United States Axminster, Inc. v. Chamberlain, Civil Action No. 4:95cv332-D-B (N.D. Miss. 10/__/1997)

CourtUnited States District Courts. 5th Circuit. United States District Courts. 5th Circuit. Northern District of Mississippi
Docket NumberCivil Action No. 4:95cv332-D-B.
Decision Date01 October 1997

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Civil Action No. 4:95cv332-D-B.
United States District Court, N.D. Mississippi, Greenville Division.
October __, 1997.


Presently before this court is the Plaintiff's "Motion for Partial Summary Judgment as to Some of Calvin B. Chamberlain, Jr.'s Counterclaims." Having considered said motion and the opposition thereto, the court is of the opinion that the motion is partly well-taken and should be granted in part and denied in part.

I. Factual Background

This dispute concerns axminster carpet loom technology. Axminster carpet is a type of floor covering in which the pattern is sewn into the carpet rather than stamp-dyed on it. The Plaintiff U.S. Axminster, Inc., (U.S. Axminster) manufactures this type of carpet, and the Defendant Calvin B. Chamberlain, Jr., (Mr. Chamberlain) is a former employee of U.S. Axminster. For a number of years, Mr. Chamberlain worked at U.S. Axminster on a new type of axminster carpet loom, which the parties refer to as the "computerized axminster loom."1 This dispute began when Mr. Chamberlain left U.S. Axminster's employ and allegedly shared trade secrets concerning the loom with the U.S. Axminster's competitors.

Today this court specifically addresses U.S. Axminster's motion for partial summary

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judgment as to Mr. Chamberlain's counterclaims for libel, slander, tortious interference with business relations, abuse of process, and breach of contract.

II. Standard of Review

Summary judgment shall be granted "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." Fed. R. Civ. P. 56(c). The burden rests upon the party seeking summary judgment to show to the district court that an absence of evidence exists in the non-moving party's case. Celotex Corp. v. Catrett, 477 U.S. 317, 325, 106 S.Ct. 2548, 2553, 91 L.Ed.2d 265 (1986); see Jackson v. Widnall, 99 F.3d 710, 713 (5th Cir. 1996); Hirras v. Nat'l R.R. Passenger Corp., 95 F.3d 396, 399 (5th Cir. 1996). Once such a showing is presented by the moving party, the burden shifts to the non-moving party to demonstrate, by specific facts, that a genuine issue of material fact exists. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 106 S.Ct. 2505, 2511, 91 L.Ed.2d 202 (1986); Texas Manufactured Housing Ass'n, Inc. v. City of Nederland, 101 F.3d 1095, 1099 (5th Cir. 1996); Brothers v. Klevenhagen, 28 F.3d 452, 455 (5th Cir. 1994). Substantive law will determine what is considered material. Anderson, 477 U.S. at 248; see Nichols v. Loral Vought Sys. Corp., 81 F.3d 38, 40 (5th Cir. 1996). "Only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment. Factual disputes that are irrelevant or unnecessary will not be counted." Anderson, 477 U.S. at 248; see City of Nederland, 101 F.3d at 1099; Gibson v. Rich, 44 F.3d 274, 277 (5th Cir. 1995). Further, "[w]here the record, taken as a whole, could not lead a rational trier of fact to find for the non-moving party, there is no genuine issue for trial." Anderson, 477

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U.S. at 248; see City of Nederland, 101 F.3d at 1099. Finally, all facts are considered in favor of the non-moving party,e Capital Partners Corp. v. Kneipper, 67 F.3d 1187, 1198 (5th Cir. 1995); Taylor v. Gregg, 36 F.3d 453, 455 (5th Cir. 1994); Matagorda County v. Russell Law, 19 F.3d 215, 217 (5th Cir.1994). However, this is so only when there is "an actual controversy, that is, when both parties have submitted evidence of contradictory facts." Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir.1994); Guillory v. Domtar Industries Inc., 95 F.3d 1320, 1326 (5th Cir. 1996); Richter v. Merchants Fast Motor Lines, Inc., 83 F.3d 96, 97 (5th Cir. 1996). In the absence of proof, the court does not "assume that the nonmoving party could or would prove the necessary facts." Little, 37 F.3d at 1075 (emphasis omitted); see Lujan v. Nat'l Wildlife Fed'n, 497 U.S. 871, 888, 110 S.Ct. 3177, 111 L.Ed. 695 (1990).

III. Discussion

U.S. Axminster moves for summary judgment as to five of Mr. Chamberlain's counterclaims: libel, slander, tortious interference with business relations, abuse of process, and breach of contract. The court shall consider each count in turn.

Libel and Slander

Mr. Chamberlain claims, "The false and malicious communications of [U.S. Axminster] to those with whom Chamberlain has sought to do business constitute common-law libel and slander." Counter-Plaintiff's Counterclaims, count III. In this diversity action, the court will look to the law of the state of Mississippi to determine whether there is no genuine issue as to any material fact supporting the counterclaim. Erie R.R. Co. V. Tompkins, 304 U.S. 64, 78, 58 S.Ct. 817, 822, 82 L.Ed. 1188 (1938); Palma v. Verex Assurance, Inc., 79 F.3d 1453, 1456 (5th Cir. 1996).

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At the outset, this court holds that Mr. Chamberlain fails to present a genuine issue as to a material fact regarding his libel claim. Libel is a defamatory statement in writing. McCullough v. Cook, 679 So. 2d 627, 630 (Miss. 1996). Mr. Chamberlain fails to present a single document containing any allegedly libelous statement or even allege that such a document exists. U.S. Axminster is entitled to a judgment as a matter of law as to the libel claim.

As to the slander claim, Mr. Chamberlain presents proof of multiple telephone conversations in which Mr. Silver allegedly "represent[ed] to third parties that USAX owns Chamberlains ideas and concepts . . . ." Chamberlain's Reply to USAX's Motion for Partial Summary Judgment ¶ 3. Whether Mr. Chamberlain overcomes summary judgment as to this claim depends on his ability to present a genuine issue as to the material facts supporting each of the following elements of a defamation claim:

(1) a false and defamatory statement concerning the plaintiff;

(2) an unprivileged publication to a third party;

(3) fault amounting at least to negligence on the party of the publisher; and

(4) either actionability of the statement irrespective of special harm or the existence of special harm caused by the publication.

Chatham v. Gulf Pub. Co., 502 So. 2d 647, 649 (Miss. 1987) (quoting Restatement (Second) of Torts, § 558 (1977)).

Defamation is a statement which tends to injure one's reputation "as to lower him in the estimation of another or to deter third persons from associating or dealing with him." Eselin-Bullock & Assocs., 604 So. 2d 236, 241 (Miss. 1992) (quoting Whitten v. Commercial Dispatch Publishing Co., 487 So. 2d 843, 845 (Miss. 1986)). Slander is a defamatory statement published by spoken words. Smith v. Jones, 335 So. 2d 896, 897 (Miss. 1976). Spoken words which are actionable irrespective of special harm are known as "slander per se." Baugh v. Baugh, 512 So.

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2d 1283, 1285 (Miss. 1987). One of the classes of words which may constitute slander per se consists of spoken words suggesting improper conduct in one's business or trade. Baugh, 512 So. 2d at 1285 & n 2. Such words are slander per se (that is, actionable per se) if they were clearly directed at the plaintiff and the defamation was clear and unmistakable from the words themselves and not the product of innuendo, speculation or conjecture. Id.; Ferguson v. Watkins, 448 So. 2d 271, 275 (Miss. 1984).

One of the telephone conversations about which Mr. Chamberlain complains occurred on October 13, 1995. For several months leading up to that day, Mr. Chamberlain and a man named David Crabtree, managing director of Craig-Crabtree, Limited, a loom manufacturer in Great Britain, had been discussing the possibility of collaborating in some way in the axminster loom industry. Specifically, Mr. Chamberlain had offered Mr. Crabtree technology which would increase the speed and efficiency of axminster looms. On the 13th of October, Mr. Silver called Mr. Crabtree to inform Mr. Crabtree that the technology Mr. Chamberlain had offered may actually belong to Mr. Silver. In his March 11, 1997, deposition, Mr. Crabtree explained the conversation as follows:

Effectively, it appeared that Mr. Silver thought that Cal Camberlain was, as I say here, "promoting or encouraging loom development work," the source of which was, or the intellectual property rights in which was vested in Mohasco and U.S. Axminster under a previous agreement. . . .

Videotaped Deposition upon Oral Examination of David Nicholas Crabtree, at 163-64. Mr. Crabtree further stated,

It was very much in general terms of "Mr. Chamberlain was now seeking" — to perhaps to use Mr. Silver's words — "some of the processes or developments that Mohasco and USAX had control over" . . . .

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Id. at 166-67.

Mr. Chamberlain does not know the precise words Mr. Silver spoke. However, by exhibiting inter alia the deposition testimony, Mr. Chamberlain presents evidence of a statement by Mr. Silver to a third party that Mr. Chamberlain was intending to exploit U.S. Axminster's technology. Viewed in the light most favorable to Mr. Chamberlain, such a statement is one which a reasonable juror might consider defamatory. Moreover, it is a statement which a reasonable juror might conclude suggests improper conduct with regard to one's business or trade, therefore actionable per se. It is also a statement which a reasonable juror might consider clearly directed at Mr. Chamberlain, as well as clearly and unmistakably defamatory not from innuendo, speculation or conjecture, but from the words themselves. Lastly, it is a statement the truth of which has yet to be determined. After all, the ownership of the loom technology in question is the central issue in this case.2 It is a question of the intent of the parties when...

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