Dodson Intern. Parts, Inc. v. Altendorf

347 F.Supp.2d 997

DODSON INTERNATIONAL PARTS, INC., Plaintiff, v. Phillip ALTENDORF, Jeffrey Altendorf, Circle H L.L.C., Resources Unlimited, Inc., Richard Moorhead, Mansfield Heliflight, Inc., and Eric Chase, Defendants.

No. 00-4134-SAC.

United States District Court, D. Kansas.

November 3, 2004.

COPYRIGHT MATERIAL OMITTED

Donald G. Scott, R. Pete Smith, McDowell, Rice, Smith & Gaar, Kansas City, MO, J. Roger Hendrix, Mark L. Bennett, Jr., Penny R. Moylan, Bennett, Hendrix & Moylan, L.L.P., Topeka, KS, for Plaintiff.

Mark S. Gunnison, Robin E. Scully, II, Payne & Jones, Chtd., Overland Park, KS, Kevin James Grauberger, Thomas E. Wright, Wright, Henson, Somers, Sebelius, Clark & Baker, LLP, Topeka, KS, Arthur E. Palmer, Goodell, Stratton, Edmonds &amp Palmer, Topeka, KS, Gary L. Franklin, Miller, Eggleston & Cramer, Ltd., Burlington, VT, for Defendants.

MEMORANDUM AND ORDER

CROW, Senior District Judge.

As reflected in the pretrial order, this is a commercial case in which the plaintiff Dodson International Parts, Inc. ("Dodson International") asserts state law claims of conspiracy, unfair competition and misappropriation of trade secrets and alleges that Phillip Altendorf and Jeffrey Altendorf while working for the plaintiff conspired with Mansfield Heliflight, Inc., Eric Chase, Richard Moorhead, and Resources Unlimited, Inc. to divert several lucrative business opportunities from the plaintiff. Prior to the Dodson International's Chapter 11 bankruptcy filed in the summer of 2002, it had settled with the Altendorfs, Richard Moorhead and Resources Unlimited, Inc. The remaining defendants, Mansfield Heliflight, Inc., ("Mansfield") and Eric Chase, had filed a motion for summary judgment (Dk.107) which had become ripe for decision, and the plaintiff had filed a motion to amend the pretrial order (Dk.110). With the termination of the automatic bankruptcy stay and notice from Dodson International's counsel of the same, (Dk.133), the court now decides the pending dispositive motion and the motion to amend the pretrial order.

SUMMARY JUDGMENT STANDARDS

A court grants a motion for summary judgment under Rule 56 of the Federal Rules of Civil Procedure if a genuine issue of material fact does not exist and if the movant is entitled to judgment as a matter of law. The court is to determine "whether there is the need for a trial-whether, in other words, there are any genuine factual issues that properly can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). "Only disputes over facts that might affect the outcome of the suit under the governing law will ... preclude summary judgment." Id. There are no genuine issues for trial if the record taken as a whole would not persuade a rational trier of fact to find for the nonmoving party. Matsushita Elec. Indust. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). More than a "disfavored procedural shortcut," summary judgment is an important procedure "designed `to secure the just, speedy and inexpensive determination of every action.' Fed.R.Civ.P. 1." Celotex Corp. v. Catrett, 477 U.S. 317, 327, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). At the same time, a summary judgment motion does not empower a court to act as the jury and determine witness credibility, weigh the evidence, or choose between competing inferences. Windon Third Oil and Gas v. Federal Deposit Ins., 805 F.2d 342, 346 (10th Cir.1986), cert. denied, 480 U.S. 947, 107 S.Ct. 1605, 94 L.Ed.2d 791 (1987).

The initial burden is with the movant to "point to those portions of the record that demonstrate an absence of a genuine issue of material fact given the relevant substantive law." Thomas v. Wichita Coca-Cola Bottling Co., 968 F.2d 1022, 1024 (10th Cir.), cert. denied, 506 U.S. 1013, 113 S.Ct. 635, 121 L.Ed.2d 566 (1992). The moving party need not disprove the nonmoving party's claim or defense; it need only establish that the factual allegations have no legal significance. Dayton Hudson Corp. v. Macerich Real Estate Co., 812 F.2d 1319, 1323 (10th Cir.1987). If this burden is met, the nonmovant must "set forth specific facts that would be admissible in evidence in the event of trial from which a rational trier of fact could find for the nonmovant." Adler v. Wal-Mart Stores, Inc., 144 F.3d 664, 671 (10th Cir.1998). (citations omitted). "To accomplish this, the facts must be identified by reference to affidavits, deposition transcripts, or specific exhibits incorporated therein." Id. A party relying on only conclusory allegations cannot defeat a properly supported motion for summary judgment. White v. York Intern. Corp., 45 F.3d 357, 363 (10th Cir.1995). Rather, the opposing party must come forward with significant admissible probative evidence supporting that party's allegations. Anderson v. Liberty Lobby, Inc., 477 U.S. at 256, 106 S.Ct. 2505. To be sufficient, the evidence must be "in specific, factual form for a jury to return a verdict in that party's favor." Thomas v. International Business Machines, 48 F.3d 478, 484 (10th Cir.1995) (quotation omitted). The rules of this court further specifically state that "all material facts set forth in the statement of the movant shall be deemed admitted for the purpose of summary judgment unless specifically controverted by the statement of the opposing party." D.Kan. Rule 56.1(a).

STATEMENT OF FACTS

In the 1960's, Bob Dodson started an aviation business, and his son, J.R. Dodson, began working full-time in the parts division of his father's business in 1980's. Growth in parts business led to the formation of Dodson International Parts, Inc., and J.R. Dodson became its president. Dodson International Parts is engaged in the business of aircraft recovery, which includes the bidding on and purchasing damaged and downed aircraft, the repair and restoration of damaged aircraft, the sale of restored or repaired aircraft, and the sale of salvaged aircraft parts. There are several other affiliated corporations and companies owned and operated by Bob and J.R. Dodson, including: Dodson Aeroservice, Inc.; Dodson Investment Holding Company; Dodson Aviation, Inc.; Dodson Rotorwing Division; and Dodson International Parts, Inc., Helicopter Division.

In the latter half of the 1980's, Bob Dodson married Pam Altendorf, who was the mother of Philip Altendorf and Jeffrey Altendorf. Prior to June of 2000, Bob Dodson referred to Philip and Jeffrey as his sons, and J.R. Dodson referred to the Altendorfs as his brothers. Phillip Altendorf began working for Dodson International Parts in 1988 and sometime in the early to middle 1990's focused his efforts on helicopters. Jeffrey Altendorf also began working for Dodson International Parts.

The plaintiff alleges the Altendorfs were never officers or shareholders in Dodson International Parts and exploited their family position and relationship by misappropriating business opportunities and transactions for their own benefit. The plaintiff further claims that other named defendants combined and conspired with the Altendorfs to engage in this misappropriation of the plaintiff's business opportunities. Under general theories of civil conspiracy, misappropriation of trade secrets and unfair competition, the plaintiff alleges that the Altendorfs while in the plaintiff's employ engaged in a series of transactions that diverted business opportunities from Dodson International to Eric Chase and Mansfield Heliflight, Inc., a corporation that prominently deals in helicopters and helicopter parts, and Richard Moorhead and Resources Unlimited, Inc. These other parties directly compete with the plaintiff for business. The remaining paragraphs under this section address the individual transactions at issue in this lawsuit.

AS 355

According to the plaintiff, Phillip Altendorf traveled to Sweden at Dodson's expense inspected the AS 355 helicopter, and submitted a bid on Dodson's behalf which the owner of the helicopter accepted in November of 1999. According to Phillip Altendorf, J.R. Dodson told him to wait on this deal because of cash flow issues, and Phillip came to the conclusion that Dodson International would not be able to complete the deal. Phillip Altendorf then approached Moorhead and Resources Unlimited and revealed this deal which Dodson was unable to complete. Altendorf told the owner of the AS355 that Moorhead was interested. Altendorf and Moorhead discussed their joint involvement on this project through Altendorf's business, Circle H. Moorhead and Altendorf agreed to split any profits received after Moorhead recovered his initial investment. In December of 1999, the helicopter was delivered to Resources Unlimited in Texas, and the engines were later transported to Dallas Airmotive. Altendorf used a truck and an employee from Dodson International to transport the engines.

To purchase the AS355, Moorhead and Resources Unlimited had taken out a high interest, short-term loan in November of 1999. When this loan became delinquent, Phillip Altendorf helped them look for alternative financing. Altendorf approached Eric Chase and Mansfield with this deal. In May of 2000, Mansfield purchased the AS 355 from Resources Unlimited and agreed to share profits with Altendorf and Resources Unlimited after all initial expenses had been paid. The engines are still located at Dallas Airmotive, and are the subject of an interpleader action filed by Dallas Airmotive in which the plaintiff disputes the title to those engines. The action is entitled Dallas Airmotive, Inc. v. Dodson International Parts, Inc., Mansfield Heliflight, Inc. and is pending in the District Court, Dallas County, Texas, Case No. 00-8220-J. The action has been abated pending the outcome of the instant case.

PUMA 330J

In Spring of 2000, Richard Moorhead of Resource Unlimited informed Eric Chase of Mansfield about...