Bobcat North America, LLC v. Inland Waste Holdings, LLC

IN THE SUPERIOR COURT OF THE STATE OF DELAWARE

BOBCAT NORTH AMERICA, LLC,

Plaintiff,

V.

INLAND WASTE HOLDINGS, LLC;

RSMDBB HOLDINGS, LLC; BART

A. BEGLEY; MONTGOMERY M.

DAVISON; and ROBERT A.

SMITH,

Defendants.

C.A. No. N17C-06-170 PRW

CCLD

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INLAND WASTE HOLDINGS, LLC; )

RSMDBB HOLDINGS, LLC; BART )

A. BEGLEY; MONTGOMERY M. )

DAVISON; ROBERT A. SMITH; )

INLAND SERVICE )

CORPORATION, LLC; and )

INLAND SERVICE OF FLORIDA, )

LLC, )

Counterclaim Plaintiffs)

and Intervenors, )

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V.

BOBCAT NORTH AMERICA, LLC,

Counterclaim

Defendant.

Submitted: January 23 , 2019

Decided: April 26, 2019

Upon PlaintWCounterclaim Defendant Bobcat North America, LLC ’s

Motion for Partial Summarjy Judgment,

GRANTED in part; DENIED in part.

MEMORANDUM OPINTON AND QRDER

Joel Friedlander, Esquire, Christopher M. Foulds, Esquire, Christopher P. Quinn,

Esquire, Friedlander & Goris, P.A., Wilmington, Delaware, Andrew J. Wronski,

Esquire (pro hac vice) (argued), Max B. Chester, Esquire (pro hac vice), Andrew M.

Meerkins, Esquire (pro hac vice), Foley & Lardner LLP, Milwaukee, Wisconsin,

Attorneys for Plaintiff/Counterclaim Defendant.

David S. Eagle, Esquire, Sean M. Brennecke, Esquire, Klehr Harrison Harvey

Branzburg LLP, Wilmington, DelaWare, William T. Hill, Esquire (pro hac vice)

(argued), Gregory R. Sellers, Esquire (pro hac vice), Klehr Harrison Harvey

Branzburg LLP, Philadelphia, Pennsylvania, Attorneys for

Defendants/Counterclaim Plaintiffs.

WALLACE, J.

_ii_

I. INTRODUCTION

Plaintiff Bobcat North America, LLC (“Bobcat”) brings this action against

Defendants Inland Waste Holdings, LLC (“Inland Holdings”), RSMDBB Holdings,

LLC (“RSMDBB”), Bart A. Begley (“Begley”), Montgomery M. Davison

(“Davison”), and Robert A. Smith (“Smith”, together With Begley and DaVison, the

“Sellers”) (Sellers, together With Inland Holdings and RSMDBB, “lnland”) for

claims arising out of Bobcat’s acquisition from Inland of a Waste management

business consisting of Inland Waste Solutions, LLC (“lnland Solutions”), ABC

Leasing Company, LLC (“ABC”), and Inland Service Corporation, LLC (“Inland

Service”) (together With Inland Solutions and ABC, the “Company”). Bobcat’s

Complaint is based on Inland’s alleged misrepresentation of the Company’s

financial statement, customer relationships, and assets to inflate the acquisition

price. Bobcat brings one count each of fraud, negligent misrepresentation, and

breach of contract through Which it seeks, inter alia, declaratory judgment and

indemnification

Inland answered the Complaint and, together With intervenors Inland Service

and Inland Service of Florida, LLC (“lnland Florida”) (Where necessary, the

reference to Inland also includes “lnland Service” and “Inland Florida”l) bring

l The Court acknowledges that Inland Service and Inland Florida are intervenors Given the

relationship among each of the Inland-affiliated parties, particularly their direct or indirect control

_1_

against Bobcat counterclaims via two counts of tortious interference, one count of

defamation, a breach-of-contract count, and an indemnification claim.

Now before the Court is Bobcat’s Motion for Partial Summary Judgment.2

For the reasons stated below, the Court GRANTS Bobcat’s Motion, in part, and

DENIES it, in part.

by Begley, Davison, and Smith, the Court uses “Inland” to reference all the relevant Inland-related

parties, and identifies the specific party where necessary.

2 After Bobcat filed its Motion for Partial Summary Judgment in October 2018, it sought

and obtained the Court’s approval for leave to amend its complaint Bobcat’s leave to amend was

unopposed by lnland. Bobcat filed its amended complaint (its second) in November 2018 [cited

hereinafter as “Second Am. Compl.”]. Bobcat’s amended complaint asserts additional facts in

connection with Inland’s alleged breach of contract and misrepresentation But those additional

factual allegations do not affect Bobcat’s current motion or Inland’s opposition thereto. So the

Court finds it unnecessary for the parties to further amend their respective motion papers. lnstead,

the Court considers the amended complaint’s additional factual allegations and those from Inland’s

amended answer when deciding this motion for partial summary judgment

_2_

II. FACTUAL AND PROCEDURAL BACKGROUND

The Court summarizes here only the factual background pertinent to this

motion. The Court extracts this background from the undisputed facts found in

Bobcat’s complaint (and its amendments), Inland’s counterclaims (and their

amendments), and the parties’ motion submissions of affidavits and exhibits

A. THE PARTIES AND INLAND’s CoNTEMPLATED SALE oF THE CoMPANY.

Bobcat is a limited liability company with its principle place of business in

Sarasota, Florida.3 George W. Dietrich is Bobcat’s Chief Executive Officer. His

son, William “Billy” Dietrich, is the President.4

The Company, founded in 1953, specializes in residential and commercial

waste management systems and services.5 On December 31, 2012, Begley and

Davison each acquired 37.5% of the Company’s outstanding equity from Smith, who

retained 25% of the equity interest.6 Begley and Davison financed their combined

purchase price of $25,000,000 through a loan from Union Bank, N.A., to be repaid

3 Pl. and Countercl. Def.’s Opening Br. in Supp. of its Mot. for Partial Summ. J., at 5

[hereinafter “Pl. ’ s Br.”].

4 Id., at 5-6. To avoid confusion, this opinion may on occasion refer to either of the Messrs.

Deitrich by his first name. No disrespect of familiarity is intended.

5 second Am. Compi. 1111 22_23.

6 Id_ y 24.

in installments of approximately $400,000 per month from the Company’s post-

acquisition revenues.7

At the time of this 2012 purchase, the Company ran a waste management

business in Fort Hood, Texas (“Ft. Hood Business”).8 ln 2014, the Company was

chosen by Memphis, Tennessee as its waste management contractor.9 Also in 2014,

the Company executed an asset swap agreement with a competitor to obtain the right

to service the City of Germantown, Tennessee_a Memphis suburb.lO

ln the Summer of 2015, Inland contemplated the sale of the Company and

retained an investment banking firm, Livingstone Partners LLC (“Livingstone”), to

l Later that year, Livingstone complied and Inland issued an

help the Company.l

lnformation Memorandum to prospective buyers, including Bobcat.12 In that

lnformation Memorandum, Inland represented, among other things, that: (l) the

Company’s model was superior in generating Earnings Before lnterest, Tax,

7 Id.

8 Pl’s Br. Ex. A Unit Purchase Agreement [hereinafter “UPA”] § Definition (ffff) “Ft. Hood

Business.”

9 Second Am. Compl. 11 32.

10 Id. 11 35.

" Defs.’ Answer to Second Am. Compl. And Countercls. Against Countercl. Def. Bobcat

[hereinafter “Answer & Countercls.”] 11 28.

12 ld. 11 29.

Depreciation, and Amortization (“EBITDA”); and (2) the Company had EBITDA

margins of35% from 2011 through 2015.13

B. BOBCAT’S ACQUISITION oF THE CoM:PANY AND THE UPA.

After receiving the lnformation Memorandum, Bobcat contacted lnland, and

in January 2016, the parties signed a formal letter of intent and commenced

negotiations14 The acquisition was finalized on May 18, 2016, when Bobcat and

Inland entered into a Unit Purchase Agreement (“UPA”). Through the UPA, Bobcat

purchased, at a price of $64,900,000: (a) 100% interest in Inland Solutions from the

Sellers; and (b) 100% interest in ABC and Inland Service from Inland Holdings

(exclusively owned by the Sellers) (the “Transaction”).lS

At the time of the Transaction, the Company maintained operations in ten

states: Arkansas, Delaware, Georgia, Kansas, Mississippi, Missouri, Oklahoma,

Tennessee, Texas, and Wisconsin.16

As part of the Transaction, the Sellers collectively received 11.9% equity

ownership interest (the “Rollover Equity”) of Bobcat through RSMDBB. RSMDBB

13 Id. 11 30.

14 Id. 11 114.

15 second Am. Compi. 11 i; UPA §§ 1,3.

16 ld_ 1 22.

was formed specifically to hold this Rollover Equity.17 The Rollover Equity was

subject to redemption by Bobcat after Closing if Inland failed to meet certain

financial performance targets tied to proposed expanded service contracts with

Memphis (“Memphis Expansion”). l 8

Under the UPA, Bobcat and Inland were bound by covenants to the other

concerning their post-closing arrangements19 including, at issue here, Inland’s

obligation of confidentiality and non-disparagement20

C. BOBCAT DiscovERs INLANi)’S ALLEGED MIsCoNDUCT AND

MISREPRESENTATION PoST-CLosING.

Shortly after the closing of the Transaction, Bobcat says it discovered Inland’s

misconduct, misrepresentation, fraud, and mismanagement of the Company.21

Among other things, Bobcat learned that: (l) the Memphis service contracts operated

at a loss of over $1 million;22 (2) numerous claims had been filed against the

Company resulting in liquidated damages of $406,000 for uncured violations that

17 Second Am. Compl. 11 15; Answer & Countercls. 11 15; UPA § 2.2.

18 UPA § 6.12(b).

19 Answer & Countercls. 1111 18-26; UPA § 6.

20 Answer & Countercls. 1122; UPA § 6.4.

21 Second Am. Compl. 1111 143_61.

22 Id. 11 152.

occurred in 2016 alone;23 and, (3) the Company failed to properly maintain its trucks

and equipment.24 Bobcat found too that the Company was faced with liquidated

damages in Delaware and had already lost certain Delaware business via

reassignment to a competitor.25 Further, Bobcat discovered what appeared to be

intentional irregularities in the Company’s pre-closing booking of ordinary

expenses.26

D. INLAND FLoRli)A AND ITs LosT CoNTRACT wITH OKALoosA.

In September 2016, while Bobcat was investigating the Company’s suspected

non-compliance with the UPA, Begley and Davison formed Inland Florida in

contemplation of bidding for a waste management contract with the Board of County

Commissioners for Okaloosa County, Florida.27 The Okaloosa Board had earlier

published a request for proposals.28 And, on November 10, 2016, Inland Florida,

with Begley and Davison as its founders, submitted a proposal to the Okaloosa

Board.29 Among other complained-of misconduct, Begley and Davison allegedly

23 Id. 11150.

24 Id. 11145.

25 Id. 11153.

26 ld. 11155.

21 ld. 11177.

22 Id. 11174.

29 1a 11181.

used UPA-protected confidential information_e.g. pricing, names, addresses, and

contract terms and conditions of the Company’s customers_to boost Inland

Florida’s credentials.30

Before the Okaloosa Board made its final decision, Billy Dietrich sent its

members an email objecting to Inland Florida’s use of Bobcat’s confidential

information.3‘ The Okaloosa Board ultimately selected another contractor in

February 2017.32 Four months later, this action ensued. And before the Court now

is Bobcat’s Motion for Partial Summary Judgment through which seeks to knock out

some of Inland’s counterclaims

III. STANDARD OF REVIEW

“The standard of review on a motion for summary judgment is well-

settled.”33 A motion for summary judgment is reviewed by this Court under Superior

Court Civil Rule 56(0), which states:

The judgment sought shall be rendered forthwith if the pleadings,

depositions, answers to interrogatories and admissions on file,

together with the affidavits, if any, show that there is no genuine

311 Id. 1111183-84.

31 1a 1192.

32 Id. 1111 193_94.

33 Pazuniak Law Oyj'z`ce LLC v. Pi-Net Int’l, Inc., 2017 WL 3701031, at *1 (Del. Super. Ct.

Aug. 25, 2017).

issue as to any material fact and that the moving party is entitled

to a judgment as a matter of law.34

The burden is on the moving party to demonstrate its prayer for summary

judgment is supported by undisputed facts or an otherwise adequate factual record

to support a legal judgment35 “If the motion is properly supported, then the burden

shifts to the non-moving party to demonstrate that there are material issues of fact

for resolution by the ultimate fact-finder.”36

The Court may grant a motion for summary judgment when: “(1) the record

establishes that, viewing the facts in the light most favorable to the nonmoving party,

there is no genuine issue of material fact, and (2) in light of the relevant law and

those facts, the moving party is legally entitled to judgment.”37 But the Court cannot

grant a motion for summary judgment “[i]f . . . the record reveals that material facts

are in dispute, or if the factual record has not been developed thoroughly enough to

allow the Court to apply the law to the factual record . . . .”38

34 Del. Super. Ct. Civ. R. 56(0).

35 See CNH Indus. Am. LLC v, Am. Cas. Co. ofReaa’ing, 2015 WL 3863225, at *1 (Del.

Super. Ct. June 8, 2015).

36 Id

37 Haft v. Haft, 671 A.2d 413, 414-15 (Del. Ch. 1995) (citing Burkhart v. Davies, 602 A.2d

56, 58~59 (Del. 1991)). See also Brooke v. Elihu-Evans, 1996 WL 659491, at *2 (Del. 1996) (“lf

the Court finds that no genuine issues of material fact exist, and the moving party has demonstrated

his entitlement to judgment as a matter of law, then summary judgment is appropriate.”).

211 CNHIndus. Am. LLC, 20i5 wL 3863225,at*1.

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A fact is material if it might affect the outcome of the pled claim under the

law governing such a claim.39 ln considering a motion for summary judgment, the

Court’s principle function is to examine the record to determine whether genuine

issues of material fact exist, but not to decide such issues40

At bottom, a claim “should be disposed of by summary judgment whenever

an issue of law is involved and a trial is unnecessary.”"'l

IV. DISCUSSION

Bobcat moves for partial summary judgment asking the Court to: (1) declare

that that the Rollover Equity has been redeemed; (2) find Inland’s breach of the

confidentiality agreement of the UPA; and (3) dismiss Inland’s counterclaims for

tortious interference with prospective business relationship and defamation based on

Billy Dietrich’s email to the Okaloosa Board.

39 Anderson v. Liberly Lobby, Inc., 477 U.S. 242, 248 (1986) (“Only disputes over facts that

might affect the outcome of the suit under the governing law will properly preclude the entry of

summary judgment.”). See also 171 re Asb. Litigation, 2006 WL 3492370, at *3 (Del. Super. Ct.

Nov. 28, 2006); Farmers Bank of Willards v. Becker, 2011 WL 3925428, at *3 (Del. Super. Ct.

Aug. 11, 2011).

40 Merrill v. Crothall-American Inc., 606 A.2d 96, 99-100 (Del. 1992) (internal citations

omitted).

41 Je/j"ries v. Kenr Czy. Vocaiional Tech. Sch. Disr. Bd. ofEduc., 743 A.2d 675, 677 (Del.

Super. Ct. 1999).

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A. BoBCAT’s CoUNT V_DECLARATORY JUDGMENT oN THE RoLLovER

EQUITY.

In Count V, Bobcat claims that because the Memphis Expansion did not occur,

Bobcat is entitled to redeem the Rollover Equity and a repayment of $530,000 from

RSMDBB.42 Bobcat moves now for a declaratory judgment on that count.

Bobcat avers that, pursuant to the UPA’s Section 6.12, redemption became

“automatic” when Inland failed to deliver the Memphis Expansion. According to

Bobcat, the Memphis Expansion is an “exclusive” condition triggering redemption

“without regard to cause.”43 Inland all but admits that the Memphis Expansion did

not occur; and Inland does not contest Section 6.12’s language.44 But Inland

counters with affirmative defenses of prevention of performance and

imposSibility/impracticability.45 Inland additionally suggests that the presently

incomplete factual record_which it says should be further developed through

discovery_prevents entry of such a declaration now.46 The parties’ post-argument

42 Second Am. Compl. 1111 257-59.

43 Pl. and Countercl. Def.’s Reply Br. in Supp. of its Mot. for Partial Summ. J., at 16

[hereinafter “Pl.’s Reply”] (“Section 6.12’s return of the Rollover Equity and the $530,000

prepayment is conditioned exclusively on the occurrence or nonoccurrence of the Memphis

Expansion, without regard to cause, showing the Sellers assumed all risks of non-occurrence.”).

44 Answer & Countercls. 11 163.

45 Defs. And Countercl. Pls’s Br. in Opp’n to Pl./Countercl. Def.’s Mot. for Partial Summ.

J, at 3, 15-22 [hereinafter “Defs.’ Opp’n”].

46 Id., at 22_24.

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submissions have further developed their positions on Inland’s affirmative

defenses.47

1. Construction of Section. 6.12 of the UPA.

Section 6.12 of the UPA, titled “l\/lemphis Expansion_Redemption and

Memphis Payment”, reads in pertinent part:

(a) Memphis Expansion

(i) . . . Begley shall have the authority to exclusively

negotiate . . . execute . . . Memphis Contract[;]

(ii) . . . Davison shall manage the Memphis Expansion

in the normal course of business, consistent with past

practices . . .48

Section 6. 12 continues: if the Memphis Expansion does not occur, the

Rollover Equity “will automatically and without further deed or action by any party

be cancelled and redeemed by [Bobcat]. . .”49 In addition, “[Begley and Davison]

47 Bobcat says Inland’s affirmative defenses are contract defenses that are inapplicable to a

declaratory judgment action. Bobcat goes on that even if those defenses are conceptually

applicable, Inland assumed the risk under the UPA_namely, the risk that the Memphis Expansion

might not occur. See Pl.’s Reply, at 12-18. During oral argument on this motion Inland brought

up cases never mentioned in its briefing to support its position that contract defenses can be applied

to declaratory actions See Official Tr. for Oral Argument held on Jan. 4, 2019, at 41-43, 83

[hereinafter “O.A. Tr.”] (D.l. 108); Power Point Presented to the Court by Defendants and

Counterclaims Plaintiffs during the .lan. 4, 2019 Hearing, at 12-13 [hereinafter “Defs.’ Power

Point”] (D.l. 105). The Court allowed Bobcat an opportunity to respond to Inland’s newly cited

authorities and Bobcat did. See Letter to The Honorable Paul R. Wallace from Christopher M.

Foulds Regarding Bobcat North America, LLC's Response to the Authorities from the Jan. 4, 2019,

Oral Argument [hereinafter “Pl.’s Sur Reply”] (D.l. 107). The Court has now considered both the

original and supplemental authorities cited by the parties

48 UPA § 6.12(3).

49 Id. § 6.12(b) (emphasis added).

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shall pay to [Bobcat] . . . an inversely proportionate amount of the Base Memphis

Payment. . .”50 The “Base Memphis Payment” is 35530,000.5l

Delaware law governs the UPA.52 And under Delaware law, “[t]he proper

construction of any contract is purely a question of law.”53 The objective is to give

effect to the parties’ mutual intent at the time of contracting.54 Absent ambiguity,

contract terms should be accorded with their plain, ordinary meaning.55 A contract

term is not ambiguous merely because the parties dispute its meaning.56 Ambiguity

exists when the disputed term “is fairly or reasonably susceptible to more than one

meaning.”57

50 Id. § 6.12(c).

5 ' Id. § 10.17 (Definitions(t)).

52 UPA § 10.6 (Laws Governing Agreement; Consent to Jurisdiction; No Jury Trial).

55 Exelon Generation Acquisitions, LLC v. Deere & Co., 176 A.3d 1262, 1263 (Del. 2017).

See also Eagle Force Hldgs., LLC v. Campbell, 187 A.3d 1209, 1212 (Del. 2018) (“Whether [a]

contract’s material terms are sufficiently defined is mostly, if not entirely, a question of law.”);

O’Brien v. Progressive N. Ins. Co., 785 A.2d 281, 286 (Del. 2001) (“[T]he interpretation of

contractual language is a question of law.”).

54 Exelon Generation Acquz`sz`tions, 176 A.3d at 1263; Salamone v. Gorman, 106 A.3d 354,

367-68 (Del. 2014) (construing a contract’S language should adhere to what “would be understood

by an obj ective, reasonable third party.”).

55 Alta Berkeley V] C. V. v. Omneon, Inc., 41 A.3d 381, 385 (Del. 2012).

56 lai

57 Id

_13_

Here, the Court finds Section 6.12’s language clear and unambiguous and,

therefore, accords its terms with their plain and ordinary meaning. That ordinary

meaning is: with respect to the Memphis Expansion, “[f]rom and after the Closing,”

Begley was to exclusively negotiate contracts for the Memphis Expansion, and if a

contract is executed, Davison was to manage its operation in the normal course of

business

The deliberately selected word “automatically,” and phrase “without further

deed or action,” unambiguously states that the Rollover Equity is tied to, and only

to, the Memphis Expansion.

2. Contract Defenses Can Be Applied to a Declaratorjy Judgment

Action.

Turning to Inland’s affirmative defenses, the first question answered must be:

Are contract defenses_like prevention and impossibility/impracticality_available

in a declaratory judgment action? They can be.

Contract defenses do not apply to equitable claims, only legal claims But a

declaratory judgment action is not per se equitable.58 So there is occasion where the

Court must determine whether a given declaratory judgment action is one in law or

58 Kraft v. WisdomTree Investments, Inc. , 145 A.3d 969, 985 (Del. Ch. 2016) (“A declaratory

judgment is a creature of statute and ‘not a purely equitable remedy.”’) (quoting Prestancia Mgmt.

Gp., Inc. v. Va. Heritage Found., IILLC, 2005 WL 1364616, at *7 (Del. Ch. May 27, 2005)).

_14_

one in equity.59 That determination turns on factors such as the nature of the

underlying claim,60 other accompanying requested relief, and the essence of the

declaration sought.6l

Here, Bobcat’s declaratory claim is based solely on a contract provision: the

construction and application of Section 6.12. This claim bears little difference, if

anyl, from, for instance, a potential breach-of-contract claim alleging Inland failed

to return the Rollover Equity as required by the contract.62 Bobcat’s declaratory

judgment claim is legal in nature; Bobcat concedes as much.63 Therefore, contract

59 Id. (“Whether a declaratory judgment is legal or equitable in nature depends on the

underlying subject matter.”).

60 Id. E.g., Eluv Hldgs. (BVI) Ltd. v. Dotomi, LLC, 2013 WL 1200273, at *5 (Del. Ch. Mar.

26, 2013) (concluding that declaratory judgment to establish share ownership was based on a claim

that was functionally equivalent to breach of contract, therefore, statute of limitations defense was

applicable by analogy).

61 See e_g., Kraft, 145 A.3d at 985-86 (finding the declaratory action is legal in nature after

concluding the underlying claim, based on Delaware constitution and DGCL, is legal in nature);

Eluv, 2013 WL 1200273, at *5 (applying the statute-of-limitation defense to a declaratory

judgment claim by analogy after concluding that the claim is legal in nature); E. Shore Envtl., Inc.

v. Kent Cty. Dep’t of Planning, 2002 WL 244690, at *4 (Del. Ch. Feb. 1, 2002) (finding equitable

jurisdiction to issue declaratory judgment because ultimate remedy being sought was an

injunction); Highlightsfor Children, Inc. v. Crown, 193 A.2d 205, 206 (Del. Ch. 1963) (finding

equitable jurisdiction over claim for declaratory judgment that shares were invalid, because “the

court must consider what plaintiffs complaint really seeks” beyond the face of the complaint);

Diel)old Computer Leasing, Inc. v. Commercial Credit Corp., 267 A.2d 586, 591 (Del. 1970)

(noting that the Court of Chancery has jurisdiction “if there is any underlying basis for equity

jurisdiction measured by traditional standards” and finding such a basis existed because “ultimate

coercive relief would be inj unctive”).

62 see, e.g., Eluv, 2013 WL 1200273, at *5.

65 Pl.’s Sur Reply, at 3 (“Nor does [Bobcat] dispute that its request for a declaration is based

on contract (as it requires the Courts to interpret Section 6.12).”). See also O.A. Tr., at 7-8

(admitting that prevention can be a defense “under a certain set of facts not present here, yes.”).

_15_

defenses, including the prevention and impossibility/impracticality Inland asserts

here, are conceptually applicable.

3. Inland’s Defense of Prevention of Pe)formance.

Inland’s defense of prevention of performance runs as follows: Bobcat’s poor

performance with Memphis “prevented” Begley from expanding the Memphis

contract. But Bobcat says this prevention defense cannot defeat summary judgment

here because Inland assumed the risk that the Memphis Expansion might not occur.

Inland disagrees, arguing that assumption of risk requires the contract language to

be explicit and Section 6.12’S is not.

The general rule concerning a condition precedent is that one has no duty to

perform until the condition occurs.64 And under the “prevention doctrine” a duty to

perform is excused if the other promisor party wrongfully prevented the condition

from occurring.65 “The key operative language . . . [is] ‘wrongfully prevented.”’66

Because “there is no prevention claim “where the contract, in effect, authorizes

64 Dist.-Realty Title lns. Corp. v. Ensmann, 767 F.2d 1018, 1023 (D.C. Cir. 1985).

65 A.I.C. Ltd. v. Mapco Petroleum Inc., 7ll F. Supp. 1230, 1238 (D. Del. 1989) (quoting

Mobile Comrnc'ns Corp. ofAm. v. Mci Commc'ns Corp., 1985 WL 11574, at *4 (Del. Ch. Aug.

27, 1985)).

66 Id. at 1238 n. 24 (D. Del. 1989). See also Shear v. Nat ’l Rz'fle Ass'n ofAm., 606 F.2d 1251,

1255 (D.C. Cir. 1979) (“This doctrine provides that when a promisor wrongfully prevents a

condition from occurring that condition is excused.”).

_16_

prevention.”67 The essential inquiry is whether or not the contract allocated the risk

of the condition’s nonoccurrence.68

Delaware and other courts have long-recognized the prevention doctrine and

its assumption-of-risk exception. Courts have found that contracts may authorize

prevention via explicit language such as “for any reason,”69 “for any reasons

”71

whatsoever,”70 “regardless of the circumstances giving rise to such condition, or

“nothing [therein] requires” the agreed-upon condition precedent be consummated72

67 Shear, 606 F.2d at 1256 Kraft, 145 A.3d at 985-86 (finding the declaratory action is legal

in nature after concluding the underlying claim, based on Delaware constitution and DGCL, is

legal in nature) (quoting 3A Corbin on Contracts §767, 545) (“The assumption of risk exception

recognizes that “there are some cases in which some sort of prevention or interference is

contemplated by the parties as quite proper and within the privileges of the promisor.”).

68 Dist. -Realty Title Ins. , 767 F.2d at 1023-24 (finding that the contract, by stating “the funds

would be returned [] if settlement did not occur ‘for no reason,”’ the contract allocated the risk of

nonsettlement to the developer of the real estate, and concluding that “there is no prevention.”).

69 Id

70 Dixon v. Bernstel`n, 182 F.2d 104, 104~05 (D.C. Cir. 1950) (contract stating real estate

buyer reserved the right to withdraw “for any reasons whatsoever.”).

71 In re Gulf Oi`l/Citz`es Serv. Tender Offer Litig., 725 F. Supp. 712, 737 (S.D.N.Y. 1989)

(Under governing Delaware law, the court found that where a contract states “regardless of the

circumstances giving rise to such condition (including any action or inaction by the Purchaser or

Gulf`),” the contract “clearly warns plaintiffs that defendants could exercise this option out

regardless of the circumstances and regardless of what actions defendants had taken or not

taken[.]”).

72 A.I.C. Ltd. v. Mapco Petroleum Inc., 711 F. Supp. 1230, 1238-39 (D. Del. 1989), affd, 888

F.2d 1378 (3d Cir. 1989) (Applying Delaware law to a claim arising from a consulting agreement

that explicitly provided that “nothing [therein] requires [Mapco] to enter into any agreement . .to

sell any or all of its [assets,]” the court concluded that the claimant “assumed the risk that Mapco

would opt not to form the contemplated asset sale transaction.”).

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Contract language that is less explicit has also been found to authorize

prevention by a contracting party or other. Frequently, these contract terms

condition the consummation of a transaction upon the approval of the other party,73

or subject one party to the discretion, satisfaction, or decision of the other party or a

third-party.74

75 Mol)ile Commc ’ns Corp. ofAm. v. MCI Commc ’ns Corp., 1985 WL 11574, at *4 (Del. Ch.

Aug. 27, 1985) (contract provided that “the consummation of the transactions shall be subject

to. . .(iii) the approval of the boards of directors of MCCA and MCI.” The court concluded that

“MCCA knew that board approval was a condition. . .l\/ICCA assumed the risk that the MCI board

would disapprove the transaction.”).

74 See, e.g., Cont’l Advisors S.A. v. GSVAsset Mgmt., LLC, 2015 WL 7720752, at *3 (N.D.

Cal. Nov. 30, 2015) (Applying Delaware law and finding where the contract stated the defendant

broker “is not obligated to compensate” plaintiff advisor if the transaction is not consummated or

if defendant unilaterally rejects the offer, the plaintiff “assumed the risk that the condition

precedent would not occur for any number of reasons outside of their control.”); Rol)ert Wood

Johnson Univ. Hosp. at Hamz'lton, Inc. v. SlW( Capital, Inc., 2013 WL 4510005, at *1-2, (D.N.J.

Aug. 26, 2013) (Under the contract, the parties’ rights and obligations to perform were subject to

five conditions precedent_three of which required the defendant to receive evidence and certain

confirmations “satisfactory to” the defendant; one of which required an interconnection agreement

“reasonably acceptable to” the defendant. Accordingly, the court found that the claimant “assumed

the risk that the conditions precedent will be prevented.”); Lilly v. Envoy, LLC, 2016 WL 7375271,

at *7-8 (W.D. Wash. Dec. 20, 2016) (Applying Delaware law, and holding that where the Stock

Purchase Agreement provided “[buyer] will have the authority and freedom to operate the Business

and the Company following the date hereof without limitation under this Agreement,” plaintiffs

had assumed the risk that defendant-buyer would not run the business in a way that allowed them

to fulfill milestone objectives that would otherwise entitled plaintiffs to an earn-out payment);

Doherty v. Am. Home Prod. Corp., 216 F.3d 1071 (2d Cir. 2000) (Applying Delaware law to a

claim for the exercise of stock options brought by at-will employees against the employer company

under option plans, the court affirmed that the “[employees] assumed the risk in the Option Plans

that their right to exercise their options would be shortened or eliminated by their termination from

an action by [employer], and as at-will employees they assumed the risk that they could be

terminated without cause...Thus, the prevention doctrine does not apply.”). But cf. Lieber v.

Morton-Norwich Prods., Inc., 1978 WL 1117, at *2 (S.D.N.Y. Sept. 29, 1978) (Under Delaware

law, a stock option agreement required continuous employment with the subsidiary which was

terminated by the sale of the subsidiary at the election by the parent company. The court held that

the sale of the subsidiary by the defendant parent company did not excuse plaintiffs at-will

employees from compliance with the express terms of the options that required them to be

employed with the subsidiary for one year.); Slamecka v. Empz`re Kosher Poultry, Inc., 290 F.

_13_

The fact that both contracting sides are sophisticated parties experienced in

their industry, weighs in favor of finding an assumption of risk in contract terms75

But where assumption of risk is found in a contract, courts caution that the specific

risk assumed must be distinguished from some “blanket” assumption of risk

claimed.76 For only a specific risk clearly assumed by a party will preclude that

party’s defensive claim of prevention.77 And absent clear contractual authorization

Supp. 2d 934, 938 (N.D. Ill. 2003) (applying lllinois law’s agency principle to a broker-seller

relationship with respect to the broker’s commission fees (as oppose to Delaware law’s approach

of treating such relationships as contract law), the court denied the defendant’s argument to defeat

plaintiffs prevention claim based on plaintiffs assumption of risk, reasoning that lllinois law

requires “[t]he commission is earned even though no enforceable contract to purchase is ever

formed and no sale is consummated, if, in fact, the failure to contract or consummate is wholly

attributable to the seller.”).

75 See, e.g., Cont’l Advz`sors, 2015 WL 7720752, at *5 (Applying Delaware law, the court

found assumption of risk, in part, based on the reason that “Plaintiffs are apparently savvy financial

organizations capable of facilitating deals of hundreds of millions of dollars.”); Dixon, 182 F.2d

at 105 (Noting in a suit by a real estate broker against a buyer arising from the commission fees,

“these are dealings between informed parties”).

76 Shear, 606 F.2d at 1253, 1256 (ln a dispute by real estate agent, Shear, against the buyer,

NRA, for buyer’s disapproval of a sale that resulted in Shear not getting paid for his commission,

the court considered NRA’s Management Committee’s procedure that “the winning bid

would. . .be unanimously recommended by the Management Committee to the Board of Directors.”

The court concluded that pursuant to the terms of the contract, Shear assumed the risk “that the

Board...would withhold approval despite the unanimous recommendations of the Management

Committee,” but “did not assume the risk that the Management committee would refuse to

recommend the contract, or that the Board would be deprived by a subsequently enacted by-law

of [the] authority to approve the contract.”).

77 See, e.g., id.; Haft v. Dart Group Corp., 877 F. Supp. 896, 903 (D. Del. 1995) (applying

prevention doctrine when employer wrongfully dismissed fixed-term contract employee without

cause, and holding that the employee cannot be denied of his stock option rights The court found

it “inconceivable” the proposition “that an employee would contract with his employer and assume

the risk of losing his stock options if the employer terminated him without cause.”); W& G Seaford

Assocs., L.P. v. E. Shore Markets, Inc., 714 F. Supp. 1336, 1341-42 (D. Del. 1989) (finding

assumption of risk inapplicable to the prevention argument because nothing in the agreement

_19_

of prevention (like that just described above), a court won’t judicially imply such a

term.78

Turning to Inland’s prevention defense, the Court finds Inland indeed

assumed the risk that the Memphis Expansion might not occur. Section 12.6 of the

UPA explicitly provides that if the Memphis Expansion does not occur, the Rollover

Equity “will automatically and without further deed or action by any party be

9179

cancelled and redeemed by [Bobcat.] The ordinary meaning and common

understanding of the word “automatically” pertinent here is “in

a manner independent of a decision or action”80 This use of “automatically” in this

contract, is reinforced by its next contractual phrase “without further deed or action

by any party.” And these words and phrases_included in this multimillion-dollar

agreement that was forged by sophisticated parties_in all meaningful ways equate

to “for any reason whatsoever,” and “regardless of the circumstances giving rise to

such condition.”

“states that either party assumed the risk that the conditions would not occur. Nor can such a term

be implied.”).

78 W & G Seaford Assocs., L.P., 714 F. Supp. at 1341-42 (finding assumption of risk

inapplicable to the prevention argument because nothing in the agreement “states that either party

assumed the risk that the conditions would not occur. Nor can such a term be implied.”).

79 UPA § 6.12(b) emphasis added).

80 Automatically, DICTIONARY.COM, http://www.dictionary.com/browse/automatically (last

visited Apr. 25, 2019).

_2()_

In unambiguously and painstakingly drafted language, Section 6.12 confers

the automation of the redemption that hinges solely on the nonoccurrence of a

predetermined event, here, the Memphis Expansion. By executing the UPA, Inland

knowingly consented to the risk that the Memphis Expansion might not occur, and

that if it did not occur, the Rollover Equity would automatically be redeemed,

without regard to the cause of the nonoccurrence.8l So Inland’s prevention defense

is foreclosed by its own knowing assumption of risk.

4. Inland ’s Defense of Impossibility /Impracticality

Inland also asserts the defense of impracticability/impossibility of

performance on the same basis as the prevention doctrine: Bobcat’s poor

performance made it impossible to expand the business with Memphis.82

81 Inland continues to argue, of course, that it did not assume the risk that the Memphis

Expansion wouldn’t occur. Rather, Inland insists “that the parties assumed the expansion would

occur,” and it could “not expect[] that Bobcat would change Memphis’s mind so quickly.” Defs.’

Power Point at Slides 23; O.A. Tr. at 48-49. According to Inland, only language as explicit as “if

the Memphis Expansion does not occur, the [R]ollover [E]quity is redeemed” would do. See id.

Slides 22_23; O.A. Tr. at 45-46 (assumption-of-risk exception “only applies where the contract

contains express language authorizing the prevention of performance.”) Not so. Having surveyed

a broad range of decisions applying Delaware law, the Court observes that finding a party has

contractually assumed a risk (and is, therefore, precluded from asserting prevention) is not always

based on some set incantation of express contractual authorization. Courts have found contracted

risk assumption based on varying contract language, as well as, reasonable commercial common

sense. Thus, Inland’s argument attempting to so narrow the application of the assumption-of-risk

exception is rej ected.

82 Defs.’ Opp’n, at 20-22.

_21_

Under Delaware law, an impracticability/impossibility defense requires the

showing of “(1) the occurrence of an event, the nonoccurrence of which was a basic

assumption of the contract; (2) the continued performance is not commercially

practicable; and (3) the party claiming impracticability did not expressly or

impliedly agree to performance in spite of impracticability that would otherwise

justify nonperformance.”83

Where the party has assumed the risk that the "impracticable/impossible”

event might occur, the defense does not apply.84 There can be no invocation of the

impossibility defense if “the supervening events were ‘reasonably foreseeable, and

could and should have been anticipated by the parties and provision made therefor

within the four corners of the agreement.”’85

Here, the sophisticated commercial parties, Bobcat and lnland, no doubt

foresaw that the Memphis Expansion simply might not occur for any number of

85 Chase Manhattan Bank v. lridium Afi'ica Corp., 474 F. Supp. 2d 613, 620 (D. Del. 2007)

(concluding that the defendants are precluded from raising the impracticability defense).

84 In re Bicoastal Corp., 600 A.2d 343, 351 (Del. 1991) (finding that the parties expressly

“provided for the contingency that Bicoastal might fail to redeem the junior preferred stock by the

mandatory redemption date,” and holding that the impossibility doctrine “does not excuse

nonperformance where the promisor has indicated an intent to assume the risk.”).

155 William Nat. Gas Co. v. Amoco Pmd. Co., i99i wL 58387, *i3 (Del. Ch. Apr. 16, 1991)

(“The doctrine of commercial frustration does not apply if at the time of contracting the

supervening events were ‘reasonably foreseeable, and could and should have been anticipated by

the parties and provision made therefor within the four corners of the agreement.”’) (quoting

Columbian Nat. Title Ins. Co. v. Twp. Title Servs., Inc., 659 F. Supp. 796, 804 (D. Kan. 1987)).

_22_

reasons or no reason at all. It is the very risk Section 6.12 contractually allocates.

Had Inland intended to place any limitation on the “automatic” redemption, it could

have done so. Having consented to taking on the potentiality that Memphis would

not expand its relationship-no matter what, and with no limitation_lnland cannot

retroactively avoid the consequence of that now-materialized risk.

Thus, given the simple interpretation of the UPA’s unambiguous language,

Inland’s affirmative defenses of prevention and impracticability/impossibility must

be rejected as a matter of law. The Court need not consider Inland’s calls for

additional discovery or suggestions that material factual disputes exist. The Court

GRANTS Bobcat’s motion for summary judgment on the claim to redeem the

Rollover Equity and the recoupment of the $530,000 Base Memphis Payment.

B. BoBCAT’s CoUNT III_BREACH oF THE CoNFIDENTIALITY AND NoN-

DIsCLosURE OBLIGATIONS BY INLAND UNI)ER § 6.4(A) oF THE UPA.

Bobcat next moves for summary judgment on its claim that Inland breached

the confidentiality obligation found in Section 6.4(a) of the UPA. Bobcat says

Inland Florida improperly used “confidential information” without authorization in

its bid for the waste management contract with the Okaloosa Board.86 Specially,

66 Pi.’S Br., at 30-35.

_23_

Bobcat claims that Inland Florida improperly (and misleadingly) used the names

addresses and other contract information of the Company’s customers87

Section 6.4(a) consists of four sentences They are broken down as follows:

First sentence: (a) . . . for a period of five (5) years after the Closing Date,

[Inland Holding] and each Member shall not . . . disclose to

any person any confidential information concerning the

Business, Facilities Equipment, Material Contracts

customers Permits or the Company Group.

Second sentence: [Inland Holding] and each l\/lember88 further agrees that

[Inland Holding] and such Member will not disclose the

pricing information, cost structure, customer names or

addresses or the terms or conditions. . .

Third sentence: lf [Inland Holding] or any Member becomes legally

compelled to disclose such confidential information [Inland

Holding] and/or such Member shall provide [Bobcat] with

prompt advance written notice . . .

Fourth sentence: “confidential information” means and includes without

limitation, all Trade Rights . . . all customer lists . . . all other

information concerning the Business . . . the Company

Group’s services clients customers acquisition prospects

subcontractors costs profits markets sales trade secrets

processes programs products marketing and distribution

methods but shall exclude any (x) knowledge, data and

information that is (i) generally known or becomes known to

the public (other than as a result of a breach of this

Agreement) . . .89

51 Id. at 32.

88 “Member,” as referenced in the UPA, is defined as each of Begley, Davison, and Smith.

See UPA § Preemble.

59 UPA § 6.4(a) (emphasis added).

_24_

The first sentence references “confidential information;” the second sentence

uses “further agrees,” and specifies five categories of information (narnely, pricing,

cost structure, customers’ names addresses and contracts’ terms or conditions); the

third sentence describes the procedure of giving notice when disclosure is legally

compelled; and the fourth sentence provides a definition of “confidential

information” and exemptions therefrom, e. g., “public information”

Bobcat acknowledges the “public information” exception, and concedes that

municipal contract information is largely public.90 According to Bobcat, the “public

information” exception only applies to the “confidential information” referenced in

the first sentence, and not the specified categories of information described in the

second sentence.91 So then, says Bobcat, because Inland Florida used items listed in

the second sentence, Inland Florida disclosed that not subject to Section 6.4(a)’s

“public information” exception92 In essence, Bobcat urges the Court to read the

90 Pl.’s Br., at 31 (“Company’s customers are municipalities making some Company

information ‘public,’ even if not widely known”); O.A. Tr., at 79~81 (“[different] terminology

in the second sentence because they mean something different”); id., at 84-85 (“l don’t dispute

that some categories of information from municipalities are public information that can be received

through FOIA requests.”).

91 Id., at 31~32.

92 Id.,ar 31_33.

_25_

first and second sentences as creating and imposing two independent, distinct and

unrelated confidentiality obligations93

Inland does not dispute that Inland Florida used the Company’s customers’

names addresses and municipal contract information without Bobcat’s prior

consent.94 But Inland does contest Bobcat’s isolationist reading of Section 6.4(a)’s

first two sentences Inland urges instead, that the “public information” exception

applies to both and its use fell within that exception.95

Factually, there is no dispute regarding Inland Florida’s use without Bobcat’s

authorization of information that could “become[] known to the public.” But the

dispositive question for summary judgment on this claim is narrow and solely one

of law: whether Section 6.4(a)’s second sentence imposes a confidentiality

obligation unexcepted by the same section’s “public information” exception lt does

not. As explained below, the second sentence is most naturally read to further

describe certain types of protected or “confidential information” ln turn, disclosure

95 1a 1111 30-35.

94 Ex. C to Pl.’s Br., Bart A. Begley’s Responses and Objections to Pl. Bobcat’s First Set of

Requests for Admission [hereinafter “Begley’s Responses”] 1111 21-35, 38, 41, 44, 46 (admitting

that the City of Augusta, City of Rogers Outaganie County, City of Dover, and Kent County were

not customers of any of Inland Florida, Inland Service, and Inland Holdings). See also Ex. D to

Pl.’s Br., Montgomery M. Davison’s Responses and Objections to Pl. Bobcat’s First Set of

Requests for Admission [hereinafter “Davison’s Responses”] 1111 14-28, 31, 34, 37, 39 (admitting

the same).

95 See e.g., Defs.’ Opp’n, at 24-29; Begley’s Responses 1111 36-44; Davison’s Responses 1111

29-37.

_26_

of that described in the second sentence might_depending on the circumstances_-

fall under Section 6.4(a)’s “public information” exception

1. T he First and Second Sentences Create Somewhat

Distinguishable but Congruous Confidentiality Obligations.

“The role of a court is to effectuate [contracting] parties’ intent.”96 Absent

textual ambiguity, the Court accords the contract’s language its plain, ordinary

meaning97 The Court takes a holistic view, reading the given instrument as a whole,

giving effect to all of its terms and reconciling or harmonizing all of its provisions.98

“[T]he meaning which arises from a particular portion of an agreement cannot

control the meaning of the entire agreement where such inference runs counter to

96 Menln Merlelle Melerlels, lee v. redeem Melerlels Ce., 68 A.3d 1208, 1218 (Del. 2012)

(en banc) (citing Lorillard Tobacco Co. v. Am. Legacy Found., 903 A.2d 728, 739 (Del. 2006)).

97 Lorillard Tobacco, 903 A.2d at 739. See also Exelon Generation Acquisitions, 176 A.3d

at 1263; Salarnone v. Gorman, 106 A.3d 354, 367-68 (Del. 2014) (construing a contract’s language

should adhere to what “would be understood by an obj ective, reasonable third party.”).

98 See generally E.l. du Penl de Nemeurs & Ce. v. shell oil Ce., 498 A.2d 1108, ii13 (Del.

1985) (“ln upholding the intentions of the parties a court must construe the agreement as a whole,

giving effect to all provisions therein.”); Martl'n Marietta Materials, 68 A.3d at 1122-26

(analyzing the language of the Non-Disclosure Agreement holistically by taking into consideration

different provisions and noting their relationships with one another); 2009 Caiola Falnily Trust v.

PWA, LLC, 2014 WL 1813174, at *7 (Del. Ch. Apr. 30, 2014); Alta Berkeley VI C. V. v. Ornneon,

Inc., 41 A.3d 381, 385-86 (Del. 2012); Elliott Assoc., L.P. v. Avatex Corp., 715 A.2d 843, 854

(Del. 1998).

_27_

the agreement’s overall scheme or plan.”99 And the Court must, when construing a

contract’s terms avoid absurd, irrational, and illogical results.100

Section 6.4(a) is unambiguous so the Court can accord its terms their plain

and ordinary meaning. Section 6.4(a)’s first sentence reads “not. . . disclose to any

??

person any confidential information concerning the Business . . . The second

sentence requires that the Inland entities “not disclose the [five categories of

information] to any person, firm, corporation, association or other entity related to

the Business.” That second sentence uses the conjunctive phrase “further agrees”

indicating something that is in addition to what has already been said in the first

sentence. Delaware courts traditionally honor the express language of a contract.

And contract construction resulting in superfluous verbiage is strongly disfavored101

lnterpreting the second sentence’s non-disclosure obligation as fully encompassed

within that described in the first sentence would effectively read the second sentence

out of Section 6.4(a) all together. The Court will not do so.

99 E.I. du Pont de Nernours & Co., 498 A.2d at 1113 (“Moreover, the meaning which arises

from a particular portion of an agreement cannot control the meaning of the entire agreement where

such inference runs counter to the agreement's overall scheme or plan.”).

199 osborn v. Kemp, 991 A.2d 1153, 1160_61 (Del. 2010).

101 Khan v. Delaware State Univ., 2017 WL 815257, at *4 (Del. Super. Ct. Feb. 28, 2017)

(“When interpreting contracts this Court...gives meaning to every word in the agreement[,] and

avoids interpretations that would result in superfluous verbiage.”) (internal quotation omitted).

_28_

As observed before, the UPA was negotiated and prepared by commercially

savvy parties Their deliberately chosen words in the contract language must be

given effect. Thus reading each sentence individually, and the entire Section 6.4(a)

holistically, the Court finds that the second sentence does create a confidentiality

obligation that is to some degree distinguishable from that of the first sentence. But

that does not end the matter.

2. T he Confidentialily Obligation Imposed by the Second Sentence is

Not Free from the “Public Information” Exception.

Recognizing the difference between the first and second sentences however,

does not mean they are completely isolated and independent To the contrary, their

relationship is that of a general provision and a specific one; between a broad

confidentiality obligation and its specific subset.

“Specific language in a contract controls over general language, and where

specific and general provisions conflict, the specific provision ordinarily qualifies

the meaning of the general one.”102

Here, the Court finds the specific provision (the second sentence) wholly

consistent with the general provision (the first sentence), and in essence, is a subset

192 oct/Holdings lne_ v. CenAgnn, lne., 889 A.2d 954, 961 (Del. 2005).

_29_

of the general provision The first sentence’s “confidential information” is inclusive

of the specified categories of information enumerated in the second sentence.103

The second sentence specifically applies to certain categories of persons and

information Under the circumstances where those criteria are met, a claim can be

based on the second sentence. The first sentence is a “catch-all” that sets forth a

general confidentiality obligation

Furthermore, the third sentence uses “such” confidential information to

reference the aforementioned information that immediately precedes “such”_that

is the specific information set out in the second sentence. Given these structural

relationships and the plain language of Section 6.4(a), the only reasonable

interpretation is that the specific information enumerated in the second sentence

further describes and is exemplary of, some of the “confidential information”

referenced more than once elsewhere throughout Section 6.4(a).

lt only follows that any exception to the general provision must apply to its

subset, i.e., the second sentence’s confidentiality obligation is subject to the fourth

sentence’s “public information” exception to the same extent the first sentence’s

confidentiality obligation is

105 Compare the second sentence’s “pricing information .cost structure, customer names

customer addresses and contractual terms,” with the first sentence’s confidential information that

includes “all customer lists . .and all other information concerning the Business . .and the

[Company’s] clients customers...costs, profits markets sales...”

_3()_

Given this construction, Bobcat’s motion can only be granted if Bobcat can

show on the present record, that Inland Florida used wholly confidential non-public

information in violation of Section 6.4(a). Bobcat hasn’t done so.

The present record demonstrates that Inland Florida used names addresses

or other contact information of certain of the Company’s municipal customers

Bobcat concedes that at least some of that information is public.104 And Bobcat

provides no affidavits exhibits or evidence that otherwise demonstrates what

information (if any) is non-public, thus protected under the confidentiality

agreement

Rather, Bobcat’s sole argument rests on its interpretation of Section 6.4(a)-

that the second sentence creates an entirely independent confidentiality obligation

that cannot be excepted under the fourth sentence. That interpretation just isn’t right.

Bobcat’s motion for summary judgment on Inland’s alleged breach of Section 6.4(a)

is DENIED.105

104 Pl.’s Br., at 32; O.A. Tr., at 79-81, 84-85.

105 Inland furthers alternative arguments to oppose summary judgment including: (1) Section

6.4(a) does not prohibit disclosure of information to the Okaloosa Board; (2) the language of

Section 6.4(a) is ambiguous and (3) Bobcat fails to allege facts supporting damages Defs.’

Opp’n, at 24, 32*34; O.A. Tr., at 57-69. The Court need not address these alternative arguments

_31_

C. CoUNTERCLAIM CoUNT I (ToRTIoUS INTERFERENCE wITH

PROSPECTIVE BUSINESS RELATIONS) AND CoUNT III (DEFAMATION)

wITH RESPECT To INLAND FLoRlDA.

Bobcat next seeks summary judgment on Inland Defendants’ counterclaims

of tortious interference and defamation Both counterclaims arise out of Billy

Dietrich’s email to the C)kaloosa Board concerning Inland Florida’s bid proposal.106

Bobcat invokes the First Amendment-based Noerr-Pennington doctrine, claiming

that Billy’s email is constitutionally privileged petitioning activity.107 Alternatively,

Bobcat contends that summary judgment is warranted under Florida law.108

The parties agree that Florida law governs this substantive claim.109 Even if

there was disagreement the Court would apply Florida law under Delaware’s “most

significant relationship” testl 10

106 Inland’s tortious interference claim also includes another count based on Billy’s email to

the Ft. Hood workforce. Bobcat’s present motion does not seek summary judgment on that count

191 Pi.’s Br., ar 35_57.

165 lel, 3148_54.

109 See O.A. Tr., at 18 (Bobcat conceding that “Florida state law is applicable to the actual

claims of the defamation and tortious claims[.]”). See also Pl.’s Br., at 36 n.13, 37 (“Moreover,

Mr. Dietrich’s email was privileged under Florida law. . .was never defamatory in the first place.”);

Defs.’ Opp’n., at 44 (“Bobcat’s arguments . .under Florida law fail[.]”).

110 Eureka Res., LLC v. Range Res.-Appalachia, LLC, 62 A.3d 1233, 1236 (Del. Super. Ct.

2012) (citing Travelers Indem. Co. v. Lake, 594 A.2d 38, 47 (Del. 1991) (adopting the flexible

approach of the “most significant relationship” provided in the Restatement (Second) of

Conflicts)).

_32_

1. Noerr-Pennington Doctrine Would Likely Not be Applied in a

Florida State Tort Action.

Bobcat first relies on the Constitution-based Noerr-Pennington doctrine,

contending that Billy’s email is protected petitioning activity. Inland contests that

the email does invoke the Noerr-Pennington doctrine,

l.'. Noerr-Pennington Doctrine Overview

Noerr-Pennington immunity is rooted in the First Amendment to the United

State Constitution which insures one’s “right to petition the government for a redress

of grievances.”111 Noerr-Pennington first emerged in the antitrust law to immunize

individual or concerted activity designed to influence legislation that might result in

trade restrictions or monopolies as a consequence of legislative activity.112 The

motive for such communication to the goverment was deemed by the Court to be

111 U.S. Const. Amend. l.

112 The Noerr-Pennington doctrine is named after the two landmark cases: Eastern Railroad

Presidents Conference v. Noerr Motor Freiglzt Inc., 365 U.S. 127 (1961), and United Mine

Workers v. Pennington, 381 U.S. 657 (1965).

_33_

irrelevant113 And Noerr-Pennington immunity has since been extended to

administrative and judicial actions.114

115

That immunity, however, is not limitless Noerr-Pennington applies only

to petitioning efforts seeking govemmental, not private, action.116 Petitioning

7

activities that employ unlawful meansll or consist of false statements to the

govemment,118 are not protected. Noerr-Pennington immunity is also subject to a

115 See Noerr, 365 U.S. at 139 (“The right of the people to inform their representatives in

government of their desires with respect to the passage or enforcement of laws cannot properly be

made to depend upon their intent in doing so.”); Pennington, 381 U.S. at 670 (“Joint efforts to

influence public officials do not violate the antitrust laws even though intended to eliminate

competition.”).

114 California Motor Transp. Co. v. Trucking Unlimited, 404 U.S. 508, 510 (1972) (holding

that Noerr-Pennington’s protection of the right to petition “governs the approach of citizens or

groups of them to administrative agencies and to courts[.]”).

115 Id. at 512-13, 515 (discussing that the Noerr-Pennington immunity does not protect

“illegal and reprehensive practices” that may corrupt the judicial process or deter and harass

competitors from having “free and unlimited” access to the agencies and courts such as perjury,

use of a fraudulent patent, illegal conspiracy with a licensing authority, misrepresentation and

bribery).

116 Allied Tube & Conduit Corp. v. Indian Head, Inc., 486 U.S. 492, 499 (1988) (citing Noerr,

365 U.S. at 136; Pennington, 381 U.S. at 671).

117 F.T.C. v. Superior Court Trial Lawyers Ass ’n, 493 U.S. 411, 424-25 (1990) (noting that

“the ends do not always justify the means,” and distinguishing that Noerr’s “restraint of trade was

the intended consequence of public action” while the boycott activity was “the means by which

respondents sought to obtain favorable legislation.”).

118 California Motor Transp. , 404 U.S. at 513 (“Misrepresentations condoned in the political

arena, are not immunized when used in the adjudicatory process.”). See also Armstrong Surgical

Ctr., Inc. v. Armstrong Cty. Mem ’l Hosp., 185 F.3d 154, 177 (3d Cir. 1999) (“[M]aterial

misrepresentations can vitiate Noerr-Pennington immunity.”), accord Cheminor Drugs, Ltd. v.

Ethyl Corp., 168 F.3d 119, 124 (3d Cir. 1999) (“[A] material misrepresentation that affects the

very core of a litigant's [] case will preclude Noerr-Pennington immunity.”); Potters Med. Ctr. v.

City Hosp. Ass ’n, 800 F.2d 568, 580 (6th Cir. 1986) (“[K]nowingly false submissions or intentional

_34_

“sham litigation” exception.119 A petitioning activity, although ostensibly directed

to influence governmental action, is a “sham” if it is actually designed to interfere

with a competitor’s business relationships120

The determination of whether a petitioning activity is a “sham” follows a two-

step inquiry.121 First, the litigation must be “objectively baseless” that “no

reasonable litigant could realistically expect success on the merits.”122 “[I]f

challenged litigation is objectively meritless” the court moves to the second-step

inquiry to examine the “litigant’s subjective motivation” to determine if the baseless

suit conceals an attempt to interfere with a competitor’s business through the “use

misrepresentations constitute an abuse of government processes”); St. Joseph’s Hospital v.

Hospital Corp. ofAmerica, 795 F.2d 948, 955 (1 lth Cir. 1986) (“l\/lisrepresentations under these

circumstances do not enjoy Noerr immunity.”); Whelan v. Abell, 48 F.3d 1247, 1254-55 (D.C.

Cir. 1995) (concluding that Noerr-Pennington does not protect “knowing misrepresentations to

state securities administrators and a federal court.”); Harris v. Adkins, 432 S.E.2d 549, 552 (W.

Va. 1993) (“the right to petition the government [] does not provide an absolute privilege for

intentional and reckless falsehoods but the right is protected by the actual malice standard.”).

119 See Noerr, 365 U.S. at 144; California Motor Transp., 404 U.S. at 515.

120 Noerr, 365 U.S. at 144. See also Clipper Exxpress v. Rocky Mountain Motor Tarijj’Bureau,

Inc. , 690 F.2d 1240, 1255 (9th Cir. 1982) (noting that the “sham exception” to Noerr-Pennington

immunity “reflects a judicial recognition that not all activity that appears as an effort to influence

government is actually an exercise of the first amendment right to petition At times this activity,

disguised as petitioning, is simply an effort to interfere directly with a competitor.”).

121 Professional Real Estate Investors, Inc. v. Columbia Pictures Industries, Inc., 508 U.S. 49,

60-61 (1993).

122 lel. et 60.

_35_

[of] the governmental process_as opposed to the outcome of that process-as an

anticompetitive weapon[.]”123

ii. Inapolicabilitv of Noerr-Pennington Doctrine to Inland

Defendants ’ Florida Common Law Based Counterclaims.

Noerr-Pennington doctrine is federally based. Bobcat concedes that Florida

state courts have not adopted Noerr-Pennington doctrine, but urges that this Court

should apply it under the federal Constitution’s Supremacy Clause.124

Under Delaware’s conflict-of-law jurisprudence, Delaware courts are

compelled to apply the foreign law as the state courts of the foreign jurisdiction

would. And Florida law simply has not adopted_in fact, it has somewhat resisted_

the Noerr-Pennington doctrine.

Florida appellate courts have not yet recognized any absolute privilege

assigned to petitioning activities under the First Amendment.125 lnstead, the Florida

Supreme Court has observed no need to do so given the “qualified privilege” or

“conditioned privilege” under Florida common law that provides wholly adequate

125 Id. at 60-61 (citing Noerr, 365 U.S. at 144; City of Columbia v. Omni Outdoor Advertising.

Inc., 499 U.S. 365, 380 (1991)(emphasis in original)).

124 see Pi.’s Br., at 38_39; o.A. Tr., en 21.

125 Fla. Fern Growers Ass ’n, Inc. v. Concerned Citizens ofPutnam Cty., 616 So. 2d 562, 567

(Fla. Dist. Ct. App. 1993) (“The original Noerr-Pennington line of cases then, hardly supports

the notion argued by appellees that there exists an absolute privilege for petitioning activities”)

(emphasis added), accord Turkey Creek, Inc. v. Londono, 567 So. 2d 943, 948 (Fla. Dist. Ct. App.

1990), approved, 609 So. 2d 14 (Fla. 1992).

_36_

protection of the First Amendment rights of speech, association, and petitioning

activities.126 In doing so, the Florida Supreme Court expressly rejected the “sham”

test and made it clear that “the right to petition decisions should adopt analogous

speech and association precedents” developed under Florida common law.127 And

so, on Inland Florida’s law-based tortious interference and defamation claims this

Court will not (and need not) announce such an unnecessary adoption for Florida

state courts but instead follows first the qualified privilege analysis utilized by them.

2. Inland’s Counterclaims for Tortious Inte)ference and

Defamation under Florida Law.

Under Florida law, Bobcat says Billy’s email is conditionally privileged

because (i) the communication is to protect Bobcat’s legitimate contractual rights

and (ii) is not defamatory.128 Inland maintains that the email is not privileged, and

existing factual disputes preclude summary judgment.129

126 see ivean v. Gelbnenln, 462 so. 2d 803, 809_10 (Fla. 1984) (finding that a parent’s

remarks concerning a teacher’s performance to the school board were privileged as a matter of law

as “statements of a citizen to a political authority.”); Londono v. Turkey Creek, Inc. , 609 So.2d 14,

18 (Fla. 1992) (“We decline to adopt the ‘sham’ test because we find that the current law in Florida

already provides protection for the First Amendment right to petition the government.”); Fla. Fern

Growers Ass ’n, 616 So.2d at 569 (affirrning that Florida Supreme Court in Londono equated “the

limited immunity from suit accorded under the First Amendment” with the “qualified privilege of

Florida’s common law.”).

127 Londono, 609 So.2d at 18; Fla. Fern Growers Ass ’n, 616 So.2d at 569.

128 Pi.’s Br., at 43_55.

129 Defs.’ opp’n, at 44_45.

_37_

i. The Court Cannot Find on the Present Record that

Billy’s Email is Privileged Communication Immune from

Liabi l itt-1 for Tortious ln terfel-'el?ce.

With respect to Inland’s tortious interference claim, Bobcat contends that the

email is privileged because it asserts Bobcat’s right under Section 6.4(a) because

Inland breached the confidentiality agreement.130 Inland contends that no valid

contract rights were asserted, and alternatively, factual disputes with respect to

Bobcat’s malice and employment of improper means preclude summary

judgment.151 Given the record at this point, the Court must agree with lnland.

Under Florida law, “[t]ort liability for interference with prospective

contractual relationships is generally recognized.”132 An interference can be

immunized from liability where the action “is undertaken to safeguard or promote

one’s financial or economic interest,”133 but not to purposefully cause a breach of

159 Pi.’s Br., at 49_50.

151 Defs.’ opp’n., at 49-51.

152 Monco Enterprises, Inc. v. Ziebart Corp., 673 So. 2d 491, 492 (Fla. Dist. Ct. App. 1996).

155 see Benee Helnllngs, LLC v. Tennlnel lnv. Cerp., 967 so. 2d 281, 293 (Fla. Dist. ct App.

2007); Yoder v. Shell Oil Co., 405 So. 2d 743, 744 (Fla. Dist. Ct. App. 1981) (holding that the

privilege to interfere is not limitless and the interfering party must “have a financial interest in the

business of the third party which is in the nature of an investment.”), rev. denied, 412 So.2d 470

(Fla. 1982); Knepper v. Genstar Corp., 537 So. 2d 619, 622 (Fla. Dist. Ct. App. 1988) (“A

statement is qualifiedly privileged if made by one who has a duty or interest in the subject matter

to one who has a corresponding duty or interest.”).

_33_

contract.154 And the claim’s target-i.e., he asserting privilege_will bear the

burden to show that the claimed interference is privileged or justified.155

To be immunized on the basis of privilege, the interfering action must be (l)

taken on a privileged occasion, and (2) the privilege may not be abused.136 Whether

an occasion gives rise to a privilege is a question of law.157 Whether the privilege

was abused is one of fact reserved for trial.158

Florida law “embraces a broad range of the privileged occasions.” 159 But there

is an inadequate factual record for the Court to find as a matter of law that Billy’s

154 Yeelen, 405 ss 2d el 744. see else Mnln'ng Enels Meel, lne. v_ Cnslek, 719 ss. 2d 926, 928

(Fla. Dist. Ct. App. 1998) (finding that the interfering “actions were sufficiently egregious to

overcome the immunity”).

155 Monco Enterprises, 673 So. 2d at 492.

156 Demby v. English, 667 So. 2d 350, 353 (Fla. Dist. Ct. App. 1995) (“Under Florida common-

law principles anyone who publishes defamatory matter is not liable if the remarks are published

upon a conditionally privileged occasion and the privilege is not abused.”); Knepper, 537 So. 2d

at 622 (“[W]here a qualified privilege exists plaintiffs must prove express malice or malice in fact

in order to recover. Express malice, or malice in fact, constitutes an abuse of a qualified privilege

leaving the defendant liable.”).

157 Nodar, 462 So.2d at 810 (“the question of whether the occasion upon which they were

spoken was privileged is a question of law to be decided by the court.”) (citing Abraham v.

Baldwin, 52 Fla. 151, 42 So. 591 (1906)).

158 Fla. Fern Growers Ass ’n, 616 So. 2d at 569-70 (“[F]actual questions remain whether the

mode, manner, or purpose of their communication amounted to abuse or forfeiture of the

privilege.”).

159 The Nodar court noted that “[t]he law of Florida embraces a broad range of the privileged

occasions that have come to be recognized under the common law,” and recognized several

examples of those privileges occasions such as the mutuality of interest between the speaker and

listener; discussion of former employee’s performance with prospective employers

communications for bona fide commercial purposes to protect the recipient’s interest; and

_39_

email was communicated on any of the recognized occasions giving rise to privilege

under Florida’s common law. l\/loreover, even if the Court could find the email was

privileged activity, factual issues exist as to whether Bobcat abused such privilege.140

Thus, Bobcat’s motion for summary judgment on this counterclaim must be

DENIED.

ii. Bobcat’s Summary Judgment Motion on Inland’s

Counterclaim for Defamation MustAlso be Denied.

Turning to Inland’s counterclaim for defamation, Bobcat again relies on

qualified privilege. And the Court again must find that that privilege-based argument

fails here.

Bobcat next argues that Billy’s email is not defamatory because it is merely

an opinion, and to the extent any factual statements are contained, they are

substantially true.141

Florida law provides “[t]o establish a cause of action for defamation, a

plaintiff must show that (1) the defendant published a false statement about the

plaintiff, (2) to a third party, and (3) the falsity of the statement caused injury to the

statements concerning matters of public concern See Nodar, 462 So.2d at 809_10 (citation

omitted).

140 Fla. Fern Growers Ass ’n, 616 So. 2d at 569. See also Demby, 667 So. 2d at 353 (“[A]nyone

who publishes defamatory matter is not liable if the remarks are published upon a conditionally

privileged occasion and the privilege is not abused.”).

141 Pl.’s Br., at 52_55.

_4()_

plaintiff.”142 Determining whether a statement if defamatory is primarily a function

of the Court.145 The Court must view the statement in its entirety.144 lf a statement

is capable of more than one meaning, it is for “the trier of fact [to] determine whether

the language used was actually understood in its defamatory sense.”145

Here, Billy’s email is open to multiple meanings or interpretations though the

tone and tenor of it hardly lost on the average reader. The Court simply cannot say

that a reasonable reading of the email precludes a finding that it is defamatory. Thus

it must be submitted to more thorough factfinding at trial to determine if the email’s

language is understood in a defamatory sense.

Turning to Bobcat’s argument that the email is an opinion, Florida law indeed

shields “statements of pure opinion” from defamation liabilities.146 But “mixed

142 NlTl/, L.L.C. v. Beleen, 61 so. 36 1249, 1252 (Fla. Dist. Ct. App. 2011)(qu611ng Reznen v.

Wellington Reg’l Med. Ctr., Inc., 837 So. 2d 437, 441 (Fla. Dist. Ct. App. 2002)).

145 smith v. Cnbnn Am. Nen. Fennel, 731 ss 2d 702, 704 (Fla. Dist. Ct. App. 1999)(“111@

court has a ‘prominent function’ in determining whether a statement is defamatory, and if a

statement is not capable of a defamatory meaning, it should not be submitted to a jury.”).

144 Id. at 705 (“[A] publication must be considered in its totality...To determine whether a

statement is defamatory, it must be considered in the context of the publication.”) (internal

quotation marks and citations omitted).

145 Id

146 E. Air Lines, Inc. v. Gellert, 438 So. 2d 923, 927 (Fla. Dist. Ct. App. 1983).

_41_

opinion” that, “although ostensibly in the form of an opinion, implies the allegation

of undisclosed defamatory facts as the basis for the opinion, is actionable.”147

A “pure opinion” differs from a “mixed opinion” in that:

“Pure opinion occurs when the defendant makes a comment or

opinion based on facts which are set forth in the article or which

are otherwise known or available to the reader or listener as a

member of the public. Mixed expression of opinion occurs when

an opinion or comment is made which is based upon facts

regarding the plaintiff or his conduct that have not been stated in

the article or assumed to exist by the parties to the

communication.”148

Florida courts have consistently found statements to be non-defamatory “pure

opinions” when the recipient of the communication knew, or was reasonably

expected to know, the facts and situations surrounding the statements.149

ln part, Billy’s email reads:

lt seems that the company (lnland Services of Florida, LLC)

bidding your reliise collection contract is in direct violation of

our purchase and sale agreement of 5/31/ 16 as well as the non-

compete agreement that goes hand in hand with that PSA. Bart

Begley and Monty Davison sold Inland to us in May of 2016 and

have no RIGHT to use the references that would allow them to

147 Id (internal quotations marks omitted).

148 From v. Tallahassee Democrat, Inc., 400 So. 2d 52, 54 (Fla. Dist. Ct. App. 1981), rev.

denied, 412 So.2d 465 (Fla. 1982).

149 See, e.g. , From, 400 So. 2d at 57 (finding the statements published on the tennis column of

a local newspaper concerning a local tennis professional to be non-defamatory because the

newspaper’s audience would be expected to know both the tennis professional’s situation and his

performance in the local community); Demby, 667 So. 2d at 355 (finding that the county

commissioner who received the statements would be expected to know the claimant’s situation in

connection with the statements).

_42_

bid your contract making this a VERY legal, sticky situation if

they were awarded this contract Having said that l wanted you

to know where we stand, we will proceed with ANY and ALL

legal recourse if those references were used in the Okaloosa Bid.

Which l know they were used because it is the only way they

would be QUALIFIED!!!! Our attorneys have already been

prepped and ready to proceed as we have been monitoring your

bid closely.

Feel free to contact me anytime, thank you and have a great

day_l$O

There is no record evidence the Okaloosa Board knew, or could be reasonably

expected to have known, the facts or situations surrounding Billy’s claims Nothing

in the record suggests the Okaloosa Board was in any way privy to the private

transactional arrangements between Bobcat and lnland. Unlike those found to have

received statements of “pure opinion,” nothing here suggests the Okaloosa Board

knew, or could reasonably be expected to know, whether Inland Florida and

Begley/Davison violated the UPA. At most, Billy’s statements are a mixture of his

opinions what he believes to be facts his strongly held feelings and his threats of

litigation The Court can’t say here, on this record, that judgment as a matter of law

on the defamation counterclaim is warranted

150 Ex. l to Pl.’s Br., February 14, 2017 Email from Mr. William “Billy” Dietrich to

Commissioner Ketchel (capitalization in original).

_43_

Bobcat’s last attempt to gain summary judgment on the defamation

counterclaim is its suggestion that even if the email does contain factual content,

those statements are true under Florida’s “substantial truth doctrine.”151

The “substantial truth doctrine” provides “a statement does not have to be

perfectly accurate if the ‘gist’ or the ‘sting’ of the statement is true.” 152 Falsity exists

if the publication is “substantially and materially false, not just if it is technically

false.”155 ln addition, a statement is false if it would have a different effect on the

reader from what the pleaded truth would have produced. 154 The defense of truth is

a question for the factfinder at trial.155

Under the substantial truth doctrine, the “gist” of Billy’s email is that Inland

Florida breached the UPA’s confidentiality agreement, and Begley and Davison

used the protected references without Bobcat’s authorization As the Court noted

before, the alleged breach of the UPA has not been determined, yet the Board could

have read the email to mean that the breach was indeed real. Thus a trial factfinder

151 Pl.’s Br., at 52-55_

152 smlln, 731 se. 2d 31706.

153 let 31707.

154

Id. (quotation omitted).

155 Glickman v. Potamkin, 454 So. 2d 612, 613 (Fla. Dist. Ct. App. 1984) (“[T]he affirmative

defenses of truth, good motive and qualified privilege present factual questions for resolution by

the jury.”).

_44_

could find that those statements have a different effect on the reader or that they are

not “substantially and materially true.”

3. T he Same Outcome Under the Noerr-Pennington Doctrine.

Having concluded the qualified privilege analysis under Florida law, Bobcat’s

Noerr-Pennington arguments nevertheless bear on the question of Noerr-

Pennington immunity’s application to tort claims arising under state law. This

question is implicated by the federal Constitution’s Supremacy Clause.156 Florida’s

declination to adopt the Noerr-Pennington analysis has not been without

criticism.157 And Florida’s application of its recognized qualified privilege to

petitioning activities has been seemingly sparse. So, if for nothing more that the

156 Courts have long faced this question in their attempts to reconcile other courts’ decisions

and to determine an appropriate approach to resolving disputes See, e.g. , Nat ’l Org. for Women,

Inc. v. Scheidler, 1997 WL 610782, at *30-31 (N.D. Ill. Sept. 23, 1997) (having noted that

“caselaw addressing the question whether the Noerr-Pennington doctrine brings first amendment

principles to bear on state law tort claims” the court declined to apply the state law of tortious

interference because doing so would violate the First Amendment); cf Myers v. Levy, 808 N.E.2d

1139, 1150_52 (Ill. App. Ct. 2004) (noticing that “[t]here is a notable amount of case law

addressing the question whether the Noerr-Pennington doctrine brings first amendment principles

to bear on state-law tort claims,” the court declined to “expand [the first amendment] privilege into

an absolute one” to the claims for defamation and false light invasion of privacy.) (quoting

McDonald v. Smith, 472 U.S. 479, 485 (1985)).

157 Computer Assocs. Int’l, Inc. v. Am. Fundware, Inc., 831 F. Supp. 1516, 1523 (D. Colo.

1993) (recogriizing that Noerr-Pennington immunity is a aconstitutional, not an antirust, doctrine,

and criticizing that Fla. Fern Growers Ass’n “ignored principles of federalism and t[ook] the

questionable approach . . . [of] view[ing] this as an issue of state law.”); Kinsman v. Winston, 2015

WL 12839267, at *8 (M.D. Fla. Sept. 15, 2015) (having applied the Noerr-Pennington doctrine,

the court also conducted the “conditional privilege” analysis and found that the same result would

flow).

_45_

sake of completeness this Court cannot simply ignore Bobcat’s attempt to invoke

Noerr-Pennington immunity.

While Florida courts characterize Noerr-Pennington as an antitrust

doctrine,158 other courts have recognized it as Constitution-based not limited to

antitrust claims.159 Those courts have applied Noerr-Pennington immunity to wide-

ranging tort claims rising under state laws160

158 Fla. Fern Growers Ass ’n, 616 So. 2d at 566-67.

159 See, e.g., Computer Assocs. Int’l, 831 F. Supp. at 1523 (“Thus Professional Real Estate

Investors and Claiborne Hardware [decisions] support the proposition that Noerr-Pennington

immunity is a constitutional, not an antitrust, doctrine.”); Campbell v. PMI Food Equip. Group,

Inc., 509 F.3d 776, 790 (6th Cir. 2007) (noting that “[a]lthough the Noerr-Pennington doctrine

was initially recognized in the antitrust field, the federal courts have by analogy applied it to claims

brought under both state and federal laws including common law claims of tortious

interference.”); RRR Farms, Ltd. v. Am. Horse Prot. Ass ’n, Inc., 957 S.W.2d 121, 128 (Tex. App.

1997) (“Lower federal and state courts have adopted Noerr’s deference to the right to petition not

only in antitrust cases but in other cases involving civil liability.”), holding modified by Baty v.

ProTech Ins. Agency, 63 S.W.3d 841 (Tex. App. 2001).

160 See, e.g., Computer Assocs. Int’l, 831 F. Supp. at 1523 (claim for unfair competition);

McGuire Oil Co., 958 F.2d at 1561 (unfair trade practices claim); IGEN Int’l, Inc. v. Roche

Diagnostics GmbH, 335 F.3d 303, 312 (4th Cir. 2003) (“[A]lthough originally developed in the

antitrust context, the doctrine has now universally been applied to business torts”); Bath Petroleum

Storage, Inc. v. Market Hub Partners, L.P., 229 F.3d 1135, 1135 (2d Cir. 2000) (“state-law claims

such as fraud and tortious interference”); Cheminor Drugs, Ltd. v. Ethyl Corp. , 168 F.3d 119, 128-

29 (3d Cir. 1999) (tortious interference and unfair competition claims); Proportion-Air, Inc. v.

Buzmatics, Inc., 57 F.3d 1085, 1085 (Fed. Cir. 1995) (tortious interference and unfair competition

claims); Oregon Nat. Res. Council v. Mohla, 944 F.2d 531, 533 (9th Cir. 1991) (abuse of process

and interference with business relations claims); Video Int ’l Prod. v. Warner-Amex Cable Comms.,

Inc., 858 F.2d 1075, 1084 (5th Cir. 1988) (business tort claims); Hufsmith v. Weaver, 817 F.2d

455, 458~59 (8th Cir. 1987) (tortious interference with business claims); Havoco of Am., Ltd. v.

Hollobow, 702 F.2d 643, 649 (7th Cir. 1983) (tortious interference claim); Campbell v. PMI Food

Equip. Group, Inc. , 509 F.3d 776, 790 (6th Cir. 2007) (recognizing “federal courts have by analogy

applied [Noerr-Pennington doctrine] to claims brought under both state and federal laws including

common law claims of tortious interference”); Suburban Restoration Co. v. ACMAT Corp., 700

F.2d 98, 102 (2d Cir. 1983) (claims based on state statute regulating unfair trade practices and

common law claims of tortious interference with a business expectancy).

_46_

In contrast to the Florida state courts’ approach, the federal courts of Florida

have recognized the applicability of Noerr-Pennington immunity to petitioning

activities.161 In petitioning for adjudicative relief, Noerr-Pennington immunizes

litigative activity (e.g., commencement of a suit) and pre-litigative activity (e.g.,

threats of litigation).162 Later decisions however, appear to have taken a more

cautious and perhaps limiting, approach that affords Noerr-Pennington immunity

only to pre-litigative activity “necessarily preliminary” to the adjudicative

proceedings.165

Of note also is the fact that, unlike other federal courts that have applied the

Noerr-Pennington doctrine to a broad spectrum of state tort claims Florida federal

161 McGuire Oil Co., 958 F.2d at 1561. See also SilverHorse Racing, LLC v. F ord Motor Co.,

2016 WL 7137273, at *3 (M.D. Fla. Apr. 27, 2016) (“‘[l]t is hard to see any reason why, as an

abstract matter, . . . common law torts . . . might not in some of their applications be found to

violate the First Amendment.”’) (quoting Whelan, 48 F.3d at 1254).

162 McGuire Oil Co., 958 F.2d at 1560, accord Coastal States Mktg., Inc. v. Hunt, 694 F.2d

1358, 1367 (5th Cir. 1983). See also Atico Int’l USA, 2009 WL 2589148, at *3 (S.D. Fla. Aug.

19, 2009) (holding that Noerr-Pennington protects a pre-litigation letter prepared and sent by an

intellectual property counsel and threatening litigation).

165 Orange Lake Country Club, Inc. v. Reed Hein & Assocs., LLC, 2019 WL 645214, at *9

(M.D. Fla. Jan. 4, 2019) (holding that the Noerr-Pennington privilege “arises immediately upon

the doing of any act required or permitted by law in the due course of the judicial proceeding or as

necessarily preliminary thereto,” and concluding that, in the context of pre-litigation activity,

Noerr-Pennington privilege only applies to statements “necessarily preliminary” to judicial

proceedings such as pre-suit communications required by statute or by contract as a condition

precedent to suit). See also Trent v. Mortg. Elec. Registration Sys., Inc., 618 F. Supp. 2d 1356,

1359 (M.D. Fla. 2007), a]f’d, 288 F. App’x 571 (1 1th Cir. 2008) (declining to extend the litigation

privilege to “pre-suit communications” where such communications were not required by law).

_47_

courts seem to adhere to the doctrine’s antitrust law origin and are less inclined to

extend the immunity to activities unrelated to anticompetitive conduct.164

The Court notes all of this to aid in the understanding of its constrained

application of the Noerr-Pennington doctrine here. Bobcat argues that Billy’s email

is privileged pre-litigation activity that is objectively meritorious and, thus not a

sham.165 But privileged pre-litigation acts that have been recognized by Florida

courts share certain commonalities they: are formalistic (often prepared by

attorneys); specify the complained-of conduct and the litigation threatened; and are

generally followed by actual lawsuits based on the same subject matter.166 Billy’s

164 Marco Island Cable, Inc. v. Comcast Cablevision of the S., Inc., 2006 WL 1814333, at *10

(M.D. Fla. July 3, 2006) (extending Noerr-Pennington immunity to the Florida Deceptive and

Unfair Trade Practices Act that mirrors Federal Sherman Act that also regulates anticompetitive

act). But Cf. Slip-N-Slide Records, Inc. v. TVT Records, LLC, 2007 WL 473273, at *7 (S.D. Fla.

Feb. 8, 2007) (refusing to extend Noerr-Pennington immunity to traditionally asserted state tort

claims “wholly unrelated to an antitrust claim”); Cisson v. Claudio & Johnson, LLC, 2017 WL

1857419, at *3 (M.D. Fla. Mar. 2, 2017) (declining to extend Noerr-Pennington doctrine to claims

brought under Florida Consumer Collection Practices Act); Roban v. Marinosci Law Grp., 34 F.

Supp. 3d 1252, 1255 (S.D. Fla. 2014) (reliising to apply Noerr-Pennington immunity to claims

brought under Federal Debt Collection Practices Act). See also Clearplay, Inc. v. Nissim Corp.,

2011 WL 3878363, at *7 (S.D. Fla. Sept. 2, 2011) (noting that “while other Circuits have applied

Noerr-Pennington immunity to bar not only anti-trust claims but also state tort claims the

Eleventh Circuit has done so only in a very specific context.”), ajf’d, 496 F. App’x 963 (1 lth Cir.

2012), cert. denied, 570 U.S. 919 (2013); Slip-N-Slide Records, 2007 WL 473273, at *7 (criticizing

that “[f]rankly, the doctrine has likely been extended far beyond what the exercise of judicial

restraint should allow”).

165 Pi.’s Br., ar 42415.

166 McGuire Oil Co., 958 F.2d at 1560 (the threat is specific as to the statutory basis of the

claim, and actual suit was later brought thereunder. The court also held that repeated threats of

litigation as a method of creating or maintaining anti-competitive conduct is within the scope of

the immunity, and does not fall within the sham exception); Atico Int’l USA, 2009 WL 2589148,

at *3 (pre-litigation letter prepared and sent by intellectual property counsel threatening litigation

_43_

email lacks much of these_it wasn’t prepared by an attomey, has no formalistic

elements and is devoid of any real specificity On multiple occasions the email

used words and phrases in all capitalized letters presumably to express threat. Yet

it is unclear what litigation is threatened, against whom, and on what specific

wrongdoing A reasonable reader can’t even discern whether the litigation is

threatened against Okaloosa, Inland Florida, Begley, Davison, or all the above.

Accordingly, the Court concludes on the present record that even under the

Noerr-Pennington doctrine Bobcat is not due summary judgment on Inland’s

tortious interference and defamation counterclaims And so, Bobcat’s motion on

those counterclaims must be DENIED.

V. CONCLUSION

For the reasons discussed, Bobcat’s Motion for Partial Summary Judgment is

GRANTED, in part, and DENIED, in part.

IT rs so oRI)EREi). @L> >

r"l.../f_.~

Paul R. Wallace, Judge

of patent infringement and such suit was later filed is privileged); Marco Island Cable, 2006 WL

1814333, at *1 (immunizing letters threatening to enforce the exclusive contract where actual suit

is filed); Silverhorse Racing, 232 F.Supp.3d 1206 (demand letters sent to trademark infringers’

business partners requesting them to remove infringing products and stop infringing activity is

immunized and is not “sham”).

_49_