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Horrell v. Lynch

September 22, 2006

MICHAEL HORRELL, PLAINTIFF,
v.
MERRILL LYNCH, PIERCE, FENNER, & SMITH INCORPORATED, DEFENDANT.



The opinion of the court was delivered by: Judge George M. Marovich

MEMORANDUM OPINION AND ORDER

Plaintiff Michael Horrell ("Horrell") filed a three-count complaint against defendant Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch"). In his complaint, Horrell asserts claims for defamation, tortious interference with contract and tortious interference with advantageous business relationship. Defendant has moved for summary judgment with respect to each of plaintiff's claims. Also before the Court are (1) plaintiff's motion to strike defendant's statement of material facts and memorandum of law and (2) plaintiff's motion to strike defendant's reply in support of its statement of facts. For the reasons set forth below, the Court denies plaintiff's motions. The Court grants defendant's motion for summary judgment.

I. Plaintiff's Motions to Strike

Local Rule 56.1 outlines the requirements for the introduction of facts parties would like considered in connection with a motion for summary judgment. As the Court notes on its website (and has mentioned in multiple opinions), the Court enforces Local Rule 56.1 strictly. See Thomas v. CitiMortgage, Inc., Case No. 03 C 6177, 2005 WL 1712266 at *1 n. 1 (N.D. Ill. Jul. 20, 2005); Perez v. City of Batavia, Case No. 98 C 8226, 2004 WL 2967153 at *10 (N.D. Ill. Nov. 23, 2004); see also Ammons v. Aramark Uniform Services, Inc., 368 F.3d 809, 817-818 (7th Cir. 2004). Facts that are argued but do not conform with the rule are not considered by the Court. For example, facts included in a party's brief but not in its statement of facts are not considered by the Court because to do so would rob the other party of the opportunity to show that such facts are disputed. Where one party supports a fact with admissible evidence and the other party fails to controvert the fact with citation to admissible evidence, the Court deems the fact admitted. See Ammons v. Aramark Uniform Services, Inc., 368 F.3d 809, 817-818 (7th Cir. 2004). This, however, does not absolve a party of its initial burden of putting forth admissible evidence to support his or its facts. Asserted "facts" not supported by deposition testimony, documents, affidavits or other evidence admissible for summary judgment purposes are not considered by the Court. The Court enforces Local Rule 56.1 with respect to both parties regardless of whether either party moves to strike non-complying portions, because the purpose of the rule is to make the Court's job manageable, not to give litigants additional ammunition to use against one another.

Based on Local Rule 56.1, plaintiff moves to strike defendant's statement of material facts and memorandum of law. This is unnecessary. As the Court has already explained, it does not consider facts that are not supported by admissible evidence and does not consider facts in briefs that are not included in a statement of material facts. (The Court does not mean to imply that defendant failed to support its facts with admissible evidence; most of its facts were duly supported. Some of plaintiff's were not.) The Court need not take the time to strike that which it can simply ignore. The reply plaintiff seeks to strike was both a reply in support of defendant's statement of facts (which is not allowed under the rules and which the Court will not consider) and a response to plaintiff's statement of facts (which is allowed under the rule and which the Court will consider). The Court will not strike defendant's pleadings, and it denies plaintiff's motions to strike.

II. Background

This case arises out of a conversation between a Merrill Lynch Financial Advisor, William Hostetler ("Hostetler"), and one of Merrill Lynch's clients, Randy Soule ("Soule"). During the conversation, Hostetler allegedly defamed plaintiff Horrell. The following facts are undisputed unless otherwise noted.

Defendant Merrill Lynch employed Hostetler as a Financial Advisor from August 1999 until March 2004. Hostetler worked with Terri Ucci as part of a team called the "UcciHostetler" team. Among the Ucci-Hostetler team's accounts were those of (1) Soule and (2) Archimedes Financial, LLC ("Archimedes"), a company owned by plaintiff Horrell. Soule and Horrell knew each other; they had had business dealings since 1997.

Soule was the president, CEO and majority shareholder of Network Electric Company ("NEC") from January 1, 1997 until December 10, 2000. At some point (the timing is unclear from the record), Soule chose Horrell to act as a consultant/broker with respect to the sale of NEC. A company called Quanta purchased NEC in late 2000, and Horrell was paid a commission for his role in the sale. Soule continued to work for NEC--which was by then a Quanta subsidiary--until December 2002.

After the sale of NEC to Quanta, Horrell had other dealings related to Quanta. Horrell's Company, Archimedes, became a member and owner of a company called IPower ("IPWR"). It is clear from the supported facts in the record that Soule had a connection to IPWR (Soule was, for example, a signatory on IPWR's Merrill Lynch account), but it is not clear what his connection was. In or about 2001, IPWR purchased from NEC $19.1 million in receivables owed to NEC by Resource Technology Corporation ("RTC"). Quanta's involvement was that it posted a $4.75 million letter of credit so that IPWR could borrow money. Quanta also secured (by providing a letter of credit) a loan from Merrill Lynch Bank of USA to IPWR.

In early July 2002, Horrell contacted Merrill Lynch about trading Quanta stock. On July 1, 2002, Horrell called Hostetler and asked to buy put options on Quanta stock in Horrell's Archimedes account. The trade was not executed on July 1, 2002.

The next morning, on July 2, 2002, Horrell told Hostetler he wanted to sell short Quanta stock in the IPWR account. The price of Quanta stock was sharply lower when the markets opened that morning than it had been at the close of business the day before. The parties dispute the contents of the conversation(s) between Horrell and Hostetler. In particular, the parties dispute whether Horrell mentioned that he had information the "street" did not know about Quanta. The actual contents of the conversation, however, do not matter. What is relevant and undisputed is that Hostetler was concerned about Horrell's desire to sell short Quanta stock. Hostetler sought advice from others at Merrill Lynch. The parties also dispute whom Hostetler spoke to, the contents of those conversations and who at Merrill Lynch decided that Merrill Lynch would not take trades from Horrell. Again, these details are irrelevant to the case. The relevant detail, which is undisputed, is that Merrill Lynch decided not to accept any trades from Horrell.

Separately, in December 2002, Quanta discharged Soule from NEC. Shortly thereafter, Soule and Horrell discussed additional financing for RTC. The reason for the contemplated loan to RTC was to protect the receivables RTC owed NEC, which IPWR had purchased. A deal never materialized and was never put into writing. It is not clear from the record who the parties to such a deal might have been. Soule testified that IPWR might have made the loan. Plaintiff put forth evidence that either RTC or Banco Panamericano (whose connection to the case is not made clear in the record) might have received the loan. Plaintiff also put forth evidence that other deals Horrell had forged between Soule and RTC were not always put into writing until after the details were finalized.

The Allegedly Defamatory Conversation

In April 2003, Soule telephoned Merrill Lynch. Although Soule was trying to reach Ucci, he spoke with Hostetler about strategies for pursuing options. Soule and Hostetler spoke about options again on or about May 6, 2003. The parties dispute the contents of the May 6, 2003 telephone call. The parties agree that during the May 6, 2003 conversation, Soule mentioned the possibility of involving Horrell in the options deals. According to defendant, Hostetler told Soule that Merrill Lynch had made a business decision not to work with Horrell. Specifically, Hostetler testified that he told Soule, "[I]t's a business decision I can't work with Mike Horrell, so I can't work with you." According to plaintiff, the conversation proceeded as Soule testified, which is as follows:

Q: All right. So you told Mr. Hostetler that you'd like to involve Mike Horrell in the conversation?

A: Yeah, to listen to what this was about and to make a good educated decision as to whether or not I was even interested in going into this sort of thing. He told me that if Mike Horrell was going to be involved that he was not interested in talking to me about it. He wouldn't deal with me if I was going to have Mike Horrell on the phone and there would be no reason to have Mike Horrell on the phone.

I asked him why or what his problem was with having Mike listen in on what we were going to be talking about, and he told me that he wouldn't deal with Mike Horrell and, as far as he was concerned, that ...


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