Bright v. QSP, INC., Civ. A. No. 2:90-0039.
| Decision Date | 28 August 1992 |
| Docket Number | Civ. A. No. 2:90-0039. |
| Court | U.S. District Court — Southern District of West Virginia |
| Parties | William T. BRIGHT, Ed King, Dee Barwick, Lowell Lawson, Frank Jorgensen, Plaintiffs, v. QSP, INC., Defendant. |
F.T. Graff, Jr., Bowles, Rice, McDavid, Graff & Love, Charleston, W.Va., for plaintiffs.
Larry A. Winter and Charles L. Woody, Spilman, Thomas, Battle & Klostermeyer, Charleston, W.Va., for defendant.
Pending is the motion by QSP, Inc. for summary judgment. The Court GRANTS the motion as to Count One, which asserts a breach of contract claim and DENIES the motion on the remaining issues. The Court further bifurcates Count Seven from the trial of the remaining issues. Count Seven alleges a breach of a July, 1986 contract and the issue raised there is separate, distinct and not germane to other counts in the amended complaint. The Plaintiffs' remaining causes of action based upon promissory estoppel, misrepresentation, interference with prospective relations and unjust enrichment will proceed to trial.
Under Rule 56(c), Federal Rules of Civil Procedure, summary judgment is proper only:
"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 summary judgment as a matter of law."
A principal purpose of summary judgment is to isolate and dispose of meritless litigation. Celotex Corp. v. Catrett, 477 U.S. 317, 324, 106 S.Ct. 2548, 2553, 91 L.Ed.2d 265 (1986). The party moving for summary judgment has the burden to show initially the absence of a genuine issue concerning any material fact. Adickes v. S.H. Kress & Co., 398 U.S. 144, 159, 90 S.Ct. 1598, 1609, 26 L.Ed.2d 142 (1970). However, once the moving party has met its initial burden, the burden shifts to the nonmoving party to "establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex Corp. v. Catrett, 477 U.S. at 322, 106 S.Ct. at 2552. To discharge this burden, the non-moving party cannot rely on its pleadings, but instead must have evidence showing that there is a genuine issue for trial. Id. at 324, 106 S.Ct. at 2553.
The relevant facts necessary to resolve the Defendant's motion for summary judgment on Count One are not in dispute. The individual Plaintiffs were shareholders of Bright of America, Inc. (BOA). William T. Bright (Bright) started BOA and owned in excess of 80% of its stock during the events giving rise to this litigation. BOA enjoyed a long-standing business relationship with QSP, a wholly owned subsidiary of the Readers' Digest Association, Inc. QSP is engaged in the business of providing organizations fund raising programs such as selling magazine subscriptions, food or gifts. BOA supplied QSP with gift products for distribution to various groups engaged in fund raising activities.
During the Fall of 1988, Bright, through BOA, sought a joint venture partner. Bright did this so he could devote more time to his other interests. BOA, through Bright and Frank Jorgeson, BOA's president, met with Tom Belli, president of QSP on November 3, 1988, to discuss a proposal for a joint venture. Jorgeson and Herb Horn, QSP's vice president, met subsequently in January, 1989, on the same subject. On February 10, 1989, BOA submitted a written proposal for joint venture to QSP.
On February 22, Belli and Horn telephoned Jorgeson and Bright. At the time QSP was having difficulty with Allegro, a supplier of food-gift products based in Georgia. Allegro appeared to be on the verge of going out of business, leaving QSP with fund raising contracts to fulfill and no certain source for supplying the food-gift products. During the phone conversation BOA agreed to accept Allegro's inventory and to undertake fulfillment of Allegro's product line for QSP. The next day QSP and BOA met to discuss the joint venture and BOA's receipt and processing of Allegro's inventory. More meetings occurred over the next several days with representatives of QSP, BOA and Allegro all participating.
On March 23 and 24 QSP discussed with its parent company, The Readers' Digest, the relationship established with BOA. QSP then informed BOA that The Readers' Digest sought an 80% interest in the joint venture. Subsequently, accountants and consultants of QSP visited BOA to review its finances and accounting procedures.
On May 25 and 27 Bright and Herb Horn met at The Greenbrier in West Virginia to negotiate the joint venture. Bright and Horn discussed a price of 7.5 million dollars for QSP's 80% of the joint venture. The projected closing of the deal was scheduled tentatively for July or August, 1989. It contemplated a stock transfer from BOA to QSP on June 30, 1991.
Subsequent to these negotiations, QSP and BOA failed to enter into any formal contract memorializing the terms and conditions of the joint venture. The two entities, however, did continue to conduct business which included distribution of the Allegro inventory and the distribution of gifts pursuant to a previously entered written contract.
On August 4, 1989, Bright sent a letter to QSP purportedly to "memorialize" the agreements between BOA and QSP regarding the purchase and joint venture. Ten days later, Belli sent Bright QSP's response to the purported "memorialization" of the agreement. Belli adamantly denied that an agreement had been reached but recognized that the parties were engaged in discussions regarding the sale of 80% of BOA to QSP. Belli further stressed that QSP could not enter into the letter agreement as submitted by Bright due to the magnitude and complexity of the proposed joint venture. Moreover, Belli opined that the legal departments of both BOA and QSP would have to agree upon "all terms and conditions, wording, timing and a dozen other things."
In Count One, Plaintiffs assert a cause of...
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Bright v. QSP, Inc.
...the QSP-BOA deal. On August 28, 1992, the district court granted QSP's motion for summary judgment on the breach of oral contract claim. 798 F.Supp. 360. At the close of BOA's case at trial, the court also granted QSP's motion for judgment as a matter of law on the interference with contrac......