DP-Tek, Inc. v. AT & T Global Information Solutions Co.

100 F.3d 828, 1996 U.S. App. LEXIS 29574, 1996 WL 659558
CourtCourt of Appeals for the Tenth Circuit
DecidedNovember 14, 1996
Docket95-3228
StatusPublished
Cited by42 cases

This text of 100 F.3d 828 (DP-Tek, Inc. v. AT & T Global Information Solutions Co.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Tenth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
DP-Tek, Inc. v. AT & T Global Information Solutions Co., 100 F.3d 828, 1996 U.S. App. LEXIS 29574, 1996 WL 659558 (10th Cir. 1996).

Opinion

SEYMOUR, Chief Judge.

DP-Tek, Inc.,, brought this action against AT & T Global Information Solutions Company, formerly known as NCR Corporation, 1 alleging tortious interference with an existing contract and with a prospective contract. Prior to trial, the district court granted NCR’s motion for summary judgment on both claims. DP-Tek, Inc. v. AT & T Global Info. Solutions Co., 891 F.Supp. 1510 (D.Kan.1995). DP-Tek appeals only with respect to the claim regarding interference with a prospective contract. We affirm.

I.

The pleadings and discovery evince the following undisputed facts. In late 1990, Venture Stores, Inc., initiated the Store Automation Project (Project), to upgrade the three components of its cash register and sales recording system. The three components consisted of Point of Sale (POS) software, POS hardware, and an In-Store Processor (ISP). This dispute arises out of the competition between DP-Tek and NCR to win the contract for the POS hardware component. ■

In early 1991, Venture sent a Request for Proposal (RFP) to several companies interested in providing services and products to upgrade the components. Venture explained in the RFP that different companies could supply different components and stated with respect to proprietary codes only that they could be included. DP-Tek submitted a proposal for the POS hardware, based upon a *830 retrofit of Venture’s existing POS hardware. 2 NCR submitted proposals for the POS hardware and ISP components, based upon new equipment. Research Computer Services (RCS), a business partner of NCR, submitted a proposal for the POS software. Other companies also submitted proposals.

In September 1991, Venture and DP-Tek executed a Product and Service Master Agreement (Master Agreement) which set forth general guidelines, including a confidentiality provision, for any potential product orders between the two companies. Venture and DP-Tek also signed a contract under which DP-Tek would sell Venture eight retrofit prototype units for evaluation. In December, DP-Tek delivered six of the units, for which Venture paid $80,000. Other companies supplied new off-the-shelf units for Venture’s evaluation.

By April 1992, Venture had determined to accelerate the implementation of the Project and solicited amended or additional proposals to obtain more competitive terms. On April 17, DP-Tek submitted its final proposal reflecting amended quantity, delivery, installation, and pricing terms. On April 30, Venture telephoned to inform DP-Tek it had been selected for the POS hardware component. During the telephone conversation, DP-Tek requested a one million dollar down-payment. Venture responded that it could not agree to such an amount and that the downpayment was a problem which would have to be resolved on a later date. Venture also contacted RCS and NCR to inform them they had been selected for the POS software and ISP components respectively.

Between September 1991 and May 1992, changes in the marketplace brought about significant decreases in the cost of new POS hardware. In early May, IBM submitted a revised proposal for the POS hardware component reflecting a substantial price reduction. In addition, NCR informed Venture that because it had been selected for the ISP component it could offer a more competitive price on the POS hardware component. Venture stated that no final contract had been executed with DP-Tek and encouraged NCR to submit an additional proposal. Shortly thereafter, Venture supplied NCR a price range which Venture thought would make the NCR proposal competitive with DP-Tek’s proposal.

In early May an NCR manager, Ms. Brenda K. Pohl, visited a Venture location on other business and overheard conversations regarding one of DP-Tek’s prototypes. She asked if an NCR team could view the prototype and was told that it could. On May 13, an NCR engineer inspected and photographed the prototype and prepared a memorandum which contained his findings.

Venture and DP-Tek continued to work on the details of a contract for the retrofit units. On May 19, Venture met with DP-Tek and RCS to address the integration of DP-Tek’s retrofit unit and RCS’ POS software. During the meeting, all parties were aware that the successful integration of the hardware and software would be facilitated by a “source code” which RCS licensed from NCR. NCR owned the source code but refused to provide it to DP-Tek. Other possibilities for integration were discussed but the parties never resolved the issue.

On May 20, NCR presented an amended proposal to Venture that was significantly less costly than its original bid. During the presentation, NCR made various comparisons between DP-Tek’s retrofit unit and its own proposed new unit. 3 Venture ultimately signed a contract with NCR in August 1992, and NCR installed the POS hardware. DP-Tek thereafter commenced this action alleging tortious interference.

In granting summary judgment for NCR, the district court acknowledged that Kansas recognizes the tort of interference with prospective business contracts, but then applied Restatement (Seoond) of Toets § 768 (1979) and held “that NCR’s actions constituted privileged business competition.” DP-Tech, 891 F.Supp. at 1528. On appeal, DP- *831 Tek contends the district court erred when it: (1) held that Kansas would adopt the competitor privilege stated in section 768; (2) held that Kansas would interpret the “wrongful means” element of section 768 to require independently actionable conduct; and, (8) placed on DP-Tek the burden of proving section 768 did not apply.

II.

A.

Standard of Review

We review a grant of summary judgment de novo. United States v. Agri Servs., Inc., 81 F.3d 1002, 1005 (10th Cir.1996). Summary judgment is warranted only where there is no genuine issue as to a material fact and the movant is entitled to judgment as a matter of law. Id. The nonmovant “may not rest upon the mere allegations or denials of his pleading, but ... must set forth specific facts showing that there is a genuine issue for trial.” Fed.R.Civ.P. 56(e); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986). An issue of material fact is genuine if the evidence is such that a reasonable jury could return a verdict for the nonmovant. Id. In applying this standard, we view the record and the reasonable inferences therefrom in the light most favorable to the nonmovant. Agri Servs., 81 F.3d at 1005.

Because this is a diversity case, we apply the substantive law of the forum state. Farmers Alliance Mut. Ins. Co. v. Salazar, 77 F.3d 1291, 1294 (10th Cir.1996).

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Bluebook (online)
100 F.3d 828, 1996 U.S. App. LEXIS 29574, 1996 WL 659558, Counsel Stack Legal Research, https://law.counselstack.com/opinion/dp-tek-inc-v-at-t-global-information-solutions-co-ca10-1996.