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NACM-New England, Inc. v. National Association of Credit Management, Inc.

United States District Court, D. Massachusetts

January 24, 2019

NACM-NEW ENGLAND, INC., Plaintiff,
v.
NATIONAL ASSOCIATION OF CREDIT MANAGEMENT, INC., Defendant.

          ORDER OF CONTEMPT

          TIMOTHY S. HILLMAN DISTRICT JUDGE

         Background

         NACM-New England, Inc. d/b/a Business Credit Intelligence (“BCI ”) has filed a Complaint against National Association of Credit Management, Inc. (“NACM”) seeking relief for breach of contract, violation of the Massachusetts Consumer Protection Act, Mass. Gen. L., ch. 93A, §11 (“Chapter 93A”), and interference with advantageous business relations. On September 24, 2018, after briefing and an evidentiary hearing, this Court granted BCI's motion for injunctive relief and entered the following Order:

a. The 2011 Agreement between BCI and NACM [shall] remain in place and continue to operate in accordance with its terms and NACM shall continue to honor all its obligations thereunder, including its obligation not to share BCI's membership list with any entity that provides core services; and
b. NACM shall refrain from interfering with the business relationship between BCI and UTC.

See Memorandum and Order, dated September 24, 2018 (Docket No. 61)(“Prior Order”), at pp. 43-44. In making this ruling, I found that NACM had improperly attempted to terminate the 2011 Affiliation Agreement between the parties.[1]

         On October 29, 2018, Robin Schauseil president of NACM (“Schauseil”), sent BCI a 90-day notice terminating the 2011 Affiliate Agreement on the grounds that BCI failed to meet the required membership retention standard in each of the months from May through August 2018. Thus, without further action by this Court, the 2011 Affiliation Agreement between the parties would terminate on January 29, 2019. This Order addresses Plaintiff's Motion For Finding Of Contempt Of Court And For Further Injunctive Relief (Docket No. 71). For the reasons set forth below, that motion is granted.

         Discussion

         On October 1, 2018, BCI informed Schauseil that BCI would submit a request for proposal (“RFP”) to acquire Pennsylvania Association of Credit Management, an Affiliate with whom BCI had a longstanding working relationship. On October 2, 2018, Schauseil sent BCI an e-mail notifying BCI that it was not qualified to reply to the RFP because it was not in “good standing” as the result of its being non-compliant with the March 14, 2012 Membership Retention Policy (“MRP”), which, she asserted, BCI had “contractually” agreed to.

         The MRP states:

a. The Affiliate will use its best efforts to solicit, secure and retain membership. Affiliate must on a net basis, retain not less than 85% of its total membership in any historical consecutive 12-month period.
b. Should retention drop below 85% in any consecutive l2-month period, the Affiliate must obtain a waiver to continue to be recognized as an Affiliate of the National Association of Credit Management.
l. The waiver must be submitted in writing to the National Board of Directors outlining the circumstances of being unable to retain 85% of total members, including details of things like membership campaigns, number of outreach attempts made to non-renewing members and the number of outreach attempts made to current members. The NACM Chairman and NACM President will discuss the circumstances of the waiver with the Affiliate Council. After discussion with the Affiliate Council, the NACM Board will consider the circumstances outlined in the waiver and take action, including but not limited to, that the Affiliate be mentored by another Affiliate with progress reports sent to the NACM Board, an audit of Affiliate membership be conducted, participation in the Affiliate Assistance Program or termination of the Affiliated Association Agreement.

         Specifically, Schauseil stated that BCI failed to meet retention standards for July and August 2018 as compared to July and August 2017. BCI was asked to submit a waiver request under the MRP. BCI did not do so and on October 29, 2018, Schauseil sent BCI notice that its membership was being terminated on January 29, 2019 for failure to ...


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