Campbell v. CGM, LLC
| Decision Date | 09 January 2017 |
| Docket Number | Civil No. 15-cv-088-JD |
| Citation | 2017 DNH 004 |
| Parties | Christopher Campbell v. CGM, LLC |
| Court | U.S. District Court — District of New Hampshire |
Christopher Campbell, brings this action against his former employer, CGM, LLC, asserting claims for breach of contract; fraud, deceit and misrepresentation; violation of the New Hampshire Consumer Protection Act, RSA Chapter 358-A; and unpaid wages under RSA chapter 275. CGM brought counterclaims against Campbell for breach of contract; conversion; violation of the Computer Fraud and Abuse Act, 18 U.S.C. § 1030; tortious interference with contract; punitive damages; and injunctive relief. Both Campbell and CGM have filed motions for summary judgment.
Summary judgment is appropriate when the moving party "shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). "A genuine dispute is one that a reasonable fact-finder could resolve in favor of either party and a material fact is one that could affect the outcome of the case." Flood v. Bank of Am. Corp., 780 F.3d 1, 7 (1st Cir. 2015). Reasonable inferences are taken in the light most favorable to the nonmoving party, but unsupported speculation and evidence that "is less than significantly probative" are not sufficient to avoid summary judgment. Planadeball v. Wyndham Vacation Resorts, Inc., 793 F.3d 169, 174 (1st Cir. 2015) (internal quotation marks omitted).
When considering cross motions for summary judgment, the court must "determine whether either of the parties deserves judgment as a matter of law on facts that are not disputed." Barnes v. Fleet Nat'l Bank, N.A., 370 F.3d 164, 170 (1st Cir. 2004) (internal quotation marks omitted). To do that, the court views each motion separately, taking the facts in the light most favorable to the nonmoving party and drawing inferences in the nonmoving party's favor. OneBeacon Am. Ins. Co. v. Commercial Union Assurance Co. of Canada, 684 F.3d 237, 241 (1st Cir. 2012).
Campbell previously moved to strike the declaration of Duane Szarek submitted by CGM in support of its objection to Campbell's motion for summary judgment. Campbell asserted that the declaration impermissibly provided expert opinions whenSzarek had not been disclosed as an expert witness. The court granted the motion to strike, and Szarek's declaration is not considered for purposes of the motions for summary judgment.
CGM challenges statements made by Campbell in his affidavits as presenting "sham" affidavits. Specifically, CGM states that Campbell's statements in his affidavit dated June 1, 2015, that his company, Intellinet, had billings of "approximately $250,000" and that the subject line on the check to Campbell from CGM for $5,000 "indicated that this was the bonus [he] had earned on annual earnings from 2001 - 2004" are contradicted by deposition testimony given almost a year later on April 25, 2016. CGM also asserts that most of Campbell's October 24, 2016, affidavit is a sham because Campbell "attempts to contradict his clear deposition answers to unambiguous questions without explanation."
In the First Circuit, "'[w]hen an interested witness has given clear answers to unambiguous questions, he cannot create a conflict and resist summary judgment with an affidavit that is clearly contradictory' without providing 'a clear satisfactory explanation of why the testimony is changed.'" Colburn v. Parker Hanninfin/Nichols Portland Div., 429 F.3d 325, 332 (1st Cir. 2005) (quoting Colantuoni v. Alfred Calcagni & Sons, Inc., 44 F.3d 1, 4-5 (1st Cir. 1994)). That is, "a party opposing summary judgment may not manufacture a dispute of fact bycontradicting his earlier sworn testimony without a satisfactory explanation of why the testimony has changed." Abreu-Guzman v. Ford, 241 F.3d 69, 74 (1st Cir. 2001). "A subsequent affidavit that merely explains, or amplifies upon, opaque testimony given in a previous deposition is entitled to consideration in opposition to a motion for summary judgment." Gillen v. Fallon Ambulance Serv., Inc., 283 F.3d 11, 26 (1st Cir. 2002)
The sham affidavit rule does not apply to the challenged statements from the June 1, 2015, affidavit. The affidavit was prepared before Campbell was deposed, not after. The affidavit was prepared in support of Campbell's objection to CGM's motion to dismiss and was filed as additional support for Campbell's later motion for summary judgment. Therefore, the affidavit was not prepared to manufacture a factual dispute for purposes of opposing summary judgment.
In addition, the challenged statements do not clearly contradict Campbell's deposition testimony. The affidavit says Intellinet had "billings of approximately $250,000" and Campbell's deposition testimony was that he did not know the most Intellinet had ever grossed in a year. Further, Campbell provided an adequate explanation of the differences in his Reply Affidavit, dated October 24, 2016. The statement about the bonus check is merely Campbell's interpretation of the subject line on the check.
The Reply Affidavit, dated October 24, 2016, provides an explanation of Campbell's statements about Intellinet's revenue and addresses statements made by CGM's founders in their declarations and deposition testimony. Because CGM asserts only that "most" of Campbell's affidavit is a sham, without explaining what statements clearly contradict Campbell's deposition testimony, CGM has not provided a sufficient explanation of the sham affidavit charge to permit review.
Therefore, none of the statements in Chris Campbell's affidavits are precluded as shams.
The background information is summarized from the parties' factual statements, with disputed facts noted as necessary.1
This case involves claims between Christopher "Chris" Campbell, the plaintiff, and CGM, LLC, which was founded and is operated by Chris's twin brother, Charles "Chuck" Campbell, and Chuck's business partner, Kevin Murphy. Hereafter, to avoid confusion between the Campbells, the individuals will be referred to by their first names as Chris, Chuck, and Kevin.
Chris is an electrical engineer who founded Intellinet, Inc., a telecommunications business, that operated in Massachusetts and New Hampshire. CGM was founded by Chuck, Kevin, and a third partner who is no longer with the company, and operates in Georgia. CGM originally provided consulting services to telecommunications companies and now provides data processing and software development compliance services to telephone companies. Kevin is responsible for CGM's administrative and financial functions, and Chuck is responsible for business development.
Intellinet did contract work for CGM in 2000. In early 2001, Chuck proposed that Chris become an employee of CGM. Chris was interested in Chuck's proposal. At the same time, another company, CCG Consulting, was considering acquiring CGM.
On March 27, 2001, Chuck sent Chris an email with the subject of "New Christo Proposal." In the email, Chuck said that the previous deal they had discussed was an "$180K annualpackage plus 10% of EBITDA."2 The new proposal was "$160K annual package plus 6% of EBITDA plus 10% of CCG stock." Chuck noted that he was concerned about Chris's monthly cash flow and the EBITDA payout in the first year. He explained the differences between the proposal if CGM were acquired by CCG and if it were not acquired.3 In closing Chuck wrote:
Chuck attached a spreadsheet to the email that is titled "Christo CGM deal" and is dated "3/26/2001." The spreadsheet provided projections for four years of annual salary and "EO" for each year. The projections were for "Previously Discussed Christo Deal" and "Proposed Christo Deal w/ CGM Acquisition." Chuck stated: Chuck also provided a projected stock value and explanation of the calculations. Chuck wrote: "We think we area better company with you on board and want to craft a deal that works for all of us."
In the course of the negotiations, Chris was given an employment agreement. CGM represents that the employment agreement originated with CCG Consulting and was then modified by CGM and its attorneys. CGM also states that the employment agreement was required by CCG as part of the proposed acquisition that was being considered at that time. Chuck testified during his deposition that there were different versions of the employment agreement. The acquisition by CCG did not go through.
Chris signed the employment agreement, which is dated May 24, 2001, but has an effective date of April 23, 2001.4 He testified that he gave the signed original of the agreement to Chuck. No one signed the agreement on behalf of CGM. Chris began to work at CGM on June 1, 2001.
The copy of the employment agreement that Chris produced is seven pages long and jumps from Section 8 to Section 13, which is the last section. The agreement states that it is effectiveas of April 23, 2001, and is between Chris and CGM, LLC. The agreement provides that Chris will be paid an annual salary of $170,000 in monthly installments as the base salary. In addition, Chris will "receive 10% of the annual earnings of Company (prorated in year one), to be calculated on a calendar year basis, and to be paid upon formal closure of the Company's [CGM's] annual books."
The agreement further provided that if the acquisition by CCG went through, Chris's annual salary would be reduced to $150,000 and the bonus would be transferred "to an identical percentage of Company's stock in the acquiring...
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