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Sweet v. Corporation of Presiding Bishop of Church of Jesus Christ of Latter-Day Saints

United States District Court, D. Utah

March 27, 2019

JAMES SWEET, an individual, and ASTANZA DESIGN LLC, a Colorado limited liability company, Plaintiffs,
v.
CORPORATION OF THE PRESIDING BISHOP OF THE CHURCH OF JESUS CHRIST OF LATTER-DAY SAINTS, a Utah Corporation, Defendant.

          EVELYN J. FURSE MAGISTRATE JUDGE

          MEMORANDUM DECISION AND ORDER GRANTING MOTION FOR SUMMARY JUDGMENT

          ROBERT J. SHELBY CHIEF DISTRICT JUDGE

         This case stems from efforts by the Church of Jesus Christ of Latter-day Saints to furnish temples in San Salvador and Rome. Before the court is Defendant's Motion for Summary Judgment on Plaintiffs' claims of unjust enrichment and intentional interference with economic relations.[1] Plaintiffs do not oppose dismissal of their unjust enrichment claim, [2] and on that basis the court dismisses it with prejudice. For the reasons given below, the court GRANTS Defendant's Motion and dismisses Plaintiffs' remaining claim of intentional interference with economic relations.

         FACTS[3]

         Plaintiff James Sweet and his wife own Plaintiff Astanza Design, LLC, an international, strategic interior design and global sourcing firm specializing in commercial projects worldwide.[4]

         Defendant Corporation of the Presiding Bishop of the Church of Jesus Christ of Latter-day Saints (CPB) hired Gloria Kummer to source furniture for new temples in San Salvador and Rome.[5] In late 2008, Kummer phoned James Sweet and asked about his relationships with furniture manufacturers in Honduras and Italy.[6] This conversation led to more contacts and events whereby in early 2009, Sweet introduced Kummer to three foreign furniture manufacturers: Caoba de Honduras, Artesanos, and Gimme doing business as Francesco Molon.[7]

         On January 1, 2009, Sweet entered into a representation agreement with Caoba de Honduras.[8] That agreement designated Sweet as the exclusive, worldwide sales representative for all Caoba de Honduras products and services sold or distributed to the LDS Church.[9] It also entitled Sweet to a commission fee for its services.[10] On February 21, 2011, Sweet entered into a representation agreement with Francesco Molon with exclusivity and commission terms similar to those of the Caoba Representation Agreement.[11]

         Sweet's business relationships thrived for a few years.[12] From 2009 to late 2012, Caoba de Honduras and Francesco Molon paid Sweet commissions on sales each made to CPB.[13] With CPB's selection of Francesco Molon as a primary supplier of furnishings for the Rome Temple, Sweet's business appeared poised for growth.[14] But CPB's introduction of a new manager, Dave Finlinson, altered the trajectory of Sweet's business.[15]

         Finlinson pressured Francesco Molon to lower its prices.[16] Finlinson offered more business in exchange for better pricing and related concessions.[17] One of those concessions was the elimination of Sweet as Francesco Molon's exclusive worldwide representative for LDS church purchases.[18] Finlinson threatened that, unless Francesco Molon eliminated Sweet, CPB would not purchase any furniture from Francesco Molon for its Rome Temple.[19] Succumbing to Finlinson's pressure, Francesco Molon eliminated Sweet and stopped paying Sweet its commission fee.[20] Similarly, CPB persuaded Caoba de Honduras to eliminate Sweet as its exclusive worldwide representative for LDS church purchases.[21] In response to CPB's interference, Sweet brought suit against CPB for (1) unjust enrichment and (2) intentional interference with economic relations.[22]

         LEGAL STANDARD

         The court must grant summary judgment “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.”[23] “A material fact is one that might affect the outcome of the suit under the governing law . . . and a genuine issue is one for which the evidence is such that a reasonable jury could return a verdict for the nonmoving party.”[24] When applying this standard, courts “view the evidence and draw reasonable inferences therefrom in the light most favorable to the nonmoving party.”[25]

         “While the party moving for summary judgment bears the burden of showing the absence of a genuine issue of material fact, the moving party need not negate the nonmovant's claim, but need only point out to the district court that there is an absence of evidence to support the nonmoving party's case.”[26] “If the moving party carries this initial burden, the party opposing the motion for summary judgment may not rest upon mere allegations or denials of his pleading . . . but must set forth specific facts showing that there is a genuine issue for trial as to those dispositive matters for which it carries the burden of proof.”[27]

         ANALYSIS

         To succeed on a claim of intentional interference with economic relations, a “plaintiff must prove (1) that the defendant intentionally interfered with the plaintiff's existing or potential economic relations, (2) for an improper purpose or by improper means, (3) causing injury to the plaintiff.”[28] With respect to the third element, a “plaintiff is required to prove both the fact of damages and the amount of damages.”[29] “To prove the amount of damages, [a] plaintiff must produce evidence that rises above speculation and provides a reasonable, even though not necessarily precise, estimate of damages.”[30] Conjecture, such as legal conclusions in an affidavit, will not suffice.[31] Rather a plaintiff must supply “supporting evidence from which the factfinder may derive a reasonable estimate of the amount of damages.”[32]

         To recover damages in the form of lost profits, a Utah plaintiff must prove net loss.[33]“Net profits are determined by computing the difference between the gross profits and the expenses that would be incurred in acquiring such profits.”[34] “[R]easonable certainty requires more than a mere estimate of net profits. In addition to proof of gross profits, there must generally be supporting evidence of overhead expenses, or other costs of producing income from which a net figure can be derived.”[35]

         Sweet does not supply evidence of its net loss. Although it produces evidence of lost gross revenue, it does not supply evidence of the costs it would have incurred in acquiring that revenue. In his Declaration, Plaintiff James Sweet states,

With respect to costs, because I worked out of my home, I had no incremental costs associated with rent, utilities, office phone, cell phone, internet and equipment costs associated with Giemme and Caoba business. Although there were costs for travel specific to the LDS Church or proportioned if the travel includes other business purposes, those costs were de minimus. The above stated costs have been included in my projections.[36]

         In its briefing, Sweet concludes a deduction for costs is unnecessary because James Sweet's “primary investment in the Giemme and Caoba business was his time.”[37] Sweet nevertheless advances two alternative, if not inconsistent, arguments that it has satisfied its burden to produce evidence of net loss damages. Sweet first seeks to satisfy its evidentiary burden with conclusory testimony that it accounted for an unspecified amount of costs in James Sweet's damage's projections. Short of that, Sweet seeks to avail itself to a de minimus exception to the rule requiring evidence of costs. Both arguments fail.

         Sweet's first argument fails because Sweet identifies no record evidence to substantiate James Sweet's conclusory testimony-for example, it nowhere supplies the cost figures necessary to identify (let alone substantiate) the unspecified costs James Sweet testifies he included in his projections[38]-and mere conclusory testimony is insufficient to create a genuine issue of fact.[39] Sweet's second argument fails because it provides no legal authority for the existence in Utah law of a de minimus exception to the net loss damages proof requirement, and this failure alone defeats any attempt to invoke that doctrine. Further, even if such ...


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