Hodgkins v. New England Telephone Co.

May 16, 1996 UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT

No. 95-1818

WILLIAM J. HODGKINS, JR.,

Plaintiff - Appellant,

v.

NEW ENGLAND TELEPHONE COMPANY,

Defendant - Appellee.

ERRATA SHEET

The opinion of this court issued on May 7, 1996 is amended
as follows:

Page 6, line 13 should read "absence of evidence to support
the non-moving party's position."

UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT

No. 95-1818

WILLIAM J. HODGKINS, JR.,

Plaintiff - Appellant,

v.

NEW ENGLAND TELEPHONE COMPANY,

Defendant - Appellee.

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MAINE

[Hon. D. Brock Hornby, U.S. District Judge]

Before

Torruella, Chief Judge,

Cyr and Stahl, Circuit Judges.

Joel C. Martin, with whom Thomas C. Bradley and Petruccelli

& Martin were on brief for appellant.

Pamela A. Smith for appellee.

May 7, 1996

TORRUELLA, Chief Judge. Plaintiff-appellant William J.
TORRUELLA, Chief Judge.

Hodgkins ("Hodgkins") sued his former employer, defendant-

appellee New England Telephone and Telegraph Company ("NET"),

because he believes that NET paid him an insufficient amount for

a cost-saving idea he submitted in its employee suggestion

program. The district court granted NET's motion for summary

judgment on Hodgkins' claims, which include breach of contract,

quantum meruit, equitable estoppel, unjust enrichment, and

negligent misrepresentation. Hodgkins appeals the district

court's decision. We reverse in part, affirm in part, and remand

for further proceedings.

BACKGROUND
BACKGROUND

Because the district court granted summary judgment in

favor of the defendant, we recite the facts in the light most

favorable to the plaintiff's claims, giving him the benefit of

all reasonably supported inferences.

NET has an employee suggestion program named "Ideas at

Work" ("the IAW program"), that encourages and rewards employee

ideas that produce savings or increased profits for NET.

According to NET's "Suggester's Guide," reviewed by Hodgkins

before he submitted his idea, the IAW program "rewards the people

who come up with ideas the company uses by paying the originators

fifteen percent of the savings or earnings from the first year of

implementation--up to a limit of $50,000." The IAW program

provides for "Initial Awards" of 15 percent (minimum of $75 and

maximum of $5,000) of the estimated net savings or profits for

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one year on so-called "tangible ideas," and "Special Merit

Awards" of up to 15% of the actual savings or profits produced by

the idea in its first year of implementation. According to an

IAW program handbook that NET supplied to its employees, "[a]ll

tangible ideas which were awarded an initial award will be re-

evaluated one year from the date of implementation to determine

the actual savings or profits."

William Hodgkins, Jr. was employed by NET in Maine from

1956 until February 1992. Hodgkins produced an idea that would

reduce the cost of changing telephone service for certain

multisubscribers such as dormitories and nursing homes. On

April 20, 1989, Hodgkins submitted his idea to the IAW program.

Hodgkins conducted his own study, and based on his own managerial

expertise, concluded that the idea would save NET money, and that

therefore NET would implement the idea, evaluate it under the IAW

program, and grant him fifteen percent of the first year's

savings. Based on his own knowledge of NET's operations and

costs, Hodgkins expected that he would receive the maximum under

the IAW program, $50,000.

Hodgkins submitted his idea to the IAW program by

signing a submission form in which he agreed to abide by the

rules of the program as laid out on the reverse side of the form

and in a NET document called General Administrative Procedure No.

53 ("GAP 53"). Both the back of the submission form and GAP 53

specified that NET had the

sole, exclusive, and complete discretion
and right to determine the terms, policy,

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structure, operation and administration
of the Program, including the right: . .
. .
e) To determine the method for
calculating the amount of any award.

f) To determine the amount of any award
granted.

g) To determine the person entitled to
receive any award.

h) To determine the extent, if any, of
the application, implementation, or use
of an idea.

The same documents also provided that "[t]he decisions of the

Company concerning the terms, policy, structure, operation or

administration of the Program are within the sole and exclusive

discretion of the Company and are final, binding, and

conclusive."

In August 1990, NET's initial evaluation reported that

Hodgkins' suggestion was "an excellent idea to move the company

forward in its goal of automated provisioning." As a result, he

received the maximum Initial Award of $5,000 in September 1990.

In January 1991, NET announced in its weekly in-house publication

that Hodgkins' idea had been adopted and that it "earned for its

suggester a Tangible Award of 15 percent of its estimated

savings." NET implemented Hodgkins' idea in July 1991, and thus

no determination of the first-year savings for a Special Merit

Award could be made until after July 1992.

Expecting to receive the maximum award for his idea,

Hodgkins retired from NET in February 1992, earlier than he would

have retired had he not expected the award. In September 1992,

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NET manager Philip DuBois informed Hodgkins by telephone that NET

had awarded him $17,500 for his idea.1 Hodgkins told DuBois

that the amount of the award was too low. DuBois then sent the

evaluation form back to the IAW program manager for re-

evaluation.

In August 1993, NET informed Hodgkins that he would not

receive a Special Merit Award. According to NET's re-evaluation

report, NET could not quantify savings associated exclusively

with Hodgkins' idea because other innovations had produced the

same results as Hodgkins' idea. Hodgkins appealed this decision,

and a second re-evaluation was performed, which arrived at the

same conclusion. NET's evaluation reports indicated that the

task of measuring savings had been rendered impossible by the

destruction of cost records, given the passage of time.

As a result, NET has not awarded Hodgkins any money

beyond the $5,000 Initial Award. Because Hodgkins did not

receive the total amount he expected, his financial plans for

retirement have been disturbed, causing him to draw prematurely

on certain investments and incur early withdrawal penalties. On

theories of breach of contract, quantum meruit, unjust

enrichment, equitable estoppel and negligent misrepresentation,

Hodgkins brought suit in district court seeking damages incurred

in reliance on statements made by NET, as well as the additional

$45,000 of award money he expected, plus money for income taxes,

1 NET contests this assertion.

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which NET had agreed to pay on any IAW program award amount. The

district court granted summary judgment on all counts.

STANDARD OF REVIEW
STANDARD OF REVIEW

We review a district court's grant of summary judgment

de novo, viewing the facts in the light most favorable to the

nonmovant, Hodgkins. Dominique v. Weld, 73 F.3d 1156, 1158 (1st

Cir. 1996); Coyne v. Taber Partners I, 53 F.3d 454, 457 (1st Cir.

1995). Summary judgment is appropriate when, based upon the

pleadings, affidavits, and depositions, "there is no genuine

issue as to any material fact, and [where] the moving party is

entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c);

Hope Furnace Assocs., Inc. v. F.D.I.C., 71 F.3d 39, 42 (1st Cir.

1995); Grenier v. Cyanamid Plastics, Inc., 70 F.3d 667, 671 (1st

Cir. 1995). To succeed, the "moving party must show that there

is an absence of evidence to support the non-moving party's

position." Hope Furnace Assocs., 71 F.3d at 42 (quoting Rogers

v. Fair, 902 F.2d 140, 143 (1st Cir. 1990)). "An issue is only

'genuine' if there is sufficient evidence to permit a reasonable

jury to resolve the point in the nonmoving party's favor." Id.

at 42-43 (quoting NASCO, Inc. v. Public Storage, Inc., 29 F.3d

28, 32 (1st Cir. 1994)).

DISCUSSION
DISCUSSION

On appeal, Hodgkins argues that the evidence sufficed

to raise genuine issues of material fact as to whether he and NET

formed an enforceable contract, and whether NET breached it.

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Alternatively, in the absence of an enforceable contract,

Hodgkins claims that he is entitled to a trial on a theory of

unjust enrichment or quantum meruit. Hodgkins also advances

claims under theories of equitable estoppel and promissory

estoppel. Finally, Hodgkins claims that the evidence requires

that a factfinder decide whether NET negligently misrepresented

to Hodgkins that he was entitled to additional compensation.

I. Breach of Contract
I. Breach of Contract

The district court decided that the IAW program formed

part of Hodgkins' contract of employment with NET. The district

court also found that the provision of the IAW program that

states that "[a]ll ideas which result in Initial Awards for

tangible ideas shall receive consideration for a Special Merit

Award" was "clearly enforceable." However, the district court

found crucial the IAW program's express condition that NET had

"the sole, exclusive, and complete discretion and right to

determine the terms, policy, structure, operation and

administration of the Program." The district court pointed to

the IAW program Submission Form, which along with allocating such

discretion to NET, provides that NET has the right "to determine

the method for evaluating ideas which are submitted" and "to

determine the method for calculating the amount of any award to

be granted." As a result, the district court found an

enforceable contract -- one which it found NET did not breach.

On appeal, Hodgkins argues that the IAW program is

severable from his employment contract, and that by accepting his

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submission and implementing his idea, NET was bound to pay him if

it was successful. Hodgkins also contends that while there was

no explicit reasonableness requirement in Hodgkins' contract with

NET, other terms in the contract substitute for it. Under this

reading of the contract, Hodgkins asserts that a genuine issue of

material fact persisted with respect to whether NET breached the

contract.

Hodgkins argues that, in the event that NET's reserved

discretion was so broad as to encompass its actions, such

discretion must have been too broad for the district court to

find an enforceable agreement. The district court's key finding

was that NET and Hodgkins formed an agreement that remained

enforceable despite the clause granting NET "sole, exclusive, and

complete discretion" over the IAW program's operation, including

authority "to determine the method for calculating the amount of

any award to be granted." According to the district court, the

latitude this provision afforded NET was sufficiently wide to

encompass NET's conduct in evaluating Hodgkins' idea. Therefore,

the district court concluded, there was no breach.

Hodgkins contends that the district court's analysis

must be erroneous. According to Hodgkins, the district court's

reading of the clause granting NET discretion is so generous to

NET that it must lead to the conclusion that Hodgkins received no

consideration or enforceable promise in return for submitting his

idea, since NET had the unbridled discretion to vary the contract

at will. See, e.g., Whitten v. Greeley-Shaw, 520 A.2d 1307, 1309

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(Me. 1987) (noting that "[e]very contract requires

'consideration' to support it"); Corthell v. Summit Thread Co.,

167 A. 79, 81 (Me. 1933) (stating that "a reservation to either

party of an unlimited right to determine the nature and extent of

his performance renders his obligation too indefinite for legal

enforcement, making it, as it is termed, merely illusory").

In considering this argument, we agree with the

district court and the parties that Maine law applies. See

Moores v. Greenberg, 834 F.2d 1105, 1107 n.2 (1st Cir. 1987)

(stating that "[w]here the parties agree what substantive law

controls in a diversity case, we can -- and ordinarily should --

accept such a concession."). Under Maine law,

the paramount principle in the
construction of contracts is to give
effect to the intention of the parties as
gathered from the language of the
agreement viewed in the light of all the
circumstances under which it was made
. . . . Such intention must be gathered
from the written instrument, construed in
respect to the subject matter, the motive
and purpose of making the agreement, and
the object to be accomplished.

Baybutt Constr. Corp. v. Commercial Union Ins., Co., 455 A.2d

914, 919 (Me. 1983), cited in Top of the Track Assocs. v.

Lewiston Raceways, Inc., 654 A.2d 1293, 1295-96 (Me. 1995).

The district court's reading of the written

instrument's literal terms is not disputed. The IAW program form

submitted by Hodgkins clearly reserves calculation and

determination of awards to NET's discretion, and Hodgkins does

not argue that he was not aware of these provisions. In the

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absence of any evidence proffered by Hodgkins that NET engaged in

bad faith acts such as intentionally destroying records, we agree

with the district court's finding that NET's conduct, including

its repeated evaluations of Hodgkins' ideas, falls within the

ambit of its "sole, exclusive, and complete discretion" over the

IAW program's operation.

However, a question lingers regarding Hodgkins'

argument that the discretion reserved by NET was so "unlimited"

as to void the agreement. See Corthell, 167 A. at 81 (noting

that a party's reservation of an unlimited right to determine the

nature and extent of its performance renders its obligation too

indefinite for legal enforcement). In Corthell, 167 A. at 81,

the Maine Law Court confronted facts bearing some resemblance to

those of the instant case. In that case, the plaintiff Corthell

executed an agreement with his employer whereby he would be

compensated for "all future inventions" with "reasonable

recognition," "the basis and amount [of which] to rest with" the

employer "at all times." Id. Despite the reservation of

discretion to the employer, the Maine Law Court held that the

employer's promise was not illusory and that the contract was

valid. Id. at 82. Stating that the contract "was to be

interpreted in good faith on the basis of what is reasonable and

intended, and not technically," and also emphasizing that the

contract contained specific language instructing that it should

be construed in that manner, the court found that the employer's

promise was not illusory based on the provision for "reasonable

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recognition" and the parties' exhibition of a contractual intent.

Id. (finding a valid enforceable agreement and also concluding

that the employer breached it).

Citing Corthell, Hodgkins argues that because the IAW

program agreement did not include any mention of "reasonable

recognition," as the agreement in Corthell did, the IAW program

agreement reserved excessive discretion for NET and was thus

void. We do not agree. See Brooking v. Maine Employment Sec.

Comm'n, 449 A.2d 1116, 1118 (Me. 1982) (noting that it was

"highly unlikely" that an employment agreement would have been

unenforceable for vagueness even though compensation for services

was not stated, and failing to note any provision requiring a

reasonable amount) (citing Corthell, 167 A. at 81). We cannot

therefore accept Hodgkins' semantic emphasis based on Corthell.

See Towne v. Larson, 51 A.2d 51, 53 (Me. 1947) (noting that while

"it is true that a contract must be sufficiently definite to

enable the court to determine its meaning and fix the legal

liability of the parties . . . [t]he court looks to substance

rather than to form, and is reluctant to construe a contract so

as to render it unenforceable if that result can be avoided")

(discussing Corthell).

As a result, we must look beyond the mere wording of

the agreement. In this regard, Top of the Track directs that, to

ascertain what was reasonable and intended, we look at the facts

surrounding an agreement's making. Top of the Track, 654 A.2d at

1295-96. Viewing the facts in the best light for Hodgkins, the

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general purpose of the IAW program agreement appears fairly

straightforward. An employee suggestion plan such as the IAW

program is intended to reward ideas and promote more active

employee participation in the productive process. See Fish v.

Ford Motor Co., 534 N.E.2d 911, 913 (Ohio Ct. App. 1987). These

programs give employees incentives in the form of rewards to work

harder and generate possible improvements. Id. At the same

time, the clauses in the employment contract and the proposal

plan document must be upheld to protect the company's interests.

Id. Among those interests is the ability of the employer to

quickly resolve instances where the suggestion involved may

provide benefits that are difficult or impossible to quantify.

We find that the district court properly concluded that

no genuine issue of material fact existed to cast doubt on the

proposition that, under Maine law, NET's promise was not

illusory. Given the context of employee relations and incentives

surrounding the IAW program, NET's promise was not rendered

unenforceable by a grant of unfettered discretion. Even

assuming, arguendo, that Hodgkins correctly argues that the IAW

program constitutes an agreement severable from his employment

relationship with NET, we cannot accept Hodgkins' assertion that

he provided NET with a suggestion in exchange for NET's promise

that it would give him an award if it wished to, at its total

discretion. Given its policies of generally informing its

employees when one of them received an award, the context in

which NET made its promise did not allow it to refuse to pay

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awards arbitrarily at its discretion. If NET refused to pay

awards, then the IAW program in the future would not provide

incentives to employees to suggest improvements. Future

improvements depended, and still depend, on current payment of

awards.2 In sum, the lack of an explicit "reasonableness"

provision alone does not render the IAW program contract

unenforceable, and this factual background further justifies the

district court's conclusion, especially in the absence of

proffered contravening evidence by Hodgkins.

Like the district court before us, we believe that the

Maine Law Court would conclude that the IAW program constituted a

valid agreement between NET and Hodgkins. Before determining the

precise contractual duty that NET faced, however, we must

consider the alleged tender by DuBois of a $17,500 special award

to Hodgkins. This is certainly a disputed issue of fact; the

question is whether it represents a material dispute. Taken, in

Hodgkins' favor, as true, this statement could not create any new

obligation on the part of the company: the submitted idea was

"past consideration" and thus insufficient to support a new

2 Perhaps NET could have quietly refused to pay higher awards
and publicize smaller but still significant awards. However,
Hodgkins has presented no evidence of such a NET policy
sufficient for his summary judgment burden. While summary
judgment is only appropriate when "there is 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); Coll v. PB

Diagnostic Sys., Inc., 50 F.3d 1115, 1121 (1st Cir. 1995), the

nonmoving party "may not rest upon the mere allegations or
denials of the . . . pleadings, but . . . must set forth specific
facts showing that there is a genuine issue for trial," Fed. R.
Civ. P. 56(e); Coll, 50 F.3d at 1121.

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contract or a modification. See Greater Boston Cable Corp. v.

White Mountain Cable Constr. Co., 604 N.E.2d 1315, 1317 (Mass.

1992) (stating that "[p]ast consideration does not support a

contract"); Hayes v. Plantations Steel Co., 438 A.2d 1091, 1093

(R.I. 1982) (concluding that because "[v]alid consideration . . .

must be bargained for . . . [t]o be valid, therefore, the

purported consideration must not have been delivered before a

promise is executed, that is, given without reference to the

promise"); 4 Richard A. Lord, Williston on Contracts 8:9, at

193-202 (4th ed. 1992).

However, we conclude that whether the agreement

contained an implicit obligation of reasonable efforts, good

faith, accurate evaluation of the idea's worth, or other such

treatment, the alleged offer of $17,500 represents evidence from

which a jury could infer that NET did not live up to its

obligations when it later claimed that Hodgkins' idea did not

merit more than the Initial Award. Having allegedly tendered a

$17,500 Special Award, NET cannot avoid factfinding as to whether

its subsequent refusal to pay any amount as a special award

breached its duty regarding the Hodgkins idea. As a result, on

the breach of contract claim, we must reverse the district

court's grant of summary judgment, and remand for further

proceedings in accord with this opinion. We leave it to the

district court, in the first instance, to determine the precise

contractual duty which arose under Maine law pursuant to the

parties' agreement.

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II. Unjust Enrichment and Quantum Meruit
II. Unjust Enrichment and Quantum Meruit

Hodgkins also seeks damages under unjust enrichment and

quantum meruit theories. Under Maine law, "[u]njust enrichment

describes recovery for the value of the benefit retained when

there is no contractual relationship, but when, on the grounds of

fairness and justice, the law compels performance of a legal and

moral duty to pay," while "quantum meruit involves recovery for

services or materials provided under an implied contract."

Aladdin Elec. Assoc. v. Town of Old Orchard Beach, 645 A.2d 1142,

1145 (Me. 1994); see A.F.A.B., Inc. v. Town of Old Orchard Beach,

639 A.2d 103, 105 n.3 (Me. 1994).

We have already discussed and upheld the district

court's finding of an enforceable agreement between NET and

Hodgkins. Without evidence of fraud, or other circumstances that

render the contract inoperative, Hodgkins is foreclosed from

seeking additional payment outside the contract terms. See Top

of the Track, 654 A.2d at 1296 (contract between the parties

forecloses unjust enrichment claim); Prest v. Inhabitants of

Farmington, 104 A. 521, 524 (1918) (valid express contract

forecloses a quantum meruit action). Because Hodgkins has put

forth no such evidence, we agree with the district court that

Hodgkins' unjust enrichment and quantum meruit claims must fail.

III. Equitable Estoppel and Promissory Estoppel
III. Equitable Estoppel and Promissory Estoppel

Hodgkins also seeks damages under theories of equitable

estoppel and promissory estoppel. Under Maine law, equitable

estoppel "bars the assertion of the truth by one whose misleading

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conduct has induced another to act to his detriment in reliance

on what is untrue." See Anderson v. Commissioner of the Dep't of

Human Servs., 489 A.2d 1094, 1099 (Me. 1985) (adding that "[a]

misunderstanding will not support application of equitable

estoppel"). According to Maine law on promissory estoppel, "[a]

promise which the promisor should reasonably expect to induce

action or forbearance on the part of the promisee or a third

person and which does induce such action or forbearance is

binding if injustice can be avoided only by enforcement of the

promise." Martin v. Scott Paper Co., 511 A.2d 1048, 1050 (Me.

1986).

Hodgkins contends that, taken as a whole, the IAW

program encouraged the submission of ideas and made specific

representations to employees, including Hodgkins, about the

evaluation process and the compensation to be paid for ideas that

produced financial results. Hodgkins argues that under Maine's

doctrine of equitable estoppel, NET's course of conduct precludes

NET from asserting rights of contract against Hodgkins, since

Hodgkins in good faith relied upon NET's conduct and was led

thereby to change his position for the worse. See, e.g.,

Waterville Homes, Inc. v. Maine Dep't of Transp., 589 A.2d 455,

457 (Me. 1991). Citing Martin, 511 A.2d at 1050 (Me. 1986),

Hodgkins also argues that promissory estoppel similarly applies.

The district court found this argument unconvincing

because it concluded that since the various IAW program

publications made it clear that NET retained complete discretion

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as to the evaluation methods and conclusions, it would have been

unreasonable for Hodgkins to conclude that such publications

promised him an award. Furthermore, the district court found

that Hodgkins could not have reasonably relied on the NET

employee newsletter of January 3, 1991, listing him as having

submitted a winning idea, since: (1) Hodgkins knew that the

announcement was made before his idea was even implemented, let

alone evaluated after one year; (2) the newsletter reference to

"15 percent of the estimated savings" is a clear reference to an

"Initial Award for a tangible idea," not a "Special Merit Award";

and (3) the announcement's reference to a "Tangible Award" for

Hodgkins clearly meant an Initial Award, since the IAW program

rules and publications use the term "tangible" to describe

"Initial Awards for tangible ideas," but not "Special Merit

Awards."

On appeal, Hodgkins attempts to sidestep the district

court's analysis in two ways. First, he asserts that a factual

question existed as to whether Hodgkins' reliance on NET's

promise was reasonable, since he had used his experience

projecting costs for NET to estimate the likely savings that NET

would realize from implementing his idea. Second, Hodgkins

contends that "taken as a whole," rather than looking at the IAW

program publications and the NET newsletter in isolation, NET's

conduct justifies both estoppel theories.

We find the district court's analysis convincing

nonetheless. With respect to his first assertion, regardless of

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his assessment of likely savings from his idea, under an

equitable estoppel theory Hodgkins was required to show he

reasonably relied or that NET made statements which it should

reasonably have expected to induce Hodgkins' actions. The

argument that a factual question existed as to his estimates

simply does not respond to the crux of the district court's

analysis: that his reliance was not reasonable. With respect to

Hodgkins' emphasis on the IAW program "taken as a whole" forming

an issue of triable fact, that allegation by itself does not

convert the issue into a question of fact for the jury. Because

Hodgkins has failed in his brief to point to evidence other than

that considered by the district court in assessing NET's conduct

under equitable estoppel, we cannot determine what additional

facts Hodgkins may be referring to by his invocation of a

holistic approach. As a result of this failure to point to other

competent evidence to surmount a supported summary judgment

motion, see Thomas v. Metropolitan Life Ins. Co., 40 F.3d 505,

510 (1st Cir. 1994) (noting that "[t]o avoid summary judgment, a

nonmoving party must be able to point to some specific, competent

evidence in support of its claim"); Cloutier v. Town of Epping,

714 F.2d 1184, 1192 (1st Cir. 1983) ("surmount[ing] a supported

motion for summary judgment" requires that plaintiffs "set forth

specific facts showing a triable issue"), we conclude that the

IAW program publications and the NET newsletter compose the

competent evidence regarding the relevant course of conduct for

both estoppel theories. We agree with the district court's

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discussion of this evidence, and find that, under an equitable

estoppel theory, Hodgkins could not have reasonably relied on

statements or conduct as evidenced in these sources. For the

same reasons, under a promissory estoppel theory, NET should not

reasonably have expected to induce Hodgkins' actions in

reliance.3

3 Hodgkins' promissory estoppel argument was not a count in his
complaint. Because it fails for the same reasons as his
equitable estoppel claim, we do not address the issue of whether
the district court erred in concluding that the promissory
estoppel argument was waived. See Hodgkins v. New England Tel. &

Tel. Co., slip op. at 8 n.2 (D. Me. 1994).

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IV. Negligent Misrepresentation
IV. Negligent Misrepresentation

Maine has adopted the Restatement (Second) of Torts

definition of the tort of negligent misrepresentation, which runs

as follows:

One who, in the course of his business,
profession or employment, or in any other
transaction in which he has a pecuniary
interest, supplies false information for
the guidance of others in their business
transactions, is subject to liability for
pecuniary loss caused to them by their
justifiable reliance upon the
information, if he fails to exercise
reasonable care or competence in
obtaining or communicating the
information.

Restatement (Second) of Torts 552(1) (1977), cited in Chapman

v. Rideout, 568 A.2d 829, 830 (Me. 1990).

Hodgkins argued below that the newsletter announcement

and IAW program publications contained false statements on which

he justifiably relied in deciding when to retire. The district

court was unconvinced by this argument. We agree with the

district court's finding that Hodgkins' negligent

misrepresentation claim must fail for the same reason as his

estoppel arguments, namely, that specific statements in the IAW

program publications and the NET newsletter, as well as the

context in which they were read, clearly rendered Hodgkins'

alleged reliance unreasonable. We note in passing that the only

false statement Hodgkins has pointed to, the alleged statement by

DuBois, taken as true, would still have been made after Hodgkins

had already retired, and thus Hodgkins cannot claim to have

relied upon it, nor does Hodgkins so claim. Hodgkins does not

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point to evidence contradicting NET's statements in the IAW

program publications and the NET newsletter that rendered

justifiable any reliance on those materials in his retirement and

related decisions. Because Hodgkins must show justifiable

reliance in order to sustain a negligent misrepresentation claim,

he consequently cannot establish that a genuine issue of material

fact remains that would compel us to grant him a trial under a

Maine law theory of negligent misrepresentation.

CONCLUSION
CONCLUSION

For the foregoing reasons, the judgment of the district

court is reversed in part, affirmed in part, and remanded for
reversed in part affirmed in part and remanded for

further proceedings.
further proceedings

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