Opinion
Case No. 98 C 7104
December 6, 2000
MEMORANDUM OPINION AND ORDER
Defendants John Galioto and Local No. 225 of the Laborer's International Union of North America have moved for summary judgment and to strike portions of plaintiff's statement of facts submitted in opposition to that motion. For the reasons stated below, the Court grants the motion to strike in part and grants the motion for summary judgment.
Background
AKW Construction and Environmental Services, Inc. performs asbestos abatement. Beginning in August of 1996, it submitted bids to the Chicago Public Schools ("CPS") seeking contracts for asbestos abatement work. At that time, Carnow, Conibear Associates, Inc. ("CCA"), an occupational environmental health consulting firm, administered and awarded contracts for lead and asbestos abatement on behalf of CPS. AKW was pre-certified as an approved contractor; it submitted a number of bids and received one contract, for approximately $1,370,000, which eventually increased to approximately $4,300,000 because of "extras."
Local 225 members provided the labor for AKW's CPS asbestos abatement work. Galioto was the business manager for Local 225; his duties included ensuring contract compliance with collective bargaining agreements. In the fall of 1996, Galioto maintains, he began receiving information from union members that AKW was violating various provisions of its collective bargaining agreement. Galioto communicated his concerns to CCA and ultimately to CPS. The Union eventually filed grievances against AKW. After the Union filed its grievances, AKW nonetheless maintained its status as a pre-certified contractor and was free to submit bids for additional work or contracts.
In the spring of 1997, CPS hired Lyceum Consultants to coordinate the lead and asbestos work in place of CCA. Lyceum's regional managers then took bids from subcontractors for the work. AKW remained approved as a contractor and was never prevented from bidding for work. It contacted some of Lyceum's regional managers, but it did not submit any bids. In 1998, AKW stopped operating when three of its principals formed a new company.
Discussion
I. Defendants' Motion to Strike Additional Facts
Galioto and Local 225 have moved to strike portions of the statement of facts submitted by AKW in opposition to summary judgment pursuant to former Local Rule 12(N) (now Local Rule 56.1(b)). We address this motion first because it affects the outcome of defendants' summary judgment motion.
Rule 56(e) of the Federal Rules of Civil Procedure states that "affidavits shall be made on personal knowledge, shall set forth such facts as would be admissible in evidence, and shall show affirmatively that the affiant is competent to testify to the matters stated therein." Fed.R.Civ.P. 56(e) (emphasis added). Pursuant to this rule, if an affidavit submitted in support of or in opposition to summary judgment contains statements beyond the affiant's personal knowledge, those statements must be excluded. See Stagman v. Ryan, 176 F.3d 986, 995 (7th Cir. 1999) (holding that all but one of the statements in the affidavit that plaintiff relied upon did not satisfy Rule 56(e)); Abioye v. Sundstrand Corp., 164 F.3d 364, 368 (7th Cir. 1998). Statements that result from speculation or conjecture, or that are conclusory, likewise do not satisfy Rule 56(e), and a court should not consider them. See Abioye, 164 F.3d at 368; Box v. AP Tea Co., 164 F.3d 364, 368 (7th Cir. 1985) (affirming district court's decision to strike affidavits filed in opposition to summary judgment); Malec v. Sanford, 191 F.R.D. 581, 584-85 (N.D. Ill. 2000). Moreover, a party may not rely on inadmissible hearsay in supporting or opposing summary judgment, just as it may not introduce hearsay evidence at trial. Malec, 191 F.R.D. at 585. Thus, a court should not consider statements in an affidavit or deposition submitted in connection with summary judgment that constitute inadmissible hearsay. See Bombard v. Fort Wayne Newspapers, 92 F.3d 560, 562 (7th Cir. 1996); Wigod v. Chicago Mercantile Exchange, 981 F.2d 1510, 1519 (7th Cir. 1992).
A. Shawu Brown's Affidavit
Defendants contend that Shawn Brown lacks the personal knowledge necessary to make the statements in paragraphs three through seven of his affidavit. Brown was the Director of Asbestos and Lead Services for CCA from August 1, 1996 through December 31, 1997; his affidavit indicates that he was "responsible for supervising some of the work performed by AKW to remove asbestos and lead from the Chicago Public Schools." Brown Affid. ¶ 1. Brown says that AKW performed the abatement in a workmanlike manner and in compliance with safety standards. Id. ¶ 2. He states that Galioto made complaints about AKW to CCA from October, 1996 through December, 1997 and that Brown's office investigated the complaints and found that they had no basis. Id. ¶¶ 3-4. Brown also states:
5. The conduct of Laborers Local 225 in making numerous unwarranted complaints against AKW's work performance was disruptive and interfered with the environmental projects of AKW in which CCA was responsible for [sic] at the Chicago Public Schools.
6. Due to the constant complaints and allegations from Laborers Local 225, CCA discontinued its practice of inviting AKW to bid on its environmental abatement projects.
7. Although AKW was the lowest bidder on an environmental abatement project in late 1997 to remove asbestos from the Crystal Lakes School, but [sic] they were not awarded that contract due to the undeserved and unwarranted negative exposure and heat created by Laborer [sic] Local 225 in accusing AKW of improper work performance. Id. ¶¶ 5-7.
Defendants argue that Brown's affidavit does not reflect that he has personal knowledge of matters relating to CCA's bid award decisions. In Abioye v. Sundstrand, the plaintiff alleged that the defendant terminated his job on the basis of his age, race, and national origin; the defendant maintained that it had fired the plaintiff because of his poor work performance. 164 F.3d at 366-67. Abioye submitted affidavits to show that Sundstrand treated young white employees better than him, but the district court struck portions of those affidavits because they represented mere "conjecture based on rumor," as the affiants had no apparent personal knowledge to make the comparison drawn in their affidavits. See id. at 368. The Seventh Circuit affirmed. See id. Like the affidavits in Abioye, Brown's affidavit reflects no personal knowledge of the alleged complaints about AKW and, more importantly, no personal knowledge of the alleged repercussions from the complaints. Brown's affidavit indicates only that he supervised, for a limited time, some work that AKW performed for CPS; it does not indicate that he had any involvement with the bidding process at CCA.
AKW argues that Brown's personal knowledge may be inferred from the contents of his affidavit and the nature of his job. In Barthelemy v. Air Lines Pilots Association, 897 F.2d 999 (9th Cir. 1989), one affiant was the chairman of an airline; the court inferred that he had personal knowledge of the airline's search for possible buyers and of its fear of one potential buyer in particular as these matters involved tasks falling within a chairman's duties. Id. at 1018. A second affiant had represented a party in negotiations, and his affidavit made this clear; the court inferred that he had personal knowledge of the details of the negotiations. Id. See also Cattawba Indian Tribe v. South Carolina, 978 F.2d 1334, 1342 (4th Cir. 1992) (presuming an individual to have personal knowledge of land possession by a family member). AKW argues that Brown's sometime supervision of AKW's work for CPS implies that he had personal knowledge of the bidding process at CCA and of alleged Union complaints about AKW. The Court disagrees. We have been given nothing that indicates that involvement in the bidding process or complaint-fielding came under the umbrella of Brown's job. Moreover, Brown's affidavit provides no information that would permit us to make such an inference.
The Court concludes that the statements in paragraphs three through seven of Brown's lack a sufficient foundation for admissibility. Plaintiff has not established that Brown has personal knowledge of those matters; his knowledge likely is premised on inadmissible hearsay. Because those statements do not satisfy the requirement of admissibility in evidence, the Court strikes them, as well as paragraphs twenty-three, twenty-six through twenty-eight, thirty, and thirty-one of AKW's statement of additional facts submitted in opposition to summary judgment, insofar as those statements are based on Brown's affidavit.
Paragraphs 26 and 28 are also based on the deposition testimony of Michael Palmieri, which we deal with in the following section of this opinion.
B. Michael Palmieri's Deposition Testimony
Michael Palmieri was responsible for the bonding and financing of AKW and had a twenty percent interest in the company. Palmieri Dep. at 14. He participated on AKW's behalf in bidding on CPS projects with CCA. See id. at 18. In his deposition, Palmieri answered questions about bidding for abatement jobs through 1998, when AKW ceased operations. He described the process of how CCA awarded bids. See Pltf. 12(N) Stmt. ¶¶ 7-12. He also described the nature and frequently of Galioto's complaints to CCA and CPS. See id. ¶¶ 24-25. Palmieri testified that he learned from CCA employees that CCA decided to award the Crystal Lake contract to another bidder because of Galioto's complaints and that CCA determined not to send AKW any additional bid requests for the same reason. See id. ¶¶ 26, 28, 29.
Palmieri says that Brown was his source of information about the Crystal Lake job. See Palmieri Dep. 46; Pltf. 12(N) Stmt. ¶ 28. But Palmieri's recounting of this conversation is inadmissible hearsay, and as discussed earlier, Brown's affidavit contains no basis for him to make such a statement on personal knowledge.
Defendants argue there is no evidence that Palmieri had any involvement, or personal knowledge of, CCA's or CPS's decision making process. The Court agrees. Palmieri was an employee of AKW, not CCA or CPS. Without direct involvement in CCA's bid award process, Palmieri cannot possibly have the requisite personal knowledge upon which to base these statements. In testifying about why AKW did not receive more contracts for CPS, Palmieri was simply repeating statements made to him by CCA employees (who themselves had no demonstrated personal knowledge of the bid award process). Palmieri's testimony in this regard is inadmissible.
AKW counters that Palmieri has personal knowledge of the bidding process due to his role as an officer of a corporation that was involved in that process. On the contrary, there is no basis to believe that an officer of a company that presents bids to CPS or CCA would have any personal knowledge of the reasons why CCA or CPS acted as they did. Moreover, Palmieri stated in his deposition that he could not answer questions about the number of bidders, and he deferred the questioner to CCA for such information. Palmieri Dep. at 81. This is tantamount to a concession by Palmieri that he lacks personal knowledge about the bidding process. Palmieri's statements regarding what CCA heard, what it did, and why it did what it did do not constitute admissible evidence. The Court therefore strikes paragraphs seven through twelve, twenty-four through twenty-six, twenty-eight, and twenty-nine of plaintiff's statement of additional facts.
II. Defendants' Motion for Summary Judgment
Under Federal Rule of Civil Procedure 56(c), a court should grant summary judgment if no genuine issue of material fact exists, and the moving party is entitled to judgment as a matter of law. The moving party carries the burden of identifying portions of pleadings, answers to interrogatories, and affidavits that show the absence of a genuine issue of material fact. Fed.R.Civ.P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). To meet its burden, the moving party may point out that the opposing party lacks evidence to support an essential element of its claim. See Celotex, 477 U.S. at 325. The burden then shifts to the nonmoving party to offer specific facts showing that there is a genuine issue for trial. Fed.R.Civ.P. 56(c); Matsushita Electric Industrial Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). The party that bears the burden of proof on an issue may not rest on the pleadings, but must demonstrate affirmatively that there is a genuine issue of material fact. Fed.R.Civ.P. 56(e); Celotex, 477 U.S. at 324; Waldridge v. American Hoechst Corp., 24 F.3d 918, 923 (7th Cir. 1994). "Material" facts might affect the outcome of the suit under the governing substantive law, and the material facts create a "genuine" issue when a reasonable trier of fact could find for the nonmoving party. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986); Eiland v. Trinity Hospital, 150 F.3d 747, 750 (7th Cir. 1988). When reviewing a summary judgment motion, the court must construe the facts in a light most favorable to the nonmoving party. Anderson, 477 U.S. at 255; see also Popovits v. Circuit City Stores, Inc., 185 F.3d 726, 731 (7th Cir. 1999).
AKW claims that the defendants tortiously interfered with its prospective business relationships with CCA and CPS and that as a result, it received no further abatement contracts. To succeed on this claim, AKW must show a valid expectation of future business, defendants' knowledge of that expectation, purposeful interference that prevented the fulfillment of AKW's expectation, and damages resulting from the interference. See Delloma v. Consolidation Coal Co., 996 F.2d 168, 171 (7th Cir. 1993); Laser Industries, Ltd. v. Eder Instrument Co., 573 F. Supp. 987, 993 (N.D. Ill. 1983); Soderlund Brothers, Inc. v. Carrier Corp., 663 N.E.2d 1, 10 (1995) (affirming summary judgment where defendant's statements did not affect city's failure to grant contracts to plaintiff).
AKW attempts to establish tortious interference using inadmissible evidence from Brown's affidavit and Palmieri's deposition, as described above. We have already stricken that evidence. The remaining admissible evidence is not sufficient to permit AKW to avoid summary judgment. First, AKW has no admissible evidence that Galioto's actions caused AKW to lose any business. It has offered no evidence from any person with knowledge of CCA's decisions who can say or even suggest that AKW would have received contract awards except for Galioto's actions.
Second, AKW's evidence is not sufficient to permit a jury to conclude that AKW had any valid expectation of future work from CPS or CCA. Mere hope or opportunity of a business relationship does not suffice to show reasonable expectation of a business relationship for a tortious interference claim. See Anderson v. Vanden Dorpel, 172 Ill.2d 399, 406, 667 N.E.2d 1296, 1299 (1996). Here, AKW received one contract but did not submit bids for more work after Lyceum replaced CCA in organizing the bid process. It remained an approved contractor, and no one ever prevented AKW from submitting bids. AKW's failure to submit bids makes it impossible to say that Gahoto's complaints had anything to do with why AKW got no further contract awards. In short, AKW has failed to offer admissible evidence that defendants' alleged interference prevented it from entering into a business relationship.
Finally, summary judgment is appropriate because AKW's damage allegations are too speculative upon which to base a claim. See Transportation Transit Assoc., Inc. v. Morrison Knudsen Corp., No. 98 C 2827, 1999 WL 116229, at *4 (N.D. Ill. Feb. 26, 1999). In that case, a subcontractor contracted with a construction company for business on a "most favored" basis; when another entity acquired the construction company, the subcontractor sued the defendant on the basis of a liquidated damages clause and a preferred vendor clause. The court held that plaintiff's damage claim was too speculative to avoid summary judgment, and that even if the plaintiff could demonstrate that it should have had the opportunity to bid on certain projects, it could not show that it would have won the contracts. Id. The same is true here; any damages that AKW claims are speculative. Though AKW stresses that there is no need to show damages with precision, there is a need to establish a basis for assessing damages or recovery, and that basis is missing here.
Conclusion
For the reasons stated above, defendants' motion to strike portions of plaintiff's statement of additional facts is granted in part. Defendants' motion for summary judgment is granted. The clerk is directed to enter judgment in favor of defendants.