Amalgamated Titanium Int'l Corp. v. Mennie Mach. Co.

581 F.Supp.3d 289

AMALGAMATED TITANIUM INTERNATIONAL CORP. and David Lamoureux

v.MENNIE MACHINE COMPANY d/b/a MMC Armory

CIVIL ACTION NO. 19-12496-RGS

United States District Court, D. Massachusetts.

Filed January 18, 2022

Brant C. Martin, Pro Hac Vice, Lauren K. Drawhorn, Pro Hac Vice, Wick Phillips Gould and Martin LLP, Forth Worth, TX, Stephen J. Lyons, Klieman & Lyons, Boston, MA, for Amalgamated Titanium International Corp.

Brant C. Martin, Pro Hac Vice, Lauren K. Drawhorn, Pro Hac Vice, Wick Phillips Gould and Martin LLP, Forth Worth, TX, for David Lamoureux.

Arlene N. Gelman, Pro Hac Vice, Chad Schiefelbein, Pro Hac Vice, Vedder Price PC, Chicago, IL, Michael D. Chefitz, Edward O. Mazzaferro, Jr., Bonner, Kiernan, Trebach & Crociata, LLP, Boston, MA, for Mennie Machine Company.

MEMORANDUM AND ORDER ON DEFENDANT'S MOTION FOR SUMMARY JUDGMENT

STEARNS, D.J.

This is a case arising from an alleged breach of a joint venture agreement between two companies – Amalgamated Titanium International Corp. and Mennie Machine Company (MMC) – to produce, market, and distribute firearms and firearms parts. Amalgamated Titanium, together with its founder and CEO David Lamoureux (collectively, ATI), sued MMC alleging, inter alia , breach of contract, conversion, defamation, and unfair and deceptive business practices. After the close of discovery, MMC moved for summary judgment, claiming that ATI's claims lack factual support. After careful review of the record and the parties’ briefs, the court will allow-in-part and deny-in-part MMC's motion.

BACKGROUND

In March of 2014, Lamoureux met MMC's president, Bill Mennie, while attending an electro-magnetic pulse seminar in Florida. See MMC Statement of Facts (MSF) (Dkt # 54) ¶¶ 16, 20; ATI Opp'n to MSF (AOMSF) (Dkt # 67) ¶ 20. On March 27, 2014, Lamoureux contacted Bill Mennie and broached the possibility of collaboration between their two companies. MSF ¶ 21; AOMSF ¶ 21. The following day, MMC executed a one-year nondisclosure and noncompetition agreement with ATI reciting that "[t]he Parties are in discussions and working with each other, in connection with conducting business together." ATI Ex. App. (Dkt # 68) Ex. C-1. On May 5, 2014, Lamoureux met with Bill Mennie and his brother David in Chicago to discuss the joint production of shotgun barrels, rifle barrels, and a fully assembled rifle. MSF ¶ 22; AOMSF ¶ 22.

On August 19, 2014, Lamoureux sent an email to Bill Mennie and MMC CFO Gary Hegland, which included a proposed profit-sharing agreement between ATI and MMC. MSF Ex. 24. Lamoureux stressed in the proposal that he and Bill Mennie would "need to get 2 agreements signed" – namely, a ten-year nondisclosure/noncompete agreement and a profit-sharing partnership agreement. Id. On November 28, 2014, MMC executed the ten-year nondisclosure/noncompete agreement. ATI Ex. D-1 at 2. ATI and MMC never signed a written partnership or joint venture agreement. MSF ¶ 40; AOMSF ¶ 40.

On January 25, 2016, Lamoureux emailed Bill and David Mennie stating that Vic Vance, MMC's gun salesman, was creating "sales estimates for the titanium guns" and that when those projections were complete, Bill Mennie "can prepare a P.O. [purchase order] for [ATI] as discussed." MSF ¶ 58; AOMSF ¶¶ 58, 58a; MSF Ex. 38. In response, Bill Mennie stated that he was "confused" about the P.O., to which Lamoureux replied: "It's similar to what we did with Remington but we can discuss it when I call today." MSF Ex. 39. Lamoureux testified in his deposition that ATI had an unsigned purchase order with Remington. MSF Ex. 7 at 416:11-417:23.

On March 7, 2016, Lamoureux sent Bill Mennie an email entitled "Paperwork and signature for Amalgamated," which stated: "Bill, [h]ere is the paperwork that we discussed that I need your signature on for my banking relationships to show that we are doing business together. I would greatly appreciate getting it back asap." MSF Ex. 40 at 1. The email included an attached document on MMC Armory letterhead entitled "Titanium Arms Products for FALL 2016 Delivery," which was backdated to February 20, 2016, and purportedly addressed to ATI. Id. at 2. The document, which refers to itself as a "Purchase Order" on its second page, contains order amounts, prices (totaling $34,752,956.52), and estimated payment dates for "Remington 870 Barrels (Pump Action)," "Mossberg 500 Barrels (Pump Action)," "MMC Armory Shotgun[s] (Pump Action)," "AR 15 - PARTS," and "AR 15 - RIFLES." Id. at 3. The final page of the document stated that delivery would take place between September and December of 2016; it also contained an unsigned signature block bearing Bill Mennie's name. Id. at 4. Later that day, Bill Mennie emailed Lamoureux a signed version of the document, with the caveat that "[t]he above volumes are projections and subject to change without notice." MSF Ex. 41 at 1, 4. Thereafter, MMC accepted shipments of ATI's titanium. AOMSF ¶ 77d.

On October 12, 2016, Hegland emailed Lamoureux, stating that MMC's "bank auditor found the Amalgamated/Meridian & Invoices/Payments and is citing [MMC] for being out of compliance with our bank covenants." ATI Ex. C-8. Hegland died before he could be deposed in this case, but it appears from the record that there never was a bank audit or covenant violation. ATI Ex. D at 104:6-106:1, 111:6-19, 130:19-131:11. On October 21, 2016, MMC sent Lamoureux a letter terminating its business relationship with ATI. ATI Ex. C-9. The termination letter also stated that MMC was "prepared to return the consigned Titanium Raw Material to ATI upon ATI's execution of the appropriate paperwork." Id. The paperwork in question was a waiver and release of "any and all claims, demands and causes of action that [ATI] now ha[s] or might have against" MMC. ATI Ex. G.

On October 25, 2016, ATI requested that MMC's counsel verify and itemize all titanium deliveries – as well as their condition and state of manufacture – in MMC's possession. ATI Ex. D-5. MMC has yet to do so. ATI Ex. D at 52:7-13, 196:6-12. According to an inventory compiled from ATI's records, MMC held at least $637,704.31 of ATI's titanium as of September of 2016. See ATI Ex. B-2; AOMSF ¶ 77d. Thereafter, either in December of 2016 or January of 2017, ATI made an additional oral demand for the return of the titanium during a conference call with MMC. ATI Ex. A at 248:4-249:19. To date, MMC has not withdrawn its requirement that ATI sign a release, ATI has not signed a release, and ATI's titanium has not been returned. See ATI Ex. D at 212:11-20.

On November 3, 2016, MMC's outside counsel, Lane Moyer, spoke by telephone with Tim Irish, an employee of Meridian, one of ATI's financial backers. MSF ¶ 97; AOMSF ¶ 97.¹ According to Irish, Moyer told him that Bill Mennie "did not sign [the] purchase order, there was not a valid purchase order between ... MMC and [ATI] and ... that he didn't know how that signature got on that document and alluded to [Irish] that maybe David Lamoureux signed that document." ATI Ex. E at 51:13-21. Irish testified that he reported what Moyer had told him to the other investment groups backing ATI. Id. at 41:24-42:10. As a result, several companies that had expressed interest in investing in ATI chose not to go forward, and Meridian shut off its financing to ATI. Id. at 48:20-50:3.² ATI initiated this lawsuit against MMC on October 21, 2019. See Not. of Removal (Dkt # 1) at 20.

DISCUSSION

"Summary judgment is warranted if the record, construed in the light most flattering to the nonmovant, ‘presents no genuine issue as to any material fact and reflects the movant's entitlement to judgment as a matter of law.’ " Lawless v. Steward Health Care Sys., LLC , 894 F.3d 9, 21 (1st Cir. 2018), quoting McKenney v. Mangino , 873 F.3d 75, 80 (1st Cir. 2017). The moving party "bears the initial responsibility of informing the district court of the basis for its motion and identifying those portions of [the record] which it believes demonstrate the absence of a genuine issue of material fact." Celotex Corp. v. Catrett , 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). If this is accomplished, the burden then "shifts to the nonmoving party to establish the existence of an issue of fact that could affect the outcome of the litigation and from which a reasonable jury could find for the nonmoving party." Rogers v. Fair , 902 F.2d 140, 143 (1st Cir. 1990). The nonmoving party "must adduce specific, provable facts demonstrating that there is a triable issue." Id. (internal quotation marks omitted). "A ‘genuine’ issue of ‘material fact’ only exists ‘if a reasonable factfinder, examining the evidence and drawing all reasonable inferences helpful to the party resisting summary judgment, could resolve the dispute in that party's favor.’ " Town of Westport v. Monsanto Co. , 877 F.3d 58, 64-65 (1st Cir. 2017), quoting Cortés-Irizarry v. Corporación Insular de Seguros , 111 F.3d 184, 187 (1st Cir. 1997). The non-moving party cannot "rest[ ] merely upon conclusory allegations, improbable inferences, and unsupported speculation." Medina-Munoz v. R.J. Reynolds Tobacco Co. , 896 F.2d 5, 8 (1st Cir. 1990).

Because the court's subject matter jurisdiction is based on diversity of citizenship, Massachusetts choice-of-law principles apply. See Reicher v. Berkshire Life Ins. Co. of Am. , 360 F.3d 1, 5 (1st Cir. 2004). "Massachusetts courts take a flexible interest-based approach to conflict of laws issues and will consider a wide variety of factors in choosing the applicable law," including "(1) the needs of the interstate and international legal regimes; (2) the policies of the forum; (3) the policies of other interested jurisdictions; (4) the protection of justified expectations; (5) the basic policies underlying the particular field of law; (6) certainty, predictability, and uniformity of result; and (7) ease of applicability." Millipore Corp. v. Travelers Indem. Co. , 115 F.3d 21, 30 (1st Cir. 1997).

(1) Joint Venture Agreement

Count I –...