ORDER
This case is before the Court for consideration of Defendants Martin Marietta Materials, Inc. and Martin Marietta Materials of Florida, LLC’s Motion for Final Summary Judgment, (Doc. 80), to which Plaintiffs White Construction Company, Inc. and Limerock Industries, Inc., have filed a response in opposition (Doc. 101). Upon due consideration, and for the reasons discussed below, the Court concludes that the Defendants’ motion is due to be granted in part and denied in part. 1
Undisputed Material Facts
I. The Parties
Plaintiffs White Construction Company, Inc. (“White Construction”) and Limerock Industries, Inc. (“Limerock Industries”), (collectively “the Plaintiffs”) are both Florida corporations engaged in the construction business with their principal places of operation in Chiefland, Levy County, Florida. The late Luther White, Sr. and his wife were the majority stockholders of both corporations, and they were considered sister corporations. A large portion of White Construction’s and Limerock Industries’ work was devoted to road construction projects for the Florida Department of Transportation.
Since the 1950s, both White Construction and Limerock Industries have operated a limerock mining facility in Taylor County, Florida, known as the “Cabbage Grove” Quarry. The mining operations conducted at Cabbage Grove included the production, marketing, distribution, and sale of limerock, crushed rock, and other aggregate products that are traditionally used in road construction projects. The limerock at Cabbage Grove is very valuable because it is the only source of hard aggregate rock north of the oolite seam near Miami, Florida, and the Plaintiffs invested millions of dollars into its operations at the quarry. They renewed the lease on the land on several occasions, installed equipment to conduct mining, and moved other equipment to the property for use in mining operations.
The owner of Cabbage Grove during the relevant time period of this case was Foley
Defendant Martin Marietta Materials, Inc. (“Martin Marietta”) is a North Carolina corporation with its principal place of business in Raleigh, North Carolina. Martin Marietta is a well-known and experienced mining company with an established distribution network in Florida and throughout the United States. It is the second largest supplier of limerock aggregate in the United States, and has extensive operations throughout the Southeast.
Defendant Martin Marietta Materials of Florida, LLC (“Martin Marietta Florida”) is a Delaware limited liability company and a wholly owned subsidiary of Martin Marietta. Martin Marietta Florida’s principal place of business is in Raleigh, North Carolina, and its sole member is Martin Marietta. Martin Marietta created Martin Marietta Florida in 2002 as a vehicle to facilitate the execution of the Mining Services Agreement with White Construction and Limerock Industries. 2
II. The Letter of Intent
In the late 1990s, Martin Marietta approached White Construction and Limer-ock Industries about possibly purchasing the mining operations at Cabbage Grove, as well as certain other real property. The negotiations were ultimately unsuccessful; however, in late 1998 and early 1999, Martin Marietta renewed discussions with the Plaintiffs about purchasing their interest in Cabbage Grove. On January 29, 1999, the Parties entered into a confidentiality agreement whereby White Construction provided Martin Marietta various documents, including a copy of White Construction’s mining lease with Foley. 3
In March 2000, before this second round of negotiations concluded, the State of Florida initiated criminal proceedings against White Construction. The proceedings resulted in the indictment of White Construction for several crimes in connection with its dealings with the Florida Department of Transportation, including charges of racketeering and grand theft. In May 2002, the criminal charges were expanded to include individual charges against Luther White, Sr., his son Luther White, Jr., and Luther White III. Limer-ock Industries has never been named as a defendant in any criminal proceedings.
At some point between March 2000 and September 2001, Martin Marietta became aware of the criminal proceedings against White Construction. Martin Marietta did not, however, cease its discussions with the Plaintiffs concerning Cabbage Grove. These discussions ultimately resulted in the execution of a Letter of Intent (“LOI”) between Martin Marietta Materials and Limerock Industries on September 27, 2001. (Doc.44-2). 4
This non-binding letter describes the basic terms of the proposed transaction, along with various examinations of Lim-erock that must be concluded to the satisfaction of [Martin Marietta] prior to the execution of a legally binding agreement. THIS LETTER EXPRESSES THE INTENT OF THE PARTIES FOR DISCUSSION PURPOSES ONLY FOR USE IN DRAFTING A DEFINITIVE CONTRACT. THIS LETTER IS NOT INTENDED TO CREATE NOR SHOULD IT BE CONSTRUED AS CREATING ANY LEGAL OBLIGATION TO CONCLUDE THIS TRANSACTION UNDER THE TERMS OUTLINED HEREIN OR ON ANY OTHER TERMS OR CONDITIONS NOR IS IT INTENDED TO CREATE ANY OTHER OBLIGATION EXCEPT FOR THE OBLIGATIONS SET FORTH IN PARAGRAPHS E ANDF.
(Id., p. 1) (emphasis in original).
The LOI provided that once it was signed by both parties, Martin Marietta would begin to draft a “definitive contract to the mutual satisfaction of the parties hereto.” Id. The LOI listed several terms and conditions which the parties anticipated the definitive contract would contain, along with other terms to be negotiated at a future date. Some of the terms included in the LOI were an anticipated purchase price of $15,500,000 for all of the assets used in Limerock Industries’ operations at the three quarries, including all real property, plants, and equipment used at each quarry; an additional payment of up to $1,161,000 for product inventory that was saleable in the normal course of business within one year from the date of the contract’s closing; and a separate payment for all outstanding accounts receivable at the time of closing. 5 (Doc. 44-2, pp. 1-3). The LOI also provided that Limerock Industries would facilitate the renegotiation of the leases at each quarry under terms satisfactory to Martin Marietta, including the right to mine, blast, quarry, and remove deposits from the land, and that the parties would execute and record a Memorandum of Lease in the land records for the jurisdictions where each quarry was located. Id. at p. 3.
The LOI stated that the “definitive contract” would include appropriate representations, warranties, and guarantees by Luther White, Sr. and the shareholders of Limerock Industries as to Limerock Industries’ contractual obligations. The LOI also stated that “[t]he definitive contract would further provide that consummation of the transaction would be contingent upon the fulfillment of certain conditions,” such as a good faith due diligence review of all corporate records, and approval of the transaction by the officers and directors of both Limerock Industries and Martin Marietta. (Doc. 44-2, pp. 4-5).
The LOI listed a closing date for the definitive contract of March 1, 2002, and
III. The O’Neal and Clifton Leases
Following execution of the LOI, the Parties began the process of due diligence, which included Martin Marietta examining the existing quarry leases, verifying the quality of the limestone aggregate, and examining the title and encumbrances on the equipment Limerock Industries was proposing to sell under the LOI. The Parties also made various attempts to negotiate the terms of a definitive asset purchase agreement and a supply agreement, as well as a non-compete agreement for the Plaintiffs. Over the next several months, the Parties circulated various drafts of the agreements, and representatives from each company met on at least two occasions to discuss the progress of negotiations. Even though the LOI was between Martin Marietta and Limerock Industries alone, White Construction was also named as a party to the final contracts.
With permission from White Construction and Limerock Industries, Martin Marietta also initiated contact with the three quarries to begin lease negotiations. On November 1, 2001, Martin Marietta’s Manager of Business Development, Charles E. Burnell, Jr., wrote to the owner of the O’Neal Quarry, Gary O’Neal, to begin negotiations. On December 21, 2001, O’Neal’s attorney, David MacKay wrote to Martin Marietta stating that: (1) O’Neal would not enter into a lease with Martin Marietta; (2) O’Neal was concerned that White Construction had previously exceeded the boundaries of its existing lease; and (3) White Construction had not been properly accounting for previously mined materials.
Martin Marietta wrote back to MacKay on January 7, 2002, urging O’Neal to reconsider its decision with respect to a lease with Martin Marietta. The letter further stated that if negotiations did go forward, Martin Marietta would require a lease of longer duration, and for a more definite term, than the existing lease between O’Neal and White Construction. On January 22, 2002, MacKay responded, reiterating that O’Neal would not enter into a new lease, but offered Martin Marietta the option of assuming the remaining term of the existing lease with White Construction. By letter dated January 28, 2002, Martin Marietta began discussions with O’Neal about assuming the existing White Construction lease, and sought assurances from O’Neal that he did not consider the existing lease to already be in default. It is not clear the extent to which communications continued between Martin Marietta and O’Neal from this point forward. What is undisputed is that Martin Marietta never obtained a new lease arrangement for the O’Neal Quarry. 6
On October 24, 2001, Burnell wrote to Dock Blanchard, attorney for the Clifton family, regarding a new proposed lease for the Clifton Quarry. After speaking with Blanchard on the phone, Burnell sent him
It appears that communications ceased for several months between Blanchard and Martin Marietta, and Martin Marietta never received a formal response to its draft lease. Contact was reestablished at some point and on June 28, 2002, Brooks sent another draft lease to Blanchard. In an attached email, Brooks explained to Blanchard that given White Construction’s and Luther White, Sr.’s legal problems, Martin Marietta had not effectuated a purchase of the mining operations, and Martin Marietta was unsure whether White Construction would ever be able to transfer assets to Martin Marietta free and clear of liens. (Doc. 81-12, p. 2). Brooks further explained that Martin Marietta was currently in discussions with White Construction to operate some of the sites, including the Clifton Quarry, whereby Martin Marietta would sublease the sites back to White Construction and/or Limerock Industries to conduct actual mining operations. Id. Brooks made clear to Blanchard that no matter what arrangement Martin Marietta worked out with White Construction and Limerock Industries, Martin Marietta would remain obligated directly to the Clifton family on any lease they executed. Id.
The Clifton family rejected the draft lease, and Martin Marietta attempted to communicate with Blanchard over the next several months. It appears that negotiations stalled because the Clifton family was considering selling part of its land to an organization interested in developing a race track. On November 12, 2002, Bur-nell wrote to Blanchard seeking again to finalize a long-term lease, explaining that Martin Marietta had been operating at the Clifton site on a month to month basis since July 1, 2002. It appears that the Cliftons were amenable to the revised lease, and Burnell sent Blanchard a final lease proposal on December 4, 2002.
Martin Marietta did not hear back from Blanchard until approximately February 25, 2003. However negotiations stalled again until April 2003. At that time, Martin Marietta learned that the Clifton family was negotiating with other entities who were interested in leasing the quarry. On April 7, 2003, Brooks wrote to Blanchard asking him to update Martin Marietta on whether there was any chance of a lease agreement between the Cliftons and Martin Marietta. Thereafter, Brooks spoke with Blanchard and informed him that Martin Marietta was no longer interested in a long-term lease. Blanchard explained that the Cliftons had received an offer from a third party who would pay a royalty rate of roughly double the rate Martin Marietta offered. On April 14, 2003, Brooks wrote to Blanchard explaining that Martin Marietta could not pay such a high royalty rate, and that Martin Marietta was no longer interested in negotiating with the Cliftons in any respect. On May 12, 2003, the Clifton family executed a seven-year lease and royalty agreement with Steven Counts, Inc., and Martin Marietta vacated the property later that summer.
TV. The Cabbage Grove Lease
During this same time, representatives from Foley and Martin Marietta met to discuss the possibility of a lease with Martin Marietta for the Cabbage Grove Quarry. Foley’s lease with White Construction
At some point during this process, Martin Marietta determined that White Construction was also a party to some of the Quarry leases, and that a significant portion of the equipment that was to be sold under the terms of the LOI also was owned by White Construction. 7 Martin Marietta became concerned that the purchase of assets from White Construction could be impacted by the company’s on-going criminal proceedings— specifically that there was a risk the State of Florida would seek forfeiture of all or most of White Construction’s assets. When Martin Marietta inquired about the seriousness of the criminal charges, White Construction repeatedly assured Martin Marietta that the charges would soon be resolved via a settlement with the State.
Martin Marietta also sought the legal advice of a criminal law attorney. Following this consultation, on March 22, 2002, Martin Marietta advised the Plaintiffs that it wished to go forward with the asset purchase, but would not be able to do so before the existing Cabbage Grove lease expired on April 1, 2002. 8 Instead, Martin Marietta insisted that the purchase be put on hold until after White Construction settled all criminal matters, and the risk of forfeiture was eliminated. In response, White acknowledged the risk of forfeiture, but insisted that it was not likely. However, White and Limerock did nothing to assuage Martin Marietta’s fears other than provide their own opinions on the matter. They also rejected Martin Marietta’s suggestion that White ask the State of Florida for an assurance that the assets sold to Martin Marietta would not be subject to criminal forfeiture.
White Construction and Limerock Industries contend that it was their intent to either renew their lease with Foley, or to sell their mining operations to a third party, if Martin Marietta was not going to purchase their assets. 9 Martin Marietta represented to the Plaintiffs that it would still go through with the asset purchase contemplated by the LOI once White Construction’s criminal proceedings were resolved. Martin Marietta also proposed that it execute a lease with Foley for Cabbage Grove, effective April 2, 2002, with the understanding that Martin Marietta’s acquisition of White Construction’s and Limerock Industries’ assets would hopefully proceed once the criminal proceedings concluded.
Immediately after execution of the Termination Agreement, Martin Marietta and Foley entered into a lease for Cabbage Grove, which included minimum annual royalty payments to Foley in the amount of $560,000, regardless of the amount of product mined. Soon thereafter Martin Marietta, White Construction and Limer-ock Industries entered into a sublease agreement whereby the Plaintiffs continued to conduct mining operations at the quarry on a month-to-month basis in exchange for paying Martin Marietta a royalty fee that was substantially equal to the amount Martin Marietta was obligated to pay to Foley.
V The Mining Services Agreement
Despite White Construction’s representations in early 2002, the company was not able to obtain a quick settlement of its criminal charges, and the ongoing proceedings were having a detrimental effect on White Construction’s financial status. From 2000 through 2002, White was forced to liquidate over $8 million in assets in order to pay mounting legal bills, stay financially afloat, and potentially cover any future assessed criminal penalties. 12 White also put its entire business up for sale, and while several entities expressed interest, White was unable to find a buyer.
Against this backdrop, White Construction and Martin Marietta began negotiations for a separate contract, which would provide Martin Marietta with additional mining rights, while also providing the Plaintiffs with an infusion of cash.
13
The
The MSA granted Martin Marietta a sublease for each of the three quarries, as well as the right to enter the quarries, to conduct all mining operations, to use all equipment currently located at each quarry, and to market and sell all mined materials. (Doc. 44-11, pp. 2-3, 6, 17). Martin Marietta obtained “absolute discretion and control regarding all aspects of the operations which it conducts” at the quarries, including the right to relocate equipment between quarries, and to modernize and replace existing equipment and related facilities. (Id., pp. 3-4). In the event Martin Marietta decided to release certain equipment from use, (because repairs exceed $1,000 or the equipment had little or no commercial value) the Plaintiffs had twelve (12) months to remove the equipment from a designated storage area. Failure to do so afforded Martin Marietta the right to sell the equipment and distribute the net proceeds to the Plaintiffs, or to cannibalize the equipment for parts. (Id.)
In exchange for these rights, Martin Marietta agreed to make several payments to White Construction and Limerock Industries. At the time of the execution of the MSA, Martin Marietta paid to the Plaintiffs approximately $ 2,900,000 in cash for the existing stockpiled limerock inventory, a seven year non-compete agreement executed by the Plaintiffs, and the accrued “goodwill” in both companies. Martin Marietta also agreed to make monthly royalty payments to the Plaintiffs based on the amount of inventory sold and removed from each quarry for the life of the contract. If the total aggregate monthly royalty payments reached $ 3,000,000 before the expiration of the MSA, Martin Marietta would continue to make monthly payments to the Plaintiffs at the lower amount of $.33 per ton of materials sold and removed from the quarries each month. (Doc. 44-11, p. 9). 15
Clearly contemplating the risk of asset forfeiture, the Parties also included a provision in the MSA agreeing that if either White Construction or Limerock Industries
suffer a forfeiture judgment under Florida law in connection with the allegations arising under the [Indictment filedagainst White Construction and other individuals] or any similar or related criminal or civil charges, they will, pursuant to Section 932.703 of the Florida Statutes, or comparable statutes that may be applicable, seek to satisfy that judgment by forfeiting assets other than any assets purchased by Martin Marietta, or to be utilized by Martin Marietta, pursuant to this Agreement.
(Doc. 44-11, p. 13).
One of the most important terms of the MSA was the “option to purchase” provision. Contrary to the terms of the LOI, which obligated Martin Marietta to purchase the Plaintiffs’ mining equipment and related assets for $15.5 million, the MSA provided Martin Marietta with the option to purchase these items at their fair market value. (Doc. 44-11, p. 20). Martin Marietta could exercise its option rights at any time prior to the end of the MSA’s term, and upon written notice to the Plaintiffs. Once the Parties determined the fair market value, Martin Marietta would be entitled to a credit against the purchase price for all payments previously made to buy White Construction’s and Limerock Industries’ preexisting inventory, non-compete agreement, and goodwill. During the term of the MSA, the Plaintiffs agreed not to negotiate with any third parties for the sale of their assets and equipment, and agreed to give Martin Marietta a thirty day right of first refusal, should a third party make an unsolicited bona fide offer for the items. (I'd).
The Parties further agreed that the MSA would expire on the earlier date of: (1) when Martin Marietta had removed all extractable limerock; (2) when the last mining lease expired; or (3) when Martin Marietta exercised its option to purchase! the Plaintiffs’ remaining assets. (Id, p. 17). Martin Marietta also had the complete discretion to terminate the Agreement at any earlier date, upon 90 days written notice. (Id).
The MSA also contained the following merger and integration clause:
Section 8.3 Entire Agreement; Amendment; Waiver, Severability. This Agreement shall be deemed to have incorporated by reference all of the exhibits referred to herein to the same extent as if they were fully set forth herein. Each reference herein to “the Agreement” or “this Agreement” shall be construed to include each such exhibit. This Agreement and the schedule and exhibits attached hereto represent the entire, understanding and agreement between the parties with respect to the subject matter hereof and supersede any prior agreements and understandings between the parties with respect to that subject matter. This Agreement may not be amended or modified except by a written instrument executed by an officer of [Martin Marietta Florida] and the Designated Representative.
(Doc. 44-11, p. 22) 16
White Construction and Limerock Industries were initially opposed to the op
White Construction and Limerock Industries contend that Martin Marietta also repeatedly assured them that the MSA was merely an interim agreement that would cease to exist once the criminal proceedings ended, and that Martin Marietta would then close on its purchase of the mining operations and assets under the terms set forth in the LOI. White Construction and Limerock Industries further represent that they relied heavily on these statements when deciding to enter into the MSA. Martin Marietta, however, contends that it never made any such statements, but instead told the companies that if White Construction could settle its criminal proceedings, that Martin Marietta hoped it could negotiate a future purchase of the assets under new terms. It is undisputed, however, that the negotiations for the MSA were conducted at arms-length, with legal representation on both sides.
IV Post MSA Events
Martin Marietta, White and Limerock operated under the terms of the MSA without incident for two years. On July 16, 2003, after it was clear that Martin Marietta was not going to be able to obtain new leases on the Clifton and O’Neal sites, representatives from Martin Marietta met in Gainesville, Florida, with Luther White. Sr., Stephen Pomeroy, Comptroller of White Construction, and Stan Cushman, attorney for White Construction and Lim-erock Industries. During the meeting, the Parties discussed the impact of the two expired mining leases on the continued viability of the MSA. 17 It was the Plaintiffs’ position that without the Clifton and O’Neal leases, the original intent of the MSA could no longer be satisfied. In a letter dated July 24, 2003, Cushman wrote to Brooks, asking whether, in light of these changed circumstances, Martin Marietta would be willing to renegotiate the MSA. (Doc. 99-13).
Brooks responded by letter dated August 1, 2003. (Doc. 99-14). In the letter, Brooks emphasized Martin Marietta’s rights under the MSA to operate and relocate all equipment at the Clifton and O’Neal quarries, and reminded Cushman that Martin Marietta intended to relocate the equipment to the Cabbage Grove site. Brooks also specified to Cushman that the deal contemplated in the LOI did not go through because of White Construction’s pending criminal matters, and that the Parties instead negotiated and executed the MSA. With respect to the MSA, Brooks stated that the option to purchase the remaining assets at the three quarries “was, and is, merely an option, and not an obligation, of Martin Marietta to purchase these remaining assets. Of course, as time goes by, these assets have become fewer and fewer as equipment has aged, etc.” (Doc. 99-14, p. 2).
Brooks also made clear to Cushman that the loss of the Clifton and O’Neal mining leases did not change the intent or operation of the MSA because the Cabbage
It does not appear that the Parties engaged in any negotiations to revise the MSA. On July 14, 2004, Luther WTiite Sr. notified Martin Marietta that the criminal proceedings against White Construction had been settled, and that both White Construction and Limerock Industries wished to go forward with Martin Marietta’s purchase of their assets under the terms and conditions set forth in the LOI. 18 By this time, however, conditions had changed — in addition to the expired leases on the Clifton and O’Neal Quarries, the company had lost the ability to sell limerock to White Construction, (a potentially significant customer), due to the fact that White Construction was now barred from any road construction work in Florida, and the value of the assets which were the focus of the LOI had depreciated in value. As a result, Martin Marietta refused to go forward with the asset purchase, and White Construction and Limer-ock Industries initiated this action.
Summary Judgment Standard
Pursuant to Federal Rule of Civil Procedure 56(c), the entry of summary judgment is appropriate only when the Court is satisfied that “there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” In applying this standard, the Court must examine the pleadings, depositions, answers to interrogatories, and admissions on file, together with any affidavits and other evidence in the record “in the light most favorable to the nonmoving party.”
Samples on Behalf of Samples v. Atlanta,
Discussion
The Plaintiffs’ Third Amended Complaint consists of twelve state law claims alleged against both Defendants: (1) Count I — breach of contract for breach of the LOI; (2) Count II — breach of fiduciary duty; (3) Count III — fraud in the inducement regarding the MSA; (4) Count IV— breach of the Defendants’ implied duty of good faith, and fair dealing with respect to the MSA; (5) Count V — breach of contract for breach of the MSA; (6) Count VI— unjust enrichment; (7) Count VII — prom
I. Count One: Breach of Contract — The Letter of Intent
Count I of the Third Amended Complaint is a breach of contract claim focusing on the LOI. The Plaintiffs allege that the LOI is a binding and enforceable contract, either by its plain terms or by the subsequent actions of all Parties, that they partially performed under the LOI when they facilitated Martin Marietta’s negotiation of a lease with Foley, and that Martin Marietta breached the LOI when it failed to purchase the assets listed in the LOI for $15.5 million. (Doc. 44, ¶¶ 48-56).
It is clear that Martin Marietta never purchased the Plaintiffs’ assets for $15.5 million, therefore there is no real question on the issue of a breach. This claim instead rests solely on a determination of whether or not the LOI, which by its very terms states that it is not a binding or enforceable contract, can, in fact, be deemed as such. Based on the applicable law and the undisputed facts of this case, the Court concludes that it cannot.
Both sides first focus on the terms of the LOI itself — specifically the level of detail contained in the letter. Martin Marietta argues that the LOI was preliminary in nature and did not contain certain definitive contract terms, while White Construction and Limerock Industries contend that all essential terms were set forth in the LOI.
By focusing on the level of specificity required to create a contract, the Parties ignore the primary, threshold issue concerning whether the Parties intended for the LOI to create a binding legal obligation. Unless the Parties intended to be bound by the LOI, they did not enter into a contract to pursue the contemplated sale of the mining equipment and assets, regardless of the level of detail set forth in the LOI.
Doll v. Grand Union Co.,
Every possible provision of a contemplated [contract] may be discussed and agreed upon, but unless the parties intend that these discussions be binding, no contract has been formed. When the parties express their intention to be bound and they specify the basic terms of the lease, the courts will enforce the contract, ... to avoid frustrating the parties’ original intent. When such indications of intent are absent or are explicitly disavowed, however, the justification for enforcing the proposed [contract] is wholly absent. The court does not address the terms of the proposed [contract] until it has satisfied itself that the parties did indeed intend to be bound.
Id. at 1368-69.
The question of whether the Parties intended to form a binding contract is determined by examining the language of the LOI, as well as the surrounding circumstances. Midt
own Realty, Inc. v. Hussain,
The Court concludes, as a matter of law, that these events cannot defeat the parties’ clear and unambiguous expression of their intent not to be bound in the absence of a formal written agreement. The LOI makes clear that the Parties contemplated future negotiations leading to a formal written contract, and the circumstances the Plaintiffs point to do not change this fact. The statements by Martin Marietta to the owners of the Clifton and O’Neal Quarries do not state that a contract has
The Plaintiffs’ reliance on Martin Marietta’s oral promises to go forward with the sale once the criminal proceedings were resolved also does not change the meaning and enforceability of the LOI. These promises were purely conditional in nature, and once again reinforce that there was no binding agreement. It is undisputed that Martin Marietta would not complete the purchase transaction unless and until White Construction’s criminal proceedings concluded, and the risk of forfeiture ceased to exist. Until these conditions precedent occurred, no deal would be consummated, and therefore there was no intent to be bound.
See Doll,
White Construction’s and Limerock Industries’ claims of partial performance also do not make the LOI a binding contract in light of the express terms of the LOI stating that the Parties did not intent to be bound until after due diligence was completed and a definitive contract was executed.
See Club Eden Roc,
Even if the Court were to conclude that these circumstances demonstrated a mutual intent to be bound by the terms of the LOI (or at least created a genuine issue of material fact), there is one other subsequent event which defeats the Plaintiffs’ claim. On July 17, 2002, the Parties entered into a comprehensive, detailed, and enforceable written agreement, which expressly covers Martin Marietta’s operation of the three quarries, as well as its purchase of the mining assets — the same transactions contemplated under the terms of the LOI. For example, the MSA provides that Martin Marietta now has the option to purchase these assets and equipment, at their fair market value, at some future point in time, and at Martin Marietta’s discretion. The MSA also provides that Martin Marietta has the complete discretion and authority to operate the mining facilities at each of the three quarries, including the use, repair, and replacement of the equipment at each quarry.
These express terms, which were the product of an arms-length negotiation process with legal representation on both sides, are valid, enforceable, and discharge any claims based on the LOI. More importantly, the MSA contains a merger and integration clause specifically providing that all prior agreements and understanding concerning the subject matter of the MSA are superseded by the MSA itself.
See Aly Handbags, Inc. v. Rosenfeld,
Summary judgment shall be granted as to Count I.
II. Count Two: Breach of Fiduciary Duty
The Plaintiffs’ second claim is based on a theory that a fiduciary relationship was created between the Parties when they executed the MSA. (Doc. 44, ¶¶ 58-60). 25 More specifically, White Construction and Limerock Industries contend that pursuant to the MSA, Martin Marietta assumed managerial duties for all three quarries, thereby creating a fiduciary duty to perform its management functions so that the Plaintiffs would not be harmed, and breached its duties by: (1) failing to negotiate new leases for the Clifton and O’Neal quarries; and (2) failing to appropriately operate, repair, and maintain the mining equipment at these quarries. (Doc. 101, pp. 14-15).
“A fiduciary relationship is based on trust and confidence between the parties where ‘confidence is reposed by one party and a trust accepted by the other ... ’.”
Taylor Woodrow Homes Fla., Inc. v. 446-A Corp.,
White Construction and Limerock Industries can establish a fiduciary relationship either by demonstrating the existence of an express contract or submitting facts upon which such a relationship can be implied in law. It is undisputed that there is no express contract creating a fiduciary relationship between the Parties. And there is also no material issue of fact concerning the existence of an implied in law relationship.
White Construction and Limerock Industries hang their hat on the MSA itself, arguing that its terms created a fiduciary relationship. However, there is nothing in the MSA that makes Martin Marietta a fiduciary of either company, nor is there anything in the contract demonstrating a placement of the Plaintiffs’ confidence in Martin Marietta and/or Martin Marietta’s acceptance of their trust. There is also no evidence before the Court establishing that the Plaintiffs were the weaker parties during the creation of the MSA, and/or dependent on Martin Marietta to advise, counsel, or protect them.
26
To the contrary, it is undisputed that all negotiations concerning the formation and
White Construction and Limerock Industries attempt to avoid the arms-length issue by arguing that “[w]hile the parties may have been dealing at arms length ‘when they entered into’ the MSA, the fiduciary duty arose thereafter precisely by virtue of the terms of the MSA and the nature of the relationship of the parties.” (Doc. 101, p. 15). In other words, the Plaintiffs admit that the fiduciary relationship is contract-based.
28
It is the law of Florida that “a cause of action for breach of fiduciary duty will not lie where the claim of breach is dependent upon the existence of a contractual relationship between the parties .... This is true because the duty is owed only as a result of the existence of the contract.”
Excess Risk Underwriters, Inc. v. Lafayette Life Ins. Co.,
III. Count Three: Fraud in the Inducement — The Mining Services Agreement
The Plaintiffs’ third claim alleges that Martin Marietta fraudulently induced them to enter into the MSA: (1) when Martin Marietta falsely represented that the MSA was only an interim agreement until White Construction’s criminal proceedings ended, at which time Martin Marietta would purchase the remaining assets under the terms of the LOI; and (2) when Martin Marietta falsely stated it would properly manage the Clifton and O’Neal Quarries. Both Plaintiffs contend that they reasonably relied on these false statements when they entered into the MSA and, as a result, suffered the loss of all three quarries, as well as the revenues they would have generated from the sale of limestone mined from the quarries. (Doe. 44, ¶¶ 63-67).
In order to recover on a claim for fraudulent inducement, a plaintiff must prove by the greater weight of the evidence that: (1) a false statement was made regarding a material fact; (2) the individu
Martin Marietta first argues that there is no record evidence establishing that it ever unequivocally told White Construction or Limerock Industries that it would purchase their assets for $15.5 million upon the conclusion of White Construction’s criminal proceedings if they executed the MSA. Taking all of the facts in the light most favorable to the Plaintiffs, the Court disagrees. White Construction and Limerock Industries have provided deposition testimony from Stephen Pomeroy that Martin Marietta did, in fact, make such a representation. There is also deposition testimony from various Martin Marietta officials that at least some sort of representation concerning the possibility of purchasing the mining equipment and other assets was made prior to the execution of the MSA. This testimony is sufficient to create material issue of fact as to the first element of the Plaintiffs’ claim.
Martin Marietta also contends that the Plaintiffs were not justified in their reliance on the alleged misrepresentations. “The law is clear that reliance by a party claiming fraud must be reasonable and justified under the circumstances.”
Smith v. Mellon Bank, 957
F.2d 856, 858 (11th Cir.1992). For if the recipient “knows that it [the statement] is false or its falsity is obvious to him,” his reliance is improper, and there can be no cause of action for fraudulent misrepresentation.
M/I Schottenstein Homes, Inc. v. Azam,
Section 7.13 of the MSA expressly provides that during the term of the Agreement, Martin Marietta shall have the option and right to purchase the assets of White Construction and Limerock Industries at their fair market value. (Doc. 44-11, p. 20). Section 7.6 provides that the term of the MSA shall continue until either (1) Martin Marietta has extracted and removed from each quarry all of the materials which Martin Marietta, in its sole and absolute discretion determines can be extracted and removed; or (2) the applicable mining lease for each quarry terminates. The MSA further provides that Martin Marietta has the sole right to terminate all or part of the Agreement, at any earlier date, simply upon 90 days written notice. (Doc. 44-11, p. 17). The only reasonable reading of these provisions of the MSA is that Martin Marietta had the sole discretion and authority to determine when the MSA would terminate, as well as if, and
Both the duration of the MSA and Martin Marietta’s discretion to purchase the assets are specifically addressed in clear terms in the MSA; terms which omit any mention of an obligation on the part of Martin Marietta to purchase the assets at a set price, or to terminate the MSA upon the conclusion of White Construction’s criminal proceedings. The alleged oral representations by Martin Marietta that it would terminate the MSA and purchase the equipment and assets for $15.5 million once White Construction resolved its criminal case are thus, at the very least adequately addressed, if not specifically contradicted, by the language of the MSA. Therefore, the Plaintiffs cannot justifiably rely on those representations as a basis for its claim.
30
See Tissuenet Custom Applications,
While not entirely clear, it appears that the Plaintiffs are arguing in the alternative that the terms of the MSA do not contradict the alleged
oral
representations of Martin Marietta concerning its purchase of the mining equipment and assets, but that the MSA is merely silent on this issue. Although the Court has already determined as matter of law that contradictory language exists, even if the MSA was silent as to Martin Marietta’s purchase of the equipment and assets, White Construction’s and Limerock Industries’ fraudulent inducement claim would still fail.
See SEB S.A. v. Sunbeam Corp.,
“Courts have also held that a party could not rely justifiably on representations not contained in the contract where the party helped draft the agreement and relinquished opportunities to reduce the representations to writing.”
SEB S.A.,
IV. Count Four: Breach of Implied Duty of Good Faith and Fair Dealing
The Plaintiffs’ next claim again focuses on the MSA, and alleges that Martin Marietta breached its implied duty of good faith and fair dealing which arose out of the terms of the MSA when Martin Marietta: (1) allowed the Clifton and O’Neal mining leases to expire; and (2) failed to repair and maintain White Construction’s and Limerock Industries’ mining equipment located at the three quarries. 33
“Under Florida law, the implied covenant of good faith and fair dealing is a part of every contract.”
Burger King Corp. v. Weaver,
The Plaintiffs acknowledge that there are no express provisions in the MSA which require Martin Marietta to renew the Clifton and O’Neal mining leases. This alone is sufficient to justify the granting of summary judgment as to this portion of their claim.
See Johnson Enterprises,
Instead, the Plaintiffs point to Sections 1.2 and 2.3 of the MSA, as well as the “essential purpose of the MSA” as evidence that Martin Marietta breached its implied duties. Section 1.2 of the MSA simply grants Martin Marietta the right to enter the three quarries and to take all action permitted under the mining leases. (Doc. 44-11, p. 2). Section 2.3 of the MSA provides that Martin Marietta “shall have the right,
but not the obligation,
to deal directly with the Mining Lessors regarding any matters affecting the Quarries and, if Martin Marietta so elects, to directly satisfy any obligation of [either Plaintiff] under the Mining Leases with respect to such owners or to take any other action it deems appropriate to maintain the Mining Leases in full force and effect.”
{Id.,
pp. 5-6) (emphasis added). Not only is there a complete absence of any language in these two Sections even suggesting that Martin Marietta was required to renew the Clifton and O’Neal leases (both of which at all relevant times remained in the names of the Plaintiffs), but Section 2.3 makes it patently clear that Martin Marietta was not obligated to renew the leases, or to deal with the owners of either quarry at all. To hold otherwise would vary the express terms of the MSA, in contravention of Florida law.
See Cox v. CSX Intermodal, Inc.,
The allegations concerning Martin Marietta’s obligation to repair and maintain the mining equipment require closer review. Section 2.2 of the MSA provides, in relevant part:
While Martin Marietta will be entitled to use equipment and facilities owned or leased by [White Construction and Lim-erock Industries] located at the Quarries... [White Construction and Limerock Industries] acknowledge and agree that Martin Marietta intends to modernize and expand the Business by replacing the equipment and related facilities at the Quarries with its own equipment and facilities as soon as Martin Marietta determines, in its sole discretion, that it is commercially reasonable to do so. Accordingly, Martin Marietta, in its sole determination, may choose to utilize any of the equipment or items at the Quarries as listed on Exhibit 1.3, at the particular Quarry where any such equipment or item is currently located or at any of the other Quarries hereunder, relocate the equipment or items set forth in Exhibit 1.3 to another facility operated by Martin Marietta, or release equipment and/or related facilities from time to time from use by Martin Marietta and relinquish all rights hereunder to use such items. Under such circumstances, Martin Marietta shall notify [White Construction and Limerock Industries] of its release of equipment and other items hereunder, whereupon [White Construction and Limerock Industries] will resume sole responsibility for such equipment and items. Such equipment and items shall be relocated by Martin Marietta to a designated storage area located at one of the Quarries and if practicable, [White Construction and Limerock Industries] will be responsible for removing such released equipment or other items from the Quarries, and thereafter using or disposing of the same in such manner as may be decided by [White Construction and Limerock Industries] in their sole discretion. If any equipment or other items relocated by Martin Marietta to the designated storage area is not removed by [White Construction and Limerock Industries] within twelve (12) months, Martin Marietta, at its sole option, may sell said equipment or items and distribute the net proceeds to [White Construction and Limerock Industries]. If the equipment or other items cannot be sold, then Martin Marietta may cannibalize the same for parts or otherwise dispose of it without liability or recourse.
During the time that Martin Marietta uses in its operations at the Quarries or elsewhere equipment and other items owned or leased by [White Construction and Limerock Industries] and not previously released hereunder, Martin Marietta, at its expense, will repair and maintain such equipment and other items in accordance with its normal business practices. The parties understand, however, that such repair and maintenance obligation is only intended to cover routine repairs and maintenance. If Martin Marietta, in its sole discretion, determines that any such individual equipment or other items require major repairs or renovations, or if it would otherwise require expenditures by Martin Marietta individually or in the aggregate in an amount greater than One Thousand Dollars ($1,000), or if Martin Marietta determines that such equipment or other items would have little or no commercial value to Martin Marietta in the operation of the Quarries if repaired or renovated, then Martin Marietta will not be obligated to make such repairs or renovations, and Martin Marietta will be entitled to release such equipment or other items from use at the Quarries as provided in the immediately preceding paragraphs....
(Doc. 44-11, pp. 4-5).
The Plaintiffs contend that Martin Marietta breached this portion of the MSA when it failed to repair and maintain the equipment located at the Cabbage Grove quarry. Specifically, Stephen Pomeroy testified both at his deposition and in his subsequent declaration that Martin Mar
Based on this testimony — the only evidence provided by either side on this issue — it is undisputed that Martin Marietta did not breach Section 2.2 of the MSA. Rather, Mr. Pomeroy makes clear in his testimony that Martin Marietta did exactly what it was authorized to do under the terms of the Agreement. Martin Marietta, in its sole discretion, determined that it no longer wished to use the mills and dragline, relocated these items to another portion of the quarry, and notified White Construction of its actions. When directly asked, Mr. Pomeroy was unable to state how much time had elapsed between the date Martin Marietta relocated the equipment and the date it notified White Construction that the equipment had been released, and the Plaintiffs have provided no other evidence which would support its claim that Martin Marietta either abused its discretion in its handling of the equipment, or breached its duty to repair, maintain, and/or release the equipment. 37 Because there are no undisputed facts on this point, the Court concludes that there has been no breach of Section 2.2 of the MSA. 38
Summary judgment shall be granted as to Count IV.
V. Count Five: Breach of Contract — The Mining Services Agreement
In order for White Construction and Limerock Industries to survive summary judgment on their fifth claim, they must establish that genuine issues of material fact exist as to whether a material breach of the MSA occurred.
See Abbott Labs., Inc. v. GE Capital,
Summary judgment is warranted as to this claim because, as discussed in Count IV above, the MSA does not obligate Martin Marietta to renew either lease, and there are no disputed issues of fact as to whether Martin Marietta breached its obligations concerning its handling of the White Construction and Limerock Industries’ mining equipment. 39
VI. Count Six: Unjust Enrichment
The Plaintiffs sixth claim is based on the equitable remedy of unjust enrichment. White Construction and Limerock Industries allege that based on Martin Marietta’s promises to eventually purchase their equipment and assets under the terms of the LOI, they allowed Martin Marietta to negotiate a lease for the Cabbage Grove Quarry in Martin Marietta’s own name. As a result, Martin Marietta has received monies from the sale of limerock materials mined from Cabbage Grove that otherwise would have been earned by White Construction and Limerock Industries. The Plaintiffs contend that it would be inequitable to allow Martin Marietta to retain these funds. (Doc. 44, ¶¶ 81-84).
The elements of a claim for unjust enrichment are: (1) a benefit conferred upon the defendant by the plaintiff; (2) appreciation by the defendant of such benefit; and (3) acceptance and retention of such benefit by the defendant under such circumstances that it would be inequitable for him to retain it without paying the value thereof.
Hercules, Inc. v. Pages,
In this case, the Court concludes that a valid and express contract exists which covers the same subject matter as the alleged implied or quasi-contract. White Construction and Limerock Industries allege that Martin Marietta promised to purchase their mining equipment and assets for $15.5 million once White Construction’s legal issues were concluded. This promise is directly contradicted by the terms of the MSA, (a contract the Court has already determined as a matter of law is valid and enforceable), which states in plain terms that Martin Marietta has the option to purchase the equipment and assets at their current fair market value. The MSA also has a comprehensive merger and integration clause, stating that any and all prior agreements and understandings between the Parties are superseded by the terms of the MSA itself. In other words, the MSA addresses the same subject matter over which White Construction and Limerock Industries seek to create an im
White Construction’s and Limerock Industries’ unjust enrichment claim is therefore defeated by the express agreement between the Parties set forth in the MSA.
See Lafarge North America, Inc. v. Ma-traco Colorado, Inc.,
No. 07-80112-CIV,
VII. Count Seven: Promissory Estoppel
The Plaintiffs next allege that these same promises to eventually purchase their assets under the terms listed in the LOI induced them to terminate their lease on the Cabbage Grove quarry, to execute the Termination Agreement, and to enter into the MSA, and that Martin Marietta breached its oral promises when it later refused to consummate the sale. White Construction and Limerock Industries further allege that: (1) Martin Marietta should have expected them to rely on these promises; (2) it was reasonable to rely on Martin Marietta’s statements; and (3) the Plaintiffs suffered harm in the form of the lost value of the Cabbage Grove lease, lost profits from the sale of limerock mined from all three quarries, and lost profits from the sale of their assets. The Plaintiffs seek damages and contend that Martin Marietta’s alleged oral promises should be enforced to avoid injustice. (Doc. 44, ¶¶ 86-92).
The Florida Supreme Court in
W.R. Grace and Co. v. Geodata Services, Inc.,
The basic elements of promissory es-toppel are set forth in Restatement (Second) of Contracts § 90 (1979), which states:
(1) A promise which the promisor should reasonably expect to induce action or forebearance on the part of the promisee or a third person and which does induce such action or forbearance is binding if injustice can be avoided only by enforcement of the promise. The remedy granted for breach may be limited as justice requires.
The character of the reliance protected is explained as follows:
The promisor is affected only by reliance which he does or should foresee, and enforcement must be necessary to avoid injustice. Satisfaction of the latter requirement may depend on the reasonableness of the promisee’s reliance, on its definite and substantial character in relation to the remedy sought, on the formality with which the promise is made, on the extent to which the evidentiary, cautionary, deterrent and channeling functions of form are met by the commercial setting or otherwise, and on the extent to which such other policies as the enforcement of bargains and the prevention of unjust enrichment are relevant.
W.R. Grace & Co.,
Martin Marietta seeks summary judgment on this claim because: (1) the oral promises are unenforceable under Florida’s Statute of Frauds; (2) the alleged oral
Martin Marietta’s first two arguments are not persuasive. There are at least material issues of fact concerning whether the Plaintiffs partially performed under the oral promises, thereby removing this claim from the Statute of Frauds. 41 Material issues of fact also exist as to whether the oral promises are sufficiently definite—there is record evidence concerning the proposed purchase price of the mining equipment and assets, as well as a potential date for performance.
Martin Marietta’s last argument is well founded. The Court concludes, as a matter of law that it was not reasonable for White Construction and Limerock Industries to rely on Martin Marietta’s oral promises in light of the plain and express terms of the MSA, which cover the same subject matter as the oral promises, and which contain a comprehensive merger and integration clause.
See Advanced Marketing Systems Corp. v. ZK Yacht Sales,
VIII. Count Eight: Quantum Meruit
As with their claim for unjust enrichment, White Construction and Limerock Industries’ claim for quantum meruit fails due to the existence of the MSA. This claim is also premised upon a theory that an implied contract existed between the Parties for the purchase by Martin Marietta of the assets listed in the LOI for $15.5 million, and that Martin Marietta agreed to consummate the purchase as soon as White Construction’s criminal proceedings were resolved. (Doc. 44, ¶¶ 94-96). However, unlike their unjust enrichment claim which is based on a theory of an implied in law agreement, the Plaintiffs now contend that their quantum meruit claim actually refers to an implied in fact contract.
This argument is unpersuasive. As with implied in law contracts, a claim of an implied in fact contract cannot survive where a valid, express contract exists that covers the same subject matter.
See Excess Risk Underwriters,
Summary judgment in Martin Marietta’s favor is warranted as to this claim.
IX. Count Nine: Breach of Oral Contract — Termination of Cabbage Grove Lease
White Construction’s and Limerock Industries’ claim for breach of oral contract also relies on the events surrounding the termination of their lease with Foley. Specifically, the Plaintiffs allege that they entered into an oral contract with Martin Marietta sometime between March 22, 2002 and April 2, 2002 whereby Martin Marietta promised to purchase the mining equipment and assets for $15.5 million once White Construction’s criminal proceedings ended, if the Plaintiffs would terminate their lease with Foley for the Cabbage Grove quarry, sign the Termination Agreement, and allow Martin Marietta to negotiate a new lease in its own name. (Doc. 44, ¶ 102). The Plaintiffs further contend that they performed their portion of the oral contract when they executed the Termination Agreement with Foley and did not seek an extension or renewal of their lease, but that Martin Marietta subsequently breached the oral contract when it refused to purchase the mining equipment and assets in July 2004.
Martin Marietta argues that summary judgment is warranted because White Construction and Limerock have not established all of the elements of their claim, and because the oral contract is barred by the statute of frauds. The Court agrees that this claim is barred by Florida’s Uniform Commercial Code Statute of Frauds, Fla. Stat. § 672.201. Pursuant to that section:
a contract for the sale of goods for the price of $500 or more is not enforceable by way of action or defense unless there is some writing sufficient to indicate that a contract for sale has been made between the parties and signed by the party against whom enforcement is sought or by his or her authorized agent or broker.
Fla. Stat. § 672.201(1).
43
Neither side disputes that the purported oral contract at issue involved the sale of goods for more than $500, therefore, unless some writing exists, the statute of frauds would render the oral contract unenforceable.
See Kolski ex rel. Kolski v. Kolski,
White Construction and Limerock Industries point to the September 27, 2001 LOI as the writing memorializing the purported oral contract, and which satisfies the Statute of Frauds. However, the LOI was executed approximately six (6) months
prior
to the making of the alleged oral contract and expired by its own terms on March 1, 2002, well before the making of any oral promises. In such circumstances, the LOI cannot satisfy Florida’s Statute of Frauds because the LOI and the alleged oral contract are two separate and independent events.
See H.P.B.C., Inc. v. Nor-Tech Powerboats, Inc.,
The Plaintiffs’ argument that they partially performed under the oral contract when they executed the Termination Agreement does not remove the oral agreement from the Statute of Frauds. “Florida courts have uniformly held that the ‘performance exception’ to the Statute of Frauds, which arose in sale of land cases, applies only when a plaintiff seeks purely equitable relief.”
Eclipse Medical, Inc.,
Moreover, even if the Statute of Frauds did not apply, and an enforceable oral contract existed (or at least material issues of fact), the plain terms of the MSA defeat this claim. Not only does the MSA (an agreement that was undisputedly negotiated at arms-length with legal representation on both sides) expressly contradict Martin Marietta’s alleged oral promise to purchase the assets at a price certain, but the MSA’s merger and integration clause provides that any prior agreements and understandings between the Parties with respect to the mining operations at all three quarries, as well as the purchase of the assets, are superseded by the MSA itself. (Doc. 44-11, Section 8.3, p. 22). At the time the Plaintiffs entered into the MSA, they accepted all terms and obligations under the Agreement, including the obligation to be bound by the integration clause.
See Rodriguez v. Tombrink Enterprises, Inc.,
Summary judgment shall be granted on Count IX.
X. Count Ten: Fraud in the Inducement — The Termination Agreement
White Construction’s and Limerock Industries’ tenth claim also arises out of events surrounding the Cabbage Grove mining lease. They assert that Martin Marietta’s allegedly false representations concerning their future purchase of their assets induced them to allow their lease of Cabbage Grove to expire, and to enter into the Termination Agreement. The Plaintiffs further allege that they were justified in relying on Martin Marietta’s false representations, and that they have suffered damages in the form of the lost lease and lost mining revenues. (Doc. 44, ¶¶ 107-112).
Martin Marietta contends that it is entitled to summary judgment because the alleged oral promise is unenforceable under Florida’s Statute of Frauds, and because the language of the Termination Agreement contradicts the oral promise. Neither argument is persuasive. Whether or not the oral promise is enforceable under the Statute of Frauds is not relevant to the resolution of this particular claim. The Statute of Frauds is used to determine whether an oral promise is itself valid and enforceable in situations where a party is seeking relief based on the promise itself — either in the form of damages or specific performance. 44 In this claim, however, the Plaintiffs are not seeking enforcement or damages from the oral promise, under either contract or tort law, but are instead merely citing the oral promise as proof of the alleged fraud by Martin Marietta which led the Plaintiffs to engage in behavior that ultimately caused them harm. In other words, while the Plaintiffs may have entitled Count X as a claim of “fraudulent inducement” it is clear that this claim is much more akin to a garden variety claim of fraud, and the Defendants have not provided any legal authority to support the use of Florida’s Statute of Frauds under facts similar to the present claim.
Martin Marietta’s argument that the language of the Termination Agreement mandates summary judgment is equally unavailing. It is clear that in Florida where a written agreement either
The Court further concludes that material issues of fact remain in dispute as to at least three of the elements of the Plaintiffs’ claim. The Parties have presented conflicting evidence as to whether anyone at Martin Marietta ever expressly promised to purchase the Plaintiffs’ assets in exchange for the Plaintiffs’ execution of the Termination Agreement, as well as to whether the Plaintiffs were justified in relying on such representations. There is also a disputed issue of fact as to whether the Plaintiffs suffered any damages because it is unclear whether Foley would have renewed its lease with White Construction and Limerock Industries at that time. Based on these numerous issues of material fact, summary judgment shall be denied as to this claim. 46
XI. Count Eleven: Tortious Interference
The Plaintiffs’ last claim concerning the Cabbage Grove lease is premised on a theory that Martin Marietta intentionally and unjustifiably interfered with their advantageous business relationship with Foley by telling Foley that White Construction would not be able to continue long-term business operations due to its pending criminal proceedings. White Construction and Limerock Industries allege that Martin Marietta made this representation with the intent to: (1) interfere with and damage them contractual relationship with Foley; and (2) cause Foley to prefer a long-term lease with Martin Marietta instead. (Doc. 44, ¶¶ 115-117). The Plaintiffs do not base this claim on their termination of the Cabbage Grove lease, but rather focus on the loss of the ability to renew the lease with Foley and/or to sell their continuing leasehold rights to another entity after April 1, 2002.
To establish a claim for tortious interference, the Plaintiffs must establish: “(1) the existence of a business relationship, not necessarily evidenced by an enforceable contract; (2) knowledge of the business relationship on the part of the defendant; (3) an intentional and unjustified interference with the relationship by the defendant; and (4) damage to the plaintiff as a result of the breach of the relationship.”
Tamiami Trail Tours, Inc.
Martin Marietta contends that there was no existing business relationship between the Plaintiffs and Foley after April 1, 2002 because, at that point, the Cabbage Grove lease had expired by its own terms and there is no evidence that Foley would have renewed the lease at that time. The Court disagrees — -White Construction and Limer-ock Industries have presented record evidence in the form of the deposition testimony of Dennis Carey and James Odom (the business representatives from Foley) establishing at the very least a question of fact as to whether Foley would have renewed its lease with the Plaintiffs, as well as to what extent Martin Marietta’s statements played into Foley’s decision-making process. These factual disputes are best left for the trier of fact to resolve. Summary judgment is denied as to Count XI.
XII. Count Twelve: Civil Theft
White Construction’s and Limerock Industries’ final claim alleges that Martin Marietta committed civil theft in violation of Florida Statute § 812.014(1) by: (1) obtaining the lease for Cabbage Grove in Martin Marietta’s own name, and encouraging the Plaintiffs to execute the Termination Agreement, while never intending to purchase the mining equipment and assets for $15.5 million; (2) convincing White Construction and Limerock Industries to allow Martin Marietta to utilize their mining equipment in exchange for the false promise to eventually buy the equipment for $15.5 million; and (3) obtaining the rights to negotiate new leases for the Clifton and O’Neal quarries, but instead allowing those leases to expire. The Plaintiffs further allege that the payments Martin Marietta made under the terms of the MSA did not reflect the true value of the lease rights and mining equipment, and that the MSA was only intended to be an interim agreement. (Doc. 44, ¶¶ 122-23).
To establish a claim for civil theft, the Plaintiffs must show that Martin Marietta “knowingly obtained or used, or endeavored to obtain or to use, the property of another with intent to, either temporarily or permanently (a) deprive the other person of a right to the property or a benefit from the property; or (b) appropriate the property to his or her own use or to the use of any person not entitled to the use of the property.” Fla. Stat. § 812.014(1). The Plaintiffs must also show that Martin Marietta did so with the felonious intent to commit theft.
See Florida Desk, Inc. v. Mitchell International, Inc.,
The Court concludes that genuine, material issues of fact exist with respect to Martin Marietta’s execution of a mining lease with Foley for Cabbage Grove, as well as with respect to the Plaintiffs’ execution of the Termination Agreement. While the Court is not entirely convinced the Plaintiffs will ultimately prevail on this claim, it is possible to interpret the record evidence to show that Martin Marietta intentionally deceived White Construction and Limerock Industries in order to obtain the Cabbage Grove lease, and that the Plaintiffs suffered harm through the loss of both the lease itself, and their continuing rights to remove their equipment and facilities.
Summary judgment is appropriate, however, on the portion of the Plaintiffs’ claim seeking damages for Martin Marietta’s refusal to purchase the mining equipment and assets for $15.5 million. It is undisputed that on July 17, 2002, White Construction, Limerock Industries, and Martin Marietta entered into the MSA, a
This portion of the civil theft claim is also derivative of the Plaintiffs’ breach of contract claims, both oral, written, and implied. As the Court has previously determined that those claims are not sustainable, the civil theft claim also fails.
See Gambolati v. Sarkisian,
Summary judgment is also warranted with respect to the expiration of the Clifton and O’Neal leases for the simple fact that there is no evidence that Martin Marietta ever deprived the Plaintiffs of their use of either quarry. The Court has previously held as a matter of law that Martin Marietta was under no obligation to renew the leases — a fact made clear by the plain and express terms of the MSA— and that they operated the mining facilities at the two quarries under the terms and conditions of the arms-length MSA. Moreover, there is no evidence in the record that Martin Marietta operated with a felonious intent as to either lease. To the contrary, the evidence is undisputed that Martin Marietta engaged in a lengthy, arms-length, detailed negotiation process with the owners of both quarries, and that the leases expired solely due to the owners’ independent decisions to lease to other entities. Summary judgment shall be granted in part and denied in part as to Count XII.
Conclusion
Accordingly, upon due consideration, it is hereby ORDERED AND ADJUDGED as follows:
(1) The Defendants’ Motion for Final Summary Judgment (Doc. 80) is GRANTED IN PART AND DENIED IN PART. Summary judgment in favor of Defendants Martin Marietta Materials, Inc. and Martin Marietta Materials of Florida, LLC and against Plaintiffs White Construction Company, Inc. and Limerock Industries, Inc. is granted as to Counts I-IX of the Plaintiffs’ Third Amended Complaint (Doc. 44), and as to the portion of Count XII (the Civil Theft claim), relating to the purchase of the Plaintiffs’ mining equipment and assets, and renewal of the Clifton and O’Neal mining leases. The Plaintiffs may go forward with their claim for fraudulent inducement with respect to the Termination Agreement (Count X), their claim for tortious interference with business relationship (Count XI), and that portion of the civil theft claim (Count XII) relating to the Cabbage Grove mining lease and the Termination Agreement;
(2) The Defendants’ Motion to Dismiss Third Amended Complaint (Doc. 50) is DENIED AS MOOT, and the Defendants
(3) The Clerk is directed to reschedule this case for final pretrial conference and trial for the term commencing June 1, 2009. The Parties shall file an amended pretrial statement prior to the date of the pretrial conference, within the time frames set forth in the applicable Federal Rules of Civil Procedure and the Local Rules of this Court;
(4) The Parties’ Joint Motions for Status Conference (Docs. 210-211) are DENIED AS MOOT; and
(5) The Clerk is further directed to withhold the entry of judgment pending resolution of all remaining claims.
IT IS SO ORDERED.
Notes
. The Defendants have also filed a motion to dismiss the Plaintiffs’ Third Amended Complaint (Doc. 50). Because the arguments raised in the motions to dismiss and for summary judgment overlap in large part, the Court will focus primarily on the motion for summary judgment, and only consider any additional arguments raised in the motion to dismiss where necessary.
.Given the close relationship between Martin Marietta and Martin Marietta Florida, as well as the Parties' frequent failure to distinguish between the two entities, the Court will refer to both companies collectively as Martin Marietta, except at times where a distinction is necessary.
. White Construction provided Martin Marietta with a second copy of the mining agreement during the subsequent discussions finalizing the Letter of Intent.
. Over the course of the years, while the Parties continued their discussions, White Construction and Limerock Industries also
. The Parties also anticipated allocating $725,000 of the asset purchase price to a non-compete agreement between Limerock Industries and Martin Marietta.
. M. Guy Brooks, III, Martin Marietta's then-Associate General Counsel, explained that Martin Marietta tabled its negotiations with O'Neal in order to focus on the Clifton site. Martin Marietta intended to combine the mining operations of both the O'Neal and Clifton Quarries, and realized that if it could not obtain a satisfactory lease with the Clifton owners, then the O'Neal quarry would be of no use. See Second Declaration of M. Guy Brooks III (Doc. 81, p. 4).
.There is a dispute concerning exactly when Martin Marietta learned about White Construction's ownership of these leases and assets. The Plaintiffs have submitted evidence that Martin Marietta was aware of White Construction's lease interests well before the execution of the LOI. Martin Marietta, however, contends that it only learned of White Construction’s ownership interests during the due diligence process when it examined the quarry leases and conducted a Uniform Commercial Code search on the mining equipment. The Court does not believe that this disputed fact is material to the resolution of the motion for summary judgment.
. There is some evidence that the issue of forfeiture was raised between the Parties at earlier points in the negotiation process, but it is undisputed that Martin Marietta did not tell White Construction and Limerock that it could not close on the final contracts until March 22, 2002.
. Although this was White and Limerock’s intention, there is some evidence that Foley would have been reluctant to renew its lease with them, given White's ongoing criminal proceedings. See Deposition of Dennis Carey, dated July 27, 2006 (Doc. 82-9, pp. 129-131, 155).
.The Plaintiffs contend that Foley would not have entered into the lease with Martin Marietta until the Plaintiffs first terminated their lease and all related rights. However, Dennis Carey, Foley's Senior Vice President, testified at his deposition that Foley would have entered into a lease with Martin Marietta regardless of whether the Plaintiffs had executed the Termination Agreement. See Deposition of Dennis Carey, dated July 27, 2006 (Doc. 82-8, pp. 94-95; Doc. 82-9, p. 141). James Sherwin Odom, Foley’s former Woodlands Manager, also opined that Foley would have gone forward without a Termination Agreement. Deposition of James Sherwin Odom, dated November 15, 2006 (Doc. 82-10, pp. 77-78, Doc. 82-11, p. 136).
. This right of removal was extremely valuable as it made it virtually impossible for any future lessee to conduct mining operations at the quarry while the Plaintiffs’ equipment and materials remained at the location. This provision operated as an inducement to the landowner to renew its leases with the Plaintiffs in order to avoid a potentially vacant quarry.
. At this time, the State of Florida was requesting approximately $ 9,250,000 as a settlement of the criminal claims against White.
. Martin Marietta contends that the contract came about when Luther White Sr. contacted Martin Marietta and asked for some financial assistance. The Plaintiffs, however, insist that it was Martin Marietta who first brought up the idea of another contract.
. Although Martin Marietta Florida is listed in the body of the MSA, the contract was signed by Martin Marietta Materials, Inc., as the “Manager and Member” of Martin Marietta Florida. It is undisputed that Martin Marietta Materials, Inc., is the “sole member” of Martin Marietta Florida, and that Martin Marietta Florida is a wholly-owned subsidiary of Martin Marietta. See Doc. 2, Exh. 1. Therefore, the Court will consider both Martin Marietta Florida and Martin Marietta Materials, Inc., to be parties to the MSA.
. The Plaintiffs contend that the $3,000,000 amount represented almost the exact amount of interest on the difference between the amounts paid to White Construction and Lim-erock Industries under the MSA, (roughly $6,000,000) and what Martin Marietta would be obligated to pay for the assets under the LOI ($15,500,000).
. The MSA also contains a provision mandating that all disputes concerning the contract, including its formation and performance of its terms, shall be resolved exclusively by arbitration in Tallahassee, Florida. (Doc. 44-11, p. 16). It is clear, however, that the Parties have waived this provision — neither side has raised the issue of arbitration at any point in this litigation, the MSA itself contemplates that a party may grant a waiver of any provision of the Agreement, and the Plaintiffs allege in their Third Amended Complaint that all conditions precedent have been satisfied, or were waived by the Defendants.
See
Doc. 44, ¶ 46; Doc. 44-11, p. 22.
See also Ivax Corp.
v.
B. Braun of Am., Inc.,
. The Parties also discussed the impact on the non-compete agreement, as well as their joint obligations to move all equipment from the Clifton quarry to the Cabbage Grove quarry-
. The final plea agreement between White and the State of Florida included a payment of just over $1 million as a criminal penalty, and a thirty (30) year ban from any further road construction projects with the Florida Department of Transportation. See Deposition of Stephen Pomeroy, dated April 26-27, 2006 (Doc. 82-17, p. 372-73, Exhibit 74).
. See Docs. 44-4, 44-5.
. White Construction and Limerock Industries also rely on the fact that the LOI contained a provision precluding Limerock Industries from negotiating with other parties to sell their assets until March 1, 2002. Again, this provision does not render the LOI a binding contract. By its own terms, it is clear that this provision was simply meant to provide some assurances to Martin Marietta before it incurred the costs and expenses in performing its due diligence review. (Doc. 44-2, p. 5). The LOI also makes clear that, notwithstanding this limitation on Limerock's negotiations, all other provisions in the LOI, in particular Martin Marietta's purchase of the mining equipment and assets, did not create any legal obligations upon any party. {Id., p. 1).
. The LOI contemplated a closing date of March 1, 2002. (Doc. 44-2, p. 4).
. Deposition of Stephen J. Pomeroy, dated April 26-27, 2006 (Doc. 82-13, p. 110, Doc. 82-14, p. 174).
. Continuation of Deposition of Stephen J. Pomeroy, dated August 4, 2006 (Doc. 82-16, pp. 350-51).
. Deposition of John Reid, dated July 6, 2006 (Doc. 98-2, pp. 23-24).
. The Plaintiffs also alleged the existence of a fiduciary duty by virtue of Martin Marietta's execution of a lease for Cabbage Grove. The Plaintiffs have abandoned this portion of their claim in their response in opposition.
. The fact that Martin Marietta stands in a position of greater bargaining power by virtue of its national economic status is not sufficient by itself to impose a fiduciary obligation on either Plaintiff.
See Cripe v. Atlantic First Nat. Bank of Daytona Beach,
. See Deposition of Stephen Pomeroy, dated November 11, 2006 (Doc. 82-22, pp. 74-76).
. Indeed, the Plaintiffs entitle this section of their opposition brief "Defendants breached their fiduciary duties under the MSA.” (Doc. 101, p. 15). It also bears noting that the breaches alleged in this claim are identical to the alleged breaches of the MSA set forth in the Plaintiff's breach of contract claim (Count V).
.The Plaintiffs reliance on
Maxwell v. First United Bank,
. The Court is further persuaded by the existence of the MSA's merger and integration clause. (Doc. 44-11, Section 8.3, p. 22). In situations where the alleged oral representations are directly contradicted by the written terms of the contract, a merger and integration clause further supports the conclusion that reliance on the oral representations is not justifiable.
See Pettinelli v. Danzig,
. The Plaintiffs argue that their Cabbage Grove lease interests are not covered by the MSA, because Martin Marietta had already entered into a lease with Foley prior to execution of the MSA. This argument fails by the plain terms of the Agreement. Section 1.1 of the MSA defines "The Quarries'' to include the Cabbage Grove Quarry, and defines the "Mining Leases” to include Martin Marietta’s lease with Foley, and sublease to Limerock. (Doc. 44-11, p. 2).
. Although both sides focus their arguments primarily on the asset purchase provisions, it bears noting that the Court's analysis applies with equal force to that portion of the Plaintiffs' claim concerning Martin Marietta’s alleged oral promise to properly manage the Clifton and O'Neal Quarries. It is undisputed that the MSA does not contain any obligations on the part of Martin Marietta to "properly manage" either quarry. To the contrary, the MSA states that Martin Marietta: (1) has the right to enter the quarries and to take all action permitted under the Mining Leases that Martin Marietta, in its discretion, deems appropriate; and (2) has the absolute discretion and control regarding all aspects of the operations which it conducts at the quarries. (Doc. 44-11, Sections 1.2, 1.4, pp. 2-3). Thus, the Plaintiffs' claim would fail either because the MSA was silent on this issue, or because the other terms of the MSA adequately covered the issue.
. The Plaintiffs’ Third Amended Complaint also alleges that Martin Marietta breached its implied duty when it renewed the Cabbage Grove mining lease in its own name. However, it appears that the Plaintiffs have abandoned this portion of their claim, and they do not address it in their summary judgment papers.
. Second Declaration of Stephen G. Pomer-oy, ¶4 (Doc. 100); Deposition of Stephen G. Pomeroy, dated November 10, 2006, pp. 86-93 (Doc. 82-22).
. Pomeroy Declaration, ¶ 4.
. Id., ¶5.
. The Court further notes that there is nothing in the MSA obligating Martin Marietta to notify White Construction and/or Limerock Industries before Martin Marietta relocated the released equipment, nor is there any time limit for when Martin Marietta must provide notification of the released equipment.
. The Court also finds persuasive Section 7.8 of the MSA, which mandates that "no act or failure to act by any party shall be deemed a default under the terms of this Agreement, and no party shall seek to recover any amount as monetary damages or any other relief from another with respect thereto, without first having given the party who has acted or failed to act in violation of the Agreement written notice of the default and an opportunity for a period of sixty (60) days to cure the violation ...." (Doc. 44-11, p. 18). It is undisputed that neither Plaintiff ever provided any such written notice to Martin Marietta with respect to its alleged breach of Section 2.2, and the Plaintiffs’ attempt to rely on the filing of its original complaint in this case as the requisite written notice fails by virtue of the plain language of Section 7.8.
. To the extent White Construction and Lim-erock Industries are contending that the MSA is not a valid contract because it was procured by fraud, such argument fails both because the Court has determined that the MSA is valid and enforceable, and because the Plaintiffs have sued for damages under various tort theories, thereby affirming the contract and its terms.
See Mazzoni Farms, Inc.
v.
E.I. DuPont De Nemours and Co.,
. The Plaintiffs’ continued argument that the MSA does not cover the Cabbage Grove Quarry is of no avail. As previously discussed, the MSA clearly and unambiguously governs the mining operations and activities at all three quarries, and in particular, Martin Marietta's use of White Construction’s and Limerock Industries’ equipment and facilities at each quarry.
.
See, e.g., Miller v. Murray,
.
See also University of Miami v. Intuitive Surgical, Inc.,
. Both sides also refer to Fla. Stat. § 725.01, which is the Florida's general Statute of Frauds governing oral contracts for the sale of lands and leases for periods of longer than 1 year, as well as for contracts that are not be performed within the space of 1 year. The oral contract at issue is not a contract for the sale of lands or for a lease between the Parties, it is a contract for the purchase of various assets. There is also a disputed issue of fact as to whether the agreement could be performed within a'year. See
Yates v. Ball,
.
See
Fla. Stat. §§ 672.201; 680.201.
See also India America Trading Co. v. White,
. Notably, all of the decisions cited by the Defendants involve situations where the same entity both made the allegedly false representation, and was one of the contracting parties in the subsequent written contract.
See e.g., Cibran,
. Martin Marietta’s argument that the Termination Agreement was completely independent from Foley’s subsequent lease with Martin Marietta is similarly replete with disputed issues of fact. At a minimum, the Plaintiffs have presented evidence that the two contracts were closely intertwined.