Kalik v . Abacus Exchange CV-99-421-M 10/19/01 UNITED STATES DISTRICT COURT

DISTRICT OF NEW HAMPSHIRE

Allen M. Kalik and Patricia G. Kalik, Plaintiffs

v. Civil N o . 99-421-M Opinion N o .

Abacus Exchange, Inc., Defendant

O R D E R

Allen and Patricia Kalik bring this diversity action against

Abacus Exchange, Inc., seeking damages for its alleged breach of

contract and violation of New Hampshire’s Consumer Protection

Act.1 Defendant denies any wrongdoing and has itself filed

several counterclaims, claiming that it was plaintiffs who

breached the contract and, in so doing, violated the Consumer

1 Although plaintiffs’ complaint names “Abacus Exchange, Inc.” as the defendant, it appears that entity no longer exists. The record suggests that in June of 1999, it was merged with Abacus Investors, Inc. Subsequently, the assets formally owned by Abacus Exchange were transferred to Abacus Communications LC. “Because the entity Abacus Exchange, Inc. no longer exists, Abacus Communications LC is identified as the defendant in its Answer, Affirmative Defenses, and Counterclaim.” Defendant’s Answer (document n o . 24) at 1 n.1. Protection Act. Presently pending is plaintiffs’ motion for

summary judgment as to four of defendant’s five counterclaims.

Standard of Review

When ruling upon a party’s motion for summary judgment, the

court must “view the entire record in the light most hospitable

to the party opposing summary judgment, indulging all reasonable

inferences in that party’s favor.” Griggs-Ryan v . Smith,

(1st Cir. 1990). Summary judgment is appropriate

when the record reveals “no genuine issue as to any material fact

and . . . the moving party is entitled to a judgment as a matter

of law.” Fed. R. Civ. P. 56(c). In this context, “a fact is

‘material’ if it potentially affects the outcome of the suit and

a dispute over it is ‘genuine’ if the parties’ positions on the

issue are supported by conflicting evidence.” Intern’l Ass’n of

Machinists and Aerospace Workers v . Winship Green Nursing Center,

(1st Cir. 1996) (citations omitted).

2 Background

On July 1 , 1998, Allen and Patricia Kalik and Abacus

Exchange, Inc. executed a “Stock Purchase Agreement,” pursuant to

which Abacus agreed to purchase from the Kaliks all of the

outstanding shares of Executive Exchange, Inc. (the “Company”).

The Agreement provided a purchase price of “a maximum of Thirteen

Million Dollars.” Exhibit A-14 to plaintiffs’ memorandum

(document n o . 2 8 ) , Stock Purchase Agreement at section 1.4.1.1.

Specifically, it provided that $10,400,000 was due at closing,

with the remaining $2,600,000 payable in installments, subject to

the Company reaching certain specified income milestones during

the first and second years of operation by the new owner.

at section 1.4.1.2. The Kaliks claim the Company met those

milestones and, therefore, say they are entitled to payment of

the full outstanding amount provided for by the Agreement. They

say that by refusing to pay the full amount required under the

Agreement, and by engaging in other allegedly wrongful conduct,

Abacus breached various provisions of the Agreement and violated

New Hampshire’s Consumer Protection Act.

3 Abacus, on the other hand, denies that the Company met the

earnings milestones that would have triggered its obligation to

pay the Kaliks the full amount specified in the Agreement and

says it paid plaintiffs all the monies to which they were

entitled, in light of the Company’s lower earnings. That dispute

is presently the subject of arbitration, as called for under the

terms of the Agreement. Additionally, however, Abacus has

brought five counterclaims, four of which are the subject of

plaintiffs’ pending motion for summary judgment.

In its first counterclaim, Abacus says the Kaliks breached

their express and implied obligations under the Agreement by

failing to disclose (or affirmatively misrepresenting) certain

material facts concerning the Company prior to closing and then

by filing suit prior to submitting their claims to arbitration.

Defendant’s second counterclaim (intentional misrepresentation)

and third counterclaim (negligent misrepresentation) are based

upon the same alleged failures to disclose, or misrepresentations

o f , material facts. In its fourth counterclaim (captioned

4 “Restitution”), Abacus seeks roughly $70,000 it had to spend to

extend the term of a software license that was critical to the

continued operation of the Company. Finally, in its fifth

counterclaim, Abacus seeks damages under the Consumer Protection

Act for plaintiffs’ alleged unfair and deceptive trade practices.

The Kaliks move for summary judgment as to all of Abacus’s

counterclaims except count four - the restitution claim. Abacus

objects.

Discussion

I. Breach of Contract and Misrepresentation Claims.

Abacus’s first breach of contract claim alleges that the

Kaliks “breached their contractual obligations by commencing this

lawsuit rather than pursuing arbitration as contemplated by the

Agreement.” Defendant’s Answer, Affirmative Defenses, and

Counterclaims at para. 3 1 . Its remaining breach of contract

claims, as well as its intentional misrepresentation and

negligent misrepresentation claims, all focus on the Kaliks’

5 alleged pre-closing misrepresentations concerning: (1) the state

of the local labor market; (2) the nature of the Company’s rights

with respect to certain software licenses; and (3) promises made

to an employee of the Company concerning the possible payment,

following the successful sale of the Company, of a “bonus” or

“reward” of approximately $100,000. In its memorandum in

opposition to summary judgment, Abacus summarizes those claims as

follows:

In reaching its decision to pay up to $13 million for a company owned by the Kaliks, Abacus justifiably relied on representations made by the Kaliks. The most critical representations made by Allen Kalik to Abacus involved the ability of [the Company] to staff its business. Contrary to these express representations, the [Company] had experienced hiring difficulties only months earlier. If Abacus had been aware of these problems, it would not have paid the high price which it paid for the [Company]. Moreover, the Kaliks failed to disclose a promise to pay a former employee a substantial amount of compensation and failed to disclose that [the Company] was not the owner of certain software. These failures are contrary to express representations in the Agreement.

Defendant’s memorandum (document n o . 29) at 7 .

6 A. Governing Law.

New Hampshire law provides that, “the procuring of a

contract or conveyance by means of fraud or negligent

misrepresentation is an actionable tort.” Nashua Trust C o . v .

Weisman,

(1982). To prevail on its negligence

claim, Abacus must point to “a negligent misrepresentation by the

[Kaliks] of a material fact and justifiable reliance” upon that

misrepresentation by Abacus. Ingaharro v . Blanchette,

4 , 57 (1982). See also Hydraform Products Corp. v . American

Steel & Aluminum Corp.,

(1985). As to the

intentional misrepresentation claim, it “must be proved by

showing that the representation was made with knowledge of its

falsity or with conscious indifference to its truth and with the

intention of causing [defendant] to rely on the representation.”

Patch v . Arsenault,

(1995). See also Walker v .

Percy,

(1997). And, finally, a breach of

contract occurs when “there is a failure without legal excuse, to

perform any promise which forms the whole or part of a contract.”

7 Bronstein v . GZA GeoEnvironmental, Inc.,

(1995)

(citation and internal quotation marks omitted).

B. Failure to Arbitrate.

The Agreement contemplates that the final series of post-

closing payments to the Kaliks would be calculated based upon the

Company’s earnings during the first and second years following

closing. It provides that at certain specified times, Abacus

would engage the accounting firm of KPMG Peat Marwick to

calculate the Company’s earnings (the “EBITDA Computation”) and

provide copies of earnings statements to the Kaliks. If the

parties cannot agree that the EBITDA Computation performed by the

accounting firm is accurate, the Agreement provides that they

will arbitrate their dispute(s). Agreement, section 1.4.1.4. As

to all other disputes related to the sale of the Company,

however, the Agreement contemplates that the parties may pursue

available legal remedies in an appropriate judicial forum. See

Agreement, sections 10.2 and 11.5.

8 In November of 1999, Abacus filed a motion seeking a stay of

these proceedings pending arbitration of some of the parties’

disputes. See Document n o . 6. The court held a hearing on the

matter, following which it stayed the case. On September 2 5 ,

2000, Abacus submitted an assented-to motion seeking an extension

of the stay, in which it represented that “[t]he parties would

like to have the opportunity to engage in the dispute resolution

process contemplated by the Stock Purchase Agreement before

undertaking the effort to prepare for trial.” Document n o . 2 6 .

The court granted that motion and, presumably, the parties are

engaged in arbitration with respect to their dispute over the

amounts due under the Agreement.

Abacus’s sole remedy for the Kaliks’ failure to arbitrate

claims properly subject to the Agreement’s arbitration provision

is to seek a stay of these proceedings and an order compelling

the Kaliks to arbitrate. See Demers Nursing Home, Inc. v . R.C.

Foss & Son, Inc.,

(1982). See also N.H. Rev. Stat.

Ann. (“RSA”) 542:2 and 3 (providing that the remedy when a party

9 has refused to arbitrate under a binding arbitration clause is to

stay any pending judicial proceedings and compel arbitration);

& 4 (same). Abacus has not pointed to any statute or

precedent that even remotely suggests it is entitled to damages

or attorneys’ fees incurred as a result of the Kaliks’ apparently

premature efforts to sue.

Having successfully obtained a stay of litigation pertaining

to the Kaliks’ arbitrable claims in this court, and an order

compelling them to arbitrate disputes related to the Company’s

post-closing earnings, Abacus has received all the relief to

which it is entitled regarding its right to arbitration under the

Agreement. Accordingly, its claim based on the Kaliks’ alleged

breach of the arbitration provision is moot.

C. The Software Issue.

Defendant summarizes it claim concerning the software

licensing issue as follows:

10 In the Agreement, the Kaliks specifically represented and warranted that the company had “all right, title and interest to or valid licenses of all Intangible Property used in the conduct of the business as presently operated . . . [and that] the company owns or possess adequate licenses or other rights to use all programs . . . used to operate the business.” Agreement § 2.22. At the time of closing, Professional Inbound, Inc., which was owned or controlled by Allen Kalik, owned certain software licensed to [the Company]. The Agreement contains no restriction on the use o f , or the length o f , the license for that software.

Defendant’s memorandum (document n o . 29) at para. 16 (emphasis

supplied). While it is true that the Agreement does not address

any limitation on the duration of the software license at issue,

Abacus fails to acknowledge that, prior to closing, the Kaliks

provided it with a copy of that software license, which was made

a part of the closing binder. That license plainly and

unequivocally discloses its limited duration - two years. See

Exhibit A-4 to plaintiff’s memorandum, Software License Agreement

at § 5 . Accordingly, as represented in section 2.22 of the

Agreement, the record reveals that the Company did in fact own or

possess “adequate licenses . . . to use all programs . . . used

to operate the business,” and defendant’s claim that the Kaliks

11 breached that section of the Agreement is wholly without merit.

Defendant’s breach of contract claim necessarily fails, as do its

misrepresentation claims relating to the software licensing

issue.

D. The Employee Compensation Issue.

In support of its breach of contract and misrepresentation

claims relating to the employee compensation issue, Abacus

asserts that, “The Kaliks promised to pay Holzberg, an employee

of the company, approximately $100,000 in the event of a sale of

the [Company’s] stock.” Defendant’s memorandum at 1 0 . Allen

Kalik describes that promise and the circumstances under which it

was extended as follows:

Michael Holzberg had been a valuable employee of [the Company] who had helped my wife and me expand the business. In recognition of these contributions, I discussed with Michael the possibility that I might personally reward him with a sum of money if [the Company] were sold. I did not, however, make any promises to Mr. Holzberg. My conversation with Mr. Holzberg is best described as casual. I never promised Mr. Holzberg that [the Company] would pay him anything beyond his normal compensation. It was clear that if I decided to pay Holzberg, this payment would come from

12 my wife and me out of the proceeds of the sale, not as compensation from [the Company] or [defendant].

Kalik Affidavit at paras. 11-12. No affidavit from Holzberg

himself has been submitted and the affidavits upon which Abacus

relies do not characterize Kalik’s “promise” differently than

Kalik does in his own affidavit. That is to say, defendant has

not submitted any evidence suggesting that Kalik obligated or

even purported to obligate the Company to give Holzberg any

additional salary, wages, commissions, or bonuses; instead,

defendant implicitly concedes that Kalik’s statements to Holzberg

amounted, at most, to a unilateral offer (of questionable

enforceability) to reward Holzberg from Kalik’s personal

resources, for his past years of loyal service to Kalik and the

Company.

Importantly, however, the Agreement does not address such

personal payments of rewards (from Kalik’s own funds) to current

or former employees. Section 2.20.7 of the Agreement,

particularly when read in conjunction with the Agreement’s

13 integration provision (section 1 1 . 5 ) , clearly and unambiguously

addresses only agreements made by the Company and/or the Kaliks,

on behalf of the Company, to pay current or former employees

wages, commissions, salaries, or other benefits (e.g., sick

leave, pay in lieu of leave, e t c . ) , other than current wages,

salaries, and other benefits that are disclosed in Schedule 2.20.

The pertinent portion of the Agreement provides:

Schedule 2.20 lists the names and job titles of all employees of the Company as of May 3 1 , 1998, the current salary, compensation, pay rate or hourly rate for each, per diem and other allowances and vacation, sick days for each (or paid days off in lieu thereof) assuming no vacation has been taken and the actual days off taken by each employee through May 3 1 , 1998 and all anticipated increases in any of the foregoing. Each employee’s length of service, employment commencement date and all relevant terms of their employment, including, without limitation, whether the employee is full or part time, salaried or hourly paid and the benefits received by such employee is set forth on Schedule 2.20. Except as listed and described on Schedule 2.20, neither the Company nor Sellers has any obligation or agreement to pay any current or former employee of the Company any amount after the date of this Agreement, except for current wages and commissions.

Agreement, section 2.20.7.

14 Defendant suggests that the phrase “any obligation or

agreement to pay” an employee includes the gratuitous offer by

Allen Kalik to personally reward Holzberg with a $100,000

payment, for past loyal services, out of Kalik’s own proceeds

from the sale. Such a broad reading of section 2.20.7 i s ,

however, inconsistent with its plain meaning. That section of

the Agreement addresses all forms of wages, salary, commissions,

and other compensation owed by the Company to current or former

employees. Schedule 2.20 details those obligations. Thus, when

read in context, and in light of the provisions set forth in the

Agreement’s integration clause, it is plain that the words “any

obligation or agreement to pay any current or former employee of

the Company any amount” refers to wages, salary, and commissions.

The phrase does not include within its scope gratuitous promises

made by the Kaliks to bestow personal gifts upon former

employees, at their own expense, with no obligation of any sort

attaching to the Company.

15 Plainly, what the Agreement addresses (and what Abacus was

legitimately concerned about identifying) are any and all

obligations that the Company might have (or that the Kaliks, as

its agents, might have assumed on behalf of the Company) to pay

wages, salaries, and/or commissions to current or former

employees beyond those disclosed in the pertinent schedules.

That Allen Kalik might have gratuitously offered, from his

personal resources, a cash gift to Holzberg (or a trip to Hawaii

or a gold watch) for his years of loyal service was not an event

that needed to be disclosed under section 2.20.7 of the

Agreement. Consequently, the Kaliks’ failure to disclose it does

not constitute a breach. And, because that promise had no effect

whatsoever on the Company or defendant, the Kaliks’ failure to

disclose it (even if disclosure had been required) cannot be

deemed to have been material. Abacus’s misrepresentation claims

also necessarily fail.2

2 Defendant vaguely suggests it deemed it necessary to purchase a release of claims from Holzberg relating to the “reward” referenced by Kalik. Nevertheless, nothing in the record suggests that defendant or the Company was in any way legally obligated to pay Holzberg the money allegedly offered by

16 E. The Labor Market Issue.

Defendant’s final claim relates to allegedly false

statements made by the Kaliks concerning the pre-closing labor

conditions in the City of Manchester. In support of that claim,

defendant says:

The Kaliks breached the contractual obligation under § 2.28 [of the Agreement] by making false representations concerning staffing and by failing to disclose staffing problems. These false representations and failures to disclose were critical to Abacus. Abacus was led to believe the business was growing and that staffing was not a problem. In fact, staffing had historically been a problem for the business, especially during its busiest time frame. The Kaliks had an express contractual duty to make Abacus aware of those problems. Failing to do so violated both the letter and spirit of the Agreement.

Defendant’s memorandum at 1 0 . The court disagrees.

Kalik as wages, commissions, benefits, etc. Moreover, defendant’s apparent decision to obtain what seems to have been an unnecessary release is not evidence that Kalik even arguably obligated the Company to pay Holzberg, or that Kalik failed to disclose a material matter that should have been revealed pursuant to section 2.20.7 of the Agreement. In other words, defendant cannot manufacture a material misstatement of fact - by buying an unnecessary release - where none truly exists.

17 In support of its claim that Allen Kalik made actionable,

materially false statements (or omissions) concerning the local

labor market, defendant relies on the affidavits of Rick Clay

(“Nor did Allen Kalik disclose that the business had encountered

staffing problems during its peak period in the fourth quarter of

1997, even though these problems had occurred only months [prior

to the closing].”), Stephen Burke (“Allen Kalik assured Rick Clay

that there was a plentiful supply of workers, that there were

colleges in the area, and that finding labor was not a problem

for [the Company].”), and Barbara Lawler (“[D]uring the five year

period that I have worked for the business, the fourth quarter of

the year always has been the busiest period for the business

based on holiday buying activity. During the five year period

that I have worked for the business, staffing has been a problem

at various times throughout the year, especially in the fourth

quarter.”).

S o , viewing the evidence in the light most favorable to

Abacus, its claim would seem to be that Allen Kalik represented

18 that, by relying upon local college students and temporary

employment agencies, the Company was able to adequately staff its

workforce. Defendant says Kalik’s representation was both

“false” and “material” and claims that, in fact, staffing had

been a “problem.” Importantly, however, defendant has submitted

no affidavits or other evidence suggesting that the Company (or

Kalik) was unable to adequately staff its workforce during any

time period. It simply claims that finding an adequate number of

employees was “difficult” and “problematic” - something it says

it never anticipated since it blindly relied on Kalik’s allegedly

material misstatements to the contrary.

Defendant’s counterclaims based on Kalik’s alleged

misrepresentations concerning the local labor market fail, as a

matter of law, for several reasons. First, Abacus suggests that

it was misled into purchasing a business it “believed was

growing,” but which was not (at least according its version of

the facts). It i s , however, clear from the record that Abacus

was provided with ample documentation (and was free to request

19 more) demonstrating exactly the rate at which the business was

growing.3

This transaction was one between supposedly sophisticated

parties, who were represented by able counsel. The closing

binder alone contains several hundred pages of documentation

memorializing the exact nature and scope of the purchase and sale

of the Company and includes, among other things, financial

statements for the Company for the years 1995, 1996, 1997, and

the five month period ending on May 3 1 , 1998. See Agreement,

Schedule 2.8.1. It is somewhat disingenuous of defendant to

claim that it was ignorant of the Company’s historical revenues,

performance, operation, or rate of growth when the purchase and

3 Additionally, the Agreement makes plain that the parties actually contemplated that the Company might not continue to grow in the two years following closing. In the event that earnings did not meet or exceed certain specified levels, Abacus was obligated to pay the Kaliks less than the full $2.4 Million in post-closing payments. See Agreement, section 1.4.1.4 (detailing the post-closing “Earn Out Amount”). Consequently, while Abacus might have “believed [the Company] was growing,” the Agreement provided specific protection against the possibility that it was not.

20 sale was consummated and, in closing the deal, blindly relied on

Kalik’s statements that generally suggested that things were

going well.

Second, taking defendant at its word and assuming that the

then-current state of the labor market in greater Manchester was

a “critical” factor in its decision to purchase the Company, it

could quite easily have obtained publically available information

on that subject. See, e.g., Messer v . Smyth,

1 , 42

(1879) (“Whether a false representation made by the vendor . . .

is actionable, depends upon whether it relates to a matter

concerning which both parties have not equal means of knowledge,

and whether it is an expression of opinion or an affirmation of a

fact. If it relates to a matter concerning which both the vendor

and purchaser have equal means of knowledge, the maxim caveat

emptor applies, and the purchaser is without remedy if he

neglects to give attention to the means of knowledge accessible

to him.”). Defendant had equal access to local labor market

data, had specific information concerning the Company’s employees

21 and labor assets, and certainly could not expect the Kaliks to

predict or warrant future labor market conditions.

Alternatively, defendant could have sought to memorialize

Kalik’s alleged material representations on that subject in the

Agreement. See generally Agreement, Article 2 (setting forth

over 13 pages of warranties and representations made by the

Kaliks to defendant, including such matters as assets owned by

the Company, accuracy of financial statements provided to

defendants, outstanding tax obligations of the Company, the

Company’s compliance with local, state, and federal environmental

laws, its compliance with ERISA, and its assurance that the

financial condition of the Company had not suffered any

“materially adverse” changes between the Interim Balance Sheet

Date and the date of closing). Defendant did not seek such

assurances.

Finally, and perhaps most critically, the alleged statements

identified by defendant as having been made by Kalik constitute

22 statements of opinion. They are not actionable statements of

fact. It has long been the law of New Hampshire that only

material misstatements of fact, upon which the complaining party

justifiably relied, are actionable. Statements of opinion,

particularly when they relate to matters as to which both parties

have equal access to relevant information, are not actionable.

A representation which merely amounts to a statement of opinion, judgment, probability, or expectation, or is vague and indefinite in its terms, or is merely a loose, conjectural, or exaggerated statement, goes for nothing. Unless the plaintiffs were willing to accept the statement for what it was worth as a promise, ordinary prudence would seem to require them not to rely upon i t , but to call for the facts upon which the opinion or expectation was founded.

Syracuse Knitting C o . v . Blanchard,

(1899)

(citation and internal quotation marks omitted). See also

Cummings v . HPG International, Inc.,

6 , 21 (1st Cir.

2001) (“There is an important threshold determination for any

misrepresentation claim, be it for deceit or for negligent

misrepresentation: only statements of fact are actionable;

statements of opinion cannot give rise to a deceit action, or to

23 a negligent misrepresentation action.”) (citing Massachusetts

cases).

In this case, Kalik’s alleged representation that staffing

was “not a problem” i s , at most, so vague a statement of opinion

as to render it non-actionable. Critically, it does not amount

to a warranty that the Company had always been able to run at

full employment. Nor could it reasonably be interpreted as a

guarantee that filling future vacant positions could be done

without even a modest effort. Instead, it is merely a statement

of Kalik’s opinion that he had been able to find adequate

employees in the local market (occasionally calling upon local

college students and temporary employment agencies) to run the

business at levels that generated the income and profits that had

been represented to defendants.4

4 Parenthetically, the court notes that Abacus cannot (reasonably) be claiming that it was unaware of the Company’s so- called staffing “problems” prior to closing. Schedule 2.20.8 to the Agreement specifically identifies the six temporary employment agencies upon which the Company periodically relied for additional staffing. That schedule also provides details concerning the dates and terms and conditions under which each of

24 In light of the foregoing, Allen Kalik’s alleged statements

(or omissions) concerning the local labor market are not, as a

matter of law, actionable as either negligent or intentional

misrepresentations, nor do they constitute a breach of his

obligations under the Agreement.

II. The Consumer Protection Act Claim.

Having concluded that the Kaliks are entitled to judgment as

a matter of law on defendant’s breach of contract, negligent

misrepresentation, and intentional misrepresentation claims, the

court concludes that they are also necessarily entitled to

summary judgment on defendant’s Consumer Protection Act claim,

which is based upon the very same conduct that forms the basis of

the tort and contract claims.

those agencies provided employees to the Company. Consequently, Abacus was certainly aware that, during peak seasonal periods, the Company turned to outside sources, including temporary employment agencies and local colleges, to adequately staff its offices.

25 New Hampshire’s Consumer Protection Act prohibits the use of

“any unfair or deceptive act or practice in the conduct of any

trade or commerce,” and provides a non-exhaustive list of

prohibited practices. RSA 358-A:2. Even assuming the Act

applies to the purchase and sale of the Company, see generally

Milford Lumber C o . v . RCB Realty, Inc., __ N.H. __,

(Sept. 2 8 , 2001), none of the conduct in which the Kaliks

are alleged to have engaged falls within the Act’s scope. As the

Court of Appeals for the First Circuit has observed, conduct is

“unfair” within the meaning of the Act if:

(1) it is within at least the penumbra of some common- law, statutory, or other established concept of unfairness, (2) it is immoral, unethical, oppressive, or unscrupulous, or (3) it causes substantial injury to consumers.

Chroniak v . Golden Inv. Corp.,

, 1146 (1st Cir.

1993) (citations and internal quotation marks omitted). Because,

as a matter of law, the Kaliks neither breached the terms of the

contract nor did they make negligent or intentional

misrepresentations (or omissions) of material fact, they cannot

26 be said to have engaged in actionable “unfair” or “deceptive”

trade practices. Consequently, defendant’s claims under the

Consumer Protection Act necessarily fail as well.

Conclusion

For the foregoing reasons, plaintiffs are entitled to

judgment as a matter of law as to the following counterclaims

advanced by defendant: count 1 (breach of contract); count 2

(intentional misrepresentations); count 3 (negligent

misrepresentations); and count 5 (violation of New Hampshire’s

Consumer Protection A c t ) . Plaintiffs’ motion for summary

judgment (document no. 28) i s , therefore, granted.

The parties shall notify the court once they have completed

arbitration and, if appropriate, the court will lift the stay and

set a scheduling conference.

27 SO ORDERED.

Steven J. McAuliffe United States District Judge

October 1 9 , 2001

cc: Steven E . Grill, Esq. William S . Hewitt, Jr., Esq. John C . Kissinger, Esq.

28