Geiger Bros. v. Conradson

Maine Superior

Geiger Bros. v. Conradson

Superior Court of Maine·Decided February 10, 2010·No. ANDcv-08-242·Unpublished

Opinion

STATE OF MAINE SUPERIOR COURT ANDROSCOGGIN, ss Civil Action Docket No. CV-08-t.42.J .. 0 I([)- A;JD- djlO/J-O I

GEIGER BROS.,

Plaintiff

v. ORDER ON MOTION SUMMARY JUDGMENT

ANITA CONRADSON, Defendant

I. BEFORE THE COURT

Before the court is plaintiff's motion for partial summary judgment on count II of the complairit ("Breach of Promissory Note").

II. FACTUAL AND PROCEDURAL BACKGROUND Geiger Bros. is a Maine corporation in the business of manufacturing, wholesaling, and distributing custom advertising products and materials. PL's SMF, <J[ 1 (hereinafter II _SMF at _."). Conradson has acted as an independent sales representative for Geiger Bros. prior to its purported termination of an Independent Dealer Agreement ("Dealer Agreement").1 [d. at <J[fj[ 2, 3. Blue Cross Blue Shield of Arizona ("Blue Cross") is a client of Geiger Bros. whose account has been handled by Conradson. [d. at fj[fj[ 5, 6. Geiger Bros.'s business dealings with Blue Cross involved a situation where Blue Cross owned an inventory of promotional products that were located at a storage facility ("the Storage Facility") in Tempe, Arizona owned by Conradson's sister. Id. at fj[fj[ 7, 8.

1 The Dealership Agreement is found as an attachment to the Affidavit of Jo-An Lantz in Support of Plaintiff's Motion for Partial Summary Judgment.

At some point, a dispute arose regarding whether Conradson was entitled to charge Blue Cross certain project management fees in the amount of $33,000. PSMF at err 11; DS;\1F at err 11; Def.'s Add. SMF, errerr 37-39 (hereinafter "_ASMF at _."). Conradson believed through her past dealings, that she was entitled to charge such fees, whereas Geiger Bros. takes the position that Conradson overcharged Blue Cross, and was required to reimburse it for the full amount. DSAMF at errerr 37-39. Following a discussion on the matter, Conradson signed a promissory note2 ("Note") that is payable on demand to Geiger Bros. for $15,000. 3 PSMF at err 12. The note provided that plaintiff would forbear demanding immediate payment on the note provided that, inter alia, the Dealer Agreement remains in effect and the defendant does not engage in any form of business related to the manufacture or distribution of promotional products. Id. at err 15.

In September 2008, Blue Cross received an invoice from a company called YESS for warehousing and fulfillment fees. PSMF at err 19. The invoices reflect that YESS's address is 4736 E. Calle de Norte, Phoenix, AZ, which Geiger Bros. claims is Conradson's address. Id. Conradson contends that she has never had any interest in YESS and that although her sister owned YESS until 2008, she is unsure as to who owned YESS when the invoices were issued. DSAMF at errerr 60-63. On October 23,2008, Geiger Bros. informed Conradson that her Dealer Agreement was being cancelled and

that she had violated the terms of the Note. PSAMF at err 68. In either mid October or . .

2 The Note is found as an attachment to the Affidavit of Ja-An Lantz in Support of plaintiff's Motion for Partial Summary Judgment.

3 In her Statement of Material Facts, Conradson alludes to an argument that the execution of the Note was the result of business compulsion and economic duress. However, she did not raise that argument as a ground for invalidating the Note. Maine has not yet recognized the doctrines of business compulsion or economic duress. See Prescott v. Ross, 383 F.Supp.2d 180, 189 (D. Me. 2005).

late November, Conradson began doing business as an entity called SWAGZ selling promotional products. 4 Geiger Bros. has filed a six count complaint against Conradson, claiming "Breach of the non-compete provisions of the Promissory Note" (count I), "Breach of the Promissory Note" (count II), "Conversion" (count III), "Negligence" (count IV), "Breach of Warehouseman's Duty, 11 M.R.S.A. § 7-204" (count V), and "Unjust Enrichment" (count VI). This motion requests summary judgment on count II only, the promissory note.

III. DISCUSSION

A. Standard of Review Summary Judgment IS appropriate when the court's review of the parties'

statements of material fact and cited record evidence indicates there exists no genuine issues of material fact such that the moving party is entitled to judgment as a matter of law. Dyer v. Dep't. of Transportation, 2008 ME 106, <[ 14, 951 A.2d 821, 825. A fact is "material" if it could potentially affect the outcome of the dispute under governing law. Id. An issue offact is "genuine" if there is sufficient evidence to require the fact finder to choose between two competing versions of the fact at trial. Inkel v. Livingston, 2005 ME 42, <JI 4, 869 A.2d 745, 747. The court considers the evidence and all reasonable inferences to be drawn from that evidence in the light most favorable to the nonmoving party. [d. However, the nonmoving party may not rely on conclusory allegations, improbable inferences, and unsupported speculation to defeat summary judgment. Dyer, 2008 ME 106 at <[ 13, 951 A.2d at 825.

4 According to Conradson, she began doing business as SWAGZ in late November 2008. DSAMF at <j[ 71. However, Geiger has submitted documentation suggesting that Conradson was engaged in business as SWAGZ as early as October 17, 2008, prior to the cancellation of the Dealership Agreement. PSAMF at 1 71.

B. Termination of the Dealership Agreement The Law Court has explained, I/[a] promissory note is a contract." QAD Investors v. Kelly, 2001 ME 116, en 13, 776 A.2d 1244, 1248. Accordingly, ordinary rules of construction apply. Id. When a contract is unambiguous, the interpretation of the contract is a question of law. Id. (citing Acadia Ins. Co. v. Buck Constr. Co., 2000 ME 154,

en 8, 756 A.2d 515, 517).

Here, the Note expressly provides that a condition of Geiger Bros.'s promise not

to demand payment is that I/[t]he Independent Dealer Agreement between [Conradson] and Geiger Bros. shall remain in full force and effect." Geiger Bros.'s has taken the position that when it terminated the Dealer Agreement, it was entitled to demand full payment on the note because the condition permitting it to demand payment was triggered. PI.'s Mot. at 5-6. Conradson has replied that the termination was illegal because she had not violated any condition of the Note. Def Mot. at 5.

Here, Conradson appears to be confusing Geiger Bros. ability to terminate the Dealership Agreement with its ability to demand payment under the Note. The Dealership Agreement outlines the terms and conditions of the relationship between Geiger Bros. and Conradson as wholesaler and distributor. Section 1 of the Dealership Agreement states I/[n]othing in this agreement shall implicitly or expressly allow either party to assume or create any contract obligation or responsibility for in the name of the other party in any way whatever." This language implies that the agreement can be freely terminated at any time, and that Geiger Bros. is not obligated to continue retaining Conradson as a dealer, nor is Conradson obligated to continue selling Geiger

Bros. products. s Consequently, whether or not Conradson violated any of the terms of the Note is immaterial as to whether Geiger Bros. had the power to terminate the Dealership Agreement, thus excusing its obligation to forbear. 6 Accordingly, the court finds that Geiger Bros.'s duty to forbear IS excused because the Dealership Agreement is no longer in effect. C. Invoicing of Blue Cross by YESS The next argument advanced by Geiger Bros. in support of its claim is that Conradson violated the non-competition provision of the Note when she allegedly billed Blue Cross for storage and warehousing fees in September 2008 and when she began engaging in the business of selling promotional products as SWAGZ.

Regarding the alleged billing of Blue Cross in September 2008, summary judgment on this ground is inappropriate.

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