City of Warrensburg, Mo. v. RCA Corp., 80-0993-CV-W-1.

• Citation: 571 F. Supp. 743
• Decision Date: 19 August 1983
• Docket Number: No. 80-0993-CV-W-1.,80-0993-CV-W-1.
• Parties: CITY OF WARRENSBURG, MISSOURI, and Industrial Development Authority of the City of Warrensburg, Missouri, Plaintiffs, v. RCA CORPORATION, CIT Financial Corporation and All-Steel, Inc., Defendants.
• Court: United States District Courts. 8th Circuit. Western District of Missouri

571 F. Supp. 743

CITY OF WARRENSBURG, MISSOURI, and Industrial Development Authority of the City of Warrensburg, Missouri, Plaintiffs, v. RCA CORPORATION, CIT Financial Corporation and All-Steel, Inc., Defendants.

No. 80-0993-CV-W-1.

United States District Court, W.D. Missouri, W.D.

August 19, 1983.

Thomas J. Conway, Thomas A. Sweeny, Michael J. Maloney, Popham, Conway, Sweeny, Fremont & Bundschu, P.C., Kansas City, Mo., for plaintiffs.

Karl F. Schmidt, Morrison, Hecker, Curtis, Kuder & Parrish, Kansas City, Mo., Joanne M. Gentile, New York City, for defendants.

MEMORANDUM OPINION AND ORDERS GRANTING DEFENDANTS' MOTION FOR SUMMARY JUDGMENT IN REGARD TO FIRST AMENDED COMPLAINT

JOHN W. OLIVER, Senior District Judge.

This case pends on defendants' motion for summary judgment, filed in regard to all eight counts of plaintiffs' First Amended Complaint filed by leave of Court on January 26, 1983. In the alternative, defendants seek partial summary judgment with regard to various items of alleged damages.

For reasons we shall state in detail, defendants' motion will be granted and the Clerk will be directed to enter final judgment in favor of defendants with regard to all eight counts of the First Amended Complaint.

I. Procedural History

On November 10, 1982 we granted in part defendants' summary judgment motion in regard to the original petition removed to this Court from the Circuit Court of Jackson County, Missouri. See Memorandum Opinion and Order Granting Defendants' Motion for Summary Judgment in Regard to Count I and Orders Directing Further Proceedings reported at 550 F.Supp. 1364. In that Memorandum Opinion, we fully stated our reasons for concluding that summary judgment should be granted in favor of defendants with respect to Count I of the original petition (alleging breach of contract against defendant All-Steel).

We also directed further proceedings consistent with SuperTurf, Inc. v. Monsanto Co., 660 F.2d 1275 (8th Cir.1981) in regard to Counts II and III of the original petition (alleging tortious interference against defendants CIT and RCA and negligent misrepresentation against defendants All-Steel and CIT) and in regard to each of the eight counts of plaintiffs' proposed first amended complaint.

Pursuant to Order (5) of that November 10, 1982 Memorandum Opinion and Orders, counsel contacted the Court to convene a pretrial conference on November 30, 1982. At that conference, counsel agreed upon procedures designed to afford all parties a full and fair opportunity to present their respective legal contentions in regard to the factual circumstances presented in this case. Accordingly, on December 13, 1982, we entered Orders Denying Motion to Compel, Granting Leave to File First Amended Complaint and Directing Further Proceedings in a manner agreeable to all parties. Pursuant to those Orders, plaintiffs filed the pending First Amended Complaint and Brief in Support of Plaintiffs' First Amended Complaint on January 26, 1983 and the pending motion for summary judgment.

II. The First Amended Complaint

Order (2) of our December 13, 1982 Orders Directing Further Proceedings provided that "on or before January 26, 1983 plaintiffs will be permitted to file their First Amended Complaint, the first three (3) counts of which shall be identical to the first three counts of plaintiffs' pending complaint and which shall set forth in additional counts such other claims as plaintiff shall choose to allege under the circumstances." Plaintiffs did, however, add two new paragraphs to the "Allegations Common to All Counts," alleging as follows:

16. The aforesaid application for a UDA Grant was in writing and was duly authorized by the City Council by passage of appropriate ordinance.

17. At all times pertinent to this action, defendants, acting through their duly authorized agents, servants and employees represented and held out to plaintiffs that:

(a) All-Steel and CIT intended to perform the commitments set forth in the UDA Grant Applications filed by the City of Warrensburg with the Department of Housing and Urban Development upon the sole condition that said application be approved by HUD;

(b) All-Steel and CIT could and would perform the commitments set forth in the UDA Grant Applications filed by the City of Warrensburg with the Department of Housing and Urban Development without first obtaining the approval of RCA; and

(c) All-Steel and CIT continued to intend to perform the commitments set forth in the UDA Grant Applications filed by the City of Warrensburg with the Department of Housing and Urban Development even though CIT had merged with a subsidiary of RCA.

Counts II and IV of the First Amended Complaint are entitled "Malicious Interference." However, Count II alleges interference with contract against defendants RCA and CIT, while Count IV alleges interference with an "on-going business relationship," only against defendant RCA. Similarly, both Counts III and V are entitled "Negligent Misrepresentation." Count V, however, incorporates by reference the specific alleged misrepresentations set forth in paragraph 17 (not 16, as Count V erroneously provided) of the "Allegations Common to All Counts." Moreover, Count V, allegedly based upon § 552 of the Restatement (Second) of Torts Pls. Brief at 5, expands the allegations of Count III to allege not merely detrimental reliance upon misrepresentations, but also alleged that "said representations were made for the guidance of plaintiffs in their on-going business and contractual relationship with defendants CIT and All-Steel and for the guidance and support of plaintiffs in their application for a UDA Grant from HUD."

Count V further alleged that:

5. Defendants All-Steel and CIT failed to exercise reasonable care in obtaining and communicating that information to plaintiffs in that, among other reasons, they failed to use reasonable care to determine whether their ability to fulfill their commitments to plaintiffs would be affected by CIT's merger with a subsidiary of RCA and inform plaintiffs of this fact at any time; (2) sic they failed to inform plaintiffs that they would withdraw from the Warrensburg project because of deteriorations in the national economy; (3) said defendants failed to inform plaintiffs what constituted a change in economic conditions that would precipitate their withdrawal from the Warrensburg project; and (4) said defendants failed to inform plaintiffs of the direction of RCA not to proceed further with the Warrensburg project.

Count VI of the First Amended Complaint, entitled "Fraud," similarly alleges that defendants CIT and All-Steel made the representations set forth in paragraph 17 (not 16) of the "Allegations Common To All Counts," and that:

4. The aforesaid representations were false and defendants All-Steel and CIT and each of them knew that the aforesaid representations were false when made. Despite this knowledge, defendants conspired to deceive plaintiffs and made such representations knowingly, willfully, intentionally, deliberately and maliciously to induce plaintiffs to spend money for the purchase and preparation of and improvements to the permanent and temporary sites of defendants' proposed facilities in Warrensburg and applying for a UDA Grant as aforesaid.

5. At the time defendants made the representations described above, both CIT and All-Steel had the intent not to perform as they represented to plaintiffs.

Count VII, entitled "Prima Facie Tort," is directed against "all defendants" and alleges that defendants' actions "in causing All-Steel and CIT to withdraw from the Warrensburg project" were done "intentionally, knowingly, willfully and maliciously, after internal analysis and considered decision" and were without just cause and excuse "because, among other reasons, All-Steel needed the Warrensburg facilities immediately so that it could meet its pending orders and maintain its position in the market place." Count VIII, entitled "Promissory Estoppel," is directed against defendants All-Steel and CIT and based upon Restatement of Contracts, § 90. Pls. Brief at 8-9

The First Amended Complaint attached exactly the same exhibits that were attached to plaintiffs' original petition. Exhibit 1 is a letter dated November 29, 1979 from Robert L. Strawbridge, Chairman of the Board of All-Steel, to Mayor Hudson of the City of Warrensburg. Exhibit 2 is a letter dated January 14, 1980 from Strawbridge to Wallace May, Esq., of the Department of Housing and Urban Development HUD. Exhibit 3 is a letter dated January 31, 1980 from Thomas E. Rice of All-Steel to Mr. Ervin E. Borchers, Vice President of Borchers and Heimsoth Construction Co., Inc. Exhibit 4 is a CIT resolution dated January 31, 1980. Exhibit 5 is an All-Steel resolution of same date.

In our November 10, 1982 Opinion, we noted that plaintiffs had made no claim in their original petition for restitution of any out-of-pocket expenses. 550 F.Supp. at 1375 We now note that plaintiffs have not made any such claim in their First Amended Complaint.

III. Defendants' Motion for Summary Judgment And Plaintiffs' Suggestions In Opposition

Rule 56(e) of the Federal Rules of Civil Procedure provides:

When a motion for summary judgment is made and supported as provided in this rule, an adverse party may not rest upon the mere allegations or denials of his pleading, but his response, by affidavits or as otherwise provided in this rule, must set forth specific facts showing that there is a genuine issue for trial. If he does not so respond, summary judgment, if appropriate, shall be entered against him.

See United States v. Farmers Cooperative Co., 708 F.2d 352 (8th Cir.1983), for a case affirming summary judgment pursuant to Rule 56(e) because appellant did not meet "its burden of generating a fact issue on ... its affirmative defense of waiver and estoppel."

Defendants appropriately set forth fifteen specific facts as to which they contend there can be no...