Havepower, LLC v. General Electric Co.

• Decision Date: 24 January 2002
• Docket Number: No. CIV.A. DKC 2001-0353.,CIV.A. DKC 2001-0353.
• Citation: 183 F.Supp.2d 779
• Parties: HAVEPOWER, LLC v. GENERAL ELECTRIC CO., et al.
• Court: U.S. District Court — District of Maryland

183 F.Supp.2d 779

HAVEPOWER, LLC v. GENERAL ELECTRIC CO., et al.

No. CIV.A. DKC 2001-0353.

United States District Court, D. Maryland.

January 24, 2002.

COPYRIGHT MATERIAL OMITTED

Leslie K. Dellon, Lepon, McCarthy, White & Holzworth, PLLC, Washington, DC, for plaintiff.

James L. Thompson, Joseph P. Suntum, Maury S. Epner, Miller, Miller & Canby, Rockville, MD, for defendants.

MEMORANDUM OPINION

CHASANOW, District Judge.

Plaintiff havePOWER, LLC asserts that General Electric Fuel Cell Systems ("GE Fuel Cell Systems" or "GEFCS") breached their distribution contract and violated Maryland Antitrust laws. havePOWER asserts that GE Fuel Cell Systems' parent company General Electric ("GE") induced GE Fuel Cell Systems to breach its contract and violated Maryland Antitrust laws by merging with Honeywell. Pending before the court and ready for resolution is the motion by Defendants General Electric Fuel Cell Systems and General Electric to dismiss pursuant to Fed.R.Civ.P. 12(b)(6) on the grounds that havePOWER failed to state any actionable claims. No hearing is deemed necessary, and the court now rules pursuant to Local Rule 105.6. For the reasons that follow, the court shall grant the motion in part and deny it in part.

I. Background

The following recitation is taken from facts alleged in Plaintiff's complaint. This case arises out of a dispute over an alleged exclusive distributorship agreement between havePOWER and GE Fuel Cell Systems, LLC, to sell fuel cells in the Washington, DC, Maryland and Northern Virginia region.¹ Fuel cell electric generators produce direct electric current that can be converted to alternating current for use by homes and industries. havePOWER was established as a division of Chesapeake Design, LLC, a Maryland company, in 1998. It became a District of Columbia limited liability company in December 1999 and was reformed as a Maryland limited liability company in August 2000. In February 1999, GE Power Systems formed GE Fuel Cell Systems to market and distribute fuel cells designed and manufactured by Plug Power, Inc. GE Fuel Cell Systems is co-owned by GE (75% share) and Plug Power, Inc. (25% share). GE Fuel Cell Systems owns the worldwide marketing and distribution rights, except for four Midwestern states, for all Plug Power fuel cell generators of up to 35 kW generating capacity. It has contracted with third parties to license the distribution, service, installation and maintenance of fuel cell systems worldwide.

On October 28, 1999, havePOWER completed an on-line application on a website to become a Distributor, Installer, and Servicer of Plug Power fuel cells. On November 16, 1999, havePOWER received a response advising it that a representative would contact havePOWER shortly. Jay Zawatsky, Chief Executive Officer of havePOWER, e-mailed Laura Chummers of GE MicroGen on January 6, 2000 to notify her that havePOWER had not yet received a response to its dealer application filed in early November. The next day, January 7, 2000, Zawatsky received a phone call from Richard Robertson, Director of North American Market Development for GE MicroGen, Inc., who outlined five capabilities havePOWER would need to demonstrate in order to become an exclusive distributor for GE's fuel cell products. These were: (1) management and installation capability; (2) financial capability; (3) a source of fuel through a strategic alliance withe a natural gas/propane supplier; (4) market presence; and (5) a vision for the future of fuel cells. He also stated that an exclusive distributor must pay a fee between $200,000 and $2,000,000 to purchase the distributorship, purchase 10 commercial fuel cell units at a unit price of $35,000, and meet mandatory annual sales quotas ranging from 300 to 2,000 fuel cells at a unit price of $8,000.

In order to comply with those prerequisites, havePOWER secured a supply of natural gas and propane from Power-Trust, signing a letter of intent on February 11, 2000. On February 15, 2000, havePOWER's executives met with Robertson at GE Fuel Cell Systems headquarters in New York and presented a strategic plan outlining their company profile and their capability to be an exclusive distributor, installer, and servicer. At the close of havePOWER's presentation, Robertson stated that GE Fuel Cell Systems would negotiate with havePOWER to become the exclusive GE Fuel Cell Systems fuel cell distributor, installer, and servicer in almost all of Maryland, the District of Columbia and Northern Virginia.

As a precondition to GE Fuel Cell's issuance of a Memorandum of Understanding, havePOWER executed a Confidential Information Agreement (CIA) on March 12, 2000 and faxed it to Robertson. havePOWER states this was not signed by GEFCS and has submitted a copy of the CIA. Paper No. 2, Ex. A.

Robertson informed Zawatsky on March 21, 2000 that negotiation of a definitive Distributor Agreement would begin soon. Zawatsky returned a signed copy of the Memorandum of Understanding (MOU) to Robertson on March 23, 2000. Robertson faxed a draft definitive Distributor Agreement to Zawatsky on March 31, 2000. The parties began to negotiate the terms of the Agreement and havePOWER asserts that during the negotiations Robertson "held himself out as having actual authority to negotiate the terms". Paper No. 2, ¶ 38. havePOWER states that both Robertson and Glickman, President of GEFCS, had the authority to bind GEFCS because Glickman expressly represented to havePOWER. at a meeting on May 4, 2000 that Robertson had the authority to speak for GEFCS and to contract with havePOWER. Paper No. 2, ¶ 41. havePOWER asserts that this authority is what it relied on in its dealings with GEFCS and its own potential clients. It also asserts that Robertson's assurances form the basis of a contract between GEFCS and havePOWER.

During that May 4 meeting, Glickman, Robertson, and Zawatsky discussed a potential deal where havePOWER would sell fuel cells to Native American tribes. On July 11, 2000, Robertson represented to havePOWER that fuel cell sales to tribes could be brokered by havePOWER and that those would be counted towards the quota requirements in the Distributor Agreement which was being negotiated. Robertson sent two final copies of the Agreement to havePOWER on July 24, 2000, asking that they be returned to GEFCS for Glickman's signature "later this week". Paper No. 2, ¶ 55. These were returned signed, along with a check for $750,000, the following day.

On August 17, 2000, Robertson asked Zawatsky for the havePOWER logo, to be used in an advertisement announcing the appointment of a new group of fuel cell distributors. Zawatsky reminded Robertson that the logo would not be finalized until havePOWER's receipt of the final, executed Distributor Agreement. Robertson assured Zawatsky that the execution of the Agreement was a "mere formality" and verbally confirmed to Zawatsky that they had a deal. Paper No. 2, ¶ 58-64. From that point on, havePOWER asserts that it relied on Robertson's representation that the deal was complete.²

Following that exchange, Robertson made a trip to havePOWER to meet with potential havePOWER clients from the National Congress of American Indians on September 21, 2000. During that meeting, havePOWER asserts that Robertson represented to havePOWER's potential clients that it was one of the exclusive distributors for GE Fuel Cell Systems. havePOWER continued its marketing efforts until Robertson notified Zawatsky on October 23, 2000 that GEFCS would not be honoring the Distributor Agreement as a result of GE's merger with Honeywell. It is undisputed that the $750,000 check tendered to GEFCS was not negotiated. A video teleconference was held on October 25, in which havePOWER alleges that Robertson admits GEFCS and havePOWER had entered into an exclusive contractual relationship.³

havePOWER asserts that, despite the fact that GEFCS was not interested in pursuing an exclusive distributorship contract with it, it contacted havePOWER's references during November. GE and GEFCS then terminated all negotiations with havePOWER on December 1, 2000.

havePOWER filed this complaint against GE and GEFCS alleging breach of contract, inducement of breach of contract, promissory estoppel and antitrust violations in the Circuit Court for Montgomery County on December 29, 2000. Defendants removed the case to this court on February 7, 2001.

II. Standard

A Rule 12(b)(6) challenge requires a court to accept all well-pled allegations of the complaint as true and to construe the facts and reasonable inferences derived therefrom in the light most favorable to the plaintiff. Ibarra v. United States, 120 F.3d 472, 473 (4th Cir.1997). Such a motion ought not be granted unless "it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957). The court, however, need not accept unsupported legal allegations, Revene v. Charles County Comm'rs, 882 F.2d 870, 873 (4th Cir.1989) or conclusory factual allegations devoid of any reference to actual events. United Black Firefighters v. Hirst, 604 F.2d 844, 847 (4th Cir.1979). Nevertheless, neither vagueness nor lack of detail is a sufficient ground on which to grant a motion to dismiss. Hill v. Shell Oil Co., 78 F.Supp.2d 764, 775 (N.D.Ill.1999) (quoting Strauss v. City of Chicago, 760 F.2d 765, 767 (7th Cir.1985)).

III. Analysis

A. Claims against General Electric ("GE")

1. Tortious Interference with Contractual Relations/Tortious Interference with Prospective Advantage

In Count I of its complaint, havePOWER alleges that GE, a third party, tortiously interfered with its contract with GEFCS. The elements of tortious interference with contract under Maryland law are:

(1) existence of a contract between plaintiff and a third party; (2) defendant's knowledge of that contract; (3) defendant's intentional interference with...