Wilson v. Continental Development Co.

• Decision Date: 24 August 1999
• Docket Number: No. 5:97CV213.,5:97CV213.
• Citation: 112 F.Supp.2d 648
• Parties: Terry WILSON, Plaintiff, v. CONTINENTAL DEVELOPMENT CO., et al., Defendants.
• Court: U.S. District Court — Western District of Michigan

112 F.Supp.2d 648

Terry WILSON, Plaintiff, v. CONTINENTAL DEVELOPMENT CO., et al., Defendants.

No. 5:97CV213.

United States District Court, W.D. Michigan, Southern Division.

August 24, 1999.

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Jeanette S. Eirich, Jeanette S. Eirich Law Offices, Denver, CO, Lawrence R. Mathews, Mathews, Ramos & Associates, Detroit, MI, for Plaintiff.

Terry L. Wilson, Centerville, VA, pro se.

John A. Waters, Grand Rapids, MI, for Defendants.

John E. Anding, Drew, Cooper & Anding, Grand Rapids, MI, for Drew, Cooper & Anding.

Marilyn Nickell Tyree, Smith, Haughey, Rice & Roegge, Grand Rapids, MI, for Gates Rubber Co.

Douglas A. Dozeman, Colleen D. Lundgren, Warner, Norcross & Judd, LLP, Grand Rapids, MI, for Reid Tool Supply.

Johyn A. Yaeger, Willingham & Cote, PC, East Lansing, MI, Mark H. Fink, Maddin, Hauser, Wartell, RothSouthfield, MI, for John Cote.

OPINION

ROBERT HOLMES BELL, District Judge.

This is a civil action arising from an unsuccessful business venture. This court has subject-matter jurisdiction both over plaintiff's federal-question claims, 28 U.S.C. § 1331, and his state-law claims, as the parties are of diverse citizenship, 28 U.S.C. § 1332.

Plaintiff, Terry Wilson, alleges that he was the inventor of a device (called "The Protector") designed to prevent damage to hoses in the industrial setting. Mr. Wilson has brought suit against his former business associates — Continental Development Company, Michael D. Sebastian, and Robert L. Hoag — all of whom were shareholders, along with plaintiff, in defendant Crown Industries, Inc. Crown Industries, Inc. was a corporation formed by the parties to market and sell plaintiff's invention. Also named as defendants are the law firm Waters & Morse and attorney John Waters, who acted as patent counsel for Crown Industries, Inc. During the life of this case, plaintiff named numerous other business entities and attorneys as defendants, but those parties have previously been dismissed.

Plaintiff commenced this action by filing a pro se complaint on October 16, 1997. That pleading was superseded by an amended complaint filed by plaintiff on January 9, 1998 (docket # 32). The amended complaint was also submitted pro se. Thereafter, plaintiff procured the services of counsel Jeanette Eirich, who filed a second amended complaint (docket # 62) on May 7, 1998. Ms. Eirich was ultimately granted leave of court to withdraw her appearance on the basis of irreconcilable differences with plaintiff. Plaintiff later retained attorney Lawrence R. Mathews, who presently represents him. Plaintiff's claims, however, continue to be embodied in the second amended complaint filed by attorney Eirich. The remaining defendants (Crown Industries, Continental Development Company, Robert L. Hoag, Michael D. Sebastian, Waters & Morse, and John Waters) filed an answer to the second amended complaint (docket # 67), which includes a counterclaim seeking to recover loans by Continental Development and Robert Hoag to plaintiff in the approximate amount of $11,000.

Plaintiff's second amended complaint purports to set forth nine causes of action against the present defendants. Counts I and II are civil RICO claims asserting a pattern of racketeering activity. Count III asserts a claim for fraud arising from defendants' naming of defendant Hoag as the inventor in a patent application covering an invention allegedly belonging to plaintiff. Original count IV was dropped from the second amended complaint. Count V sets forth a shareholder's derivative claim for misappropriation of corporate opportunity stemming from defendants' alleged diversion of business from Crown Industries to other unnamed entities. Count VI sets forth a claim for civil conspiracy. Count VII alleges a theft of trade secrets, asserting that defendants removed plaintiff's property and then falsely claimed that the property had been stolen. Plaintiff brings count VIII as a shareholder of Crown Industries, Inc. for vindication of shareholder's rights. Count IX is for breach of the written contract between the parties. Count X is for tortious interference with a contract or business opportunity.

Presently pending before the court is a motion for summary judgment filed by defendants Continental Development Company, Crown Industries, Inc., Waters & Morse, P.C., Michael D. Sebastian, Robert L. Hoag, and John A. Waters (the moving defendants). The motion seeks a summary judgment dismissing all of plaintiff's claims in his second amended complaint. In addition, defendants Continental Development and Hoag seek judgment on their counterclaim in the amount of $11,410.69, minus certain setoffs, representing the amount asserted in the counterclaim as recovery of loans made to plaintiff. (Motion For Summary Judgment, docket # 102). Plaintiff has responded to the motion, arguing that genuine issues of material fact preclude the entry of summary judgment. For the reasons set forth below, the court determines that plaintiff has failed to raise a triable issue of fact in support of any of his claims, except his claim for royalties in the amount of $416 and his demand for issuance of stock certificates. Summary judgment will enter on behalf of defendants on all other claims. Robert Hoag will be granted summary judgment against plaintiff on his counterclaim for $4,493.87. Plaintiff will be granted summary judgment on Continental Development's counterclaim. Plaintiff will receive an offset of $416 against his outstanding debt to Crown Industries, Inc. and injunctive relief ordering the issuance of stock reflecting his 13% ownership in Crown Industries, Inc.

Summary Judgment Standard

As the Sixth Circuit has noted, the federal courts have entered a "new era" in summary judgment practice. Cox v. Kentucky Dep't of Transp., 53 F.3d 146, 150 (6th Cir.1995); Street v. J.C. Bradford & Co., 886 F.2d 1472, 1478-81 (6th Cir.1989). While preserving the constitutional right of civil litigants to a trial on meritorious claims, the courts are now vigilant to weed out fanciful, malicious, and unsupported claims before trial. Summary judgment is appropriate when the record reveals that there are no issues as to any material fact in dispute and the moving party is entitled to judgment as a matter of law. FED. R.CIV.P. 56(c); Sable v. General Motors Corp., 90 F.3d 171, 175 (6th Cir.1996); Payne v. Board of Educ., 88 F.3d 392, 397 (6th Cir.1996) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986)). The standard for determining whether summary judgment is appropriate is "whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law." See Adcox v. Teledyne, Inc., 21 F.3d 1381, 1385 (6th Cir.), cert. denied, 513 U.S. 871, 115 S.Ct. 193, 130 L.Ed.2d 126 (1994) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. at 251-52, 106 S.Ct. 2505); see also, Crabbs v. Copperweld Tubing Products Co., 114 F.3d 85, 88 (6th Cir.1997).

The court must consider all pleadings, depositions, affidavits, and admissions on file, and draw all justifiable inferences in favor of the party opposing the motion. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986); Wathen v. General Elec. Co., 115 F.3d 400, 403 (6th Cir.1997). The party moving for summary judgment bears the initial burden of pointing out to the district court that there is an absence of evidence to support the nonmoving party's case, but need not support its motion with affidavits or other materials "negating" the opponent's claim. Moore v. Philip Morris Companies, Inc., 8 F.3d 335, 339 (6th Cir.1993). Once defendants show that "there is an absence of evidence to support the nonmoving party's case," plaintiff has the burden of coming forward with evidence raising a triable issue of fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). To sustain this burden, plaintiff may not rest on the mere allegations of his pleadings. FED.R.CIV.P. 56(e); Copeland v. Machulis, 57 F.3d 476, 479 (6th Cir.1995); Cox, 53 F.3d at 150. A party opposing a motion for summary judgment has the burden to come forth with requisite proof to support his legal claim, particularly where he has had an opportunity to conduct discovery. See Noble v. Chrysler Motors Corp., 32 F.3d 997, 999 (6th Cir.1994); Street v. J.C. Bradford & Co., 886 F.2d at 1478-81; Booker v. Brown & Williamson Tobacco Co., 879 F.2d 1304, 1310 (6th Cir.1989). In so doing, plaintiff must set forth specific facts showing that there is a genuine issue for trial. FED.R.CIV.P. 56(e); see Kensu v. Haigh, 87 F.3d 172, 175 (1996); Brennan v. Township of Northville, 78 F.3d 1152, 1156 (6th Cir.1996). The respondent must "do more than simply show that there is some metaphysical doubt as to the material facts." Matsushita, 475 U.S. at 586, 106 S.Ct. 1348.

Undisputed Facts

The following facts appear of record. When a factual issue is subject to dispute, the court has either resolved the dispute in favor of plaintiff for purposes of the pending motion or has noted the dispute and finds it to be immaterial.

Plaintiff, Terry Wilson, was formerly employed by an industrial supply company in California. During this employment, he perceived the need among industrial corporations for a product that would cover hoses and protect them from truck tires, sharp objects, and other sources of damage. Mr. Wilson's idea was to cover the hoses with a protective sleeve. In 1990, he moved from California to Grand Rapids, where he found a company, Cadillac Plastics, which manufactured a material suitable for use as a hose covering.

Plaintiff began to do business under the name Crown Manufacturing. It is unclear whether Crown Manufacturing was a corporation or a d/b/a, but it appears to have been the...