801 F.2d 536 (1st Cir. 1986), 85-1972, Ismert and Associates, Inc. v. New England Mut. Life Ins. Co.

Docket Nº:85-1972.
Citation:801 F.2d 536
Party Name:ISMERT AND ASSOCIATES, INC., Plaintiff, Appellant, v. NEW ENGLAND MUTUAL LIFE INSURANCE COMPANY, Defendant, Appellee.
Case Date:September 19, 1986
Court:United States Courts of Appeals, Court of Appeals for the First Circuit

Page 536

801 F.2d 536 (1st Cir. 1986)

ISMERT AND ASSOCIATES, INC., Plaintiff, Appellant,



No. 85-1972.

United States Court of Appeals, First Circuit

September 19, 1986

Heard March 3, 1986.

Gordon T. Walker with whom John Traficonte and McDermott, Will & Emery, Boston, Mass., were on brief for plaintiff, appellant.

Robert E. Sullivan, Boston, Mass., with whom David P. Novello, Lexington, Mass., and Palmer & Dodge, Boston, Mass., were on brief for defendant, appellee.

Before COFFIN and BREYER, Circuit Judges, and MALETZ, [*] Senior Judge.

MALETZ, Senior Judge.

Plaintiff-appellant Ismert & Associates, Inc. (Ismert) appeals from the district court's entry of summary judgment on behalf of defendant-appellee New England Mutual Life Insurance Company (NEL) and from the subsequent denial of Ismert's motion for relief from judgment. We affirm.

Page 537

I. Introduction

This case stems from the dissolution of a business relationship between Ismert and NEL. In its complaint, Ismert alleged that NEL was liable for breach of contract, unfair or deceptive trade practices, violation of the Sherman Act, and tortious interference with contract and advantageous business relationships. In addition to denying Ismert's major allegations, NEL asserted an affirmative defense of release. Ismert, in its responding papers, 1 did not deny the existence of a document purporting to be a release and executed by both parties, but contends that there are disputed issues of fact as to whether that document constitutes a release. In the alternative, Ismert argues that any release is void for duress. Finally, it argues that even assuming there is in existence a binding release, the terms of that release do not extinguish all of its claims. The district court found that Ismert had released its claims; that Ismert could not avoid the release for duress; and that the release barred all the claims raised. This appeal followed.

II. Standard of Review

To survive NEL's motion for summary judgment, Ismert must establish that there is a genuine issue of material fact requiring a trial. Matsushita Electric Industrial Co. v. Zenith Radio Corp., --- U.S. ----, ----, 106 S.Ct. 1348, 1355-56, 89 L.Ed.2d 538 (1986); see Fed.R.Civ.P. 56(c). In determining whether Ismert has met this burden, we must "determine whether any further exploration of the facts is really necessary." Johnson v. Educational Testing Service, 754 F.2d 20, 25 (1st Cir.) (quoting Packish v. McMurtrie, 697 F.2d 23, 27 (1st Cir.1983) ), cert. denied, --- U.S. ----, 105 S.Ct. 3504, 87 L.Ed.2d 635 (1985). Summary judgment is appropriate if the facts upon which Ismert relies to support its allegations are not susceptible of the interpretation it seeks to give them. Kazmaier v. Wooten, 761 F.2d 46, 49 (1st Cir.1985); see Anderson v. Liberty Lobby, Inc., --- U.S. ----, ----, 106 S.Ct. 2505, 2511, 91 L.Ed.2d 202 (1986) (standard for summary judgment is identical to standard for directed verdict; summary judgment should be granted if there can be but one reasonable conclusion); Boston Five Cents Savings Bank v. Secretary of HUD, 768 F.2d 5, 8 (1st Cir.1985) (if no reasonable person could differ about the issues in case, there is no genuine factual issue left for a jury to decide); see generally Celotex Corp. v. Catrett, --- U.S. ----, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). On the other hand, we must reverse the grant of summary judgment if issues of fact that were adequately raised below must be resolved before the legal issues may be decided. Emery v. Merrimack Valley Wood Products, Inc., 701 F.2d 985, 986 (1st Cir.1983).

As we are required to do, we view the facts in the light most favorable to Ismert, the party that opposed the motion, indulging all inferences favorable to that party. See Poller v. Columbia Broadcasting System, 368 U.S. 464, 473, 82 S.Ct. 486, 491, 7 L.Ed.2d 458 (1962); United States v. Diebold, Inc., 369 U.S. 654, 655, 82 S.Ct. 993, 994, 8 L.Ed.2d 176 (1962) (per curiam); Hahn v. Sargent, 523 F.2d 461, 464 (1st Cir.1975), cert. denied, 425 U.S. 904, 96 S.Ct. 1495, 47 L.Ed.2d 754 (1976). This standard of review applies regardless of the outcome below. Floyd v. Farrell, 765 F.2d 1, 5 (1st Cir.1985).

III. Background

  1. The Relationship Between the Parties

    NEL is a mutual life insurance company organized under Massachusetts law; Ismert, a Missouri corporation, is a property tax consulting service that identifies overappraised business properties and pursues tax reduction applications on behalf of the property owners. It earns contingency

    Page 538

    fees for successful applications. Ismert initially marketed its consulting service through various life insurance agents, including some agents from NEL. That changed in 1982, when Ismert and NEL entered into a marketing agreement that gave NEL agents the exclusive right to promote and sell Ismert's service. In connection with that agreement, NEL loaned money to Ismert and obtained an option to buy up to 50% of Ismert's common stock. NEL's General Agents were to receive 15% of Ismert's gross fees attributable to their sales of the Ismert service.

  2. Deterioration of the Relationship

    Shortly after the parties entered into these agreements, their relationship began to deteriorate. According to Ismert, NEL became concerned about the loyalty of the NEL agents and its capacity to control them, and therefore disparaged Ismert's program to the agents and coerced and dissuaded them from selling Ismert's service. Ismert also asserts that NEL violated its obligation to provide marketing support. It contends that these acts and omissions drove Ismert to the brink of bankruptcy since Ismert had severed all non-NEL sales relationships and was totally dependent on the now unproductive NEL relationship for its revenue.

    Sometime in 1983, Fred Ismert (Mr. Ismert), president of the company bearing his name, informed NEL that Ismert would not renew the exclusive marketing agreement when it expired in November 1983. He also notified NEL's assistant counsel, Mary Counihan Livingston, that because of NEL's breach of contract, Ismert would not be able to repay NEL on the terms set forth in the parties' original loan agreement. Mr. Ismert advised Ms. Livingston that if Ismert were required to make payments under the existing agreement, it would be forced to file for bankruptcy. He requested that NEL investigate Ismert's financial condition so that the parties could then agree on a new repayment schedule. According to Mr. Ismert, Ms. Livingston told him he would have to execute a release preventing Ismert from suing NEL. When Mr. Ismert responded that his company's poor financial condition was the result of NEL's own actions, Ms. Livingston allegedly retorted that Ismert would do what it was told or suffer the consequences. Auditors employed by NEL subsequently determined that Ismert's financial situation was precarious and that it could not meet its debt obligations.

  3. Negotiations on Termination of the Relationship

    In September 1983, NEL sent Ismert drafts of four proposed agreements, each indicating an effective date of May 1, 1984: a release; an agreement to terminate the exclusive agency agreement; a cancellation of the stock option agreement; and a modification and extension agreement easing Ismert's loan repayment obligations. NEL's letter accompanying these four drafts noted that it was: "RE: Rough Draft of Documents pertaining to the termination of the business relationship between Ismert and New England Life." Various modifications to the language of the four documents were proposed by each of the parties throughout the remaining months of 1983. In January 1984, Ismert proposed a substantial restructuring of the proposed loan modification agreement, and negotiations continued. On June 22, 1984, NEL sent Ismert new proposed drafts of the loan modification agreement and of the document that would cancel NEL's stock option; on July 3, 1984, it sent Ismert new drafts of the release and of the document that would terminate the exclusive agency agreement. Toward the end of July, the loan modification agreement and the stock option cancellation agreement were executed by Mr. and Mrs. Ismert and by NEL. Under the loan modification agreement, the Ismert debt was to be paid off at rates significantly lower than those originally agreed upon. 2

    Page 539

    Both before and after the signing of the stock option cancellation and loan modification agreements, the parties exchanged proposed drafts of a release. Affidavits submitted by the parties reflect disagreement over precisely what clauses in the various draft releases were the subject of contention. Mr. Ismert's affidavit indicates that the primary dispute centered around a clause in paragraph 5, insisted upon by NEL, providing that "nothing herein shall be construed to prevent NEL from designating the products and services which its fieldforce shall sell." Mr. Ismert feared that such a provision would preclude NEL agents from marketing Ismert's services on a non-exclusive basis after termination of the exclusive marketing agreement. Ms. Livingston's affidavit indicates that, to the contrary, the dispute concerned language allegedly added by Mr. Ismert to a portion of paragraph 5 that barred the parties from making libelous statements against each other. It appears that there was no substantial dispute over any clauses in the draft releases other than these two.

    In July 1984, Ismert's counsel, Larry Welch, made handwritten changes on a draft proposed by NEL, 3 including the addition of language at the end of paragraph 5 indicating that nothing in the release would prevent Ismert from marketing its services through anyone not a party to the release. Following receipt...

To continue reading