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Galeana Telecommunications Investments, Inc. v. Amerifone Corp.

United States District Court, E.D. Michigan, Southern Division

January 26, 2018

GALEANA TELECOMMUNICATIONS INVESTMENTS, INC., Plaintiff/Counter-Defendant,
v.
AMERIFONE CORP., Defendant/Counter-Plaintiff, and FIRST INTERNATIONAL EXCHANGE GROUP, INC., et al. Defendants.

         OPINION & ORDER (1) GRANTING DEFENDANTS AMERIFONE AND BEYDOUN'S MOTION FOR SUMMARY JUDGMENT (Dkt. 88); (2) GRANTING DEFENDANT OSEFF'S MOTION FOR SUMMARY JUDGMENT (Dkt. 83); (3) GRANTING DEFENDANTS DALALY AND FIEG'S MOTION FOR SUMMARY JUDGMENT (Dkt. 87); (4) DENYING PLAINTIFF/COUNTER-DEFENDANT GALEANA'S MOTION FOR SUMMARY JUDGMENT AGAINST AMERIFONE AND BEYDOUN (Dkt. 85); AND (5) DENYING PLAINTIFF GALEANA'S MOTION FOR SUMMARY JUDGMENT AGAINST DALALY AND FIEG (Dkt. 90)

          HON. MARK A. GOLDSMITH, UNITED STATES DISTRICT JUDGE.

         This matter is before the Court on five motions for summary judgment filed by the parties. Defendants Amerifone Corporation (“Amerifone”) and Issam Beydoun have filed a motion for summary judgment regarding Plaintiff Galeana Telecommunications Investments, Inc.'s (“Galeana”) claims of breach of contract, fraud, and concert of action (Dkt. 88). Defendant Harold Oseff has filed a motion for summary judgment on Galeana's claims of fraud and concert of action (Dkt. 83). Defendants First International Exchange Group, Inc. (“FIEG”) and Dhafir Dalaly have also filed a motion for summary judgment regarding Galeana's fraud and concert-of-action claims (Dkt. 87).

         In turn, Galeana has filed a summary judgment motion, both as Plaintiff and Counter-Defendant, against Amerifone and Beydoun (Dkt. 85). As Plaintiff, Galeana seeks summary judgment on its breach-of-contract, fraud, and concert-of-action claims. As Counter-Defendant, Galeana seeks summary judgment on Amerifone and Beydoun's fraudulent inducement claim. Galeana has also filed a motion for summary judgment on its fraud and concert-of-action claims against FIEG and Dalaly (Dkt. 90).

         The issues have been fully briefed, and a hearing was held on September 28, 2017. For the reasons discussed below, the Court grants the motions of Amerifone, Beydoun, Oseff, FIEG, and Dalaly, and denies Galeana's motions.

         I. BACKGROUND

         Galeana is a telecommunications investor and the parent company of MetroBeam Wireless Telecommunications (“MetroBeam”), which also operates as Kulacom Jordan (“Kulacom”). Amerifone Mot. for Sum. Judg. ¶¶ 2-3. Fouad Alaeddin (“Fouad”) is the majority owner of Galeana, and Hazim Alaeddin (“Hazim”) is both the CEO of MetroBeam and Galeana's managing director. Id. ¶¶ 4-5.

         Issam Beydoun is an officer and shareholder of Amerifone, which invests in the telecommunications industry. Id. ¶ 1. Harold Oseff was a shareholder at Seyburn Kahn, a Michigan law firm. Oseff Mot. for Sum. Judg. ¶ 7. After Beydoun hired Seyburn Kahn to incorporate and represent Amerifone, Oseff also served as Amerifone's attorney, secretary, and general counsel, all without receiving pay. Id. ¶¶ 7-8. Dhafir Dalaly is the owner of FIEG, a financial services company. Id. ¶¶ 28. Dalaly also owned Atlantic Bank. Id. ¶ 29.

         MetroBeam provided broadband services in the Kingdom of Jordan, but those services became less commercially viable after the introduction of 3G and 4G services in the country. Id. ¶¶ 3-4. As a result, Galeana decided to pursue a license to provide 3G and 4G services. Id. ¶ 5. After some communication between Galeana and Amerifone, Oseff, at Kulacom's request, wrote a letter dated June 26, 2012 to Hazim. Id. ¶ 17. The purpose of the letter was to persuade Jordan's Telecommunications Regulatory Commission (“TRC”) to issue a 3G license. Amerifone Mot. for Sum. Judg. ¶ 20. The letter explained that Amerifone's U.S. investors “have indicated that they desire to have the opportunity to invest up to USD $100, 000, 000 in companies with bona fide telecommunications licenses[, ]” but that those investors did not want to fund the investments until Kulacom had obtained a 3G license; the letter further explained that the identities of the investors could not be revealed due to non-disclosure agreements. Oseff Letter, Ex. 8 to Amerifone Mot. for Sum. Judg. (Dkt. 88-9).

         On December 6, 2012, Jordan announced that it would accept bids for a 3G and 4G license. Oseff Mot. for Sum. Judg. ¶ 41. Galeana and Amerifone began negotiating a stock purchase agreement for the purchase of Kulacom shortly after this announcement; the parties executed the agreement on January 8, 2013. Id. ¶¶ 42, 44. The agreement had multiple conditions precedent; notably, the TRC's acceptance of the licensing bid was a precondition to closing. Purchase Agreement, Ex. 12 to Oseff Mot. for Sum. Judg., ¶ 4.2 (Dkt. 83-13). If the conditions precedent were met, Amerifone would purchase MetroBeam for $40 million. Id., ¶ 3. A subsequent amendment to the agreement, entered on September 3, 2013, shifted some contractual responsibilities to Amerifone. Amendment to Purchase Agreement, Ex. 14 to Oseff Mot. for Sum. Judg., ¶ 1 (Dkt. 83-15). For example, Amerifone - not Galeana - would be responsible for submitting the bid to the TRC in a manner acceptable to the TRC. Id. At some point during these negotiations, Amerifone apparently told Galeana that part of the funding for the bid would come from a settlement of a lawsuit in Lebanon, see Fouad Email to Oseff, Ex. 15 to Amerifone Mot. for Sum. Judg. (Dkt. 88-16), though the record is sparse on details regarding the details of that supposed promise.[1]

         Both Amerifone and MetroBeam submitted bids for a telecommunications license: Amerifone for ninety million Jordanian Dinars (“JD”) (approximately $127 million) and MetroBeam for seventy million JD (approximately $99 million).[2] Amerifone Mot. for Sum. Judg. ¶ 55. Amerifone's bid included a guarantee of fifteen million JD from Atlantic Bank, Oseff Mot. for Sum. Judg. ¶ 56, even though Atlantic Bank had previously been ordered by the State of Michigan to cease and desist doing business as a bank due to money laundering activity, [3] Galeana Mot. for Sum. Judg. against FIEG, ¶¶ 5-6 (Dkt. 86). Upon submission of the bids, the TRC alerted Amerifone that its submission was unacceptable and requested that the bid bond come from a Jordanian bank or that a letter of credit be submitted in a form acceptable to a Jordanian bank. Galeana Mot. for Sum. Judg. against Amerifone ¶ 5 (Dkt. 85). Ultimately, the TRC awarded the license to a third provider, a company called Zain, based on its bid of 160 million JD (approximately $225 million). Amerifone Mot. for Sum. Judg. ¶ 61. After the bid was awarded to Zain, the chairman of the TRC left the Commission to become a consultant with Zain. Id. ¶ 63.

         Galeana filed suit in November 2015, asserting a breach of contract claim against Amerifone and various misrepresentation claims against Amerifone, FIEG, Beydoun, Oseff, and Dalaly. In an August 2016 opinion, the Court dismissed several of the claims. See Galeana Telecommunications Investments, Inc. v. Amerifone Corp., 202 F.Supp.3d 711 (E.D. Mich. 2016). Galeana's only remaining claims are breach-of-contract and fraud claims against Amerifone and Beydoun, its fraud claim based on the June 2012 letter against Oseff, various fraud claims against Dalaly/FIEG, and a concert-of-action claim against all parties. Also remaining is Amerifone's counterclaim for fraud against Galeana.

         II. STANDARD OF REVIEW

         A motion for summary judgment under Federal Rule of Civil Procedure 56 shall be granted “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.” Fed.R.Civ.P. 56(a). A genuine dispute of material fact exists when there are “disputes over facts that might affect the outcome of the suit under the governing law.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). “[F]acts must be viewed in the light most favorable to the nonmoving party only if there is a ‘genuine' dispute as to those facts.” Scott v. Harris, 550 U.S. 372, 380 (2007). “Where the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party, there is no genuine issue for trial.” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986).

         Once the movant satisfies its initial burden of demonstrating the absence of any genuine issue of material fact, the burden shifts to the nonmoving party to set forth specific facts showing a triable issue of material fact. Scott, 550 U.S. at 380; Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). The nonmoving party “must do more than simply show that there is some metaphysical doubt as to the material facts, ” Scott, 550 U.S. at 380 (quoting Matsushita, 475 U.S. at 586), as the “mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment, ” id. (quoting Anderson, 477 U.S. at 247-248) (emphasis in original); see also Babcock & Wilcox Co. v. Cormetech, Inc., 848 F.3d 754, 758 (6th Cir. 2017) (“A mere scintilla of evidence or some metaphysical doubt as to a material fact is insufficient to forestall summary judgment.”).

         III. ANALYSIS

         A. Amerifone and Beydoun Motion

         Three Galeana claims remain active against Defendants Amerifone and Beydoun: breach of contract, fraud, and concert of action. Amerifone and Beydoun seek summary judgment on all three claims.

         1. Breach of Contract

         Galeana's breach claim is grounded in Amerifone and Beydoun's failure to provide a bid bond from a suitable financial institution in support of the bid. In attacking the breach claim, Amerifone and Beydoun focus on one issue: whether there is any evidence that the alleged breach caused any damage. Amerifone and Beydoun argue that Galeana was not harmed by the alleged breach of the contract, because the ninety million JD bid would have been rejected due to Zain's bid of 160 million JD. In support, Defendants point to an email from Fouad, the managing partner of Galeana, acknowledging that the TRC used Amerifone and MetroBeam to push Zain to a bid of 160 million JD. Email from Fouad, Ex. 24 to Amerifone Mot. for Sum. Judg., at 3 (cm/ecf page) (Dkt 88-25) (“[T]he TRC used both of us to push Zain to offer I [sic] higher bid outside the process (JD 160M).”). Amerifone also points to Hazim's admission that the failure to supply a proper bid bond had nothing to do with the loss of the bid. Hazim Dep., Ex. 2 to Amerifone Mot. for Sum. Judg., at 224 (Dkt. 88-3) (confirming that the chairman of the TRC had said the “offer will not be refused due to not submitting bank bond”). Additionally, Amerifone observes that the chairman of ...


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