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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND PROFESSIONAL STAFF LEASING CORPORATION : : v. : Civil Action No. DKC 99-816 : THE PERSONNEL DEPARTMENT, INC.: MEMORANDUM OPINION Pending before the court are Defendant's Motion for Summary Judgment (paper no. 10), Plaintiff's Motion to Dismiss the Amended Counterclaim (paper no. 22), Defendant's Motions for a Protective Order and Stay (paper nos. 29 and 30), and

Plaintiff's Motion to Compel and for Sanctions (paper no. 35). The dispositive matters are fully briefed, and the court now rules pursuant to Local Rule 105.6, no hearing being deemed necessary. For the reasons stated more fully below, the court

will GRANT Defendant's Motion for Summary Judgment and DENY IN PART and GRANT IN PART Plaintiff's Motion to Dismiss. I. Background This case arises from negotiations in early 1999 for the multi-million dollar sale of Defendant to Plaintiff. Both

parties are organizations that provide payroll, tax and employee benefit services to their clients. In January 1999, Plaintiff's

president, Balaji Ramamoorthy, met with Defendant's president, Barry Farah, and other representatives to discuss the purchase of Defendant's assets. On January 13, 1999, the two parties

executed a reciprocal confidentiality agreement. On January 22, 1999, the two parties signed a six-page letter of intent recording some terms of the proposed purchase. The letter of intent included, among other things, a statement of the assets to be sold and a purchase price of $4,500,000. The letter included two passages of particular significance to this case. First, Section 4 of the letter stated in part:

Should the parties not agree upon the terms of a formal purchase contract, this letter shall be null and void and the Deposit shall be returned to the Purchaser. Should the transaction not be completed for any reason after execution of the purchase contract, other than a material breach of the purchase contract by the Seller or other than for the reason set forth in the last sentence of Section 5, the Deposit, together with the interest thereon, shall be given to the Seller. Second, Section 14 stated: "Both parties will engage in a `best efforts' attempt to finalize the document by February 1, 1999."1

The parties signed two different letter agreements on that day, the second of which contained the quoted language from Section 14. The first letter was mistakenly included in the Complaint, rather than the second letter. 2

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Soon after the signing of the letter agreement, relations between the two parties fell apart. Attorneys for the parties

drafted purchase contracts, and several versions were exchanged between the parties. However, the parties failed to agree on The main issue of contention

the final terms of the contract.

was the collateral Plaintiff would offer for the purchase money note. Finally, on February 18, 1999, Defendant ended

negotiations, and Plaintiff filed this suit on March 24, 1999 alleging breach of contract. According to Defendant, Farah

advised Ramamoorthy that there was no basis for the lawsuit, and, in reply, Ramamoorthy stated, "I agree, but it would keep anyone else from buying your business for at least three years." Amended Counterclaim

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