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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND : HAVEPOWER, LLC : v. GENERAL ELECTRIC CO., et al. : MEMORANDUM OPINION Presently pending and ready for resolution in this breach of contract case are: (1) the motion of Plaintiff havePower, LLC for summary judgment; (2) the motion of Defendant General Electric Fuel Cell Systems, LLC (GEFCS) for summary judgment; and (3) Plaintiff's motion to file a sur-reply. The issues have been fully briefed and Local Rule 105.6. For the : Civil Action No. DKC 2001-0353 :

no hearing is deemed necessary.

following reasons, the court will grant Plaintiff's Motion for Leave to File Surreply and grant Defendant's motion for summary judgment on the breach of contract and promissory estoppel claims. The court will deny Plaintiff's motion for summary judgment on the breach of contract and promissory estoppel claims. Both parties'

motions for summary judgment on the claim for specific performance will be denied as moot.

I. Background

The following facts are set forth as uncontroverted.1

This

case arises out of a dispute over an exclusive distributorship agreement between havePower and GE Fuel Cell Systems, LLC, (GEFCS) to sell fuel cells in the Washington, DC, Maryland and Northern Virginia region. Fuel cell electric generators produce direct

electric current that can be converted to alternating current for use by homes and industries. havePower was established as a

division of Chesapeake Design, LLC, a Maryland company, in 1998. It became a District of Columbia limited liability company in December 1999 and was reformed as a Maryland limited liability company in August 2000. In February 1999, GE Power Systems formed

GE Fuel Cell Systems to market and distribute fuel cells designed and manufactured by Plug Power, Inc. owned by GE and Plug Power, Inc. In late 1999, havePower contacted GEFCS to explore the GE Fuel Cell Systems is co-

possibility of becoming a regional distributor of Plug Power fuel cells. After an initial period of correspondence, on or about

February 15, 2000, havePower representatives traveled to GEFCS's offices in Latham, New York where they toured the facility and presented havePower's Strategic Plan to GEFCS in a meeting. The

Plan detailed: (1) havePower's company profile; (2) havePower's business experience and revenue performance; (3) the fuel cell

Disputed facts will be set forth in the sections below and viewed in the light most favorable to the non-moving party. 2

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products and services to be offered by havePower; (4) the current state of fuel cell technology; (5) havePower's management team; (6) havePower's strategic alliance with PowerTrust; (7) havePower's capital structure; (8) havePower's secured gas and propane supply; and (9) havePower's market presence. Over the course of the next few months, havePower and GEFCS engaged in extensive negotiations over the terms of a limited exclusive distributorship of certain Plug Power fuel cells. Jay

Zawatsky (Zawatsky), Chief Executive Officer of havePower, and Richard Robertson (Robertson), Director of North American Market Development for GE MicroGen, Inc., were the primary negotiators on behalf of havePower and GEFCS respectively. From March through July 2000, Robertson and Zawatsky exchanged communications and preliminary documents in an attempt to work toward a definitive Distributor Agreement between havePower and GEFCS. At all times material to the formation of the Distributor

Agreement contract, GEFCS's President, Barry Glickman (Glickman), delegated to Robertson: (1) authority to negotiate the terms of a definitive Distributor Agreement, within certain parameters; (2) actual authority to communicate to havePower GEFCS's decision concerning contract terms and approval, subject to approval first by Glickman and then by the GEFCS distributor review and approval process; and (3) actual authority to negotiate the terms of a definitive Distributor Agreement on behalf of GEFCS within the

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terms of its standard contract, although anything outside of those standard terms also needed to be approved by Glickman and any distribution agreement, before it could take effect, was subject to GEFCS's approval process. Beginning in May 2000, havePower and GEFCS engaged in talks contemplating the sale of fuel cells by havePower, as a GEFCS distributor, to American Indian tribes in addition to the Maryland, Washington, DC, and Northern Virginia markets. By letter dated May 4, 2000, Zawatsky communicated to GEFCS that havePower was ready to execute the definitive Distributor Agreement and asked for wiring instructions to enable havePower to transmit $750,000 to GEFCS as the fee for the exclusive distributorship that would be created by the definitive Distributor Agreement. Over the course of July 2000, havePower and GEFCS continued negotiations Agreement. over specific terms of a definitive Distributor

By letter dated July 24, 2000, Robertson sent Zawatsky

two copies of the definitive Distributor Agreement for execution by havePower explaining that Robertson would submit the copies for Glickman's signature later that week. By letter dated July 25,

2000, havePower returned the copies of the Distributor Agreement, executed by havePower, to Robertson along with a check in the amount of $750,000. In a telephone conversation on August 17, 2000, Robertson notified Zawatsky that GEFCS's marketing department was assembling

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a print advertisement and had requested that the trademarks for all fuel cell distributors be included in the ad copy, which was due to the printers soon. Robertson asked Zawatsky to transmit to him an

electronic version of havePower's logo for inclusion in the print advertisement that was set to run in the Fall 2000 issues of several trade publications. While the parties dispute other

portions of the conversation between Zawatsky and Robertson, it is undisputed that the next day, Zawatsky sent two files containing havePower's final logo design via e-mail to Robertson. then retained intellectual property lawyers to havePower a

initiate

trademark/servicemark application process, paid for a comprehensive trademark search, and intensified its marketing efforts. Beginning at the end of August 2000 and continuing through September 2000, Zawatsky and Robertson's communications addressed proposed

installation projects, GEFCS's advertisement and marketing efforts (a topic GEFCS also addressed with other distributors), and

discussions with the leader of the Washoe Tribe of Nevada and California and other Native American tribal leaders. On October 23, 2000, Robertson telephoned Zawatsky. The

conversation called into question the viability of the terms of the parties' current distributorship agreement. On October 25, 2000,

Zawatsky, George Milne, and Bill Ingersoll, representing havePower, participated in a telephone conference with Robertson and Glickman which havePower recorded without the knowledge of the GEFCS

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participants.

In

that

teleconference,

neither

Glickman

nor

Robertson confirmed or denied a contractual relationship with havePower. Robertson did explain that the just-announced merger

between GE and Honeywell had an effect on GEFCS's unwillingness to enter into exclusive distributorships. Glickman invited the

havePower executives to visit GEFCS in Latham, New York to continue their discussions in person. On November 6, 2000, Zawatsky, Milne, and Ingersoll traveled to GEFCS's offices to meet with Robertson and Glickman. Because

Glickman was unable to participate in the meeting, the havePower executives met only with Robertson. Robertson reminded them that

havePower had not yet secured GE distributor approval and explained that GEFCS had decided not to enter into any more exclusive fuel cell distributorships. The parties then discussed available

options.

In the following weeks, havePower sent GEFCS a copy of At the end Cole the

the tape-recorded teleconference on October 25, 2000. of November 2000, Glickman, Robertson, and Gwen

contacted

disclosed references havePower had submitted earlier to conduct reference checks. havePower filed the present action against GE and GEFCS alleging breach of contract, inducement of breach of contract, promissory estoppel and antitrust violations in the Circuit Court for Montgomery County on December 29, 2000. Defendants removed the

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case to this court on February 7, 2001 on the basis of diversity jurisdiction and moved for dismissal on March 9, 2001. This court

decided, in an order issued on January 24, 2002, to dismiss havePower's claims of breach of implied contract and violation of Maryland antitrust laws, but denied Defendants' motion with respect to havePower's claims of breach of a written contract, promissory estoppel, and specific performance against GEFCS. havePower moved for summary judgment on August 5, 2002 and GEFCS cross-moved for summary judgment on August 26, 2002.

Plaintiff moved for leave to file surreply in support of its motion for summary judgment on October 9, 2002. II. Plaintiff's Motion for Leave to File Surreply Plaintiff seeks leave to file a surreply to bring to the court's attention what Plaintiff deems are seven major

misstatements and distortions of the record evidence contained in Defendant's reply. Despite Defendant's objection, the court will

grant permission to file the surreply. III. Cross-Motions for Summary Judgment A. Standard of Review It is well established that a motion for summary judgment will be granted only if there exists no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. FED. R. CIV. P. 56(c); Anderson v. Liberty Lobby, Inc., 477

U.S. 242, 250 (1986); Celotex Corp. v. Catrett, 477 U.S. 317, 322 7

(1986).

In other words, if there clearly exist factual issues

"that properly can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party," then summary judgment is inappropriate. Anderson, 477 U.S. at 250; see

also Pulliam Inv. Co. v. Cameo Properties, 810 F.2d 1282, 1286 (4th Cir. 1987); Morrison v. Nissan Motor Co., 601 F.2d 139, 141 (4th Cir. 1979); Stevens v. Howard D. Johnson Co., 181 F.2d 390, 394 (4th Cir. 1950). The moving party bears the burden of showing that FED. R. CIV. P.

there is no genuine issue as to any material fact.

56(c); Pulliam Inv. Co., 810 F.2d at 128 (citing Charbonnages de France v. Smith, 597 F.2d 406, 414 (4th Cir. 1979)). When ruling on a motion for summary judgment, the court must construe the facts alleged in the light most favorable to the party opposing the motion. See Diebold, 369 U.S. at 655; Gill v. Rollins A party

Protective Servs. Co., 773 F.2d 592, 595 (4th Cir. 1985).

who bears the burden of proof on a particular claim must factually support each element of his or her claim. "[A] complete failure of

proof concerning an essential element . . . necessarily renders all other facts immaterial." Celotex Corp., 477 U.S. at 323. Thus, on

those issues on which the nonmoving party will have the burden of proof, it is his or her responsibility to confront the motion for summary judgment with an affidavit or other similar evidence. Anderson, 477 U.S. at 256. stated: 8 In Celotex Corp., the Supreme Court

In cases like the instant one, where the nonmoving party will bear the burden of proof at trial on a dispositive issue, a summary judgment motion may properly be made in reliance solely on the "pleadings, depositions, answers to interrogatories, and admissions on file." Such a motion, whether or not accompanied by affidavits, will be "made and supported as provided in this rule," and Rule 56(e) therefore requires the nonmoving party to go beyond the pleadings and by her own affidavits, or by the "depositions, answers to interrogatories, and admissions on file," designate "specific facts showing that there is a genuine issue for trial." Celotex Corp., 477 U.S. at 324. However, "'a mere scintilla of Barwick v.

evidence is not enough to create a fact issue.'"

Celotex Corp., 736 F.2d 946, 958-59 (4th Cir. 1984) (quoting Seago v. North Carolina Theaters, Inc., 42 F.R.D. 627, 632 (E.D.N.C. 1966), aff'd, 388 F.2d 987 (4th Cir. 1967)). There must be

"sufficient evidence favoring the nonmoving party for a jury to return a verdict for that party. If the evidence is merely

colorable, or is not significantly probative, summary judgment may be granted." Anderson, 477 U.S. at 249-50 (citations omitted).

In cases where a court is confronted with cross-motions for summary judgment, the court must consider each party's motion individually to determine if that party has satisfied the summary judgment standard. See Kohl v. Association of Trial Lawyers of

America, et al., 183 F.R.D. 475, 478 (D.Md. 1998) (citing 10A Charles A. Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice and Procedure,

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