Secure Our City, Inc. v. ECI Systems, LLC
| Decision Date | 15 March 2022 |
| Docket Number | Civil Action No. 18-12334-NMG |
| Parties | SECURE OUR CITY, INC., Plaintiff, v. ECI SYSTEMS, LLC, et al., Defendant. |
| Court | U.S. District Court — District of Massachusetts |
Timothy K. Cutler, Cutler & Wilensky LLP, Waltham, MA, for Plaintiff.
Alexander R. Zwillinger, John Nathan Cole, Patricia B. Gary, Kenney & Sams, P.C., Southborough, MA, for Defendants ECI Systems LLC, Justin Davis.
This dispute arises out of the former business relationship between Secure Our City, Inc. ("SOC" or "plaintiff") and ECI Systems, LLC ("ECI") and its Chief Executive Officer ("CEO") Justin Davis ("Davis") (collectively with ECI, "defendants"). Pending before the Court are a plethora of motions including, inter alia, cross-motions for summary judgment and a motion for judgment on the pleadings.
SOC designs and provides security systems for commercial and educational institutions. It contracted with ECI, a security systems integrator, to install such systems for several of its clients, including Cumberland Farms, Inc. ("Cumberland Farms") and UDR, Inc. ("UDR").
In July, 2017, SOC and ECI entered into a Confidentiality, Non-Compete and Non-Solicitation Agreement ("the Agreement"). The Agreement provides, in relevant part, that ECI is not to share SOC's business information with third parties and that ECI is not to solicit or seek to engage in business with customers that SOC introduced to ECI.
SOC alleges that, during its business relationship with defendants, ECI submitted fraudulent invoices seeking payment for nonexistent services and costs. SOC further alleges that ECI: (1) made false and disparaging comments about SOC to its customers, (2) disclosed confidential information to its customers and (3) sabotaged its customers’ security systems, leading to the termination of the agreement between Cumberland Farms and SOC. ECI, in turn, responds that SOC had completed its work for Cumberland Farms and that Cumberland Farms no longer chose to work with SOC due to its mismanagement of the project.
In November, 2018, SOC filed suit against ECI and Davis in this Court seeking monetary and injunctive relief due to defendants’ purported breach of the Agreement and related conduct. Defendants answered the complaint, asserted counterclaims against SOC and sought damages from UDR as a reach and apply defendant in December, 2018. Geva Barash ("Barash") was added as a third-party defendant, both individually and as manager of SOC.
The parties filed cross-motions for summary judgment in April, 2021 and plaintiff subsequently submitted two motions to strike materials that defendants had submitted in support of their motion. In August, 2021, this Court denied one of those motions to strike and allowed defendants to amend their answer but reserved consideration of the parties’ motions for summary judgment. Since that time, plaintiff has filed an additional motion for partial summary judgment, which has engendered yet another motion to strike from defendants, as well as a motion for leave to file an amended complaint in response to a motion to intervene by a third-party. Defendants have also filed a motion for judgment on the pleadings. The Court addresses each of those pending motions seriatim.
The three pending motions to strike are of two varieties. The two filed by plaintiff seek to strike portions of defendants’ motion for partial summary judgment that refer to: (1) sections of Davis’ affidavit submitted in support of that motion and (2) Barash's deposition. More specifically, plaintiff alleges that four statements contained in Davis’ affidavit go beyond the affiant's personal knowledge and that Barash impermissibly offered a legal opinion concerning the liquidated damages clause of the Agreement during his deposition. The third motion to strike, filed by defendants, is of a different sort. That motion seeks to strike plaintiff's motion for partial summary judgment because it was untimely and plaintiff purportedly failed to confer with defendants prior to its submission, in violation of the local rules of this Court. Defendants also seek to exclude that motion on the grounds that it conflates an opposition to defendants’ earlier motion for summary judgment with a stand-alone motion.
The four paragraphs of Davis’ affidavit that plaintiff seeks to strike satisfy that standard because they are based on his personal knowledge as ECI's CEO and offer lay opinions derived from that experience. Barash's deposition testimony may also be proffered because it concerns his intent as an SOC employee and does not impermissibly offer a legal conclusion. Although Barash referred to a "penalty" during his deposition, the fact that it carries a legal connotation does not forbid its use by lay witnesses. See United States v. Reda, 787 F.3d 625, 629 (1st Cir. 2015). Use of the term does not cross "the line between conclusory and descriptive terminology." Id. Defendants’ argument in opposition to plaintiff's motions to strike are persuasive and the challenged portions of the motion will not be struck.
The Court will, however, strike plaintiff's motion for partial summary judgment. Motions for summary judgment in this case were to be filed on or before April 14, 2021, more than six months before plaintiff's submission. Plaintiff neither sought nor received permission to extend that deadline. Its opposition to the motion to strike, which simply addresses the merits of the motion, fails to address that procedural shortcoming and does not attempt to explain why, even if plaintiff had to wait for defendants’ amended answer, plaintiff waited another three months to file its dispositive motion. Furthermore, the substance of the motion (i.e., the enforceability of the Agreement's liquidated damages clause) is already before the Court in defendants’ motion for summary judgment.
Accordingly, the motions to strike filed by plaintiff (Docket Nos. 159 and 160) will be DENIED and the motion to strike filed by defendants (Docket No. 192) will be ALLOWED .
Plaintiff moves for leave to file an amended complaint, voluntarily dismissing without prejudice two of its claims: wrongful interference with advantageous business and contractual relations (Count III) and defamation and commercial disparagement (Count IV).
In general, a party may amend his complaint by leave of the court, which should be "freely give[n] ... when justice so requires". Fed. R. Civ. P. 15(a)(1) ; Holbrook v. Boston Scientific Corp., 487 F.Supp.3d 100, 104 (D. Mass. 2020). Rule 15(a) gives courts broad discretion in deciding whether to allow or deny leave to amend. U.S. ex rel. Ge v. Takeda Pharm. Co., 737 F.3d 116, 127 (1st Cir. 2013). However, a more stringent standard applies when a court has entered a scheduling order under Fed. R. Civ. P. 16(b) that includes a deadline for amendments and/or supplements to the pleadings and an amendment is requested after that deadline.
In that event, a motion to amend filed outside the parameters set by the scheduling order will be granted only upon a showing of "good cause." Such an elevated standard makes perfect sense: without it, scheduling orders would be little more than aspirational statements, to be disregarded by the parties whenever compliance proves inconvenient.
Miceli v. JetBlue Airways Corp., 914 F.3d 73, 86 (1st Cir. 2019) (quotations and citations omitted).
Here, plaintiff filed the subject motion almost 30 months after the agreed-upon deadline for amendments to the pleadings. As such, plaintiff bears the burden of showing that a good cause exists to justify the late amendment. Although it is not a particularly demanding standard, plaintiff has made no effort to meet it. SOC submitted no memorandum in support of its motion which only vaguely asserts that allowance thereof will negate the pending motion to intervene and streamline the matter for trial. If the good cause standard has substance, plaintiff's bare-bones explanation is deficient.
Plaintiff's motion for leave to file an amended complaint (Docket No. 195) will be, therefore, DENIED.
Philadelphia Indemnity Insurance Company ("PIIC"), ECI's commercial general liability insurer, seeks to intervene as a matter of right or permissively pursuant to Fed. R. Civ. Proc. 24(a)(2) or Rule 24(b)(1)(B). It does so for the limited purpose of submitting a request for jury instructions and special verdict questions with respect to the claim for defamation and commercial disparagement, which PIIC believes may be covered by ECI's insurance policy.
Under Fed. R. Civ. Proc. 24(a)(2) :
a party seeking to intervene as of right must show that: (i) its motion is timely; (ii) it has an interest relating to the property or transaction that forms the foundation of the ongoing action; (iii) the disposition of the action threatens to impair or impede its ability to protect this interest; and (iv) no existing party adequately represents its interest.
Ungar v. Arafat, 634 F.3d 46, 50 (1st Cir. 2011) ; see Fed. R. Civ. Proc. 24(a)(2). Courts have repeatedly declined to find that an insurer's interest satisfies that second requirement because such an interest is contingent rather than direct. Travelers Indem. Co. v. Dingwell, 884 F.2d 629, 638 (1st Cir. 1989), and cases cited. PIIC seeks to intervene for the purpose of ensuring that any damages awarded to SOC are properly allocated among the claims to avoid post-trial disagreement between insurer and insured. That, however, is "not directly...
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