TOPSHELF MANAGEMENT, INC. et al v. CAMPBELL-EWALD COMPANY
Filing
35
MEMORANDUM OPINION AND ORDER, signed by CHIEF JUDGE THOMAS D. SCHROEDER on 11/28/2017, that CEC's motion for summary judgment (Doc. 25 ) is GRANTED and, in light of the court's previous dismissal of all other claims for relief (Doc. 17 ), this action is DISMISSED WITH PREJUDICE. (Butler, Carol)
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF NORTH CAROLINA
TOPSHELF MANAGEMENT, INC.;
TOPSHELF CO., LLC; TOPSHELF
COMPANY, LLC f/k/a SHOWTIME
SPORTS AND MARKETING, LLC; and
SHOWTIME MOTORSPORTS, INC.,
Plaintiffs,
v.
CAMPBELL-EWALD COMPANY,
Defendant.
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1:15cv00939
MEMORANDUM OPINION AND ORDER
THOMAS D. SCHROEDER, District Judge.
This
is
an
action
by
Plaintiffs
Topshelf
Company,
LLC
(“Topshelf”), successor in interest to Showtime Motorsports, Inc.
(“Showtime”),
and
Topshelf
Management,
Inc.
(“Topshelf
Management”), all owned and operated by Brian Efird, 1 arising out
of former business relationships with Defendant Campbell-Ewald
Company (“CEC”).
Before the court is CEC’s motion for summary
judgment as to Plaintiffs’ third claim for relief, which charges
that CEC engaged in unfair and deceptive trade practices through
a series of allegedly misleading representations.
(Doc. 25.)
The
motion has been fully briefed (Doc. 27; Doc. 30; Doc. 31) and is
ready for decision.
For the reasons set forth below, the motion
1
CEC argues that Topshelf can sue only for itself and not on behalf of
its predecessor, Showtime. (Doc. 31 at 2–3.) Because the court grants
CEC’s motion for summary judgment on other grounds, this issue need not
be reached.
will be granted and, because all other claims have previously been
dismissed (Doc. 17), the action will be dismissed.
I.
BACKGROUND
The facts, viewed in the light most favorable to Plaintiffs
as the non-moving parties, establish the following:
A.
CEC’s Contract with the Navy
CEC
is
an
advertising
company
that
services to the U.S. Navy from 2005 to 2013.
15.)
provided
marketing
(Doc. 26 ¶¶ 2, 4, 6,
During that time, one of CEC’s responsibilities was to run
“field events,” such as fairs and airshows, as part of the Navy’s
recruitment efforts.
(Id. ¶ 4.)
A component of these shows were
Navy simulators, which CEC contracted to provide, that reproduced
the effect of flying a Navy jet. (Id. ¶ 10.)
From 2005 to 2009, CEC’s dealings with the Navy were governed
by an umbrella contract that authorized the Navy to spend hundreds
of millions of dollars on marketing for up to five years; however,
the agreement obligated the Navy to spend a minimum of $5 million
and committed the Navy to no more than one year of service.
¶¶ 5–6.)
(Id.
After the first year, each additional year was at the
Navy’s option.
(Id. ¶ 6.)
On May 20, 2009, CEC entered into a new umbrella contract
with the Navy, which contained the same essential terms.
¶ 8–9.)
(Id.
Like the earlier contract, this contract was eligible to
run up to five years and in fact remained in effect until 2013,
2
when the Navy ceased contracting with CEC.
Under
these
umbrella
contracts,
(Id. ¶¶ 8–9, 15.)
the
Navy
would
issue
statement of work to CEC that requested specific services.
¶ 13.)
a
(Id.
CEC would then provide pricing information to the Navy,
after which the Navy would issue a task order for the requested
services.
(Id.)
Once it received the task order, CEC would issue
a corresponding purchase order to a subcontractor.
(Id.)
Thus,
under its contract with the Navy, CEC could issue a purchase order
only if and when the Navy had first issued a task order. 2
B.
Showtime’s Subcontract with CEC
CEC first met with Efird in 2008 to consider subcontracting
its Navy simulator work to Showtime, another marketing company.
(Id. ¶ 7; Doc. 30-2 at 14.)
On September 8, 2008, Showtime signed
CEC’s Purchase Order Terms and Conditions form that would govern
each purchase order.
the
boundaries
of
(Doc. 26-5 at 22.)
the
relationship,
This document set forth
including
that
no
work
performed by Showtime would be authorized or reimbursed prior to
the issuance of a purchase order.
a
merger
clause
stating
that
(Id. at 2.)
the
agreement
It also included
is
“binding
and
complete,” “supersedes all other agreements and representations,”
2
Topshelf’s complaint alleges that after CEC stopped subcontracting with
it, CEC created a company to deceive the Navy into believing it met the
small business requirement of the umbrella contract that Topshelf
previously satisfied. (Doc. 1 ¶ 30.) That argument appears to have
been abandoned (Doc. 27 ¶¶ 24–25), so it is not addressed further.
3
and cautions that no “additions or modifications to this Agreement
shall be effective unless they are in writing, signed by both
parties, and make specific reference to this Agreement.” (Id.)
On
October
6,
2008,
Efird
received
an
email
from
John
Schroeder, a CEC employee who served as the main point of contact
with Efird, stating that CEC was in the process of “responding to
a 10-year pricing request” from the Navy for business marketing
services.
(Doc. 30-3 at 9.) 3
The email also stated that CEC was
planning to “select Showtime Motorsports as [its] primary partner
for
supplying
simulators.”
the
next
generation
of
interactive
mobile
(Id.)
In November of 2008, CEC issued Showtime a purchase order for
three months, subject to CEC’s Purchase Order Terms and Conditions.
(Doc. 26-4 at 5–6.)
Pursuant to this purchase order, Showtime was
able to supply two simulators (“Sims 1 and 2”), both manufactured
by Doron Precision and refurbished by Showtime, in under five weeks
for a Navy event in December 2008.
(Doc. 30 at 2; Doc. 30-2 at 8–
9.) Apparently approving of Showtime’s work, CEC chose to continue
to subcontract simulator work to Showtime, and from March 11, 2009,
to August 24, 2010, CEC issued multiple purchase orders to Showtime
to supply and operate Sims 1 and 2 for various periods of time
3
At the time this email was written, CEC believed the umbrella contract
would be for a maximum of ten years. (Doc. 32 ¶ 2.) Instead, as noted
above, CEC entered into two contracts with a maximum of five years each.
(Id.; Doc. 26 ¶¶ 6, 9.)
4
(ranging from a few months to a few days, but less than a year
each).
(Doc. 26-4 at 8–14.)
During the course of these short-
term purchase orders, Efird acknowledged that Showtime was not
working under a long-term contract.
C.
(Doc. 27-3 at 26.)
Showtime’s Dissolution and CEC’s Decision to Supply Sim
3
In June 2010, as a result of the Navy’s changes to its
simulator program, CEC’s Schroeder issued a request for proposal
that called for a subcontractor to provide the Navy with three new
simulators.
(Doc. 27-3 at 32.)
When the Navy modified its request
to call for only one simulator (“Sim 3”), CEC similarly modified
its request for proposal in July 2010.
(Id. at 37.)
In response,
CEC received bids from multiple vendors, including Showtime; CEC
also considered an internal proposal to supply Sim 3 itself,
without
a
subcontractor.
(Doc.
27-3
at
19,
38–44.)
After
reviewing these bids, CEC decided to subcontract the Sim 3 work to
Showtime.
(Doc. 27-1 at 49.)
In late August 2010, Schroeder left CEC and was replaced by
Yvonne Hughes.
(Doc. 26 ¶ 23; Doc. 27-3 at 3)
the Navy issued CEC a task order for Sim 3.
On September 3,
(Doc. 26-3 at 44–52.)
In turn, on September 8, Hughes advised Efird that “Showtime has
been awarded the additional Navy Simulator business” and that once
she received the exact proposal Efird had sent to Schroeder, she
could issue a purchase order to Showtime for the work on Sim 3.
5
(Doc. 27-1 at 49.)
However, on September 21, before CEC could
issue a purchase order, Efird’s attorney wrote CEC that Showtime
was “winding up its operations” and “dissolving at the end of
2010.”
(Doc. 27-2 at 30.)
The letter also notified CEC that Efird
would be associated with a new company, Topshelf Management, which
would be available to enter into contracts with CEC.
(Id.)
Following this news, CEC reconsidered its decision to issue
Showtime a purchase order for Sim 3 and decided to do the work
itself.
(Doc. 27-4 at 19–22.)
In assessing its vendor options,
CEC noted that Showtime was a “B+” vendor with “financial response
issues” and a “short cut mentality.”
observed
that
Topshelf
(Doc. 30-3 at 40.)
Management
may
be
going
CEC also
through
an
“ownership and management reorganization” that could impact its
performance.
(Doc. 27-4 at 19.)
CEC expressed this concern both
internally and in its communications with the Navy.
(Id. at 19–
21; Doc. 30-5 at 44–45.)
In order to prepare to supply Sim 3 itself, but without
informing
Topshelf
Management,
CEC
contacted
two
simulator
manufacturers, Metropolis and Doron Precision, 4 to gather details
about manufacturing a new sim.
(Doc. 27-2 at 3–5.)
CEC also
sought detailed technical information regarding simulators from
4
After making these inquiries, CEC decided to use Doron Precision to
manufacture Sim 3. (Doc. 26 ¶ 22.) As noted above, this was the same
company Showtime worked with to supply Sims 1 and 2.
6
Topshelf Management, claiming to need the information in order to
match Topshelf Management’s scope of work with the Navy’s request.
(Doc. 30-2 at 13.)
D.
Topshelf’s Subcontract with CEC
From October 26, 2010, through at least June 17, 2011, CEC
expressed to Efird serious concerns about Showtime’s, and later
Topshelf’s, performance. (Doc. 30-5 at 50–65.)
included
Sims
simulators
1
and
failing
2
to
Topshelf’s employees.
being
in
work;
and
These complaints
unacceptable
condition;
unprofessional
(Id.; Doc. 27-2 at 46–50.)
conduct
the
by
During that
time, Topshelf refurbished Sims 1 and 2 at the cost of “tens of
thousands of dollars.”
(Doc. 30-2 at 19; Doc. 30-5 at 53–62.)
Topshelf did so in the belief it would receive another purchase
order from CEC because, according to Efird, “[t]hat’s just how
business was always done.”
(Doc. 30-2 at 20.)
By 2011, Efird had changed business entities again and was
conducting
business
Topshelf Management.
with
CEC
through
Topshelf,
(Doc. 27-1 at 19–20.) 5
rather
than
Despite being upset
and expressing his displeasure to CEC after learning that Topshelf
did not receive a purchase order for Sim 3, Efird decided to
“tak[e] the high road” and have Topshelf continue to supply Sims
1 and 2 for CEC.
(Id. at 57; Doc. 30-2 at 18.)
5
On January 4,
Topshelf Management continues to exist and shares office space with
Topshelf. (Doc. 1 ¶ 7.)
7
2011, Topshelf signed the same Purchase Order Terms and Conditions
form that Showtime had executed and was issued a purchase order
from CEC to supply Sims 1 and 2 from January 12, 2011, through
January 12, 2012.
(Doc. 26-4 at 15; Doc. 26-5 at 15.)
Hughes
advised Efird that even with a one-year purchase order, “there are
no guarantees, [and the] Navy can cancel the contract at anytime
[sic].”
(Doc. 27-1 at 54.)
have never had a contract.
At one point, Efird acknowledged: “I
All I ever have [sic] is a PO.”
(Id.
at 53.)
During his working relationship with CEC, Efird (on behalf of
Showtime,
and
then
Topshelf)
tried
contract.
(Doc. 27-3 at 13–15, 27.)
to
negotiate
a
long-term
However, Schroeder, Hughes,
and Charles Spieser, another CEC employee who dealt with both
Showtime and Topshelf, all deny ever having made any promises of
long-term work.
(Doc. 27-2 at 8-13; Doc. 27-3 at 9, 18–22; Doc.
27-4 at 4–12.)
Efird admitted that his expectation of receiving
future purchase orders was based on his impression that the “gist”
of the relationship with CEC was that if CEC “had the Navy
relationship,” then Topshelf would be “providing the simulators”
for them.
(Doc. 27-1 at 8.)
On December 12, 2011, CEC informed Efird that it received a
statement of work from the Navy that discontinued Sims 1 and 2 and
that Topshelf’s work on those simulators would cease on January
12, 2012.
(Id. at 59.)
CEC continued to provide Sim 3, as well
8
as another simulator, also constructed by Doron Precision, for the
Navy until January of 2013, when the Navy stopped using simulators
from CEC.
(Doc. 26 ¶¶ 15, 22.)
Topshelf initially sued CEC in Forsyth County Superior Court
on October 29, 2014.
(Doc. 9 ¶ 1.)
The case was removed to this
court and on August 3, 2016, was dismissed without prejudice
because the claims lacked the requisite particularity.
3.)
(Id. ¶¶ 2–
On November 15, 2016, Topshelf filed the present complaint,
alleging negligent misrepresentation (first claim for relief),
fraud (second claim for relief), violation of North Carolina’s
Unfair and Deceptive Trade Practices Act (“UDTPA”), N.C. Gen. Stat.
§ 75-1.1 (third claim for relief), and breach of contract (fourt
claim for relief).
(Doc. 1 ¶¶ 36, 42, 46, 54.)
On August 26,
2016, the court granted CEC’s motion to dismiss the first, second,
and
fourth
limitations.
claims,
finding
(Doc. 17.) 6
them
barred
by
the
statute
of
Following discovery, CEC filed the
present motion for summary judgment on the remaining UDTPA claim.
(Doc. 25.)
II.
ANALYSIS
Summary judgment is appropriate “if the movant shows that
there is no genuine dispute as to any material fact and the movant
6
CEC did not assert the statute of limitations as a defense to
Topshelf’s UDTPA claim in its motion to dismiss (Doc. 6 at 3 n.1), but
now argues that this claim is time-barred as well (Doc. 27 at 23).
Because the court grants CEC’s motion for summary judgment on other
grounds, this argument need not be reached.
9
is entitled to judgment as a matter of law.”
56(a).
Fed. R. Civ. P.
“A genuine issue of material fact exists ‘if the evidence
is such that a reasonable jury could return a verdict for the
nonmoving party.’”
Basnight v. Diamond Developers, Inc., 146 F.
Supp. 2d 754, 760 (M.D.N.C. 2001) (quoting Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 248 (1986)).
In determining a motion
for summary judgment, the court views the “evidence in the light
most favorable to the non-moving party, according that party the
benefit of all reasonable inferences.”
Id.
Summary judgment
should be denied “unless the entire record shows a right to
judgment with such clarity as to leave no room for controversy and
establishes affirmatively that the adverse party cannot prevail
under any circumstances.”
Guessford v. Pennsylvania Nat. Mut.
Cas. Ins. Co., 983 F. Supp. 2d 652, 659 (M.D.N.C. 2013) (quoting
Campbell v. Hewitt, Coleman & Associates, Inc., 21 F.3d 52, 55
(4th Cir. 1994)).
To establish a UDTPA claim, a plaintiff must show that the
defendant (1) committed an unfair or deceptive act or practice,
(2) which was in or affecting commerce, and which (3) proximately
caused it injury.
704, 711 (2001).
Dalton v. Camp, 353 N.C. 647, 656, 548 S.E.2d
An act or practice is unfair “if it is immoral,
unethical, oppressive, unscrupulous, or substantially injurious to
consumers,” and is deceptive “if it has the capacity or tendency
to deceive.”
Ace Chem. Corp. v. DSI Transp., Inc., 115 N.C. App.
10
237, 247, 446 S.E.2d 100, 106 (1994) (internal citations and
quotations omitted).
As this court previously noted, “[t]he crux
of [UDTPA] claims is usually determining what conduct suffices as
‘unfair or deceptive,’ which is a question of law for the court.”
Topshelf Mgmt., Inc. v. Campbell-Ewald Co., 117 F. Supp. 3d 722,
729 (M.D.N.C. 2015).
A breach of contract, even if intentional, does not constitute
a
UDTPA
violation
unless
aggravating circumstances.
it
is
accompanied
by
substantial
Canady v. Crestar Mortgage Corp., 109
F.3d 969, 975 (4th Cir. 1997).
However, the exercise of a
contractual right can be an unfair or deceptive practice if it
involves egregious and aggravating conduct.
S. Atl. Ltd. P'ship
of Tennessee, L.P. v. Riese, 284 F.3d 518, 539 (4th Cir. 2002).
A misrepresentation, even absent intent or bad faith, can
constitute an unfair and deceptive trade practice so long as a
party’s words or conduct possess the requisite tendency or capacity
to mislead.
First Atl. Mgmt. Corp. v. Dunlea Realty Co., 131 N.C.
App. 242, 254, 507 S.E.2d 56, 64 (1998).
To make a successful
UDTPA claim based on a misrepresentation, a plaintiff must show
that it actually relied on the misrepresentation and that such
reliance
was
the
proximate
cause
of
the
injury.
Tucker
v.
Boulevard at Piper Glen, LLC, 150 N.C. App. 150, 153–54, 564 S.E.2d
248, 251 (2002).
Lastly, an unfulfilled promise cannot be the
basis for an unfair and deceptive trade practice claim unless the
11
promise was made fraudulently with no intention to carry it out.
Smith v. Central Soya of Athens, Inc., 604 F. Supp. 518, 530
(E.D.N.C. 1985).
Topshelf argues that CEC violated the UDTPA in two distinct
ways: (1) choosing to supply Sim 3 itself, after having led
Topshelf to believe that it would receive a purchase order for it;
and (2) making a series of representations that led Topshelf to
believe that it would receive future purchase orders, and then
abruptly ending the parties’ working relationship knowing that
Topshelf had invested in updating Sims 1 and 2.
Each argument
will be addressed in turn.
A.
CEC’s Decision to Supply Sim 3.
Topshelf argues that CEC violated the UDTPA in regard to its
conduct involving Sim 3 by (1) deciding to supply Sim 3 itself,
after having informed Showtime it would receive a purchase order
for it; (2) creating a secret list of purported issues with
Showtime’s performance to justify its choice to supply Sim 3
itself;
(3)
contacting
Metropolis
and
Doron
Precision
about
building Sim 3 without Topshelf Management’s knowledge; and (4)
requesting detailed specifications from Topshelf Management about
building Sim 3 under the guise of assisting Topshelf Management
comply with the Navy’s requests for work.
CEC denies that it
created a secret list of issues but rather compiled a list of pros
and cons for each of the vendors that submitted a proposal for Sim
12
3.
CEC also emphasizes the fact that it chose Showtime to supply
Sim 3 and only changed its mind when it learned of Showtime’s
dissolution. CEC further argues that, having not issued a purchase
order to Showtime, CEC had no contract with Showtime regarding Sim
3 and was free to contact Doron Precision and Metropolis.
The court agrees with CEC.
As an initial matter, Plaintiffs
have not demonstrated how Showtime could have been damaged by any
alleged unfair or deceptive conduct in connection with its failure
to have been awarded Sim 3.
By its own admission, Showtime was
winding up operations in September 2010 and would be dissolved by
year-end.
It was not accepting new business.
(Doc. 27-2 at 30.)
As such, it could not have accepted a purchase order for Sim 3.
Moreover, Plaintiffs have offered no evidence to suggest that
CEC’s statement offering Showtime a purchase order for Sim 3 was
false when it was made; instead, it appears that CEC simply changed
its mind about this purchase order when it learned of Showtime’s
dissolution.
Smith, 604 F. Supp. at 529–31 (holding that a
promissory statement of future intent which does not come to
fruition is not an unfair or deceptive practice).
Further, there
is no evidence that CEC engaged in a campaign against any of the
Plaintiffs in an effort to take over the work for Sim 3.
To the
contrary, CEC initially decided to award Showtime the purchase
order for Sim 3.
did
CEC
Only after learning of Showtime’s dissolution
reconsider
and
inform
13
the
Navy
that
it
considered
Showtime’s change of business entities to have “impaired the
vendor’s ability to deliver SIM 3 on time and on budget.”
30-5 at 45.)
(Doc.
Nevertheless, CEC advised the Navy that Showtime had
“provided adequate service” on Sims 1 and 2 and should be allowed
to continue on those contracts.
(Id.)
CEC is also correct that evaluating the pros and cons of a
subcontractor under these circumstances is not a violation of the
UDTPA.
See S. Atl. Ltd. P'ship of Tennessee, L.P., 284 F.3d at
535 (noting that “only practices that involve ‘[s]ome type of
egregious or aggravating circumstances’ are sufficient to violate
the UDTPA”) (quoting Dalton, 353 N.C. at 657, 548 S.E.2d at 711)).
Showtime’s
dissolution
was
a
significant,
material
event
sufficient to have concerned CEC enough to revisit its decision
whether to continue doing business with Showtime.
CEC’s decision
reflects a rational business response. 7 It is not the kind immoral,
unethical, oppressive, or unscrupulous conduct that can give rise
to an UDTPA claim.
S.E.2d at 106.
See Ace Chem. Corp., 115 N.C. App. at 247, 446
Plaintiffs’ attempt to mischaracterize Showtime’s
dissolution as “essentially just a name change” (Doc. 30 at 4)
7
Topshelf also argues that if CEC “had true concerns regarding
Plaintiffs’ ability to perform and satisfy the Navy’s demands, Defendant
would not have continued to represent to the Navy and to Plaintiffs,
that Plaintiffs[] should continue to work on the first and second
simulator.” (Doc. 30 at 19–20.) This argument is unpersuasive. Asking
Topshelf to continue its work under the current purchase order for Sims
1 and 2 is entirely different from asking Topshelf to take on a new
project constructing and operating Sim 3.
14
ignores
the
condition.
company’s
material
negative
change
in
financial
Thus, neither CEC’s representation to Showtime nor
CEC’s decision to supply Sim 3 was an unfair or deceptive act.
Further, the Purchase Order Terms and Conditions forms that
Topshelf signed preclude Plaintiffs’ claims.
The form made clear
that no work could be assigned before issuance of a purchase order,
and they also included a merger clause that supersedes all written
and oral representations made before the forms were signed. Smith,
604 F. Supp. at 526–27.
Given that CEC informed Showtime that it
would be awarded the purchase order for Sim 3 on September 8, 2010,
and Topshelf signed the form on January 4, 2011, the claim that
Showtime relied on representations of receiving the purchase order
is barred by the terms of the form.
Also, as CEC made clear that
there could be no agreement absent the issuance of a purchase
order, and CEC never issued a purchase order to any Plaintiff for
Sim 3, no Plaintiff has a claim based on Sim 3. 8
Any argument that
CEC committed an unfair or deceptive act by failing to contract
for Sim 3 therefore fails.
Canady, 109 F.3d at 975.
Finally, Plaintiffs have failed to show that CEC’s actions
were the proximate cause of any harm suffered.
While Topshelf
claims it incurred expenses upgrading Sims 1 and 2 (Doc. 30 at
8
Showtime dissolved before CEC could ever issue a purchase order for
Sim 3 but, as noted, the court need not rely on this additional ground.
15
10), any attempt to tie these expenses to a belief that it would
receive a purchase order for Sim 3 fails, given that these upgrades
occurred well after Topshelf learned that it would not receive a
purchase order for Sim 3.
Plaintiffs
inquiries
have
of
not
(See Doc. 27-1 at 57–58.)
explained
Topshelf
how
Management
they
or
were
of
656,
548
S.E.2d
at
(2001). 9
711
harmed
Doron
Metropolis about simulator manufacturing.
Moreover,
by
CEC’s
Precision
and
Dalton, 353 N.C. at
Consequently,
Plaintiffs’
contentions as to Sim 3 are unavailing, and CEC’s motion for
summary judgment will be granted.
B.
CEC’s
Representations
Relationship.
Plaintiffs
next
misrepresentations
argue
that
About
that
caused
CEC
a
Long-Term
engaged
Topshelf
to
in
a
Working
series
believe
it
of
was
performing at, or above, expectations and would continue to receive
purchase
orders
from
CEC.
These
alleged
misrepresentations
include statements that (1) CEC and Topshelf were a team; (2) the
working relationship with Topshelf was a high priority for CEC;
(3) CEC was working to protect the best interests of Topshelf; (4)
praised the quality of Topshelf’s work; and (5) generally gave
Plaintiffs the impression that they would receive purchase orders
from
CEC
as
long
as
CEC
was
contracting
with
the
Navy
for
9 Any claim by Topshelf that it was injured by CEC reaching out to Doron
Precision or Metropolis is undermined by the fact that that Efird emailed
Spieser that he “would have gladly” helped CEC with the “buildout” of
Sim 3, if he had been asked. (Doc. 27-1 at 57.)
16
simulators.
Topshelf also argues that it spent “tens of thousands
of dollars” to upgrade Sims 1 and 2, in reliance on its expectation
of receiving future purchase orders shortly before CEC ended its
working relationship with Topshelf.
(Doc. 30-2 at 19.)
CEC denies that it made any promises of future work to
Plaintiffs and contends that the absence of any record evidence of
any representations belies the claim.
In addition, CEC contends
that any claim of reliance on any alleged statement nevertheless
would
not
undisputed
be
justified
repeated
due
warnings
to
the
that
merger
the
Navy
clause
could
and
CEC’s
cancel
the
purchase orders at any time, or simply refuse to issue further
statements of work for the simulators.
Again, the court agrees with CEC.
CEC made clear that it did
not have any long-term contract with Topshelf.
54.)
(Doc. 27-1 at 53–
Instead, Showtime and Topshelf agreed that they worked under
a series of short-term purchase orders.
(Id.; Doc. 27-3 at 26.)
Even within the duration of those purchase orders, CEC advised
Topshelf that the purchase orders were subject to cancellation by
the Navy at any time.
(Doc. 27-1 at 53–54.)
Efird was also aware
that Showtime, and then Topshelf, could only receive purchase
orders for Sims 1 and 2 if the Navy requested that CEC provide
simulators.
(See id. at 8–10; Doc. 27-2 at 13.)
There is no
dispute that the Navy cancelled its program for Sims 1 and 2 in
January of 2012.
(Doc. 27-1 at 59.)
17
There is nothing unfair or
deceptive about not extending a subcontractor relationship when
the underlying employer discontinues the work.
CEC is also correct that Plaintiffs cannot claim to have been
deceived by any positive comments or vague statements about future
expectations of work with CEC; such statements, particularly in
light of the written terms of the contractual relationship, cannot
give rise to an unfair and deceptive practices claim. Smith, 604
F. Supp. at 527, 530–31 (holding that “expressions of belief or
opinion
regarding
respective
the
businesses”
future
and
of
plaintiffs’
“promissory
and
statement[s]
defendants’
of
future
intent” do not violate the UDTPA).
Finally, for these same reasons, Topshelf cannot succeed in
claiming that it was somehow misled into upgrading Sims 1 and 2 in
reliance on CEC’s representations of further work.
There is
nothing in the record to suggest that CEC represented to Topshelf
that if it made these upgrades, it would receive further purchase
orders.
Until a purchase order was issued, no Plaintiff had any
legitimate expectation of future work.
To have hoped otherwise,
particularly based on Efird’s explanation, “[t]hat’s just how
business was done” (Doc. 30-2 at 20), simply counted chickens
before they hatched.
It fails to serve as a basis on which to
claim that CEC’s conduct was unfair or deceptive, particularly in
light of the contractual relationship between the parties.
As a
factual matter, moreover, the record reflects that these upgrades
18
were necessary in order for Topshelf to continue to carry out its
work under its purchase order for Sims 1 and 2, ending in January
of 2012.
(Doc. 27-2 at 46–50.)
Therefore,
Plaintiffs’
contentions
as
to
a
long-term
relationship lack merit, and CEC’s motion for summary judgment on
this ground will be granted as well.
III. CONCLUSION
For the reasons stated,
IT IS THEREFORE ORDERED that CEC’s motion for summary judgment
(Doc.
25)
is
GRANTED
and,
in
light
of
the
court’s
previous
dismissal of all other claims for relief (Doc. 17), this action is
DISMISSED WITH PREJUDICE.
/s/
Thomas D. Schroeder
United States District Judge
November 28, 2017
19
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