Bolen v. Paragon Plastics, Inc., Civ. A. No. 90-10095-C.

• Decision Date: 20 December 1990
• Docket Number: Civ. A. No. 90-10095-C.
• Citation: 754 F. Supp. 221
• Parties: Robert J. BOLEN, Jr., Plaintiff, v. PARAGON PLASTICS, INC., Gilbert Beinhocker, and Risdon Corporation, Defendants.
• Court: U.S. District Court — District of Massachusetts

754 F. Supp. 221

Robert J. BOLEN, Jr., Plaintiff, v. PARAGON PLASTICS, INC., Gilbert Beinhocker, and Risdon Corporation, Defendants.

Civ. A. No. 90-10095-C.

United States District Court, D. Massachusetts.

December 20, 1990.

Stuart T. Rossman, Lee H. Glickenhaus, Gaston & Snow, Boston, Mass., for plaintiff.

John Phillips Connelly, Hutchins & Wheeler, Marc K. Temin, Foley, Hoag & Eliot, Boston, Mass., for defendants.

MEMORANDUM

CAFFREY, Senior District Judge.

This case is before the Court on the defendant's, Gilbert Beinhocker ("Beinhocker"), motion for summary judgment. Fed.R.Civ.P. 56. Jurisdiction is founded upon diversity of citizenship, and the amount in controversy exceeds $50,000. The plaintiff, Robert J. Bolen ("Bolen"), brought this action against defendant, Paragon Plastics, Inc. ("Paragon") and Paragon's Chief Executive Officer, Beinhocker, alleging breach of their Sales Representative Agreement ("Agreement"). Defendant, Paragon, then counterclaimed for breach of contract and for a declaratory judgment. The complaint also contained three counts against Risdon Corporation ("Risdon"), a company that purchased certain assets from Paragon. On September 25, 1990, this Court granted Risdon's motion to dismiss as to all three claims against it for failure to state a claim for which relief could be granted. Beinhocker now moves for summary judgment as to both claims against him for fraud and for violation of Mass.Gen.L. ch. 93A. In connection with this motion, Beinhocker has moved to strike portions of Bolen's affidavit. Upon consideration, Beinhocker's motion for summary judgment should be denied.

I.

Defendant, Paragon, is a Massachusetts corporation engaged in the manufacture and sale of molded plastic products. By an Agreement dated April 1, 1985, plaintiff, Bolen, became a sales representative for Paragon. The Agreement states that Bolen would act in the capacity of an independent contractor. The Agreement also states that Bolen is to use his best efforts to solicit and obtain orders for the purchase of Paragon's products. The Agreement contained a list of the only companies from which Bolen could solicit orders. Under the terms of the Agreement, Paragon was to pay Bolen a commission based upon a percentage of the orders he obtained from the specified companies.

Working under this Agreement, Bolen obtained new business for Paragon, including what the amended complaint deems the "Wisk Account," which called for the production of plastic spouts and closures for "Wisk," a product manufactured by Lever Brothers Corporation ("Lever Brothers"). Bolen's amended complaint states that he spent substantial time and money over the course of approximately three years to obtain the Wisk Account, an account that he alleges was worth at least 4-5,000,000 dollars annually to Paragon. Such plastic closures, it is alleged, are used in the industry for seven to ten years, giving the Wisk Account an anticipated value over the life of the closure of 28-50 million dollars.

The amended complaint alleges that Beinhocker and Risdon directly negotiated the sale between Paragon and Risdon. According to Bolen's affidavit, in the spring of 1989, he had several telephone conversations with Beinhocker during which Beinhocker assured Bolen that if Paragon sold the Wisk Account, Bolen would receive the commissions to which he was entitled. (Bolen affidavit, ¶ 6). Further, Bolen's affidavit states that on May 4, 1989, it was requested that Bolen participate in a meeting with Risdon, representatives from Lever Brothers and Paragon, at which time the transfer of the Wisk Account from Paragon to Risdon was discussed. (Bolen affidavit, ¶¶ 7, 8).

According to Bolen's affidavit, Bolen again met with Beinhocker on May 10, 1989 to discuss Beinhocker's promises, and the assurances at the May 4 meeting that Bolen would be compensated for facilitating the transfer. (Bolen affidavit, ¶ 13). Bolen alleges that at the May 10 meeting, Beinhocker told Bolen that he would pay Bolen "high five figures" as compensation for his acquiescence to, and assistance in, facilitating the sale of the Wisk Account to Risdon. (Amended Complaint, ¶ 14). Beinhocker denies having made such a statement. (Beinhocker affidavit, ¶ 8). He admits, however, that he and Bolen engaged in "salesmen bantering" during which he told Bolen that as a Paragon employee, he might receive a bonus if Paragon received a high price from Risdon. (Answer to Interrogatory 7). Bolen states that he relied on Beinhocker's representations by working to facilitate the sale to Risdon, actions he would not have taken absent Beinhocker's promises. (Bolen affidavit, ¶ 16). The negotiations between Paragon and Risdon eventually culminated in the sale to Risdon of the Wisk Account and other Lever Brothers accounts on June 9, 1989 for $2,000,000. Bolen instituted this action on January 12, 1990, and on January 22, 1990, he received a letter from Beinhocker, purporting to terminate the Agreement.

Bolen asserts ten claims against the two remaining defendants arising out of these facts. Bolen asserts two claims against Beinhocker for fraud and for unfair and deceptive trade practices. In addition, he maintains eight claims against Paragon. His first claim is one for breach of the Agreement for failure to pay commissions that he would otherwise have received had Paragon not sold the account to Risdon. Bolen alleges that these commissions would have amounted to at least $750,000. Bolen's remaining seven counts against Paragon are as follows: breach of an implied duty of good faith and fair dealing; quantum meruit; promissory estoppel; fraud; declaratory judgment; breach of the Agreement for purportedly terminating on January 22; and unfair and deceptive trade practice.

II.

Defendant, Beinhocker, has moved for summary judgment as to Bolen's claims against him for fraud and for violation of Mass.Gen.L. ch. 93A. Summary judgment is appropriate "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). The moving party bears the initial burden of demonstrating the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265 (1986); Adickes v. S.H. Kress & Co., 398 U.S. 144, 157, 90 S.Ct. 1598, 1608, 26 L.Ed.2d 142 (1970). The moving party may satisfy this burden by showing that there is an absence of evidence to support the non-moving party's case. Celotex, 477 U.S. at 325, 106 S.Ct. at 2553.

Only after the moving party has met its burden of coming forward with proof of the absence of any genuine issue of material fact does the party opposing the motion bear the burden of responding. Id. at 321, 106 S.Ct. at 2551; Adickes, 398 U.S. at 159-60, 90 S.Ct. at 1609. The opposing party may not rest upon the mere allegations or denials in its pleading, but must respond with affidavits or otherwise to show the existence of a genuine issue for trial. Fed.R.Civ.P. 56(e); Adickes, 398 U.S. at 159-60, 90 S.Ct. at 1609. A dispute about a material fact is a "genuine issue" if the evidence is such that a reasonable jury could return a verdict for the non-moving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48, 106 S.Ct. 2505, 2509-10, 91 L.Ed.2d 202 (1986). On summary judgment, the inferences to be drawn from the underlying facts must be viewed in the light most favorable to the non-moving party. United States v. Diebold, Inc., 369 U.S. 654, 655, 82 S.Ct. 993, 994, 8 L.Ed.2d 176 (1962). In light of this standard, this Court shall examine the plaintiff's claims against Beinhocker.

A. Motion to Strike

It is first necessary to address Beinhocker's motion to strike portions of Bolen's affidavit pursuant to Fed.R.Civ.P. 12(f). A party may move to strike any portion of an affidavit that violates Fed.R. Civ.P. 56(e). Lacey v. Lumber Mut. Fire Ins. Co. of Boston, 554 F.2d 1204, 1205 (1st Cir.1977) (quoting Wright, Miller & Kane, Federal Practice and Procedure: Civil 2d § 2738 (1983)). Hearsay evidence which would be inadmissible at trial cannot be considered on a motion for summary judgment. Garside v. Osco Drug, Inc., 895 F.2d 46, 50 (1st Cir.1990). A court will disregard only the inadmissible portions of an affidavit of which portions have been stricken. Beinhocker points to five paragraphs in the affidavit that he alleges are either conclusory or constitute hearsay. Even if all five portions of the affidavit were stricken, this Court's decision to deny Beinhocker's motion for summary judgment would not be altered for the reasons stated below in the discussion of the fraud claim. Nonetheless, for purposes of addressing Beinhocker's motion to strike, each of these paragraphs will be briefly addressed in light of the limited factual record before the Court at this stage of the litigation.

1. Paragraph ten of Bolen's affidavit states that "At this meeting, in relation to the possible sale of the Wisk Account, representatives of Lever Brothers asked `what about the Bolens?'" Beinhocker attacks this paragraph on the grounds that it constitutes hearsay. Hearsay is an oral or written assertion used to prove the truth of the matter asserted. Fed.R.Evid. 801. According to the very definition of hearsay, an inquiry is not an assertion, and therefore does not constitute hearsay. United States v. Lewis, 902 F.2d 1176, 1179 (5th Cir.1990); Inc. Publishing Corp. v. Manhattan Magazine, 616 F.Supp. 370, 388 (S.D.N.Y.1985), aff'd, 788 F.2d 3 (2d Cir.1986); see United States v. Vest, 842 F.2d 1319, 1330 (1st Cir.), cert. denied, 488 U.S. 965, 109 S.Ct. 489, 102 L.Ed.2d 526 (1988). Furthermore, the plaintiff is correct in arguing that the statement is not being used to prove the truth of the matter asserted.

2. Similarly, Beinhocker attacks...