Tart v. Imv Energy Systems of America, Inc.

• Court: U.S. District Court — Northern District of Georgia
• Writing for the Court: Duffey
• Citation: Tart v. Imv Energy Systems of America, Inc., 374 F.Supp.2d 1172 (N.D. Ga. 2005)
• Decision Date: 31 March 2005
• Docket Number: No. 1:03 CV 1479 WSD.,1:03 CV 1479 WSD.
• Parties: Randal TART, Plaintiff, v. IMV ENERGY SYSTEMS OF AMERICA, INC., Defendant.

374 F.Supp.2d 1172

Randal TART, Plaintiff, v. IMV ENERGY SYSTEMS OF AMERICA, INC., Defendant.

No. 1:03 CV 1479 WSD.

United States District Court, N.D. Georgia, Atlanta Division.

March 31, 2005.

COPYRIGHT MATERIAL OMITTED

Gary Richard Kessler, Irvin Stanford & Kessler, Atlanta, GA, for plaintiff.

Margaret Hutchins Campbell, Anthony Craig Cleland, Ogletree Deakins Nash Smoak & Stewart, Atlanta, GA, for defendant.

ORDER

DUFFEY, District Judge.

This matter is before the Court on Plaintiff Randal Tart's ("Plaintiff") Motion for Summary Judgment [36], Defendant IMV Energy Systems of America, Inc.'s ("Defendant" or the "Company") Memorandum in Opposition to Plaintiff's Motion for Summary Judgment [43], Plaintiff's Reply Brief in Support of his Motion for Summary Judgment [48], Defendant's Motion for Summary Judgment [39], Plaintiff's Memorandum of Law in Opposition to Defendant's Motion for Summary Judgment [44], and Defendant's Reply in Support of Summary Judgment Motion [47].

I. BACKGROUND

A. The Parties

Plaintiff has a degree in Mechanical Engineering from North Carolina State University and a Masters in Business Education from Duke University. (Pl.'s Statement of Facts ¶ 1.) He has worked in the power protection industry since 1987 and was employed by C & D Industries ("C & D") for several years prior to his employment at the Company. (Id. ¶¶ 2-3.) Plaintiff was the top sales person at C & D, earning approximately $180,000 per year. (Id. ¶ 3.)

In 1998, IMV Systems ("IMV"), a Swiss company providing uninterruptible power supply ("UPS")¹ products and services, decided to enter the U.S. market. (Def.'s Statement of Facts ¶ 1.) To do so, in July 1999, IMV incorporated Defendant as a Delaware corporation doing business in the State of Georgia. (Id. ¶ 2.) In December 1999, Defendant entered into a preliminary agreement with Elox, a North Carolina company, to set up a manufacturing facility in the United States. (Id. ¶ 4.) In February 2000, Defendant acquired Power Maintenance International ("PMI"), a Texas company, to provide service and support for its U.S. products. (Id. ¶ 5.) In May 2000, Defendant entered into a letter of intent with Elox, made financial investments to set up manufacturing at Elox, and sent employees from Europe to Elox's facility. (Id. ¶¶ 6-7.) In June 2000, Defendant purchased land near PMI for a manufacturing facility. (Id. ¶ 8.)

In September 2000, General Electric ("GE") approached IMV about acquiring the company. (Id. ¶ 9.) In anticipation of the acquisition, in October 2000, GE and IMV entered into a confidentiality agreement, which prevented Defendant from making expenditures in excess of $2000 without first obtaining GE's permission, and prevented IMV from disclosing the potential acquisition. (Id. ¶¶ 10-11.) In February 2001, IMV announced GE was conducting due diligence to acquire IMV, and in July 2001, GE closed on its acquisition of IMV. (Id. ¶¶ 12-13.)

B. Plaintiff's Employment With The Company

Plaintiff was one of Defendant's first four employees in the United States, serving as Defendant's Vice President of Marketing and Sales for the eastern United States. (Def.'s Statement of Facts ¶¶ 14-15.) Plaintiff had more than twelve years of experience in the UPS industry when Defendant recruited him, including employment at Chloride Power Electronics where he aided in bringing a European product into the U.S. market. (Id. ¶¶ 18-19.) Defendant's President, Jurg Schwerzmann ("Schwerzmann"), recruited Plaintiff to join the Company. (Pl.'s Statement of Facts ¶ 6.)

Before Plaintiff signed his employment agreement in April 2000, Plaintiff met with Schwerzmann, viewed Defendant's website and traveled to Switzerland to visit IMV's factory, where he spoke with IMV's personnel and engineers. (Def.'s Statement of Facts ¶¶ 24-26.) Defendant also provided Plaintiff with materials regarding Defendant's business and products, including several press releases that Plaintiff read before signing his employment agreement. (Id. ¶¶ 27-29.) Plaintiff signed his only written employment agreement with Defendant on April 25, 2000, and began his employment on June 1, 2000. (Id. ¶¶ 30-31, 33.) The terms of Plaintiff's incentive bonus plan were not agreed upon when he started working. (Id. ¶ 35.)

After Plaintiff began his employment at Defendant, Defendant had problems getting its remaining U.S. products UL² listed, experienced delays caused by design changes, and the "Internet bubble" began to burst. (Id. ¶¶ 37-39.) In April 2001, Defendant gave Plaintiff six-months notice, as required by his employment agreement, that his employment would end in October. (Id. ¶ 40.)

C. Alleged Misrepresentations

Plaintiff alleges Defendant's representatives made numerous misrepresentations to induce Plaintiff to leave C & D to join the Company. These alleged misrepresentations concern: (1) available products for the U.S. market, (2) production facilities in the United States, (3) Defendant's financial commitment to U.S. market development, (4) Defendant's relationship with IBM, (5) Defendant's business partners, and (6) Plaintiff's benefits.

1. Existing Products In United States Market

Plaintiff claims Defendant misrepresented the products available for sale in the United States in two separate press releases. A September 22, 1999 press release states, in part:

Jurg P. Schwerzmann, chief operating officer of IMV Holding, Ltd. who will also serve as president of IMV Energy Systems of America, said "Our well planned approach to the North American market will offer potential U.S. business partners the most complete solution `model' for safe and managed power anywhere."... All IMV UPS systems are UL-listed .... SitePro is an intelligent on-line UPS family with three-phase ratings of 10-500 KVA.³

(Pl.'s Statement of Facts ¶¶ 10-11.) An October 12, 1999 press release also allegedly represented Defendant had 10-500 KVA systems for sale in the United States.

When Defendant recruited Plaintiff, the Company had, at most, only products up to 40 KVA available for sale or that were UL certified. (Def.'s Statement of Facts ¶ 21.) By September 2000, Defendant had units up to 120 KVA which were UL listed, or were in the UL-listing process. Being in the listing process enabled Defendant to market them as listed. (Def.'s Statement of Facts ¶¶ 21, 34.) Plaintiff claims a lack of a complete product line and UL certification made Defendant's products difficult to sell. (Pl.'s Resp. to Def.'s Mot. for Summ. J. at 7.)

Plaintiff also asserts Defendant's SitePro line of products were not FCC compliant. (Pl.'s Resp. to Def.'s Mot. for Summ. J. at 7.) This allegedly contradicts Defendant's Site Pro literature, given to Plaintiff while he was being recruited, that stated the Site Pro product complied with FCC requirements. According to Plaintiff, the lack of FCC compliance made the products difficult to sell. (Id.)

2. North Carolina Facility

Plaintiff claims he was told by Schwerzmann and the Company that Defendant had a North Carolina manufacturing facility. (Pl.'s Opp. to Def.'s Mot. for Summ. J. at 8.) A press release dated May 22, 2000, states, in part:

In addition to establishing a manufacturing facility in North Carolina, IMV recently announced that Mesquite, Texas-based power maintenance international (PMI) would provide global maintenance services for IMV products.

(Pl.'s Statement of Facts ¶ 21.) Plaintiff claims having a United States manufacturer was important to Plaintiff from a sales perspective because of "reduced lead time" for manufacturing and the desirability of domestic products among purchasers. (Pl.'s Opp. to Def.'s Mot. for Summ. J. at 9.) Defendant had not established a manufacturing facility in North Carolina. Rather, in December 1999, Defendant had only entered into a preliminary agreement with Elox, a North Carolina company, to set up a manufacturing facility in the United States. (Def.'s Statement of Facts ¶ 4.) While Defendant had in May 2000, entered into a letter of intent with Elox, made financial investments to set up manufacturing at Elox, and sent employees from Europe to Elox's facility (id. ¶¶ 6-7.), the Company ultimately decided not to manufacture in North Carolina. (See Schwerzmann Depo. Tr. at 99-100.)

3. Commitment Of Capital

Plaintiff claims he was told on May 7, 2000, that $7.5 million had been raised by IMV specifically for Defendant's United States venture. He learned later the money was not spent for this purpose. (Pl.'s Opp. to Def.'s Mot. for Summ. J. at 10, 18.)

4. IBM Business Relationship

Plaintiff alleges he was shown a February 14, 2000 press release which states, in part, "IMV Energy Systems of America (IMV) was recently ranked as one of IBM's top suppliers." (Pl.'s Statement of Facts ¶ 25.) After Plaintiff began working for Defendant, Plaintiff discovered the Company had not sold any products to IBM. (Pl.'s Statement of Facts ¶ 27.) He learned only IMV's European division, and not the Defendant, had a strong relationship with IBM. (Id. ¶ 26.)

5. Salary And Benefits After GE's Acquisition Of IMV

While Defendant was recruiting Plaintiff to join the Company, Plaintiff told Defendant it was important to him that in-vitro fertilization be covered by his health plan. Schwerzmann promised Plaintiff he would have in-vitro benefits as long as Plaintiff was employed by the Company. (Pl.'s Opp. to Def.'s Mot. for Summ. J. at 11.) Defendant provided medical benefits for fertility treatments until July 2001 when GE acquired Defendant. (Pl.'s Statement of Facts ¶¶ 33-34; Def.'s Statement of Facts ¶ 42.) Under GE's plan, Plaintiff no longer received in-vitro health benefits. Consequently, Plaintiff spent over $65,000 for in-vitro expenses. (Id. ¶ 36.) GE also did not provide Plaintiff with long-term disability or 401(k) coverage. (Pl.'s Statement of Facts ¶ 35.)

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