Date: 02-06-2002

Case Style: George Lombard and Lomar, Inc. v. Booz-Allen & Hamilton, Inc., et al.

Case Number: 00-7516

Judge: Winter

Court: United States Court of Appeals for the Second Circuit

Plaintiff's Attorney: Jeffrey M. Duban, Law Offices of Jeffrey M. Duban, New York, New York, for Plaintiffs-Appellants.

Defendant's Attorney: Bennett H. Last of Gilbride, Tusa, Last & Spellane LLC, New York, New York, for Defendants-Appellees.

Description: George Lombard and his wholly-owned corporation, Lomar, Inc. (collectively "Lombard" or "he"), 1 appeal from Judge Jones' grant of summary judgment dismissing claims for the intentional interference with prospective economic advantage and for negligence.

Briefly stated, Lombard is a former senior executive of Lockheed Aeronautical Systems Company ("Lockheed"), who hoped to build and operate an aerostructures manufacturing plant in Puerto Rico. The venture was to be titled NEWCO, and Lomar was to serve as the corporate owner. Lombard sought assistance from several Puerto Rican officials, including the Administrator of the Economic Development Administration of Puerto Rico ("EDA") and the President of the Puerto Rico Industrial Development Company ("PRIDCO"). These officials appear to have expressed interest in the project and recommended that Lombard approach the Government Development Bank of Puerto Rico ("GDB") to obtain debt financing. However, GDB was skeptical and retained a consulting firm, Booz-Allen & Hamilton, Inc. ("BAH"), to do a feasibility study of the proposed loan. Concluding that the NEWCO project was risky, BAH proposed various changes in the financial structure of the venture that Lombard was either unwilling or unable to make. GDB thereafter turned down Lombard's loan application. Lombard was unable to obtain financing elsewhere, and the NEWCO venture never got off the ground.

Lombard then brought the present action, seeking over $100 million in damages. The issues on this appeal involve claims against BAH and its employee W. Frank Jones for intentionally interfering with Lombard's business relationship with EDA, PRIDCO, and GDB, and, alternatively, for negligently preparing the feasibility study. We hold that Lombard did not meet his burden of proffering evidence sufficient to create a genuine issue of material fact on his intentional interference claim. We also hold that, under New York law, a loan applicant may not recover for negligence by a consulting firm retained by a potential lender to review the merits of a loan application.

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Under New York law, 3 recovery of damages for tortious interference with prospective economic advantage must be based on a factual showing that: (i) the plaintiff had business relations with a third party; (ii) the defendants interfered with those business relations; (iii) the defendants acted for a wrongful purpose or used dishonest, unfair, or improper means; and (iv) the defendants' acts injured the relationship. See Burba v. Rochester Gas and Elec. Corp., 528 N.Y.S.2d 241, 243 (N.Y. App. Div. 1988); see also Nadel v. Play-By-Play Toys & Novelties, Inc., 208 F.3d 368, 382 (2d Cir. 2000); Purgess v. Sharrock, 33 F.3d 134, 141 (2d Cir. 1994). Although Lombard's case is thin with regard to the substantiality of his business relations with EDA, PRIDCO, and GDB -- verbal encouragement but little else from EDA and PRIDCO, outright skepticism from GDB -- the record is simply bereft of any evidence that BAH either acted solely to injure Lombard or used improper means to do so.

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Click the case caption above for the full text of the Court's opinion.

Outcome: Affirmed

Plaintiff's Experts: Unknown

Defendant's Experts: Unknown

Comments: