2) breach
of the duty of good faith and fair dealing, (3) GLM’s Massachusetts General Law 93A (“Chapter
9
93A”) claim; and (4) LoJack’s counterclaims, all of which are based on GLM’s failure to pay for
goods and services received.5 Massachusetts law applies to all of these claims. G.L.M. Sec. &
Sound, Inc. v. LoJack Corp., 10-CV-04701 (JS) (ARL), 2011 WL 4594825, at *4 (E.D.N.Y.
Sept. 30, 2011) (“Massachusetts law governs Plaintiff’s breach of contract and breach of the
covenant of good faith and fair dealing claims because the Agreement expressly provides that
Massachusetts law governs . . . . [It also applies to] Plaintiff’s claim under Massachusetts
General Law Chapter 93A.”). Also relevant here, the Court (Seybert, J.) previously ruled that
allegations concerning oral statements that were made prior to the execution of the Distribution
Agreement must be disregarded in light of the Distribution Agreement’s integration clause. Id.
(citing Agr. ¶ 17). That analysis still holds, and the Court will not revisit it here.
DISCUSSION
I.
Summary Judgment Standard of Review
Summary judgment is proper only where, construing the evidence in the light most
favorable to the non-movant, “there is no genuine dispute as to any material fact and the movant
is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a); see also Redd v. N.Y. Div. of
5
On October 12, 2010, GLM initiated this action. LoJack subsequently moved to
dismiss. While that motion was pending, GLM moved to amend its Complaint and filed a
Proposed Amended Complaint (“PAC”) that asserted the following eight claims: (1) breach of
contract; (2) breach of the covenant of good faith and fair dealing; (3) misrepresentation; (4)
tortious interference with business relations; (5) violation of the New York Franchise Sales Act;
(6) violation of Massachusetts General Law 93A; (7) price discrimination under the federal
Robinson–Patman Act (“RPA”); and (8) breach of fiduciary duty. (Dkt. 17.) On September 30,
2011, the Court (Seybert, J., then-presiding) dismissed GLM’s misrepresentation and fiduciary
duty claims and its claims under New York’s Franchise Sales Act and Massachusetts’ General
Law Chapter 93A, and it dismissed with leave for GLM to re-plead its RPA and tortious
interference claims. (Dkt. 24 (full citation infra in body text).) GLM moved for reconsideration,
which the Court granted “to the extent that GLM’s [Chapter] 93A claim may proceed on the
theory that LoJack’s allegedly lying to GLM about LoJack’s best price was the baseline
offending act,” and denied in all other respects. (Dkt. 40).
10
Parole, 678 F.3d 166, 173-74 (2d Cir. 2012). A dispute is “genuine” when “the evidence is such
that a reasonable jury could return a verdict for the nonmoving party.” Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 248 (1986). A fact is material where it is legally relevant such that it
“might affect the outcome of the suit under the governing law.” Id. In determining whether
there are genuine disputes of material fact, the court must “resolve all ambiguities and draw all
permissible factual inferences in favor of the party against whom summary judgment is sought.”
Terry v. Ashcroft, 336 F.3d 128, 137 (2d Cir. 2003) (citation and quotation omitted).
This standard imposes the initial burden on the moving party to demonstrate the absence
of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Once the
moving party has met this burden, the party opposing summary judgment must identify specific
facts and affirmative evidence that contradict those offered by the moving party to demonstrate
that there is a genuine issue for trial. Id. at 324; see also Anderson, 477 U.S. at 256-57. The
nonmoving party “may not rely on mere conclusory allegations nor speculation, but instead must
offer some hard evidence showing that [their] version of the events is not wholly fanciful.”
D’Amico v. City of N.Y., 132 F.3d 145, 149 (2d Cir. 1998) (collecting cases).
“Summary
judgment is appropriate only ‘[w]here the record taken as a whole could not lead a rational trier
of fact to find for the non-moving party.’” Donnelly v. Greenburgh Cent. Sch. Dist. No. 7, 691
F.3d 134, 141 (2d Cir. 2012) (quoting Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp.,
475 U.S. 574, 587 (1986)).
II.
LoJack’s Motion for Summary Judgment
In this case, all of GLM’s claims are based directly or derivatively on the contention that
it was entitled to the “best price” at which LoJack offered its devices to dealers. There are a
number of disputed facts and issues, including the substance of discussions regarding best price;
11
whether such discussions took place before or after the execution of the Distribution Agreement;
whether they took place before or after the VMS/LoJack Agreement; whether there was
consideration for the alleged oral modification of the Distribution Agreement; and whether
alternate pricing plans that LoJack offered to other distributors did, in fact, result in better prices
than GLM received, among others. However, even were the Court to resolve the legal issues in
GLM’s favor, and in fact accepting GLM’s version of the facts relating to the oral modification
as true,6 there is insufficient evidence for the Court to conclude, under relevant Massachusetts
law, that LoJack agreed to orally modify a completely integrated agreement that specifically
precluded oral modification.
A. Breach of Contract
Under Massachusetts law, the elements of a breach of contract claim are (1) a written or
oral agreement (2) for valid consideration, (3) performance by the plaintiff and breach by the
defendant, and (4) damage to the plaintiff. Mass. Cash Register, Inc. v. Comtrex Systems Corp.,
901 F.Supp. 404, 415 (D. Mass. 1995).
1. The Alleged “Best Price” Oral Modification of the Distribution Agreement
According to GLM, in October 2002, in exchange for GLM’s assistance in recruiting
distributors to sell LoJack products, Wafer offered—with LoJack’s approval—that GLM would
receive the “best price” on SVRUs and would also receive a $2.00 commission for each SVRU
sold by a distributor recruited by GLM. (FAC ¶ 18; (Dkt. 63 (“Op. Br.”) at 6).) The parties
agree, however, that the plain language of the Distribution Agreement forbids amendment in any
6
As previously discussed, there is a dispute as to whether discussions regarding best
price occurred before and/or after the September 2012 Distribution Agreement. However, the
Court, viewing, as it must, the evidence in the light most favorable to the Plaintiff, conducts its
analysis based on the assumption that at least some discussion regarding best price occurred after
the Distribution Agreement.
12
manner other than by “written instrument” duly executed by both GLM and LoJack. (Def. 56.1
¶ 27.) The parties further agree that no discussions regarding “best price” between GLM and
LoJack or Wafer were ever memorialized, formally or informally.7 (Id. ¶ 34.)
Under Massachusetts law, a provision that an agreement may only be amended by a
written instrument, like the one in the Distribution Agreement, does not automatically bar oral
modification of the contract. See Cambridgeport Sav. Bank v. Boersner, 413 Mass. 432, 439
(1992) (hereinafter “Cambridgeport”). “Mutual agreement on modification of the requirement
of a writing may . . . ‘be inferred from the conduct of the parties and from the attendant
circumstances’ of the instant case.’” Id. (quoting First Pa. Mortg. Trust v. Dorchester Sav.
Bank, 395 Mass. 614, 625 (1985). But the law “imposes stringent proof requirements for such
oral modification.” Wagner And Wagner Auto Sales, Inc. v. Land Rover N. Am., Inc., 547 F.3d
38, 46 (1st Cir. 2008). The evidence of a subsequent oral modification “must be of sufficient
force to overcome the presumption that the integrated and complete agreement, which requires
written consent to modification, expresses the intent of the parties.” Cambridgeport, 413 Mass.
at 439 n. 10; see also Wells Fargo Bus. Credit v. Environamics Corp., 77 Mass. App. Ct. 812,
817 (2010) (“[I]n order to support the existence of an oral modification . . . the parol evidence
must be of sufficient strength to present an ambiguity between the actual conduct of the parties
and the contract.”); see also Beal Bank S.S.B. v. Krock, 97-CV-2241, 1998 WL 1085807, at *3
(1st Cir. 1998) (“Massachusetts . . . impose[s] a heavy burden on the party seeking to modify an
integrated written contract by subsequent oral agreement.”); Lydon v. Nationwide Mut. Ins. Co.,
91-CV-11971 (NG), 1997 WL 260064, at *10 (D. Mass. May 9, 1997) (“[T]he evidence must be
sufficiently clear and convincing to overcome the ‘presumption’ that waiver was not intended.”).
7
Informal memorialization could include, for example, email communications between
the parties.
13
To defend against LoJack’s motion for summary judgment, GLM offers the following
evidence: (1) Tabackman’s testimony that in exchange for GLM’s assistance in recruiting
distributors to sell LoJack products, Wafer offered that GLM would receive the “best price” on
SVRUs and would also receive a $2.00 commission for each SVRU sold by a GLM-recruited
distributor8 (Tabackman Tr. 142-44); (2) DelGuercio’s testimony that though he was not a part
of the discussions regarding best price, he was “aware” that such discussions had occurred
(DelGuercio Tr. 83-87); (3) Wafer’s testimony that VMS paid GLM a $2.00 per Unit
commission, and that Wafer gave GLM the best price promise “based on conversations” he had
had with Abely and Ron Rossi, then-LoJack CEO (Wafer Tr. 75-78); (4) Tabackman’s and
Wafer’s testimony that GLM attempted to recruit new distributors, and that VMS paid GLM the
$2.00 commission fees for those distributors (Wafer Tr. 75; Tabackman Tr. 143; Tabackman
Aff. ¶ 47); (5) e-mails that, GLM argues, suggest that LoJack attempted to hide from GLM
pricing arrangements that LoJack had with other distributors. (Dkt. 63-7, Att. Ex J-L.)
Applying the standards set forth under Massachusetts law, GLM has failed to present—or
put in genuine dispute—“evidence of sufficient force to overcome the presumption” that the
parties did not intend to waive the written modification requirement in “the fully integrated and
complete [Distribution Agreement].” See Cambridgeport, 413 Mass. at 439; Lydon, 1997 WL
260064, at *10. The evidence does not suggest that Wafer had the authority to bind LoJack to a
best price promise, and there is a complete lack of evidence suggesting that LoJack (or GLM, as
discussed infra) acted in accord with the alleged oral modification or believed that the
Distribution Agreement had been orally modified.
8
Tabackman also testified that Wafer told him that Joe Abely told Wafer that GLM
would get the best deal. This testimony is barred from consideration because it is inadmissible
hearsay.
14
That GLM attempted to recruit distributors and that VMS paid GLM a $2.00 per Unit
commission fails to demonstrate anything beyond GLM’s own (and perhaps VMS’s) subjective
belief as to the existence of an oral modification of the Distribution Agreement. See Wells Fargo
Bus. Credit, 77 Mass. App. Ct. at 819 (citations omitted). Indeed, the fact the VMS—not
LoJack—paid GLM the $2.00 commission from GLM-recruited distributors suggests that this
oral modification, to the extent it existed, was between GLM and VMS.9
This is in harmony
with, according to Levy (GLM’s vice-president), GLM’s contemporaneous understanding of the
recruiting agreement it had with VMS. (Levy Tr. 32-33 (Dkt. 60-3, Att. 2); Def. 56. 1 ¶¶ 5, 33.)
The VMS/LoJack Agreement obligated VMS and Wafer to recruit distributors like GLM
for LoJack.
It stands to reason that, in an effort to satisfy its responsibilities under the
VMS/LoJack Agreement, Wafer promised $2.00 of VMS’s commission received from LoJack to
GLM for GLM-recruited distributors.10 The VMS/LoJack Agreement does not refer to any
promise by LoJack to compensate GLM in way for assisting VMS in recruiting distributors. The
VMS/LoJack Agreement was amended twice in writing, as required by its terms; neither
amendment referred to any agreement by LoJack to compensate GLM in any way. (Def. 56.1 ¶
9
This understanding of the best price promise is what GLM initially pleaded in its
complaint. There, GLM alleged that “[i]n an effort to secure [GLM’s] help in signing other
LoJack Distributors throughout the country, George Wafer, President of VMS, promised Gary
Tabackman that [GLM] would receive the ‘best price’ from LoJack. In addition, [sic] to the
‘best price,’ VMS promised to pay $2.00 of its commission received from LoJack to GLM for
each LoJack unit that was purchased by a Distributor which GLM helped to recruit.” (FAC ¶
18.)
10
Certainly Wafer, even if a LoJack agent, would have been free to make agreements on
behalf of his own company, VMS. Because the terms of the VMS/LoJack Agreement required
VMS to recruit distributors, VMS was entitled to do that the best way it saw fit, including
soliciting GLM’s assistance in recruiting other distributors. None of that equates, however, to an
amendment of GLM’s Distribution Agreement with LoJack.
15
41.) The parties clearly understood—as evidenced by their practice—that any amendment had to
be memorialized by signed writing.
The problems with Wafer’s testimony that he promised GLM the best price “based on
conversations” with LoJack are two-fold. First, this alone is not the kind of evidence sufficiently
clear and convincing to overcome the deference to which the plain language of the Distribution
Agreement is entitled.
See Lydon, 1997 WL 260064, at *10.
Second, the “attendant
circumstances” do not factually support Wafer’s testimony. For example, GLM was aware that
any changes to the Distribution Agreement, especially with respect to price, had to be completed
via a signed, written instrument. Indeed, any time there was a price change during the course of
the Distribution Agreement, a written PCN document was prepared and signed by the parties.
(Def. 56.1 ¶ 75.) Moreover, in or around September of 2005, Tabackman began corresponding
by electronic mail with Abely about a proposed price increase for the SVRUs. (Id. ¶ 43.)
Tabackman requested that LoJack not increase GLM’s price. (Id. ¶ 44.) Not once during
approximately six months of correspondence relating to the price increase did Tabackman
mention or refer to any “best price” promise by LoJack. (Id. ¶ 45.) It strains credulity to believe
that Tabackman would have failed to mention that LoJack was contractually bound to give his
company the best price on SVRUs, if GLM was in fact so entitled, during a six-month
negotiation over precisely that—the price LoJack was charging GLM for SVRUs.
LoJack’s internal e-mails also do not support GLM’s position. The Court has reviewed
the e-mails in question (Dkt. 63-7, Att. Ex. J-L), and finds no mention of a best price guarantee.
The text most supportive of GLM’s argument is contained in an internal LoJack e-mail written
by DelGuercio, the GLM relationship manager, wherein he attempts to persuade his colleagues
that GLM should get a better deal due to their large sales volume. It reads, “[a]s we’ve
16
discussed, I have concerns, given the tight geography, it’s only a matter of time that GLM will
gain exposure to some of our more aggressive pre-installation pricing guidelines and this would
have them feeling like they are entitled to deeper pricing discounts given the current volume
trends.” (Id. at ECF pg. 115.) Whatever support this lends GLM’s argument, it cuts more
sharply against it. The absence of any ‘best price’ reference is conspicuous; and the fact that
GLM would feel “entitled” to a better deal (not even the best) based on its performance, rather
than based on a contractual guarantee, is damning.
Tabackman’s self-serving affidavit, which partly contradicts his deposition testimony,
along with the equivocal assertions as to the issue of oral modification made by DelGuercio and
Wafer in their affidavits, do not provide the specificity necessary to establish a genuine dispute
of material fact where a fully integrated agreement is at issue. See Wells Fargo Bus. Credit, 77
Mass. App. Ct. at 817-18 (citing Community Natl. Bank v. Dawes, 369 Mass. 550, 554 (1976)).
The alleged “best price” promise is not clearly or expressly manifested in any written document
or the subsequent conduct of at least one of the parties to the alleged oral modification, LoJack.
Even if Wafer had the authority to bind LoJack, the fact that LoJack did nothing to act in
conformity with the alleged oral modification suggests that it never believed it was bound by the
deal between Wafer and VMS. While GLM can demonstrate that it attempted to act on the
alleged oral modification by recruiting distributors, it has no evidence of any such action taken
by LoJack on the other side of the alleged modification. At most, the evidence shows that GLM
had an agreement with VMS to recruit distributors for LoJack’s products—a conclusion
reinforced by the fact that the $2.00 commission was paid by VMS, not LoJack. Furthermore,
the claim that GLM sought to recruit distributors because of a “best price” promise from LoJack
is critically undercut by other evidence, such as Tabackman’s failure to rely on, or even
17
reference, a “best price” promise during the September 2005 to March 2006 price negotiations
with Abely.
In light of the applicable standards pertaining to fully integrated agreements with written
modification clauses, GLM needed to demonstrate that both parties believed an oral
modification had been reached. Memorialization of the agreement, action in conformity with the
agreement, written communications, such as an e-mail, recognizing the terms of the agreement,
among other things, may have sufficed. None of that exists here.
2. GLM’s Other Breach Theories
In its complaint, in addition to the “best price” theory, GLM also alleged that LoJack
breached the Distribution Agreement by failing to: (1) provide GLM with product unless it paid
in advance; (2) after the Distribution Agreement was terminated, credit GLM’s account for
returned product, and pay GLM $50 per Unit sold to dealers in Plaintiff’s territory for six months
post-termination; and (3) credit GLM for unclaimed incentive payments. In its motion for
summary judgment, LoJack argued that these theories were nonviable because (1) LoJack was
not obligated to ship product to GLM when GLM was in material breach of the Distribution
Agreement; (2) LoJack’s termination of the Distribution Agreement in October 2010
extinguished its obligation to make any post-termination contract payments to GLM; and (3)
there was no agreement binding LoJack to credit GLM for any monies in connection with the
incentive program. The Court now turns to these disputes.
First, GLM alleges that LoJack breached the Distribution Agreement when, contrary to
the terms of the Distribution Agreement, in September 2010—just prior to termination—LoJack
required GLM to pre-pay for any Units it wanted to purchase. (FAC ¶ 124.) At the time LoJack
requested pre-payment, GLM owed LoJack over $1,000,000 for product previously ordered and
18
received by GLM. (Def. 56.1 ¶¶ 86, 89-91.) GLM’s failure to pay for product it purchased and
received constituted a material breach under the Distribution Agreement. See Teragram Corp. v.
Marketwatch.com, Inc., 444 F.3d 1, 12 (1st Cir. 2006) (holding that failure to pay for goods
constitutes a material breach) (citing Lease-It, Inc. v. Massachusetts Port Authority, 33 Mass.
App. Ct. 391, 396 (1992)). According to Section 15.2 of the Agreement, “[t]he failure of either
party to require the performance or obligation of this Agreement, or the waiver of either party of
any breach of this Agreement, shall not prevent any subsequent enforcement of such term or
obligation or be deemed a waiver of any subsequent breach.” GLM’s material breach, therefore,
released LoJack from its obligation to supply to GLM without advance payment. See Teragram,
444 F.3d 1 at 11 (“[A] material breach by one party excuses the other party from further
performance under the contract.”) (quoting Ward v. Am. Mut. Liab. Ins. Co., 15 Mass. App. Ct.
98, 100 (1983)).
Next, GLM claims that it was entitled to certain post-termination payments, i.e., credit for
returned product and payment for SVRUs sold by GLM to dealers, following termination of the
Distribution Agreement in October 2010. (FAC ¶ 124.) On October 6, 2010, LoJack sent GLM
a notice that showed that GLM had a balance due of over $1,000,000, of which hundreds of
thousands of dollars were more than 120 days past due. (Id. ¶ 86.) The letter requested that
GLM bring its account up to date. (Dkt. 60-3, Att. 27.) In response, on October 12, 2010, GLM
sent a letter to LoJack stating that it was giving the required two-weeks’ notice of termination
under Section 12. 3 of the Distribution Agreement (no-cause termination), which would take
effect as of October 26, 2010. (Def. 56.1 ¶ 88.) On October 22, 2010, LoJack replied with a
letter to Tabackman terminating the Distribution Agreement, effective immediately pursuant to
19
Section 12.2 due to GLM’s material breach, namely GLM’s substantial overdue balance for
product ordered and received by GLM. (Id. ¶ 89.)
Because LoJack properly terminated the Distribution Agreement for cause, it was not
obligated to make any post-termination payments to GLM. Pursuant to Section 12. 5 of the
Agreement, “[i]n the event that, after any termination of this Agreement, other than by LoJack
pursuant to section 12.2 [for-cause termination], LoJack continues to make sales to [specified
dealers recruited by GLM], LoJack will pay [GLM] a fee of $50 per unit with respect to all
SVRUs sold to such dealer within 18-days of the termination of this Agreement.” (Id. ¶ 78.)
These payments, therefore, were not due if LoJack terminated the Distribution Agreement forcause pursuant to Section 12.2. (Id. ¶ 80.) As discussed above, due to GLM’s failure to pay,
LoJack was entitled to terminate for cause. Thus, pursuant to the clear terms of the Distribution
Agreement, LoJack’s for-cause termination became effective immediately, and released LoJack
of its post-termination obligations. See Liberty Mut. Ins. Co. v. Gibbs, 773 F.2d 15, 17 (1st Cir.
1985) (“Under Massachusetts law, “[w]here the wording of the contract is unambiguous, the
contract must be enforced according to its terms.”) (citation omitted)); see also Seaco Ins. Co. v.
Barbosa, 435 Mass. 772, 779 (2002) (“If a contract . . . is unambiguous, its interpretation is a
question of law that is appropriate for a judge to decide on summary judgment.”)
Finally, GLM alleges that LoJack improperly withheld credit for pre-paid incentive
monies not claimed by dealership salespeople. (FAC ¶ 124.) The sales incentive program is not
addressed in the Distribution Agreement.11 However, according to LoJack’s written Rewards
Policy, all unclaimed incentives were the property of LoJack. (Id. ¶¶ 70-71.) The policy
11
Because GLM’s breach of contract claim asserts that LoJack breached the Distribution
Agreement, and the Rewards Policy is outside the scope of the Distribution Agreement, GLM’s
claim could fail for this reason alone.
20
specifically states, “All LoJack Rewards VIN incentives must be claimed within 90 calendar
days from the date of LoJack equipment invoicing. All VIN incentives that expire are the
property of LoJack Corporation.” (Rewards Policy at 1.)
Tabackman asserts that he was told otherwise, namely that GLM would receive any
unclaimed incentive payments. However, Tabackman’s conduct rebuts his self-serving claim
that there was an oral modification to the written Rewards Policy. Sometime prior to 2006,
GLM requested that LoJack pay it for unclaimed incentives. (Def. 56. 1 ¶ 73.) LoJack refused
this request as contrary to the Rewards Policy on or before March 9, 2006.
(Id. ¶ 74.)
Thereafter, Tabackman, without protest, signed several documents known as PCNs, each of
which stated at the bottom that all unclaimed incentives belonged to LoJack.
(Id. ¶ 75.)
Therefore, there is no evidence that the Rewards Policy provided for anything other than what
was made clear by its written terms, and GLM was not entitled to any unclaimed incentives
pursuant to those terms.
B. Duty of Good Faith and Fair Dealing Claim
GLM’s claim for breach of the common law doctrine of the duty of good faith and fair
dealing alleges that, “LoJack’s agreement to sell GLM its [SVRUs] at its ‘best price’ required
LoJack to be honest in fact and take no action that would undermine its promise to GLM or deny
GLM the fruits of its bargain.” (FAC ¶ 128.)
Under Massachusetts law, every contract is “subject, to some extent, to an implied
covenant of good faith and fair dealing.” Ayash v. Dana-Farber Cancer Inst., 443 Mass. 367,
385 (2005). “The concept of good faith ‘is shaped by the nature of the contractual relationship
from which the implied covenant derives,’ and the ‘scope of the covenant is only as broad as the
contract that governs the particular relationship.’” Young v. Wells Fargo Bank, N.A., 717 F.3d
21
224, 238 (1st Cir. 2013) (quoting, Ayash, 443 Mass. at 385). The implied covenant may not be
“invoked to create rights and duties not otherwise provided for in the existing contractual
relationship.” Uno Restaurants, Inc. v. Boston Kenmore Realty Corp., 441 Mass. 376, 385
(2004).
The Court has already concluded that there is insufficient evidence to establish an oral
modification to the Distribution Agreement regarding best price. Because LoJack’s breach of
good faith and fair dealing claim depends on proof of the asserted “best price” promise, the
Court grants summary judgment in favor of LoJack on this claim.
C. Chapter 93A Claim
To make out an unfair competition claim under Chapter 93A, a plaintiff “must establish
that the alleged offending act was (1) within at least the penumbra of common law, statutory law
or other established concepts of unfairness, (2) is immoral or otherwise unscrupulous, and (3)
inflicted injury on another business.” Rohm & Haas Elec. Materials, LLC v. Elec. Circuits
Supplies, Inc., 759 F. Supp. 2d 110, 123 (D. Mass. 2010) (quoting Franklin v. Ciroli, 865
F.Supp. 940, 947 n. 18 (D. Mass. 1994)). “A showing of bad faith requires dishonest purpose,
conscious wrongdoing, or unfairness beyond bad judgment or failing to abide by the terms of a
contract.” Id. (citation omitted). Or, as the First Circuit has put it, “[t]he objectionable conduct
must attain a level of rascality that would raise an eyebrow of someone inured to the rough and
tumble world of commerce.” Saint-Gobain Indus. Ceramics Inc. v. Wellons, Inc., 246 F.3d 64,
73 (1st Cir. 2001).
GLM’s Chapter 93A claim is predicated on its allegations that LoJack induced GLM to
continue the relationship by falsely stating that GLM was receiving LoJack’s best price. G.L.M.
Sec. & Sound, Inc. v. LoJack Corp., 10-CV-4701 (JS) (ARL), 2012 WL 4512499, at *6
22
(E.D.N.Y. Sept. 28, 2012).12 To the extent GLM’s claim is based on lies or deception about a
perceived best price agreement, the claim fails because the Court has found no such agreement
existed. See Pembroke Country Club, Inc. v. Regency Sav. Bank, F.S.B., 62 Mass. App. Ct. 34,
41 (2004); Cantell v. Hill Holliday Connors Cosmopulos, Inc., 55 Mass. App. Ct. 550, 556
(2002); Park Drive Towing, Inc. v. City Of Revere, 442 Mass. 80, 86 (2004). Without a best
price agreement, even assuming LoJack hid the fact that it offered better prices to other dealers
and misled GLM about the same, LoJack’s conduct does not rise to the level necessary to sustain
a Chapter 93A claim. See Massachusetts Sch. of Law at Andover, Inc. v. Am. Bar Ass’n, 142
F.3d 26, 41 (1st Cir. 1998) (holding that to sustain a Chapter 93A claim, “the defendant’s
conduct must be not only wrong, but also egregiously wrong—and this standard calls for
determinations of egregiousness well beyond what is required for most common law claims.”).
The Court, therefore, grants summary judgment in favor of LoJack on GLM’s Chapter
93A claim.
D. LoJack’s Counterclaims
LoJack counterclaims that it is owed compensation for products and services GLM
ordered and received from LoJack, from which GLM profited when it resold the products, and
then failed to pay LoJack for more than $1,000,00 worth of products and services without any
legal justification. (Dkt. 60-1 (“Mov. Br.”) at 22.)
GLM essentially concedes that if LoJack did not breach the Distribution Agreement, then
LoJack is entitled to payment for goods and services rendered. As discussed below, LoJack has
demonstrated the existence (1) a written or oral agreement (2) for a valid consideration, (3)
12
This is the only theory under which the Court (Seybert, J.) granted GLM leave to
proceed on its Chapter 93A claim. G.L.M. Sec. & Sound, Inc., 2012 WL 4512499, at *6.
23
performance by LoJack, and breach by GLM, and that (4) LoJack suffered damages as result.
See Mass. Cash Register, Inc., 901 F.Supp. 404 at 415.
The Agreement set forth the price and payment terms obligating both LoJack and GLM.
(Agr. ¶ 6.1.) LoJack sent GLM invoices from March to October of 2010 relating to orders
placed by GLM, and products and services shipped and billed to GLM. (Def. 56. 1 ¶¶ 90-181.)
GLM admits receiving the products and services, and its failure to pay for either. (Id.) GLM
sold the SVRUs to dealers for at least $300 per unit. (Id. at 67.) On October 6, 2010, LoJack
sent GLM a notice which showed that GLM had a balance due of over $1,000,000, of which
hundreds of thousands of dollars were more than 120 days past due. (Id. ¶ 86.) Thus, LoJack
has made out a breach of contract claim, see Signarella v. Boston, 342 Mass. at 387, and
summary judgment is granted to LoJack on this counterclaim.13
LoJack also brings a counterclaim for breach of good faith and fair dealing based on two
theories. The first boils down to the fact that GLM did not pay for goods and services received.
This is denied as duplicative of its breach of contract claim. Second, LoJack “contends that
GLM breached the implied covenant in making its phony complaint about the alleged ‘best
price’ issue in the summer of 2010 as a means to gain leverage to negotiate with LoJack about
the million dollar debt it owed to LoJack.” (Mov. Br. at 23-4.) In support of this contention
LoJack argues that “[n]ot until GLM was significantly behind in its payments to LoJack did it
put in writing its ‘best price’ theory, which first appeared in its First Amended Complaint,” and
“GLM has not been able to produce a single document during the eight year term of the parties’
relationship that speaks to, or mentions[,] ‘best price.’” (Id. ¶ 24.) However persuasive a theory,
13
LoJack’s quasi-contract counterclaims, for goods sold and delivered and for unjust
enrichment, were brought “as alternatives to its breach of contract claim.” (Mov. Br. 24.) They
are thus denied as moot.
24
LoJack has not offered evidence as to GLM’s motivation that would preclude a rational trier of
fact from finding in favor of GLM on this claim. LoJack’s motion for summary judgment on this
counterclaim is, therefore, denied. See Donnelly, 691 F.3d at 141.
III.
LoJack’s Motion to Strike
Following submission of the parties’ briefs on summary judgment, LoJack moved to
strike portions of the affidavits filed by GLM in support of its opposition to LoJack’s motion for
summary judgment, primarily on the ground that “they impermissibly contradict prior sworn
testimony.” (Dkt. 62 at 3.) Because LoJack’s motion for summary judgment is granted, its
motion to strike is denied as moot. The Court notes, however, that where statements in the
subject affidavits failed to “set out facts that would be admissible in evidence,” Fed. R. Civ. P.
56(c)(4), or contradicted clear prior deposition testimony, the Court declined to consider those
statements. See Trans-Orient Marine Corp. v. Star Trading & Marine, Inc., 925 F.2d 566, 572
(2d Cir. 1991) (“The rule is well-settled in this circuit that a party may not, in order to defeat a
summary judgment motion, create a material issue of fact by submitting an affidavit disputing
his own prior sworn testimony.”).
IV.
GLM’s Motion to Amend
On December 19, 2013, more than one month after the summary judgment motion had
been fully briefed, and more than seven months after the deadline for parties to do so, GLM
moved to amend its operative complaint. (Dkt. 69; (See Dkt. 44 (setting the deadline for
amendment of pleadings as 2/14/13))). The upshot of GLM’s motion is that although its FAC
“characterized LoJack’s best-price promise as a modification to the parties’ initial written
[Distribution Agreement],” GLM now submits that the evidence adduced during discovery
25
“supports the view that the [best price agreement] was in fact distinct” from the Distribution
Agreement. (Dkt. 69-2 (“Amend Br.”) at 3.)
Rule 15(a) of the Federal Rules of Civil Procedure (“FRCP”) provides that a party may
amend its complaint once as a matter of course before a responsive pleading has been served;
thereafter, the party may do so “only with . . . the court’s leave,” which should “freely” be given
“when justice so requires.” Fed. R. Civ. P. 15(a)(2). But where, as here, a motion to amend is
filed after the deadline the court has set for amending the pleadings, Rule 16(b)’s more stringent
“good cause” standard applies. Parker v. Columbia Pictures Indus., 204 F.3d 326, 340 (2d Cir.
2000). 14
GLM’s motion fails for two reasons. First, GLM’s proposed amendment is futile. See
McCarthy v. Dun & Bradstreet Corp., 482 F.3d 184, 200 (2d Cir. 2007) (“A district court has
discretion to deny leave for good reason, including futility…”) Here, the “separate agreement”
theory fails for the same reason as the “oral modification” theory: there is insufficient evidence
to demonstrate that LoJack ever agreed to offer GLM the best price. The evidence GLM could
offer in support of its proposed new claim would create no triable issue of fact, and LoJack
would still be entitled to judgment as a matter of law under FRCP 56.
See Milanese v. Rust-
Oleum Corp., 244 F.3d 104, 110-11 (2d Cir. 2001) (holding that when a motion to amend is filed
in tandem with a fully briefed summary judgment motion, the summary judgment standard,
rather than the motion to dismiss standard, applies in determining futility); see also Decter v.
Second Nature Therapeutic Program, LLC, 13-CV-3519 (JFB), 2014 WL 4378805, at *12
(E.D.N.Y. Sept. 5, 2014) (denying leave to amend as futile because the amended complaint did
14
The parties dispute whether the Court should apply the more stringent standard
imposed by Rule 16(b), rather than the more lenient one under Rule 15. The issue is ultimately
irrelevant because GLM’s motion does not satisfy either standard.
26
“not contain facts that overcome the legal defects identified by the Court in [its] Memorandum
and Order in connection with the claims that are being dismissed, nor could any such additional
facts be alleged that could cure the legal defects.”)
Second, even were GLM’s claims viable, the motion would still be denied on the ground
of undue delay. “Delay in seeking leave to amend a pleading is generally not, in and of itself, a
reason to deny a motion to amend. However, the Court may deny a motion to amend when the
movant knew or should have known of the facts upon which the amendment is based when the
original pleading was filed, particularly when the movant offers no excuse for the delay.” Smith
v. Westchester Cnty. Dep't of Corr., 12-CV-3941 (SHS) (FM), 2014 WL 4384104, at *10
(S.D.N.Y. Sept. 3, 2014) (citations and quotations omitted). That is precisely the case here. All
of the facts on which GLM relies in support of its motion to amend were within its ken at the
time it filed its First Amended Complaint. GLM has not cited, nor can the Court find, anything
produced by LoJack during discovery that supports the proposition that GLM’s new theory was
only recently discovered. Cf. Parker, 204 F.3d at 341 (refusing to find good cause where the
information supporting the amendment to the complaint was available to support movant’s
claim, “and nothing he learned in discovery otherwise altered that fact.”). Even if GLM’s
motion was based on new evidence, it should have noticed its motion for leave to amend shortly
after the close of discovery, not after reading LoJack’s summary judgment papers and deciding it
had a better theory for its case.
For these reasons, GLM’s motion to amend is denied.
CONCLUSION
In summary, LoJack’s motion for summary judgment as to GLM’s claims for breach of
contract, breach of the duty of good faith and fair dealing, and violation of Massachusetts
27
General Law 93A is GRANTED. LoJack’s motion for summary judgment is GRANTED as to
its breach of contract claim and DENIED as to the remainder of its counterclaims. LoJack’s
motion to strike is DENIED as moot. GLM’s motion to amend is DENIED.
The parties shall submit by October 17, 2014, a letter to the Court advising (1) whether
LoJack intends to go forward with its remaining counterclaims, and (2) a jointly agreed upon
schedule regarding damages briefing regarding the breach of contract claim on which LoJack has
prevailed.
SO ORDERED:
/s/ Pamela K. Chen
PAMELA K. CHEN
United States District Judge
Dated: September 19, 2014
Brooklyn, New York
28
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