Electro-Mechanical Products, Inc. et al v. Alan Lupton Associates Inc.

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Chief Judge Philip A. Brimmer
Civil Action No. 22-cv-00763-PAB-SBP
ELECTRO-MECHANICAL PRODUCTS, INC., a Colorado corporation,
DAVID P. MORRIS, an individual, and
DAVID J. WOLENSKI, an individual,
Plaintiffs,
v.
ALAN LUPTON ASSOCIATES INC., a New York corporation,
Defendant.
ORDER
This matter comes before the Court on Plaintiffs’ Motion for Judgment on the
Pleadings Dismissing the Fourth, Fifth, and Sixth Claims for Relief of Alan Lupton
Associates Inc.’s Counterclaims [Docket No. 22]. The Court has jurisdiction pursuant to
28 U.S.C. § 1332.
I. BACKGROUND1
The counterclaims at issue arise out of a contractual dispute between Electro-
Mechanical Products, Inc. (“EMP”) and Alan Lupton Associates, Inc. (“Lupton
Associates”). EMP is a manufacturer of machine components that relies on
commissioned sales agents to sell its products to commercial accounts. Docket No. 16
at 3, ¶ 8. Lupton Associates is a commission sales company. Id., ¶ 9. In 1989, EMP
1 The facts below are taken from the answer and counterclaims filed by
defendant Alan Lupton Associates, Inc., Docket No. 16, and are presumed to be true,
unless otherwise noted, for purposes of ruling on plaintiffs’ motion.
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and Lupton Associates entered into a contract under which Lupton Associates would
find customers and sell EMP’s products in several states and EMP would pay Lupton
Associates a 5% commission on all sales to accounts that Lupton Associates brought to
EMP. Id., ¶ 10. In 2000, EMP and Lupton Associates agreed to an amendment of the
original contract (“Amended Sales Contract”). Id., ¶ 12. The Amended Sales Contract
provided that “the Sales Agreement may not be terminated by EMP (except for Cause)
nor may EMP elect not to renew it . . . so long as Alan Lupton [Sr.] or any other
shareholder in Lupton Associates or family member . . . thereof or employee of Lupton
Associates owns stock in EMP.” Id. at 4, ¶ 16. Alan Lupton’s son, Alan Lupton II, owns
stock in EMP. Id. at 3-4, ¶ 13. The Amended Sales Contract defines “Cause” as a
“material breach of the Sales Agreement or material nonperformance under the Sales
Agreement.” Id. at 5, ¶ 19. If EMP terminates the Amended Sales Contract under any
circumstance other than for Cause, Lupton Associates is entitled to a 5% commission
on “all parts or programs on which Lupton Associates was entitled to commission at the
time of the notice of termination or nonrenewal, and all parts of programs on which sale
begin after such notice but as a result of Lupton Associates’ prior activities or services.”
Id., ¶ 17. If EMP terminates the contract for Cause, Lupton Associates is entitled to a
5% commission only on orders received through 60 days following the termination. Id.,
¶ 20.
Plaintiffs David P. Morris and David J. Wolenski are officers and shareholders of
EMP. Id. at 2, ¶¶ 3-4. In 2021, Mr. Morris and Mr. Wolenski identified a third-party
company (“Potential Buyer”) that was interested in a buyout of EMP. Id. at 6, ¶¶ 24-26.
Potential Buyer informed Mr. Morris, Mr. Wolenski, and EMP that it would not purchase
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EMP at the price that Mr. Morris and Mr. Wolenski wanted unless the contract between
Lupton Associates and EMP was renegotiated or terminated. Id., at 7, ¶ 28. Lupton
Associates claims that, as a result, “EMP, Morris, and Wolenski decided to eliminate the
troublesome contractual obligation” to Lupton Associates. Id., ¶ 32. Terminating the
Amended Sales Contract without cause would not solve the Potential Buyer’s reticence
because it would have obligated EMP to continue to pay Lupton Associates
commission, so EMP, Mr. Morris, and Mr. Wolenski “hatched a plan to attempt to
terminate the Amended Sales Contract for ‘cause.’” Id. at 7-8, ¶¶ 33-34. Lupton
Associates alleges that no sufficient justification existed to terminate the Amended
Sales Contract for cause. Id. at 8, ¶ 35.
On March 23, 2022, EMP sent a “Default Letter” to Lupton Associates claiming
that Lupton Associates was in default on the Amended Sales Contract and demanding a
“cure” within 30 days. Id., ¶ 37. Lupton Associates responded that the allegations in
the Default Letter were faulty and “point[ed] out the circumstances with Potential Buyer
that were creating the improper and wrongful attempt to terminate EMP’s legitimate and
ongoing contractual obligations.” Id. at 9, ¶ 41. On April 25, 2022, Mr. Morris, Mr.
Wolenski, and EMP sent a “Termination Letter” to Lupton Associates stating that the
Amended Sales Contract was terminated for cause. Id., ¶ 42.
Lupton Associates claims that EMP, through the actions of Mr. Morris and Mr.
Wolenski, breached its obligations to Lupton Associates by improperly and falsely
claiming that Lupton Associates breached the Amended Sales Contract and by
wrongfully purporting to terminate the Amended Sales Contract. Id., ¶ 45. Lupton
Associates claims that EMP is further violating the Amended Sales Contract by refusing
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to communicate and continuing to accept orders from accounts for which Lupton
Associates would be owed commissions. Id., ¶ 46.
Lupton Associates brings six counterclaims against Mr. Morris, Mr. Wolenski, and
EMP: (1) and (2) breach of contract asserted against EMP; (3) breach of the implied
duty of good faith and fair dealing asserted against EMP; (4) knowing failure to pay
sales commissions under New York consolidated laws, Labor Law- Lab § 191 asserted
against EMP; (5) intentional interference with a contract asserted against Mr. Morris and
Mr. Wolenski; and (6) civil conspiracy asserted against Mr. Morris and Mr. Wolenski. Id.
at 10-16, ¶¶ 48-91. Plaintiffs seek judgment on the pleadings for Lupton Associates’
fourth, fifth, and sixth counterclaims. Docket No. 22 at 1.
II. LEGAL STANDARD
The Court reviews a motion for judgment on the pleadings under Federal Rule of
Civil Procedure 12(c) much as it does a motion to dismiss pursuant to Rule 12(b)(6).
See Adams v. Jones, 577 F. App’x 778, 781-82 (10th Cir. 2014) (unpublished) (“We
review a district court’s grant of a motion for judgment on the pleadings de novo, using
the same standard that applies to a Rule 12(b)(6) motion.”) (quoting Park Univ. Enters.,
Inc. v. Am. Cas. Co. of Reading, PA, 442 F.3d 1239, 1244 (10th Cir. 2006), abrogated
on other grounds by Magnus, Inc. v. Diamond St. Ins. Co., 545 F. App’x 750, 753 (10th
Cir. 2013) (unpublished)). The Court must “accept all facts pleaded by the non-moving
party as true and grant all reasonable inferences from the pleadings in favor of the
same.” Id. at 782. To prevail, the moving party must show that “no material issue of
fact remains to be resolved and the party is entitled to judgment as a matter of law.”
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United States v. Any & All Radio Station Transmission Equip., 207 F.3d 458, 462 (8th
Cir. 2000).
A “motion for a judgment on the pleadings only has utility when all material
allegations of fact are admitted or not controverted in the pleadings and only questions
of law remain to be decided by the district court.” 5C Charles Alan Wright & Arthur R.
Miller, Federal Practice & Procedure § 1367 (3d ed. Apr. 2023); see also Park Univ.
Enters., 442 F.3d at 1244 (“Judgment on the pleadings should not be granted unless
the moving party clearly establishes that no material issue of fact remains to be
resolved and the party is entitled to judgment as a matter of law.” (quotation marks and
citation omitted)). A party may raise arguments that could be made in a motion under
Rule 12(b)(6) in a motion under Rule 12(c). Fed. R. Civ. P. 12(h)(2).
To survive a motion to dismiss under Rule 12(b)(6), a complaint must allege
enough factual matter that, taken as true, makes the plaintiff’s “claim to relief . . .
plausible on its face.” Khalik v. United Air Lines, 671 F.3d 1188, 1190 (10th Cir. 2012)
(citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “The ‘plausibility’
standard requires that relief must plausibly follow from the facts alleged, not the facts
themselves be plausible.” RE/MAX, LLC. v. Quicken Loans Inc., 295 F. Supp. 3d 1163,
1168 (D. Colo. 2018) (citing Bryson v. Gonzalez, 534 F.3d 1282, 1286 (10th Cir. 2008)).
Generally, “[s]pecific facts are not necessary; the statement needs only ‘give the
defendant fair notice of what the claim is and the grounds upon which it rests.’”
Erickson v. Pardus, 551 U.S. 89, 93 (2007) (per curiam) (quoting Twombly, 550 U.S. at
555) (alterations omitted). However, a plaintiff must provide “supporting factual
averments” with his allegations. Cory v. Allstate Insurance, 583 F.3d 1240, 1244 (10th
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Cir. 2009) (“conclusory allegations without supporting factual averments are insufficient
to state a claim on which relief can be based.” (citation omitted)). The Court need not
accept conclusory allegations. See, e.g., Hackford v. Babbit, 14 F.3d 1457, 1465 (10th
Cir. 1994) (“we are not bound by conclusory allegations, unwarranted inferences, or
legal conclusions.”).
“[W]here the well-pleaded facts do not permit the court to infer more than the
mere possibility of misconduct, the complaint has alleged – but it has not shown – that
the pleader is entitled to relief.” Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009) (internal
quotation marks and alteration marks omitted); see also Khalik, 671 F.3d at 1190 (“A
plaintiff must nudge [his] claims across the line from conceivable to plausible in order to
survive a motion to dismiss.”) (quoting Twombly, 550 U.S. at 570)). If a complaint’s
allegations are “so general that they encompass a wide swath of conduct, much of it
innocent,” then plaintiff has not stated a plausible claim. Khalik, 671 F.3d at 1191
(quotations omitted). Thus, even though modern rules of pleading are somewhat
forgiving, “a complaint still must contain either direct or inferential allegations respecting
all the material elements necessary to sustain a recovery under some viable legal
theory.” Bryson, 534 F.3d at 1286 (alteration marks omitted).
III. ANALYSIS
A. Knowing Failure to Pay Sales Commissions Under New York Law
New York Labor Law § 191 regulates the compensation of “sales
representatives” who solicit wholesale orders on behalf of “principal[s]” and are paid by
commission. N.Y. Labor Law § 191-a(a), (c)-(d) (McKinney 1988). The law mandates
that contracts between sales representatives and principals must be in writing and
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requires principals to pay sales representatives no more than five days after they have
earned their commission. Id., § 191-b-1, 3. If the principal does not timely pay a sales
representative, it is liable to the sales representative for double damages. Id., § 191-c3.
Lupton Associates alleges that it is a “sales representative” and EMP is a “principal” and
therefore EMP’s failure to pay commissions that it owes to Lupton Associates violates
§ 191. Docket No. 16 at 13-14, ¶¶ 73, 75-76. Accordingly, Lupton Associates alleges
that it is “entitled to double damages for all past and future commissions owed” under
§ 191 as well as costs and attorney’s fees. Id. at 14, ¶ 77.
Plaintiffs claim that EMP is not liable to Lupton Associates under § 191 because
EMP is not a “principal” and Lupton Associates is not a “sales representative” within the
meaning of the statute.2 Docket No. 22 at 5, 7-8. Section 191-a defines a “principal” as
“a person or company engaged in the business of manufacturing, and who: (1)
[m]anufactures, produces, imports, or distributes a product for wholesale; (2) [c]ontracts
with a sales representative to solicit orders for the product; and (3) [c]ompensates the
sales representative in whole or in part by commissions.” N.Y. Labor Law § 191-a(c).
Plaintiffs claim that EMP is not a “principal” because it manufactures component
parts for sale to equipment manufacturers, not products for resale at the retail level.
Docket No. 22 at 7. Lupton Associates argues that a manufacturer who sells
2 Plaintiffs’ motion states that plaintiffs “reserve their right to argue that New York
law does not apply to Lupton Associates’ claim for unpaid sales commissions.” Docket
No. 22 at 5 n.1. Nevertheless, the parties’ arguments concerning Lupton Associates’
fourth counterclaim are based on the premise that New York law applies to this
counterclaim. Therefore, for purposes of ruling on plaintiffs’ motion, the Court will
operate under the same premise. See Grynberg v. Total S.A., 538 F.3d 1336, 1346
(10th Cir. 2008) (“Because the parties’ arguments assume that Colorado law applies,
we will proceed under the same assumption.”).
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component parts can be a “principal” under § 191. Docket No. 24 at 5. The courts that
have interpreted § 191’s definition of a “principal” have not addressed the issue of
whether a manufacturer of component parts can be considered a “principal.”3 See, e.g.,
McGovern Consulting, LLC v. Newstex, LLC, 2014 WL 939294, at *2-3 (N.Y. Sup. Ct.
Mar. 7, 2014) (holding that § 191 applies only to companies dealing in tangible,
manufactured objects rather than services); DeLuca v. AccessIT Group, Inc., 695 F.
Supp. 2d 54, 63-64 (S.D.N.Y. 2010) (holding that a company that was in the business of
hardware and software sales and technical support was not a “principal” under § 191);
Szafran v. Sandata Technologies, Inc., 452 F. App’x 41, 44 (2nd Cir. 2011)
(unpublished) (holding that § 191 did not apply to a “service provider” that did not
manufacture, import, or distribute products for wholesale).
Plaintiffs argue that the inclusion of the term “wholesale” in § 191 indicates that a
manufacturer of component parts is not a “principal” under the statute. Docket No. 22 at
6-7; Docket No. 27 at 2-4; see N.Y. Labor Law § 191-a(c)(1) (defining a “principal” as a
manufacturer who “[m]anufactures, produces, imports, or distributes a product for
wholesale.”). Plaintiffs argue that “wholesale” means the sale of goods to a retailer for
resale. Docket No. 22 at 6. Lupton Associates argues that the term “wholesale” should
not be construed so narrowly, claiming that “wholesale” can refer to the sale of
3 Lupton Associates claims that Polyfusion Electronics, Inc. v. Promark
Electronics, Inc., 108 A.D. 3d 1186 (N.Y. App. Div. 2013), applied § 191 to a claim
involving the sale of electronic components to equipment manufacturers. Docket No. 24
at 5-6. The case describes the plaintiff as “a contract electronics manufacturer” and
states that “the record establishes that plaintiff was a ‘principal’ . . . for purposes of the
statute,” but it provides no further analysis about the nature of plaintiff’s business.
Polyfusion Electronics, 108 A.D. 3d at 1186-87. Accordingly, this opinion offers no
guidance as to whether a components manufacturer may be a “principal” as defined by
§ 191.
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component parts that are incorporated into other products for resale. Docket No. 24 at
4-5. Based on its interpretation of “wholesale,” Lupton Associates argues that the
manufacturer of component parts could be a “principal” under § 191. Id. There is no
caselaw establishing whether the definition of “product[s] for wholesale” as used in
§ 191 includes component parts. See N.Y. Labor Law § 191-a(c)(1). Accordingly,
whether component parts can be “product[s] for wholesale” under the statute is a matter
of statutory interpretation.
Dictionaries define “wholesale” as “the sale of commodities in quantity usually for
resale (as by a retail merchant),” wholesale, Merriam-Webster, www.merriam-
webster.com/dictionary/wholesale, and the sale of goods “in large quantities and at low
prices, typically . . . to be sold on by retailers at a profit.” Wholesale, Oxford English
Dictionary, doi.org/10.1093/OED/9545606614. These definitions do not refer to the
retailers changing the products or utilizing them as component parts. Rather, these
definitions suggest that a “product for wholesale” refers to a finished product that is to
be sold at retail.
The legislative history of § 191 also indicates that a component part is not
“product for wholesale” within the meaning of the statute.4 The memoranda in support
4 Courts are encouraged to review legislative history when construing New York
statutes. See Sprint Comms. Co., L.P. v. City of New York Dept. of Finance, 152
A.D.3d 184, 189 (N.Y. App. Div. 2017) (“Although the language of the respective
statutes appears at first glance to be unambiguous, it is nevertheless appropriate to
review the legislative history behind their adoption.”); see also New York State Bankers
Ass’n v. Albright, 38 N.Y.2d 430, 434 (N.Y. 1975) (“While the statutes may appear
literally ‘unambiguous' on their face, the absence of ambiguity facially is never
conclusive. Sound principles of statutory interpretation generally require examination of
a statute's legislative history and context to determine its meaning and scope.”). The
court in McGovern Consulting consulted a memorandum supporting introduction of the
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of the bill that became § 191 indicate that the purpose behind the law was to ensure that
sales representatives receive their due commission for sales of manufactured goods.
Memorandum in Support of Legislation, Bill Jacket, L 1987, ch 451, at 9; Memorandum
of Support, Bill Jacket, L 1987, ch 451, at 10.5 Each memorandum includes the
following paragraph:
It 	has 	been 	the 	history, 	especially 	in 	the 	garment 	industry, 	that
manufacturers do not enter into written contracts when they engage the
services 	of 	sales 	representatives. 	These 	sales 	representatives 	are
responsible for displaying and selling the manufacturer’s product to the
retail stores and are generally paid solely on a commission basis. 	As a
result of there being a lack of a signed document, sales representatives are
often not receiving their due commission. 	In addition, any proceeding the
sales representative might bring to recover his or her commission is unduly
burdened by the lack of a written document.
Memorandum in Support of Legislation, Bill Jacket, L 1987, ch 451, at 9; see also
Memorandum of Support, Bill Jacket, L 1987, ch 451, at 10.
This legislative history suggests that § 191 was motivated by the plight of sales
representatives in the garment industry and was intended to prevent clothing
manufacturers from failing to pay the commissions owed to sales representatives who
sold manufactured garments to retail stores. Given this context, it is likely that
“product[s] for wholesale” in § 191 means products sold to a retailer for resale, not
products sold as component parts. Accordingly, a manufacturer of component parts
does not “[m]anufacture[ ], . . . a product for wholesale” within the meaning of § 191 and
bill into the New York legislature to interpret § 191. McGovern Consulting, 2014 WL
939294, at *2-3.
5 The bill jacket for the bill that became § 191, which includes the memoranda
cited above, has been digitized by the New York State Library and is available at
nysl.ptfs.com/aw-server/rest/product/purl/NYSL/i/196e3b6e-f86c-4516-baf2-
7a644ed3b1da.
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is thus not a “principal” under § 191. See N.Y. Labor Law § 191-a(c). Therefore, based
on the allegations in the counterclaim, EMP is not a “principal” under § 191.
Plaintiffs also argue that Lupton Associates’ claim under § 191 should be
dismissed because Lupton Associates is not a “sales representative” under the statute.
Docket No. 22 at 8. Section 191-a(d) defines a “sales representative” as “a person or
entity who solicits orders in New York state and is . . . an independent contractor, but
does not include one who places orders for his own account for resale.” N.Y. Labor
Law § 191-a(d). Plaintiffs claim that Lupton Associates has failed to allege that it is a
sales representative under § 191-a(d) because “Lupton Associates does not allege that
its employees were in New York when they solicited the orders for which Lupton
Associates was allegedly not paid a commission.” Docket No. 22 at 8.
Whether Lupton Associates is a sales representative depends on whether its
employees were located in New York when they solicited orders from customers, rather
than on whether the customers were located in New York when the customers placed
the orders. See Kaye v. Artmatic Corp., 625 N.Y.S.2d 216, 217 (N.Y. App. Div. 1995)
(“[T]he statute should be interpreted with an emphasis placed on the [sic] whether [the
alleged sales representative] solicited orders from New York and not upon the location
of the customers.”); Gould Paper Corp v. Madisen Corp., 614 F. Supp. 2d. 485, 491
(S.D.N.Y. 2009) (holding that having customers in New York was insufficient to
demonstrate that a defendant was a sales representative under the statute; but instead
a party “must have actually solicited orders in New York” to qualify as a sales
representative). Accordingly, Lupton Associates’ allegation that it completed sales “to
customers located in, or operating out of New York,” Docket No. 16 at 13, ¶ 72, alone, is
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insufficient to establish that Lupton Associates is a “sales representative” under § 191.
Although Lupton Associates alleges that it is a New York corporation with a principal
place of business in New York, it does not allege that the employees who solicited
orders for EMP were located in New York. Docket No. 16. Therefore, based on the
allegations in the counterclaim, Lupton Associates has failed to allege that it is a “sales
representative” under § 191. See N.Y. Labor Law § 191-a(d).
Accordingly, Lupton Associates has failed to allege that EMP is a principal and
Lupton Associates is a sales representative within the meaning of § 191. The Court will
dismiss Lupton Associates’ fourth claim for relief.
B. Intentional Interference With Contract
To state a counterclaim for intentional interference with contract, Lupton
Associates must allege that Mr. Morris and Mr. Wolenski “intentionally and improperly
interfere[d] in the performance of a contract.”6 See W.O. Brisben Companies, Inc. v.
Krystkowiak, 66 P.3d 133, 136 (Colo. App. 2002), aff'd on other grounds, 90 P.3d 859
(Colo. 2004). Lupton Associates bases its claim for interference on the allegation that
Mr. Morris and Mr. Wolenski improperly caused EMP to terminate the Amended Sale
Contract with Lupton Associates. Docket No. 16 at 15, ¶¶ 84-85. Plaintiffs respond that
Mr. Morris and Mr. Wolenski cannot be liable for interference with the contract because
they were corporate officers acting, in part, to serve EMP’s interests. Docket No. 22 at
10.
6 The parties’ arguments concerning Lupton Associates’ fifth and sixth
counterclaim are based on the premise that Colorado law applies. Therefore, the Court
will operate under the same premise. See Grynberg, 538 F.3d at 1346 (“Because the
parties’ arguments assume that Colorado law applies, we will proceed under the same
assumption.”).
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Under Colorado law, a corporate agent who, “while acting within the scope of
official duties, causes his or her principal to breach a contract generally will not be held
liable for tortious interference with that contract.” W.O. Brisben Companies, 66 P.3d at
136. The agent will not be liable if he or she “acted, in part at least, to serve the
corporation’s interests,” as opposed to if “the agent was motivated out of personal
animus towards one or both of the contracting parties.” Id. (internal quotations omitted).
“[A]n agent acts improperly only when he or she is motivated solely by the desire to
harm one of the contracting parties or to interfere in the contractual relations between
the parties.” Id. at 137.
Lupton Associates argues that the alleged interference by Mr. Morris and Mr.
Wolenski was improper because it “was designed primarily to benefit them individually
by means of personal gain with no reasonable benefit to EMP,” arguing that the
transaction with Potential Buyer “was a stock sale, that . . . served only the financial
gain of the stockholders.” Docket No. 24 at 7. However, nowhere in the answer and
counterclaims does Lupton Associates allege that Mr. Morris and Mr. Wolenski were
motivated solely by the desire to harm Lupton Associates or interfere in its contract with
EMP. This omission is fatal to Lupton Associates’ claim for interference with a contract
by corporate officers. See W.O. Brisben Companies, 66 P.3d at 137.
Moreover, Lupton Associates’ counterclaims allege that “EMP, Morris, and
Wolenski . . . wanted to sell to Potential Buyer,” and that “EMP, Morris, and Wolenski
decided to eliminate the troublesome contractual obligation” between EMP and Lupton
Associates. Docket No. 16 at 7, ¶¶ 31-32. These statements indicate that EMP, Mr.
Morris, and Mr. Wolenski were united in their motivation to sell EMP stock to Potential
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Buyer and terminate the Amended Sale Contract, contrary to Lupton Associates’
argument that the officers’ alleged interference with the contract did not serve EMP’s
interests.7 The Court will dismiss Lupton Associates’ fifth counterclaim against Mr.
Morris and Mr. Wolenski.
C. Civil Conspiracy
“[C]onspiracy ‘is a derivative cause of action that is not actionable per se.’” Fine
v. Tumpkin, 330 F. Supp. 3d 1246, 1257 (D. Colo. 2018) (quoting Double Oak Const.,
L.L.C. v. Cornerstone Development Intern., L.L.C., 97 P.3d 140, 146 (Colo. App. 2003)
overruled on other grounds by L.H.M. Corp., TCD v. Martinez, 499 P.3d 1050 (Colo.
2021)) (applying Colorado law). A civil conspiracy claim may not be sustained where
the acts underlying the alleged conspiracy do not constitute a cause of action. Id.
Here, Lupton Associates’ claim for civil conspiracy against Mr. Morris and Mr. Wolenski
are based on the allegation that Mr. Morris and Mr. Wolenski improperly caused EMP to
terminate its contract with Lupton Associates. Docket No. 16 at 15, ¶¶ 88-89. As stated
above, Lupton Associates has failed to state a claim for tortious interference. Thus,
Lupton Associates has likewise failed to state a claim for civil conspiracy.
IV. CONCLUSION
Therefore, it is
7 Lupton Associates also argues that “the transaction with the Potential Buyer
was a stock sale[ ] that did not serve to benefit EMP at all, but instead served only the
financial gain of the stockholders selling their stock.” Docket No. 24 at 7. This
argument would have the Court ignore the corporate form for closely held companies
and presume that actions taken by principals who are shareholders were done in the
interest of themselves, not the company. The Court declines to do so.
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ORDERED that Plaintiffs’ Motion for Judgment on the Pleadings Dismissing the
Fourth, Fifth, and Sixth Claims for Relief of Alan Lupton Associates Inc.’s Counterclaims
[Docket No. 22] is GRANTED. It is further
ORDERED that defendant Alan Lupton Associates’ fourth, fifth, and sixth
counterclaims are DISMISSED.
DATED September 26, 2023.
BY THE COURT:
___________________________
PHILIP A. BRIMMER
Chief United States District Judge
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