Alphas Co., Inc. v. Kilduff

• Citation: 72 Mass. App. Ct. 104,888 N.E.2d 1003
• Decision Date: 20 June 2008
• Docket Number: No. 07-P-157.,07-P-157.
• Parties: THE ALPHAS COMPANY, INC. v. Thomas KILDUFF & another.<SMALL><SUP>1</SUP></SMALL>
• Court: Appeals Court of Massachusetts

888 N.E.2d 1003

72 Mass. App. Ct. 104

THE ALPHAS COMPANY, INC. v. Thomas KILDUFF & another.¹

No. 07-P-157.

Appeals Court of Massachusetts, Suffolk.

Argued January 10, 2008.

Decided June 20, 2008.

Christopher M. Morrison, Boston, for the plaintiff.

Marc C. Laredo, Boston, for Thomas Kilduff.

Valerie S. Carter, Lexington, for Tom Lange Co., Inc.

Present: GELINAS, GREEN, & KATZMANN, JJ.

KATZMANN, J.

In this appeal, we consider the factors that entitle a party opposing summary judgment to a continuance for discovery. The plaintiff, The Alphas Company, Inc. (Alphas), appeals from the entry of summary judgment in favor of the defendants, Thomas Kilduff and Tom Lange Company, Inc. (Lange), on Alphas's claim for breach of contract and various tort and statutory claims stemming from Alphas's purchase of fruit from Lange. Alphas complains that the Superior Court judge abused his discretion in denying Alphas's request to conduct discovery, pursuant to Mass. R.Civ.P. 56(f), 365 Mass. 825 (1974), prior to ruling on the defendants' summary judgment motions. Lange cross-appeals from summary judgment in Alphas's favor on Lange's counterclaim for abuse of process. We determine that Alphas should have been permitted discovery in connection with its breach of contract and related claims. In all other respects, we affirm the judgments.

Background. We summarize the facts from the summary judgment record. In May, 2001, Alphas purchased a fruit distribution company, Boston Citrus, Inc. (Boston Citrus), from Steven Abbate. Abbate became an Alphas employee, along with another former Boston Citrus employee, Joseph Sevelitte. Prior to the purchase, Lange had supplied most of Boston Citrus's fruit, and Boston Citrus was indebted to Lange for a considerable sum. By the time Alphas purchased Boston Citrus, Lange had taken over control and management of Boston Citrus, under the supervision of the defendant Thomas Kilduff, Lange's vice president of sales for its Boston office. Alphas continued to purchase most of its fruit from Lange.

In 2002, Alphas came to believe that Abbate and Sevelitte were stealing inventory. Alphas filed complaints against both.² Discovery followed, including the depositions of Abbate and Kilduff and subpoenas to three of Lange's suppliers. Ultimately, Abbate and Sevelitte paid Alphas to settle the litigation.

At some point in 2002, Alphas began to suspect that Lange was overcharging for fruit. According to Alphas, Kilduff had agreed to sell fruit to Alphas at twenty-five cents per package over Lange's cost; the defendants deny any such agreement. Alphas also suspected, as a result of discovery in the lawsuit against Abbate, that Kilduff was collecting cash payments from Abbate and engaging in other financial schemes, at Alphas's expense.

In November, 2003, Alphas filed the complaint in the instant case against Lange and Kilduff. Alphas asserted counts against Lange for breach of contract and breach of the implied covenant of good faith and fair dealing. Against both Kilduff and Lange, Alphas asserted counts for deceit, civil conspiracy, interference with business relations, conversion, and violations of G.L. c. 93A, and the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. §§ 1341 & 1346 (2000). Along with the complaint, Alphas served Lange with a request for production of documents. Lange moved for a protective order with regard to certain categories of the document request, and filed an answer and counterclaim for abuse of process and violation of G.L. c. 93A.

The Superior Court docket omits mention of several subsequent filings and their disposition that are critical to this appeal. The parties have stipulated to the existence and content of certain orders entered orally by the judge that were not entered on the Superior Court docket. Among other things, the parties have stipulated that on February 11, 2004, at a hearing on Lange's motion for a protective order, a Superior Court judge ordered all discovery barred, except for the deposition of Alphas by the defendants.

Kilduff and Lange filed motions for summary judgment on or about June 3, 2004, though Lange's motion was not recorded on the Superior Court docket. Alphas opposed the motions and sought additional discovery pursuant to Mass.R.Civ.P. 56(f).³ According to the parties' stipulation, on October 12, 2004, in response to the defendants' motion for clarification, the judge allowed Alphas and Lange a document request for invoices. The parties have also stipulated that Lange responded to Alphas's request for invoices with another motion for a protective order, but neither that motion nor Alphas's opposition were docketed. Lange did produce a computer printout purportedly representing the information contained in its invoices to Alphas.

Without ruling on Lange's motion for a protective order, the judge allowed summary judgment in favor of Lange and Kilduff on all counts, with the notation that

"[u]pon examination of the Summary Judgment record, after argument of counsel, there is no basis upon which a reasonable trier of fact could find for the plaintiff. Mere allegations of `kickbacks' in unrelated transactions do not rise to the requisite standard of proof at summary judgment that genuine and material issues of fact exist in the controversy."

The case proceeded on Lange's counterclaim for abuse of process and violation of G.L. c. 93A. The parties at that point were permitted discovery. On cross motions for summary judgment, the judge issued a memorandum of decision, ruling in Alphas's favor.

Alphas filed this appeal from the entry of summary judgment for Kilduff and Lange. Lange filed a cross-appeal from the entry of summary judgment for Alphas on the counterclaim.

Discussion. The principal issue before us is whether the Superior Court judge abused his discretion in granting summary judgment to the defendants without first allowing Alphas to conduct the discovery it requested. See generally Commonwealth v. Fall River Motor Sales, Inc., 409 Mass. 302, 307, 565 N.E.2d 1205 (1991) (refusal to grant a continuance under rule 56(f) is "set aside only upon a clear showing of an abuse of discretion"). "A continuance is appropriate if the party opposing a summary judgment motion shows that it cannot, without further discovery, `present by affidavits facts essential to justify [its] opposition.'" Ibid., quoting from Mass.R.Civ.P. 56(f). In order to avoid the disposition of the defendants' summary judgment motion without the requested discovery, Alphas must make a "minimal, threshold showing that there is a factual basis to support [its] complaint." E.A. Miller, Inc. v. South Shore Bank, 405 Mass. 95, 100, 539 N.E.2d 519 (1989). "Litigants may be denied an opportunity for discovery if their complaints and affidavits have `not made even a minimal showing warranting the requested discovery.'" Ibid., quoting from MacKnight v. Leonard Morse Hosp., 828 F.2d 48, 51 (1st Cir.1987).

Turning to Alphas's affidavit and related submissions, we assume the facts set out in the nonmoving party's summary judgment materials are true, and we make all logically permissible inferences in its favor. See Willitts v. Roman Catholic Archbishop of Boston, 411 Mass. 202, 203, 581 N.E.2d 475 (1991); Zhang v. Massachusetts Inst. of Technology, 46 Mass.App.Ct. 597, 598, 708 N.E.2d 128 (1999). See also Community Natl. Bank v. Dawes, 369 Mass. 550, 553-556, 340 N.E.2d 877 (1976). We consider Alphas's request for relief under rule 56(f), in the context of the facts Alphas must prove to make out its claims.

1. Breach of contract. Alphas claimed that it entered into an oral contract with Lange to purchase produce at twenty-five cents per package over cost. The allegation was supported by the deposition testimony of John Alphas, wherein he reported that Kilduff, Lange's vice president of sales for its Boston office, told him on several occasions that Kilduff would sell produce to Alphas at Lange's cost plus twenty-five cents per package. The existence of an oral contract and its terms was further supported by the deposition testimony of Abbate, the former Alphas employee, which was taken in the lawsuit brought against him by Alphas.⁴

Alphas's summary judgment materials thus satisfied its burden, under Mass. R.Civ.P. 56(f), of making a threshold showing that there was a factual basis to its claim that an oral contract existed between the parties.⁵ Alphas also alleged that Lange breached the terms of the oral contract by charging Alphas more than the agreed-upon twenty-five cents per package. The deposition testimony of John Alphas, indicating that Alphas suspected in 2002 that it was being overcharged, provided the requisite support under rule 56(f) for the claimed breach. But Alphas argues that the restrictions placed on discovery by the judge thwarted Alphas's ability, in opposing summary judgment, to set forth specific facts showing the extent of the breach and its damages.

In seeking a continuance under rule 56(f), Alphas sought discovery of evidence showing, among other things, information pertaining to Lange's costs in connection with produce it sold to Alphas, as well as Lange's invoices to Alphas. In response to Alphas's request, the judge permitted discovery only of Lange's invoices to Alphas. Lange responded to Alphas's interrogatory seeking all such invoices with a motion for a protective order, and produced only a computer-generated report of information contained in its invoices to Alphas. The judge, without ruling on the protective order, allowed the summary judgment motions of both defendants.

Cases addressing rule 56(f) have identified various requirements for obtaining relief. "One common reason for the denial of a continuance in this context is the irrelevance of further discovery to the issue being adjudicated in summary judgment." Commonwealth v. Fall River Motor Sales, Inc., 409 Mass. at 308, 565 N.E.2d 1205. To withstand a summary...