United States District Court, E.D. Pennsylvania
March 22, 2004.
AMERICAN HEARING AID ASSOCIATES, INC., Plaintiff,
GN ReSOUND NORTH AMERICA, t/a GN ReSOUND CORPORATION, Defendant
The opinion of the court was delivered by: ROBERT KELLY, Senior District Judge
Presently pending before this Court is the Motion for Summary
Defendant GN ReSound North America, t/a GN ReSound Corporation ("GN").
For the following reasons, GN's Motion will be granted.
American Hearing Aid Associates, Inc. ("AHAA") filed a Complaint
on October 25, 2001. The eight-Count Complaint set forth claims for
breach of contract (Count I), breach of the implied covenant of good
faith and fair dealing (Count II), intentional interference with existing
contractual relations (Count III), intentional interference with
prospective economic advantage (Count IV), negligent interference with
prospective economic advantage (Count V), improper interference with
contract (Count VI), unjust enrichment (Count VII) and conversion (Count
VIII). At this stage in the litigation, the only Counts remaining are the
claims for breach of contract (Count I), breach of the implied covenant
of good faith and fair dealing (Count II) and conversion (Count VIII).
AHAA's claims are based on a business relationship between the parties
that soured over a competition for customers.
AHAA is a national hearing health care network of associates that is
comprised of independent hearing health care professionals (i.e.
audiologists, hearing aid dispensers, otolaryngologists, etc.). AHAA
offers a variety of services and incentives to AHAA Associates in order
to maintain its extensive network. For example, AHAA has developed
business relationships with manufacturers and suppliers of hearing
equipment and devices in order to provide valuable benefits to AHAA
Associates. "Once affiliated with [AHAA], Associates are eligible to
purchase hearing health care equipment and devices through AHAA at
substantial price discounts due to AHAA's ability to purchase such
equipment and devices in significantly greater volumes than the
Associates would be able to purchase independently." (Compl. ¶ 10).
In order to obtain volume discounts, AHAA contracts with manufacturers
and suppliers of hearing equipment and devices. The manufacturers and
suppliers benefit from these contracts because they obtain, through AHAA,
access to AHAA's national network of associates. Along with the volume
discounts, manufacturers and suppliers often offer bonuses and other
incentives to AHAA based on the number of purchases these AHAA network
members make through AHAA. These contractual incentives encourage AHAA to
persuade AHAA Associates to order equipment and devices from these
network affiliated manufacturers and suppliers in large volumes.
Outside of a membership fee of $150, AHAA does not charge its members
for many of the consultative and guidance services it provides. AHAA
Associates pay for services by making purchases through the AHAA network.
In turn, AHAA is compensated through the deep discounts (AHAA retains a
portion of any discount as profit) and other incentives it receives from
contracting manufacturers and suppliers.
GN is a global manufacturer of hearing health care equipment and
devices. Specifically, GN is one of the world's largest manufacturers of
hearing aids. GN sells its products through two different avenues. First,
GN maintains its own sales force throughout the United States and sells
its products directly to health care professionals. Second, GN works with
"buying groups," such as AHAA, to enhance product sales to these
professionals. The claims in the instant case center around these two
AHAA has contracted with GN (or it predecessor) since 1998 through a
series of agreements that have ranged from one year to three years in
duration. Each contract gave GN the right to sell its products through
AHAA to AHAA Associates. Morever, each contract compensated AHAA through
discounts on the purchase of GN products by AHAA Associates. Finally, by
offering financial rewards, the contracts encouraged AHAA to utilize its
sales force to meet certain volume sales targets in relation to GN
This current lawsuit arises out of a contract that GN and AHAA entered
into in May 2000 and amended in May 2001 (collectively the "Contract").
The Contract outlines that "[GN] manufactures and distributes a number of
different models of hearing instruments" and that AHAA "is in the
business of distributing and/or selling hearing instruments." (Pl.'s Mem.
Opp. Summ. J., Ex. 4). In terms of the relationship of the parties
established by this Contract, the agreement states that "the parties to
this [Contract] are independent contractors, and nothing in this
[Contract] is intended to create any relationship of partnership, joint
venture, employment, franchise, or agency between the parties."
(Id.). The Contract states that the parties purpose is "to
enter into an agreement pursuant to which [AHAA] may purchase hearing
instruments from [GN] for resale." (Id.). The agreement
specifically acknowledges that AHAA is a "member-based organization" and
that AHAA Associates "are entitled to purchase from [GN] through [AHAA]."
(Id., Ex. 5). As previously described, the Contract also
outlines the compensation that AHAA would receive from the arrangement
through discounts on GN products and volume-based sales incentives (i.e.
In June and July 2001, the relationship between GN and AHAA began to
deteriorate. Specifically, GN began to formulate a plan that would allow
it to bypass AHAA and the AHAA network when making future sales to health
care professionals. GN came to the conclusion that it would make better
economic sense for it to sell its health care equipment and devices
directly to health care professionals rather than through AHAA. This
formulated plan was called the "AHAA Exit Strategy" by upper-level GN
employees. (Jackson Dep. at 148). The plan called for the GN sales force
to approach AHAA Associates and encourage them to begin to purchase GN
products directly from GN rather than through AHAA. Notably, many of
these members had previously purchased products directly from GN. The
foundation of GN's plan to change the purchasing method of AHAA
Associates was to undercut the prices that AHAA was offering for GN
products and to offer other various promotions to these buyers. This
"AHAA Exit Strategy" was to be coordinated from GN headquarters in
Minnesota and the entire plan was to be kept secret from AHAA. As
conceded by GN, the ultimate goal of the "AHAA Exit Strategy" was to
"take as many accounts away from AHAA as possible." (Pl.'s Mot. Opp.
Summ. J. at 26).
In September 2001, GN put the "AHAA Exit Strategy" into action. The GN
sales force approached AHAA Associates and numerous AHAA Associates
switched to a direct purchasing line with GN. Thus, these customers began
bypassing the AHAA network when they made their purchases from GN. AHAA
alleges this conduct resulted in a substantial loss of revenue and
damaged its relationship with both existing and prospective AHAA
Significantly, for purposes of AHAA's claims, AHAA alleges that
customer lists it sent to GN pursuant to the Contract were improperly
used by GN to convert AHAA Associates to a direct purchasing line.
Moreover, AHAA alleges that GN sent customer lists to one of AHAA's
competitors in an attempt to take additional business away from AHAA.
GN's use of these customers lists is the basis for AHAA's conversion
AHAA filed its eight-Count Complaint on October 25, 2001. In Response
to the instant Motion, AHAA has voluntarily dismissed the majority of its
claims. The only Counts remaining are its claims for breach of contract
(Count I), breach of the implied covenant of good faith and fair dealing
(Count II) and conversion (Count VIII). GN filed this Motion for Summary
Judgment on January 13, 2004. GN argues that there are no disputed issues
of material fact and that all of AHAA's claims fail as a matter of law.
Moreover, as part of the instant Motion, GN requests that this Court
award it attorneys' fees pursuant to a provision in the parties' Contract
that states the prevailing party in any litigation can recover attorneys
fees. On February 10, 2004, AHAA filed its Response to the current
Motion. Further, on February 24, 2004, GN filed a Reply in support of its
Motion. Finally, on March 3, 2004, AHAA filed a Sur-Reply in regards to
II. STANDARD OF REVIEW
Pursuant to Rule 56(c) of the Federal Rules of Civil Procedure, summary
judgment is proper "if there is no genuine issue as to any material fact
and the moving party is entitled to judgment as a matter of law."
Fed.R.Civ.P. 56(c). Essentially, the inquiry is "whether the evidence presents
a sufficient disagreement to require submission to the jury or whether it
is so one-sided that one party must prevail as a matter of law."
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251-52 (1986).
The moving party has the initial burden of informing the court of the
basis for the motion and identifying those portions of the record that
demonstrate the absence of a genuine issue of material fact. Celotex
Corp. v. Catrett, 477 U.S. 317, 323 (1986). An issue is genuine only
if there is a sufficient evidentiary basis on which a reasonable jury
could find for the non-moving party. Anderson, 477 U.S. at 249.
A factual dispute is material only if it might affect the outcome of the
suit under governing law. Id. at 248.
To defeat summary judgment, the non-moving party cannot rest on the
pleadings, but rather that party must go beyond the pleadings and present
"specific facts showing that there is a genuine issue for trial."
Fed.R.Civ.P. 56(e). Similarly, the non-moving party cannot rely on unsupported
assertions, conclusory allegations or mere suspicions in attempting to
survive a summary judgment motion. Williams v. Borough of W.
Chester, 891 F.2d 458, 460 (3d Cir. 1989)(citing Celotex,
477 U.S. at 325 (1986)). Further, the non-moving party has the burden of
producing evidence to establish prima facie each element of its
claim. Celotex, 477 U.S. at 322-23. If the court, in viewing
all reasonable inferences in favor of the non-moving party, determines
that there is no genuine issue of material fact, then summary judgment is
proper. Id. at 322; Wisniewski v. Johns-Manville
Corp., 812 F.2d 81, 83 (3d Cir. 1987).
GN argues that AHAA's remaining claims of breach of contract, breach of
the implied covenant of good faith and fair dealing and conversion are
ripe for summary judgment. The Court will now address each of these
claims in light of the applicable summary judgment standard.
A. Breach of Contract Claim
AHAA's first claim is that GN breached the Contract between the
parties. AHAA is clear that its breach of contract claim is based on GN's
alleged breach of an express contractual provision. AHAA has
been less than clear, however, in stating precisely which contractual
provision(s) in the Contract GN has allegedly breached. AHAA's general
claim under this cause of action is that GN breached the Contract through
its coordinated effort to "actively pursue AHAA members for the express
purpose of taking margin and rebate volumes away from AHAA." (Pl.'s Mem.
Opp. Summ. J. at 56-57). In its Sur-Reply, AHAA narrows its claim
somewhat by stating that "by deliberatively (and secretly) working to
switch the purchasing method of AHAA `members,' this intentional conduct
breached GN's explicit promise to pay AHAA for all its `member' purchases
for the duration of the contract." (Pl.'s Sur-Reply Br. at 2). In sum,
AHAA's breach of contract claim is premised on the breach of a promise to
pay margin and rebate on AHAA Associate purchases. In response, GN simply
argues that there is no contractual provision that prohibits it from
approaching AHAA Associates and convincing them to change their
purchasing arrangements. This Court agrees with GN and finds that there
are no genuine issues of material fact that surround this claim and that
the claim fails as a matter of law.
According to California law, "[t]o be entitled to damages for breach of
contract, a plaintiff must plead and prove (1) a contract, (2)
plaintiff's performance or excuse for nonperformance, (3)
defendant's breach, and (4) damage to plaintiff." Walsh v.
W. Valley Mission Cmty. College Dist., 78 Cal.Rptr.2d 725, 733
(Cal. Ct. App. 1998)(emphasis added). In the instant case, as GN
emphasizes, AHAA has not presented sufficient evidence to reach the trial
stage relating to its claim that GN breached the Contract when it
approached AHAA Associates and convinced them to alter their purchasing
methods. Thus, AHAA has failed to establish the third prong of a
prima facie breach of contract case pursuant to California law.
AHAA's breach of contract claim is essentially based on GN's promise to
pay AHAA (through margin and rebates) for the duration of the three-year
contract when AHAA Associates made purchases of GN products. AHAA claims
that GN breached this covenant when it convinced AHAA Associates to
bypass the AHAA network and purchase GN products directly from GN.
Essentially, AHAA is alleging that GN's conduct was a breach of contract
because it stripped AHAA of the benefits it was entitled to receive (i.e.
margin and rebates) when AHAA members made purchases of GN products.
The specific provisions in the Contract that deal with the issues of
margins, rebates and the description of AHAA Associates demonstrate the
baselessness of AHAA's breach of contract claim. Specifically, it is what
these contractual provisions fail to say that supports the proposition
that this claim is ripe for summary judgment. The Court will first
outline the critical contractual provisions that AHAA appears to allude
to in support of its argument. Next, the Court will analyze these
provisions to show why AHAA's breach of contract claim must fail at this
summary judgment stage of the litigation.
First, the Contract specifically describes an AHAA Associate ("Customer
Member") as follows:
[AHAA] is a member-based organization.
[AHAA]'s members are entitled to purchase
from [GN] through [AHAA]. [GN] will send
invoices to [AHAA] for [GN] Products purchased
which invoices will reflect the list price less
the discount. . . .[AHAA] shall provide to [GN] a
list of its members and shall update it regularly
with any changes. [GN] will not be required to
process orders from any entity or person until
[AHAA] has advised [GN] that such entity or person
is a member of [AHAA].
(Pl.'s Mem. Opp. Summ. J., Ex. 5)(emphasis added). Second, in
relation to margins, the Contract states that "[AHAA Associates] will
receive from [AHAA] a 24% discount off the list price as reflected on the
Price List and with respect to orders from [AHAA Associates] [AHAA] will
be billed by [GN] at a 48% discount off the list price as reflected on
the Price List." (Id.). Third, in relation to rebates, the
Contract provides that "[f]or [GN] Products listed on the Price List that
are ordered by [AHAA] during the twelve (12) month period
commencing on June 1, 2001 and each succeeding twelve (12) month period
during the term of the Agreement, [AHAA] shall be entitled to a rebate as
follows. . . ." (Id.)(emphasis added). AHAA directs this Court
to the above contractual provisions and its overall breach of contract
argument when it states in its Response the following:
Quite simply, it is impossible to interpret GN's
contract in any way other than how AHAA
interprets it AHAA had covenanted with GN
to have the AHAA membership purchase GN units
through AHAA, and for each unit purchased by an
AHAA member, AHAA would receive the margin
discount and the back-end rebate earned by those
sales. GN had no legal right under the express
terms of its contract to sidestep this
arrangement, approach AHAA members, and have them
change their purchase arrangement-after
becoming an AHAA member-in order to avoid paying
AHAA its otherwise earned margin and discount.
(Pl.'s Mem. Opp. Summ. J. at 58).
There are numerous ways in which these contractual provisions display
how AHAA's breach of contract claim lacks merit. As an initial matter,
and most importantly, there is no contractual provision or language cited
by AHAA (or found by this Court) that prohibits GN from approaching AHAA
members and persuading them to alter their purchasing arrangement to a
direct channel with GN. As GN emphasizes, "[t]he relevant inquiry is not
whether the Contract permits GN to `approach AHAA members, and
have them change their purchase arrangement,' but whether the Contract
prohibits GN from doing so." (Def.'s Reply Br. at 2). There was
simply no provision in the Contract that explicitly prohibited GN's
conduct that would support an express breach of contract claim.
The contractual provisions outlined above do nothing to support AHAA's
argument. In fact, in many ways, these provisions cut against its breach
of contract claim. The provision defining an AHAA Associate states that
"[AHAA]'s members are entitled to purchase from [GN] through [AHAA]."
(Pl.'s Mem. Opp. Summ. J., Ex. 5). Notably, this provision does not
mandate that AHAA Associates only purchase GN products through AHAA. AHAA
and GN clearly did not agree to an exclusive contact where GN could sell
products to AHAA Associates only through the AHAA channel. Moreover, in
relation to the provision dealing with margins, the contractual provision
clearly displays that AHAA would only receive a financial benefit as a
result of a sale if AHAA was involved in the transaction. Finally, in
relation to the rebate provision referred to by AHAA, AHAA is only
entitled to a rebate "[f]or [GN] Products listed on the Price List that
are ordered by [AHAA]. . . ." (Id.)(emphasis added).
Clearly, these rebate entitlements do not apply when GN sells products
directly to AHAA Associates because AHAA would not have ordered the
products on behalf of any members.
In sum, GN has directed this Court to the fact that AHAA has no
contractual provision to support its breach of contract claim. In turn,
AHAA has not produced sufficient evidence at this summary judgment stage
to show that its breach of contract claim should survive. Specifically,
there is no contractual provision in the Contract that prohibits GN from
approaching AHAA Associates and persuading them to switch from the
indirect AHAA purchasing channel to the direct GN channel. GN was simply
acting to protect is own financial interest and there was no provision in
the Contract that prohibited this conduct even if it did have a negative
impact on AHAA's business. Moreover, the contractual provisions that AHAA
directs this Court to do not support its breach of contract claim. These
contractual provisions outline what AHAA was entitled to when it was
involved in a sale of GN products. There is no evidence that GN did not
compensate AHAA pursuant to the Contract when AHAA was used as a conduit
in a sale. AHAA has attempted to create an express breach of contract
cause of action when there is no contractual provision that supports its
claim. This Court finds that summary judgment in GN's favor is
appropriate regarding the breach of contract claim.
B. Breach of the Implied Covenant of Good Faith and Fair
AHAA's second remaining claim is that GN breached the implied covenant
of good faith and fair dealing through its conduct. AHAA's argument is
that GN breached this covenant when it frustrated AHAA's ability to earn
contracted-for discount margins and rebates when it persuaded AHAA
Associates to alter their purchasing methods. As will be discussed, this
claim must also be dismissed at the summary judgment stage because GN's
conduct did not breach any contractual provision. The applicable law is
clear that this type of implied covenant claim cannot impose substantive
duties or limits on a contracting party beyond those in the relevant
agreement. AHAA's claim fails because it attempts to limit GN's conduct
in a manner not reflected in the Contract.
Pursuant to California law, the implied covenant of good faith and fair
dealing is implied by law in every contract and it exists to prevent one
contracting party from unfairly frustrating the other party's entitlement
to benefits pursuant to the contracting parties' agreement. Guz v.
Bechtel Nat'l Inc., 8 P.3d 1089, 1110 (Cal. 2000). In other words,
"the implied covenant imposes upon each party the obligation to do
everything that the contract presupposes they will do to accomplish its
purpose." Careau & Co. v. Sec. Pac. Bus. Credit, Inc.,
272 Cal.Rptr. 387, 398 (Ca. Ct. App. 1990)(quoting Schoolcraft v.
Ross, 146 Cal.Rptr. 57 (Cal. Ct. App. 1978)). In the instant case,
AHAA's argument is that GN's conduct gave rise to a claim because it
frustrated AHAA's ability to obtain "contracted-for financial benefits."
(Pl.'s Mem. Opp. Summ. J. at 53).
The law is clear in California that AHAA's implied covenant of good
faith and fair dealing claim must fail since this Court has found that GN
did not breach any contractual provision when it put the "AHAA Exit
Strategy" into action. The California Supreme Court has emphasized that
this covenant cannot "be endowed with an existence independent of its
contractual underpinnings." Guz, 8 P.3d at 1110 (quoting
Walker v. Truck Ins. Exch., Inc., 900 P.2d 619, 639 (Cal.
1995)). In other words, the covenant "cannot impose substantive duties or
limits on the contracting parties beyond those incorporated in the
specific terms of the agreement." Id. More specifically, as one
California court described:
`[t]he covenant of good faith is read into
contracts in order to protect the express
covenants or promises of the contract, not to
protect some general public policy interest not
directly tied to the contract's purposes.' In
short, it is an implied-in-law term of the
contract. Therefore, its breach will always result
in a breach of the contract, although a breach of
a consensual (i.e. express or implied-in-fact)
contract term will not necessarily constitute a
breach of covenant.
Careau & Co., 272 Cal.Rptr. at 398-99 (quoting
Foley v. Interactive Data Corp., 765 P.2d 373, 394 (Cal.
1988)). As another California court noted, "if there exists a contractual
relationship between the parties . . . the implied covenant is limited to
assuring compliance with the express terms of the contract, and cannot be
extended to create obligations not contemplated in the contract."
L.A. Equestrian Ctr., Inc. v. City of L.A.,
21 Cal.Rptr.2d 313, 323 (Cal. Ct. App. 1993) (quoting Racine & Laramie, Ltd.
v. Dep't of Parks & Recreation, 14 Cal.Rptr.2d 335 (Cal. Ct. App.
As previously discussed, this Court will dismiss AHAA's breach of
contract claim because the evidence shows that GN complied with all
relevant contractual provisions. Thus, according to the law cited above,
AHAA's breach of the implied covenant of good faith and fair dealing
claim must also be dismissed because AHAA is attempting (through the
claim) to add substantive limits on GN's conduct that were not reflected
in the Contract. As noted, this covenant is "limited to assuring
compliance with the express terms of the contract." Id. This
Court has determined that GN was within the bounds of the contract when
it approached AHAA Associates and persuaded them to alter their
purchasing methods. Thus, GN cannot be held liable for this implied
covenant claim since the cause of action is limited to assuring
compliance with the contract. This claim cannot be used to add
substantive limits on GN's conduct that were not spelled out in the
written Contract. GN did not breach the express terms of the contract,
therefore, it did not breach the implied covenant at issue. This Court
finds that summary judgment in GN's favor is appropriate regarding the
breach of the implied covenant of good faith and fair dealing claim.
C. Conversion Claim
AHAA's third remaining claim is one of conversion against GN. The
substance of AHAA's conversion claim has been ambiguous throughout the
litigation. Nevertheless, AHAA's claim now appears to be focused on GN's
alleged conversion of customer lists that belonged to AHAA. Specifically,
AHAA alleges that GN took customers lists that AHAA provided to GN
pursuant to the Contract and used these lists for their own self-interest
to convert AHAA Associates to a direct purchasing method. Moreover, AHAA
alleges that GN transmitted these lists to Sonus, a competitor of AHAA,
in an attempt to harm AHAA's business. AHAA's conversion claim will also
be dismissed at this stage because it fails pursuant to the applicable
Unlike the other two claims previously discussed in this Memorandum,
this conversion cause of action qualifies as a tort claim as opposed to a
contract claim. The preliminary question is whether the choice of law
provision in the Contract mandates that California law apply to the
conversion claim or whether another state's law applies. Both parties
cite Pennsylvania law in regards to the conversion claim. This Court
agrees that Pennsylvania law applies to the conversion claim because the
choice of law provision is not broad enough to cover this tort claim and
because the forum law of Pennsylvania regarding conversion does not
conflict with any other relevant state's law.
According to Pennsylvania law, conversion is the "deprivation of
another's right of property, or use or possession of a chattel, or other
interference therewith, without the owner's consent and without legal
justification." Universal Premium Acceptance Corp. v. York Bank
& Trust Co., 69 F.3d 695, 704 (3d Cir. 1995). In this case,
AHAA's conversion claim is two-fold. First, AHAA alleges that GN
misappropriated customer lists that AHAA was obligated to provide GN for
administrative purposes (i.e. shipping purposes) pursuant to the
Contract. Specifically, AHAA contends GN used these customer lists
improperly by using them as a tool to target AHAA Associates and switch
their purchasing methods. Second, AHAA alleges that GN is liable for
conversion because it transmitted these customer lists to a competitor of
AHAA (Sonus) in attempt to harm AHAA's business.
AHAA's conversion claim is essentially that GN converted trade secrets
through its conduct. Pennsylvania law does allow for trade secrets to be
the subject of a conversion claim. Air Prods. and Chem., Inc. v.
Inter-Chem. Ltd., No. 03-6140, 2003 WL 22917491, at *12 (E.D.
Pa. Dec. 2, 2003). Moreover, confidential customer lists have qualified as
trade secrets pursuant to Pennsylvania law. Nat'l Risk Mgmt., Inc.
v. Bramwell, 819 F. Supp. 417, 430 (E.D. Pa. 1993). "In order to
succeed on his or her conversion claim a plaintiff must prove that: `(1)
he or she owns a trade secret, (2) the trade secret was
communicated to the defendant within a confidential relationship; and (3)
the defendant used the trade secret to the plaintiff's detriment.'"
Id. (quoting Schmidt, Long & Assoc., Inc. v. Aetna
U.S. Healthcare, Inc., No. 00-3683, 2001 WL 856946, at *8 (E.D. Pa.
July 26, 2002)(emphasis added).
AHAA's claim fails because it has not established that the customer
lists at issue qualified as trade secrets. Pursuant to Pennsylvania law,
"a trade secret may consist of any formula, pattern, device or
compilation of information which is used in one's business and which
gives him an opportunity to obtain an advantage over competitors who do
not know or use it." Air Prods. and Chem., Inc., 2003 WL
22917491, at *9 (quoting Restatement (First) of Torts § 474 cmt. b).
The critical factors in determining whether information qualifies as a
trade secret are "substantial secrecy and competitive value to the
owner." Id. Significantly, "customer lists and confidential
business information . . . cannot be trade secrets if they are easily or
readily obtained, without great difficulty, through some independent
source other than the trade secret holder." Nat'l Risk Mgmt.,
Inc., 819 F. Supp at 431.
In the instant case, AHAA has not produced sufficient evidence at this
summary judgment stage to show that the customer lists it provided to GN
(which GN allegedly misused) qualified as trade secrets because they were
substantially secret. Instead, the record displays that a list of AHAA
Associates is readily available on the Internet at AHAA's website. AHAA's
President and an AHAA employee admitted this fact in their deposition
testimony. (Urwin Dep. at 120; Russomagno Dep. at 172). Thus, customer
lists that AHAA provided to GN cannot be the subject of a conversion
claim because they are not confidential and are, in fact, available to
the public, including AHAA competitors. Id. ("[C]ourts have
denied protection to customer lists which are easily generated from trade
journals, ordinary telephone listings, or an employee's general knowledge
of who, in an established industry, is a potential customer for a given
product."). AHAA's conversion claims fails as a matter of law and GN is
entitled to summary judgment in its favor regarding this claim.
For the reasons set forth above, this Court finds that AHAA's remaining
claims for breach of contract, breach of the implied covenant of good
faith and fair dealing and conversion should be dismissed at this summary
judgment stage. There are no genuine issues of fact surrounding any of
AHAA's remaining claims and GN is entitled to judgment as a matter of law
on all these claims. Accordingly, the Court will grant GN's Motion for
An appropriate Order follows.
AND NOW, this 22nd day of March, 2004, upon consideration of
Defendant's Motion for Summary Judgment (Doc. No. 42), and the
Responses and Replies
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