Concrete Co. v. Lambert

Decision Date01 June 2007
Docket NumberCivil Action No. 2:05cv1026-CSC.
Citation510 F.Supp.2d 570
PartiesThe CONCRETE COMPANY, Plaintiff, v. Harry E. LAMBERT, et al., Defendants.
CourtU.S. District Court — Middle District of Alabama
MEMORANDUM OPINION AND ORDER

CHARLES S. COODY, United States Chief Magistrate Judge.

I. INTRODUCTION

When business competitors join together for strategic purposes, they would be wise to structure their arrangements with an eye toward minimizing the inevitable friction which the future might bring. Absent mechanisms to turn to when bad blood grows invective, irreconcilable business disputes quickly transgress into legal quagmires. The subsequent fallout seeks in vain for a remedy, turning eventually to the courts to alleviate the impasse. Such a situation has brought the present matter before the court.

Concrete Co., Inc. v. MMC Holdings, Inc. 201 F.Supp.2d 1192, 1193 (M.D.Ala., 2001). Once again the court finds itself embroiled in a business dispute involving the same two principals — Frank Foley and Harry Lambert. In this case, the plaintiff The Concrete Company1 ("TCC"), claims that defendant Harry Lambert ("Lambert") breached his contract with it by violating a non-competition provision. TCC further argues that Carol's Contracting ("CC") is guilty of intentionally interfering with a business relationship. Carol's Contracting is a trucking company owned by Carol Lambert, Harry Lambert's wife. Finally, TCC alleges that Lambert and CC conspired to intentionally interfere with a business relationship.

The court has jurisdiction of this action pursuant to its diversity jurisdiction, see 28 U.S.C. § 1332, under which the court applies state substantive law and federal procedural law. See Erie R. Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938). Pursuant to 28 U.S.C. § 636(c)(1) and M.D. Ala. LR 73. 1, the parties have consented to the United States Magistrate Judge conducting all proceedings in this case and ordering the entry of final judgment. Now pending before the court is the defendants' motion for summary judgment filed on October 24, 2006 (doc. # 86) and the plaintiff's motion for partial summary judgment filed on February 23, 2007 (doc. # 106). After careful review and consideration of the motions for, summary judgment, and the responses and the evidentiary material filed in support of and in opposition to the motions, the court concludes that the plaintiff's motion for partial summary judgment is due to be denied, and the defendants' motion for summary judgment is due to be granted.

II. THE SUMMARY JUDGMENT STANDARD

Under FED. R. CIV. P. 56(c) summary judgment is proper "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 a judgment as a matter of law." Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).2 The party moving for summary judgment "always bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of the `pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any,' which it believes demonstrate the absence of a genuine issue of material fact." Id. at 323, 106 S.Ct. 2548. The movant may meet this burden by presenting evidence showing there is no dispute of material fact, or by showing that the nonmoving party has failed to present evidence in support of some element of its case on which it bears the ultimate burden of proof. Id. at 322-324, 106 S.Ct. 2548. If the movant succeeds in demonstrating the absence of a material issue of fact, the burden shifts to the nonmovant to establish, with evidence beyond the pleadings, that a genuine issue material to the non-movant's case exists. See Fitzpatrick v. City of Atlanta, 2 F.3d 1112, 1115-17 (11th Cir.1993); see also FED. R. CIV. P. 56(e). ("When a motion for summary judgment is made and supported ... an adverse party may not rest upon the mere allegations or denials of [his] pleading, but [his] response ... must set forth specific facts showing that there is a genuine issue for trial."). What is material is determined by the substantive law applicable to the case. Anderson v. Liberty Lobby Inc., 477 U.S, 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). A dispute of material fact "is `genuine' ... if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Id. at 248, 106 S.Ct. 2505. The non-movant "must do more than simply show that there is some metaphysical doubt as to the material facts." Matsushita Elec. Ind. Co. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). Rather, the non-movant must present "affirmative evidence" of material factual conflicts to defeat a properly supported motion for summary judgment. Anderson, 477 U.S. at 257, 106 S.Ct. 2505. If the non-movant's response consists of nothing more than conclusory allegations, the court must enter summary judgment for the movant. See Holifield v. Reno, 115 F.3d 1555, 1564 n. 6 (11th Cir.1997); Harris v. Ostrout, 65 F.3d 912 (11th Cir.1995). However, if there is a conflict in the evidence, "the [plaintiff's] evidence is to be believed and all reasonable `inferences must be drawn in his favor." Anderson, 477 U.S. at 255, 106 S.Ct. 2505; de Molina v. Merritt & Furman Ins. Agency, 207 F.3d 1351, 1356 (11th Cir.2000). After the nonmoving party has responded to the motion for summary judgment, the court must grant summary judgment if there remains no genuine issue of material fact and the moving party is entitled to judgment as a matter of law FED. R. CIV. P. 56(c). With these principles of law in mind, the court will determine now whether summary judgment is appropriate and should be granted.

III. FACTS3

The Concrete Company is a Georgia corporation involved in the ready mix concrete and sand and gravel business. (Compl. at ¶ 1). TCC is controlled by Frank D. Foley. In 1996, TCC entered the Montgomery market by purchasing a ready mix concrete business.

Harry Lambert is sixty-three (63) years old, has a high school education, arid has worked in rock quarries since he graduated from high school. When Harry met Carol, he was working at a rock quarry, and they married in 1967. In the late 1980's or early 1990's, Lambert began working in the sand and gravel business.4 In 1996, Lambert formed MMC Holdings, Inc. ("MMC Holdings"), a corporation engaged in the business of mining sand and gravel in Montgomery, Alabama. MMC Holdings mined aggregate from leased property referred to as the City Pit.

On June 5, 1997, Foley, individually and on behalf of TCC, and Lambert, individually and on behalf of MMC Holdings, entered into an agreement ("Agreement") to form a limited liability corporation, Montgomery Materials Company, L.L.C ("Montgomery Materials"). TCC provided the capital and MMC Holdings provided the assets, resulting in each entity acquiring a fifty percent (50%) ownership interest in Montgomery Materials. Montgomery Materials hired Lambert as its general manager and began mining the City Pit. Carol Lambert was hired as the bookkeeper for Montgomery Materials.

By the summer of 2000, Foley and Lambert's relationship had soured. For reasons not material to the issues in this case, TCC triggered the Buy — Sell provision contained in the Agreement that created Montgomery Materials. As a result of litigation, TCC forced a sale of Lambert and MMC Holdings' interests in Montgomery Materials to Foley and TCC.5 The buysell provision was fully realized on April 10, 2002, but was retroactively effective to January 2, 2001. Also as a result of the forced sale, Carol Lambert was also fired from her job as bookkeeper.

The Agreement contains non-competition provisions. At issue in this case is the non-competition agreement which prohibits Lambert from "engaging in the Territory in the business of excavating, mining, distributing, delivering, selling or otherwise disposing of any Product at wholesale or retail." The Territory is defined as 60 miles of the Montgomery city limits. The "Product" is defined in section 1(b) as "sand, gravel, clay, and/or topsoil." The Period is for five years.

The non-competition provision also prohibits Lambert from having any interest in, acting as an agent, broker, distributor, advisor or consultant to, or assisting any person, firm, corporation, or business in the Territory in performing prohibited activity. The parties all agree that the non-competition provision, if enforceable, became effective on January 2, 2001, and expired by its own terms on January 2, 2006.

Shortly after the forced sale, and during the period of the non-competition provision, Carol Lambert formed a trucking company which she incorporated on April 26, 2002. (Dep. Carol Lambert at 20). Carol knew that Lambert had an agreement "not to go back in the sand and, gravel business," but they "had to have an income."6 (Id.). Carol hired two drivers, although she concedes that Lambert also drove for her. She leased her trucks to Foshee Trucking which in turn would obtain jobs to haul aggregate, dispatch her trucks, and pay her a commission. (Id. at 32-33). Carol's Contracting trucks only hauled aggregate and was paid by Foshee, not the purchasers of the aggregate that her trucks hauled. Foshee Trucking also paid worker's compensation premiums for Carol's drivers, including Lambert. (Id. at 140). It is undisputed that during the applicable period of the...

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