Full opinion text
Order SILVER, District Judge. Pending before the Court are fifteen motions for summary judgment and various related motions. On August 24, 2001, a hearing was held to address nine of the summary judgment motions, as well as Defendant Gaberino’s Motion for Court to Apply June 21, 2001 Rulings to Him. In its September 26, 2001 Order, the Court ruled on the ten motions argued at the hearing and promised that a written opinion would follow. This is that opinion. Background Southwest Gas Corporation (“Southwest”) is a Nevada-based utility that distributes natural gas to customers in Nevada, California, and Arizona. ONEOK, Inc. (“ONEOK”) is an Oklahoma-based utility that distributes natural gas to customers in Oklahoma and Texas. On December 14, 1998, Southwest and ONEOK entered into a merger agreement (“Merger Agreement”) under which Southwest was to merge into ONEOK and Southwest’s shareholders were to receive $28.50 per share. The Merger Agreement contained a “No Shopping” provision that required Southwest to enter into a “confidentiality and standstill” agreement if Southwest wished to disclose confidential information to any unsolicited third-party suitor that approached Southwest and offered a “Superior Proposal.” (Merger Agreement § 5.2(a)). The Merger Agreement also required Southwest to pay ONEOK a $30 million “termination fee” if Southwest terminated the Merger Agreement based on such a proposal. (Id. § 8.3(a)). Southern Union Company (“Southern Union”) is a Texas-based utility that distributes natural gas to customers in Texas, Missouri, Florida, and Pennsylvania. Southern Union obtained a copy of the Merger Agreement within a week after the merger between Southwest and ONEOK was announced. (4/18/00 Bouchard Depo. at 22-23). Southern Union knew that pursuant to the terms of the Merger Agreement, “an uninvited bidder would have to enter into a confidentiality agreement essentially identical to the one between Southwest and ONEOK.” (Id. at 21). On February 1, 1999, Southern Union presented its own merger offer to Southwest. (2/1/99 Kelley Letter to Maffie). Southern Union was prepared “to execute an agreement identical in all material respects” to the Merger Agreement entered into by ONEOK and Southwest and to offer Southwest $32 per share, as compared with ONEOK’s offer of $28.50 per share. (Id.). On February 21, 1999, the Southwest Board of Directors (“Board”) held a special meeting “to determine whether to provide information to or enter into discussions with Southern Union ... regarding its offer.” (2/21/99 Minutes). At that meeting, the Southwest Board resolved that Southern Union’s merger offer was a “Superior Proposal” to the ONEOK proposal and authorized Southwest’s officers to enter into discussions with Southern Union “upon execution by [Southern Union] of a confidentiality agreement.” (Id.; see 4/15/99 Cortez Depo. at 113). That same day, Southern Union and Southwest executed a confidentiality and standstill agreement (“Standstill Agreement”) essentially identical to the one between Southwest and ONEOK. Between February and the end of April 1999, Southern Union and Southwest exchanged drafts of a proposed merger agreement that would have supplanted the Merger Agreement between ONEOK and Southwest. (See, e.g., 3/8/99 & 4/22/99 Bouchard Letters to Lossing). However, Southern Union and Southwest were unable to agree on several terms, including whether Southern Union would pay the required $30 million termination fee directly to ONEOK or whether the money would be placed in escrow. (4/22/99 Bouchard Letter to Lossing). The parties also could not agree on the inclusion of a liquidated damages provision. (4/18/00 Bouchard Depo. at 184). On April 5, 1999, James Irvin, a Commissioner with the Arizona Corporation Commission (“ACC”), wrote a letter (“Irvin Letter”) to Maffie and Hartley of Southwest. (4/5/99 Irvin Letter). The Irvin Letter generally advised Maffie and Hartley about the factors that the ACC would consider in evaluating applications for regulatory approval, which Southern Union and ONEOK would need to file and have approved before they could merge with Southwest. (Id.). In addition, the Irvin Letter stated: “I also have spent a considerable amount of time discussing these factors with my colleagues at the Nevada and California utility commissions, and advise you that they share my concerns.” (Id.). The Irvin Letter did not expressly state that a ONEOK merger was favored, nor did it disparage Southern Union. (Id.). On April 25, 1999, the Southwest Board held a meeting to consider a revised ONEOK offer of $30 per share. (4/25/99 Minutes). The Southwest Board resolved that ONEOK’s offer should be accepted and Southern Union’s offer should be rejected. (Id.). On April 27, 1999, Southern Union increased its bid to $33.50 per share. (4/27/99 Kelley Letter). On May 4, 1999, the Southwest Board voted to reject Southern Union’s new offer. (5/4/99 Minutes). Several months later on January 21, 2000, Larry Brummett, ONEOK’s Chief Executive Officer, sent a letter to Southwest indicating that, pursuant to the terms of the Merger Agreement, ONEOK did not intend to consummate the merger with Southwest. (1/21/00 Brummett Letter). Procedural History As a result of these failed merger attempts, the parties filed five lawsuits in three states. Southwest filed the first action, CV-OO-452-PHX-ROS, against Southern Union in Nevada on April 30, 1999 (“Nevada Action”). Southern Union asserts counterclaims against Southwest in the Nevada Action. ONEOK filed the second action, CV-OO-1812-PHX-ROS, against Southern Union in Oklahoma on May 5, 1999 (“First Oklahoma Action”). Southern Union asserts counterclaims against ONEOK in the First Oklahoma Action. Southern Union filed the third action, CV-99-1294-PHX-ROS, against Southwest, ONEOK, and numerous individual defendants in Arizona on July 19, 1999 (“First Arizona Action”). ONEOK asserts counterclaims against Southern Union in the First Arizona Action. ONEOK filed the fourth action, CV-00-1775-PHX-ROS, against Southwest in Oklahoma on January 21, 2000 (“Second Oklahoma Action”). No counterclaims are asserted in the Second Oklahoma Action. Southwest filed the fifth action, CV-00-119-PHX-ROS, against ONEOK and Southern Union on January 24, 2000 (“Second Arizona Action”). No counterclaims are asserted in the Second Arizona Action. In an Order dated December 15, 2000, the Court granted in part and denied in part portions of several motions to dismiss filed in the First Arizona Action. (Doc. #556). Subsequently, the five actions were consolidated for purposes of discovery on March 27, 2001 and June 5, 2001. (Doc. # 750 & # 939). In the June 5, 2001 Order, the Court also aligned the parties with respect to the various claims and counterclaims asserted in the five actions. (Doc. # 939). In an Order dated June 21, 2001, the Court granted in part and denied in part the remaining portions of the motions to dismiss filed in the First Arizona Action. (Doc. # 1011). The Court also issued rulings regarding the law governing most of the remaining claims, but did not do so for certain claims that appeared to be duplica-tive of other claims. (Id.). On July 31, 2001, the Court issued an Amended Order that did not alter the substantive determinations set forth in its June 21, 2001 Order. (Doc. # 1185). The tables contained on pages 50 through 55 of the July 31, 2001 Order set forth the claims remaining, the applicable law, and the alignment of the parties. (See id.). Discussion I. STANDARD OF REVIEW A court must grant summary judgment if the pleadings and supporting documents, viewed in the light most favorable to the non-moving party, “show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(c) (1996); see Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Jesinger v. Nevada Fed. Credit Union, 24 F.3d 1127, 1130 (9th Cir.1994). Substantive law determines which facts are material. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); Jesinger, 24 F.3d at 1130. In addition, “[o]nly disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment.” Anderson, 477 U.S. at 248, 106 S.Ct. 2505. The dispute must be genuine, that is, “the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Id. A principal purpose of summary judgment is “to isolate and dispose of factually unsupported claims.” Celotex, 477 U.S. at 323-24, 106 S.Ct. 2548. Summary judgment is appropriate against a party who “fails to make a showing sufficient to establish the existence of an element essential to that party’s case, and on which that party will bear the burden of proof at trial.” Id. at 322, 106 S.Ct. 2548; see Citadel Holding Corp. v. Roven, 26 F.3d 960, 964 (9th Cir.1994). The moving party need not disprove matters on which the opponent has the burden of proof at trial. Celotex, 477 U.S. at 323, 106 S.Ct. 2548. Furthermore, the party opposing summary judgment “may not rest upon the mere allegations or denials of [the party’s] pleadings, but ... must set forth specific facts showing that there is a genuine issue for trial.” Fed.R.Civ.P. 56(e); see also Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586-87, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986); Brinson v. Linda Rose Joint Venture, 53 F.3d 1044, 1049 (9th Cir.1995). There is no issue for trial unless there is sufficient evidence favoring the non-moving party. If the evidence is merely colorable or is not significantly probative, summary judgment may be granted. Anderson, 477 U.S. at 249-50, 106 S.Ct. 2505. However, “[t]he evidence of the non-movant is to be believed, and all justifiable inferences are to be drawn in his favor.” Id. at 255, 106 S.Ct. 2505 (citing Adickes v. S.H. Kress & Co., 398 U.S. 144, 158-59, 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970)). II. SOUTHWEST’S AND MAFFIE’S MOTIONS FOR SUMMARY JUDGMENT ON SOUTHERN UNION’S FRAUDULENT INDUCEMENT CLAIM Count Three of Southern Union’s Second Amended Complaint in the First Arizona Action is a fraudulent inducement claim against Southwest and Maffie that the Court has determined shall be treated as a counterclaim in the Nevada Action and governed by California law. (See 6/21/01 Order). In Count Three, Southern Union alleges that Maffie and Southwest fraudulently induced Southern Union to enter into the Standstill Agreement by falsely stating that Southwest would conduct a good faith evaluation of Southern Union’s merger offer. (Second Am. Compl. ¶¶ 50-52). In its Motion for Summary Judgment Re: Preclusive Effect of February 21, 1999 Confidentiality and Standstill Agreement (Doc. # 802), and in a separate Motion for Summary Judgment Re: Fraudulent Inducement and Punitive Damages (Doc. # 1034), Southwest argues that Southern Union cannot prevail on its fraudulent inducement claim because: (1) Southern Union was not induced by Maf-fie’s statements to sign the Standstill Agreement; (2) Southern Union could not have relied on Maffie’s statements because the Standstill Agreement provides that any oral representations will have no effect; (3) there is no evidence that, at the time the parties entered into the Standstill Agreement, Southwest did not intend to perform a good faith evaluation of Southern Union’s offer; and (4) Southern Union cannot prove fraud by clear and convincing evidence, as required to recover punitive damages under California law. Similarly, Maffie argues in his Motion for Summary Judgment (Doc. # 1236) that Southern Union cannot show that Maffie made a false representation on which Southern Union justifiably relied and that Southern Union’s claimed damages are, in any event, too speculative. In its September 26, 2001 Order, the Court granted Southwest’s and Maffie’s motions to the extent that Southern Union is seeking “lost profit” damages for Southern Union’s inability to make a tender offer to Southwest’s shareholders, but denied the motions to the extent that Southern Union is seeking out-of-pocket and punitive damages on Count Three. A. Fraudulent Inducement “ ‘Promissory fraud’ is a subspecies of the action for fraud and deceit.” Lazar v. Superior Ct., 12 Cal.4th 631, 49 Cal.Rptr.2d 377, 381, 909 P.2d 981 (1996). “The elements of fraud, which give rise to the tort action for deceit, are (a) misrepresentation (false representation, concealment, or nondisclosure); (b) knowledge of falsity (or ‘scienter’); (c) intent to defraud, i.e., to induce reliance; (d) justifiable reliance; and (e) resulting damage.” Id., 49 Cal.Rptr.2d at 380, 909 P.2d 981 (internal quotations and citations omitted). Southern Union must prove each of these elements to prevail on its claim for fraudulent inducement. See Kruse v. Bank of Am., 202 Cal.App.3d 38, 60-61, 248 Cal.Rptr. 217 (1988). Moreover, under California law, Southern Union must prove its damages with “reasonable certainty.” See, e.g., Mann v. Jackson, 141 Cal.App.2d 6, 296 P.2d 120, 123 (1956). In addition, Southern Union may recover punitive damages only if it proves by clear and convincing evidence that Defendants Maf-fie and Southwest are guilty of oppression, fraud, or malice. See Cal. Civ.Code § 3294(a); Basich v. Allstate Ins. Co., 87 Cal.App.4th 1112, 105 Cal.Rptr.2d 153, 158 (2001) (applying the standard in the context of summary judgment). 1. Misrepresentation, knowledge of falsity, and intent to defraud Southern Union alleges that Maffie, and hence Southwest, promised Southern Union that Southwest would conduct a good faith evaluation of Southern Union’s merger offer. Southern Union claims that when Maffie made this promise, he knew it was false and he did not intend to fulfill it. Southern Union also claims that it is entitled to punitive damages because Southwest and Maffie acted maliciously and fraudulently with the specific intent to oppress and harm Southern Union. The undisputed facts establish that Southwest committed to Southern Union, both orally and contractually, that its merger offer would be evaluated in good faith. Both Judd and Sundt of the Southwest Board testified that Southwest made such a commitment. (1/5/00 Judd Depo. at 144-45; 3/13/01 Sundt Depo. at 87-88). In fact, Sundt testified that the Southwest Board specifically told Southern Union that its offer would be evaluated in good faith. (3/13/01 Sundt Depo. at 87-88). Further, at a minimum, there is a genuine issue of material fact whether Maffie, as a Southwest representative, made a good faith representation because Kelley testified that Maffie said: “Look, just relax. You’re going to get, you know, a fair review of your proposal, but you need to sign the standstill agreement.” (11/28/00 Kelley Depo. at 496-97). “A promise of future conduct is actionable as fraud only if made without a present intent to perform.” Magpali v. Farmers Group, Inc., 47 Cal.App.4th 1024, 55 Cal.Rptr.2d 225, 231 (1996). “[I]f [a] plaintiff adduces no further evidence of fraudulent intent than proof of nonperformance of an oral promise, he will never reach a jury.” Tenzer v. Superscope, Inc., 39 Cal.3d 18, 216 Cal.Rptr. 130, 137, 702 P.2d 212 (1985). In proving fraud, however, rarely does a plaintiff have direct evidence of a defendant’s fraudulent intent. Therefore, the subsequent conduct of a defendant, such as his failure to immediately carry out his pledge, has some evidentiary value to show that a defendant made the promise without the intent to keep the obligation. Las Palmas Assocs. v. Las Palmas Ctr. Assocs., 235 Cal.App.3d 1220, 1 Cal.Rptr.2d 301, 311 (1991). Conversely, the Ninth Circuit has held that a party's “initial performance in accordance with its promises negates any possible inference of fraud.” Kaylor v. Crown Zellerbach, Inc., 643 F.2d 1362, 1368 (9th Cir.1981). There are genuine issues of material fact regarding whether Southwest intended to perform a good faith evaluation of Southern Union’s offer at the time the Standstill Agreement was executed. After Southern Union made its merger offer on February 1, 1999, and before it signed the Standstill Agreement on February 21, 1999, Edward Zub of Southwest allegedly misrepresented Southern Union’s debt-to-equity ratio to ACC Commissioner Carl Kunasek and his assistant, Jerry Porter, during a meeting held February 10, 1999. (7/13/00 Zub Depo. at 130). Zub stated that if Southern Union financed the entire acquisition with debt, “the cap structure would be 88/12.” (Id.). Zub also told Kunasek and Porter that Southern Union had a “rocky situation” and “customer problems” in Missouri, that Southern Union had cut forces or management in Missouri, and that a consumer advocate group was trying to levy a fine against Southern Union. (Id. at 133-34; see 4/17/01 Porter Depo. at 534). Zub also told Greg Patterson of the Arizona Residential Utility Consumer Office on February 12, 1999, that Southern Union’s debt-to-equity ratio would be 90/10. (10/28/99 Patterson Depo. at 24). Likewise, Zub told Patterson that Southern Union had service problems in Missouri and that Zub was concerned that Southern Union would eliminate local Southwest management or dismantle and sell off parts of the company. (Id.). Other evidence may create the inference that Southwest did not intend to merge with Southern Union even if Southern Union’s offer was superior. Southwest, through its counsel O’Melveny and Myers, retained Sitrick and Company (“Sitrick”), a public relations firm, that employed a “wheel of pain” strategy. (12/6/00 Sitrick Depo. at 119, 222). According to Sitrick, “[t]he wheel of pain is getting in the public domain information, factual information, about someone who is on the other side who is stirring up the waters that is factual but may not be flattering but is also relevant to the matter at hand.” (Id. at 222). As of April 21, 1999, Sitrick had no concerns about Southern Union’s ability to finance the proposed merger. (Id. at 125-26). Nevertheless, an undated memorandum (“Sitrick Memo”) entitled “Southwest Gas Corporation (SWX) Merger Synopsis” was prepared by Sitrick. It outlined a “wheel of pain” strategy for convincing Southwest’s shareholders to accept ONEOK’s offer, and its stated purpose was to persuade Southwest shareholders that Southern Union could not finance the proposed merger on terms acceptable to regulators. (Sitrick Memo at 5). As a result, there are genuine issues of material fact regarding the first three elements of Southern Union’s fraudulent inducement claim. A jury could reasonably find that: (1) Maffie and the Southwest Board falsely represented to Southern Union that Southwest would conduct a good faith evaluation of Southern Union’s merger proposal; (2) Maffie and Southwest knew that these representations were false; (3) Maffie and Southwest did not intend for a good faith evaluation to be conducted; and (4) Maffie and Southwest made the misrepresentations for the purpose of inducing Southern Union to sign the Standstill Agreement and forgo alternative takeover options. 2. Justifiable reliance Southwest contends that Southern Union knew that it would have to enter into the Standstill Agreement based on the provisions of the Merger Agreement between Southwest and ONEOK and for Southern Union to be able to perform due diligence and formulate a competitive merger offer. Thus, Southwest argues that Southern Union would have entered into the Standstill Agreement regardless of whether Maffie made any assurances about a good faith evaluation. Southwest also contends that Southern Union’s reliance on Maffie’s statement, if any, was not justifiable. “Justifiable reliance is an essential element of a claim for fraudulent misrepresentation[.]” Guido v. Koopman, 1 Cal.App.4th 837, 2 Cal.Rptr.2d 437, 440 (1991). “Reliance exists when the misrepresentation or nondisclosure was an immediate cause of the plaintiffs conduct which altered his or her legal relations, and when without such misrepresentation or nondisclosure he or she would not, in all reasonable probability, have entered into the contract or other transaction.” Alliance Mortgage Co. v. Rothwell, 10 Cal.4th 1226, 44 Cal.Rptr.2d 352, 900 P.2d 601, 608-09 (1995); see Engalla v. Permanente Med. Group, Inc., 15 Cal.4th 951, 64 Cal.Rptr.2d 843, 859, 938 P.2d 903 (1997). In other words, a party must be “thoroughly induced” by a fraudulent misrepresentation that, “judging from the ordinary experience of mankind, in the absence of it he would not, in all reasonable probability, have entered into the contract or other transaction.” Spinks v. Clark, 147 Cal. 439, 82 P. 45, 47 (1905) (citation omitted). Reliance upon the misrepresentation, however, does not need to “be the sole or even the predominant or decisive factor in influencing” the decision to enter a contract, but rather, it needs to be only a “substantial factor” in the decision. Id. (quoting the Restatement (Second) of Torts, § 546 cmt. b). “[T]he reasonableness of the reliance is ordinarily a question of fact,” but “whether a party’s rebanee was justified may be decided as a matter of law if reasonable minds can come to only one conclusion based on the facts.” Guido, 2 Cal.Rptr.2d at 440. Reliance upon statements that contradict a subsequent written agreement may not be justifiable. See Slivinsky v. Watkins-Johnson Co., 221 Cal.App.3d 799, 270 Cal.Rptr. 585, 589 (1990). Nevertheless, “[u]nder California law, a contract integration provision stating that all representations are contained therein does not bar a claim of fraudulent inducement by parol misrepresentations, regardless of the level of sophistication of the parties.” California State Auto. Ass’n Inter-Ins. Bur. v. Policy Mgmt. Sys. Corp., No. C-93-4232-CW, 1996 WL 45280, at *11 (N.D.Cal. Jan.9, 1996) (citing Ron Greenspan Volkswagen, Inc. v. Ford Motor Land Dev. Corp., 32 Cal.App.4th 985, 38 Cal.Rptr.2d 783 (1995)); see Ron Greenspan Volkswagen, Inc., 38 Cal.Rptr.2d at 789; Sherman v. Mut. Benefit Life Ins. Co., 633 F.2d 782, 785 (9th Cir.1980) (“Noncontradictory parol evidence is admissible to show fraud even though the termination clause is integrated.”); Airs Int'l, Inc. v. Perfect Scents Distribs., Ltd., 902 F.Supp. 1141, 1147 (N.D.Cal.1995) (merger clause does not preclude evidence of fraudulent inducement); Fed. Reserve Bank of S.F. v. HK Sys., Eaton Corp., No. C-95-1190-MHP, 1997 WL 227955, at *5 (N.D.Cal. Apr.24, 1997). The existence of an integration provision does not render reliance on the parol statements unreasonable. California State Auto. Ass’n Inter-Ins. Bur., 1996 WL 45280 at *11; Ron Greenspan Volkswagen, Inc., 38 Cal.Rptr.2d at 789. There are genuine issues of material fact regarding whether Southern Union would have entered into the Standstill Agreement if it had known that Southwest did not intend to evaluate its merger offer in good faith. Some evidence presented suggests that Southern Union gave serious consideration to pursuing a tender offer to Southwest’s shareholders, but instead opted to obtain due diligence. For example, Kelley testified that if Southern Union had “known of the intent of Southwest management to engage in acts aimed at undermining and defeating Southern Union’s financially superior offer, [he] would have never signed the Standstill Agreement. Instead, Southern Union would have made its offer public and pursued its offer to purchase Southwest directly with Southwest’s shareholders.” (5/9/01 Kelley Aff. ¶ 5). Similarly, John Brennan, Vice Chairman of Southern Union, testified that Southern Union forfeited its right to pursue a tender offer, a proxy fight, media campaigns, and the formation of Southwest shareholder voting groups when it entered into the Standstill Agreement. (6/19/01 Brennan Aff. ¶ 2). Brennan also testified that even though “Southern Union’s general course of business is to engage in friendly negotiations[,]” it would not have given up its right to pursue a hostile course if it had known that its merger proposal would not receive fair consideration. (Id. ¶ 3). John Cavalier of Donaldson, Lufkin, and Jenrette (“DLJ”), Southern Union’s financial advisor, testified that Southern Union was advised by its counsel not to enter into the Standstill Agreement because “it kept us from going hostile, but we signed it in order to be permitted to get the due diligence done.” (10/30/01 Cavalier Depo. at 70-71). John Rice of DLJ testified that a tender offer was discussed and documents were prepared in relation to a proposed tender offer. (6/12/01 Rice Depo. at 354). Rice also testified that Southern Union decided not to go forward with a tender offer after Southwest agreed to sign the Standstill Agreement. (Id. at 354-55). However, George Lindemann, Southern Union’s Chairman and Chief Executive Officer, testified that a tender offer was “not the route we would have gone.” (12/13/00 Lindemann Depo. at 188). Likewise, Ronald Endres, Executive Vice President of Southern Union, testified that Southern Union did not seriously consider a tender offer. (11/8/00 Endres Depo. at 147). Outside counsel for Southern Union, Aaron Fleischman, testified that Southern Union does not generally make tender offers when the management of the other corporation does not want to be sold to Southern Union. (11/28/00 Fleischman Depo. at 441-42). Even Kelley could not recall any tender offers being made since he joined Southern Union in 1990. (11/28/00 Kelley Depo. at 285). In addition, Cavalier testified that the only reason Southern Union signed the Standstill Agreement was that it expected Southwest to conduct a good faith evaluation (10/31/00 Cavalier Depo. at 501). He also opined that Southern Union would not have been able to afford a hostile tender offer, and that he had never seen a successful tender offer in the utility industry (10/30/00 Cavalier Depo. at 415-16). Regarding the prevalence of confidentiality and standstill agreements in merger transactions, Robert Yolles, a ONEOK attorney, testified that “[i]n deals for public companies, it would be extraordinary for there not to be” a confidentiality and standstill agreement. (5/30/01 Yolles Depo. at 91). Likewise, Joris Hogan, an attorney hired to advise Southern Union’s financial advisor, testified that confidentiality and standstill agreements are customary. (5/3/01 Hogan Depo. at 331). Based on the evidence discussed above, there are genuine issues of material fact regarding whether Southern Union would have entered into the Standstill Agreement if it had known that it would not receive a good faith evaluation of its merger offer. The integration clause in the Standstill Agreement does not alter this conclusion. The Standstill Agreement provides, in pertinent part: Each party hereto agrees that unless and until a definitive agreement with respect to the Proposal referred to in the first paragraph of the Agreement has been executed and delivered, neither it nor the other party hereto will be under any legal obligation of any kind whatsoever with respect to such a transaction by virtue of the Agreement or any written or oral expression with respect to such a transaction by any of its Representatives or by any Representatives thereof except, in the case of the Agreement, for the matters specifically agreed to herein. (Standstill Agreement ¶ 10) (emphasis added). Although Southern Union necessarily agreed that Southwest would not be obligated with respect to any oral expressions regarding the proposed merger, such an agreement does not preclude proof that Southern Union justifiably relied on Maf-fie’s alleged representations, particularly where, as here, the representations became contractual obligations. See California State Auto. Ass’n Inter-Ins. Bur., 1996 WL 45280 at *11; Ron Greenspan Volkswagen, Inc., 38 Cal.Rptr.2d at 789. 3. Damages for fraudulent inducement Southern Union claims that it would not have entered into the Standstill Agreement and would have made a successful and profitable tender offer directly to Southwest’s shareholders if it had known that it would not receive a good faith evaluation of its merger offer. To prevail on this claim, Southern Union must prove the tender offer to Southwest’s shareholders would have succeeded. In addition, Southern Union must establish damages from the inability to make a tender offer. In California, damages must be proven with “reasonable certainty” in both contract and tort actions. See Vestar Dev. II, LLC v. General Dynamics Corp., 249 F.3d 958, 961 (9th Cir.2001) (contract action); Mann v. Jackson, 141 Cal.App.2d 6, 296 P.2d 120, 123 (1956) (“It is well established that damages may be awarded for loss of profits where such profits can be shown with a reasonable degree of certainty, whether the action be for tort or for breach of contract.”). Thus, Southern Union must prove its damages, including any “lost profit” damages, with reasonable certainty. a. lost profit damages from Southern Union’s inability to make a tender offer to Southwest shareholders Southern Union argues that its tender offer would have been accepted by the Southwest shareholders because Southern Union’s per-share price was higher than ONEOK’s. Maffie and Southwest dispute that Southern Union can show that it was “reasonably certain” to succeed on a tender offer to Southwest’s shareholders. In particular, Southwest contends that among the numerous obstacles to a successful Southern Union tender offer were the substantial “defensive mechanisms” that the Southwest Board would have deployed to defeat a “hostile” Southern Union takeover. As discussed above, the question of whether Southern Union would have made a tender offer is genuinely disputable, but assuming it would have made one, Southern Union must also show that Southwest’s shareholders were reasonably certain to have accepted the offer. Toward that end, Southern Union argues that the higher dollar value of its offer establishes that it was reasonably assured of acceptance. Southwest, however, contends that the defensive mechanisms available to the Southwest Board created insurmountable obstacles to a successful Southern Union takeover. At the August 24, 2001 hearing, the parties argued their positions at length. (8/24/01 Hr’g Tr. at 11-35). Southern Union contends that once Southwest entered into the merger agreement with ONEOK, Southwest was effectively on the “auction block.” See Revlon, Inc. v. MacAndrews & Forbes Holdings, Inc., 506 A.2d 173, 182 (Del.1986). As a result, the Southwest Board could not have availed itself of “poison pills” to defeat a Southern Union tender offer, but would have been duty-bound to obtain the best value for Southwest’s shareholders. See id. (“The duty of the board had thus changed from the preservation of Revlon as a corporate entity to the maximization of the company’s value at a sale for the stockholders’ benefit.... The whole question of defensive measures [thus] became moot.”). Southern Union insists that in the absence of the defensive mechanisms, it was reasonably assured of succeeding on a tender offer to Southwest’s shareholders. Southwest has emphasized the number and strength of defensive mechanisms at the Southwest Board’s disposal, citing testimony from Southern Union’s own expert to establish that Southwest’s defensive mechanisms were especially potent. (8/24/01 Hr’g Tr. at 17-19). Southwest also argued that because the Revlon duties that Southern Union attempts to rely on are duties that the Southwest Board owes to its shareholders — not to outside bidders — the existence of such duties would have had no bearing on a Southern Union takeover attempt. (Id. at 35). The law establishes that the Merger Agreement between Southwest and ONEOK triggered the Southwest Board’s Revlon duties to its shareholders. Thus, the Southwest Board had a duty to obtain the best value for its shareholders and could not have invoked the various defensive mechanisms to the extent that these were inconsistent with its Revlon duties. See Paramount Communications, Inc. v. QVC Network, Inc., 637 A.2d 34, 48 (Del.1994). Under these circumstances, Southwest cannot as a matter of law rely on the existence of its defensive mechanisms as obstacles to a successful Southern Union tender offer. Even without the defensive mechanisms, however, Southern Union has not presented sufficient evidence to establish that it would have been reasonably certain to succeed on and profit from a tender offer to Southwest’s shareholders. See Vestar, 249 F.3d at 961; Mann, 296 P.2d at 123. Indeed, Southern Union offers no evidence regarding the specific terms of such a tender offer. Consequently, the Court cannot speculate whether the tender offer would have been accepted or whether, and to what extent, it would have been profitable. See Computer Sciences, Corp. v. Computer Assocs., Int'l, Inc., Nos. CV 98-1374-WMB-SHX, CV 98-1440-WMB-PHX, 1999 WL 675446, at *24 (C.D.Cal. Aug.12, 1999) (“CA’s tender offer was nowhere near the verge of closing either at the time of [Defendants’] alleged interference or upon the tender offer’s expiration, and whether CA’s tender offer would have closed absent the alleged interference is anybody’s guess.”). Southern Union cannot recover speculative lost profit damages for its inability to make a tender offer to the Southwest shareholders. b. reliance damages Although Maffie and Southwest are correct that Southern Union has not met its burden to preclude summary judgment with respect to lost profit damages from its inability to make a tender offer, it is incorrect that Southern Union cannot prove any damages on its fraudulent inducement claim. Under California law, a defrauded party is entitled to the actual damages resulting from its reliance on the defendant’s fraudulent promise. Indeed, Southern Union can seek all of its “out-of-pocket” or “reliance” damages — that is, “time spent, expenses incurred, opportunities foregone, or perhaps harm to its reputation.” Vestar, 249 F.3d at 962 (emphasis added). Although Southern Union has presented insufficient evidence to establish lost profit damages from its inability to make a tender offer (“its opportunities foregone”) with reasonable certainty, Southern Union may seek out-of-pocket reliance damages (time spent and expenses incurred) to the extent that it can establish such damages with reasonable certainty. Thus, Southern Union has withstood summary judgment on its fraudulent inducement claims with respect to its actual out-of-pocket reliance damages. c. benefit-of-the-bargain damages: lost profit damages from Southern Union’s failed merger with Southwest At the August 24, 2001 hearing, Southern Union argued two ways to prove damages on the fraudulent inducement claim under California law. (8/24/01 Hr’g Tr. at 28-30). First, proof can be made by showing that, absent Southwest’s alleged fraudulent inducement, Southern Union would not have entered into the Standstill Agreement, and a Southern Union tender offer to Southwest’s shareholders would have occurred, succeeded, and been profitable. (Id.). Such lost profit damages from Southern Union’s inability to make a tender offer are typical tort damages that would make Southern Union whole by putting it in the position it would have been in absent Southwest’s alleged fraudulent inducement. Second, relying on Alliance Mortgage Co. v. Rothwell, 10 Cal.4th 1226, 44 Cal.Rptr.2d 352, 900 P.2d 601 (1995) and Cal. Civ.Code § 3333 (damages for torts in general) and § 1709 (damages for deceit), Southern Union claims that “benefit of the bargain damages are also available under fraud.” (Id. at 29). Under this damages theory, Southern Union could prove its damages by showing that it would have merged with Southwest and profited from the merger if, as allegedly promised, Southwest had conducted a good faith evaluation of Southern Union’s merger offer. This theory seems inconsistent with a fraudulent inducement claim, however, because justifiable reliance is an essential element of the claim; such reliance exists when, absent the misrepresentation, the allegedly defrauded party would not have entered into the bargain. See, e.g., Engalla v. Permanente Med. Group, Inc., 15 Cal.4th 951, 64 Cal.Rptr.2d 843, 859, 938 P.2d 903 (1997). Here, Kelley testified that if Southern Union had known that Southwest would not evaluate Southern Union’s offer in good faith, Southern Union would not have entered into the Standstill Agreement. (Kelley Aff. ¶ 5). Southern Union acknowledges that “it may seem slightly inconsistent that fraud nullifies a contract and then provides you with benefit of the bargain damages,” but argues that “we live with that slight inconsistency because [we are] trying to punish the fraud-feasor and [we are] trying to make the victim of the fraud whole.” (8/24/01 Hr’g Tr. at 29) (emphasis added). Damages that .make Southern Union whole, however, are technically tort damages, not benefit-of-the-bargain damages. In its Response, Southwest argues that Southern Union misstates California law. (Resp. at 5). Relying on two California Supreme Court cases and two California Court of Appeal cases from the Fifth and Fourth Districts, Southwest argues that benefit-of-the-bargain damages are available “only when the fraud is committed by a fiduciary.” (Id. at 7). Southwest further argues that because it was not Southern Union’s fiduciary, Southern Union’s “fraud damages are restricted to any out-[of]-pocket losses it suffered in reliance on Southwest’s alleged fraud.” (Id. at 5). In its Reply, Southern Union contends that it “is only under [Cal. Civ.Code § 3343] — which applies to fraud cases involving property transactions — that a party must demonstrate a 'fiduciary duty* in order to recover ‘benefit-of-the-bargain’ damages.” (Reply at 5). Relying on Alliance Mortgage and two California Court of Appeal cases from the First District, Southern Union claims that it is entitled to benefit-of-the-bargain damages under Civil Code §§ 1709 and 3333. (Id. at 3-4). It is not surprising that the parties reach different conclusions regarding the measure of damages available to Southern Union because “[p]art of the difficulty in analysis of [California] law in this type of case arises out of the veritable gallimaufry of confusing rules gleaned from different types of actions.” Overgaard v. Johnson, 68 Cal.App.3d 821, 825, 137 Cal.Rptr. 412 (1977) (emphasis added). Some of the cases are based on contract, others on fraud, and still others on unjust enrichment. Id. In addition, courts and litigants often consider the out-of-pocket and the benefit-of-the-bargain rules as “the sole antagonists on the battlefield of damages when at times neither is truly applicable.” Id. The Court finds, however, that Southern Union may not recover benefit-of-the-bargain damages on its fraudulent inducement claim under the majority view of California courts. i. Cal. Civ.Code §§ 3333 and 1709 Cal. Civ.Code §§ 3333 and 1709, enacted in 1872, set forth the damages available for torts in general: “For the breach of an obligation not arising from contract, the measure of damages ... is the amount which will compensate for all the detriment proximately caused thereby, whether it could have been anticipated or not.” Cal. Civ.Code § 3333; and for deceit: “One who willfully deceives another with intent to induce him to alter his position to his injury or risk, is hable for any damage that he thereby suffers.” Cal. Civ.Code § 1709. As discussed above, Southern Union contends that Southwest’s fraudulent inducement allows recovery, pursuant to Civil Code §§ 3333 and 17Ó9, of benefit-of-the-bargain damages, i.e., the difference between the actual value of what Southern Union received and what it expected to receive (a good faith evaluation of its merger proposal). See Overgaard, 68 Cal.App.3d at 825, 137 Cal.Rptr. 412. Southwest contends, however, that Southern Union is limited to actual out-of-pocket damages, i.e., the difference between the actual value Southern Union received and the actual value it conveyed (the right to pursue a tender offer). See id. ii. California Supreme Court cases Nearly fifty years ago, the California Supreme Court rejected the theory of recovery of benefit-of-the bargain damages under Civil Code §§ 1709 and 3333. Gagne v. Bertran, 43 Cal.2d 481, 275 P.2d 15, 22 (1954). In Gagne, the plaintiffs purchased property in rebanee on the defendant’s misrepresentation. Id. The California Supreme Court held that the plaintiffs’ damages should not be measured as though the defendant’s misrepresentation had been true (i.e., benefít-of-the-bargain damages), but that “damages, whether for deceit or negligence, must be measured by the actual losses suffered because of the misrepresentation.” Gagne v. Bertran, 43 Cal.2d 481, 275 P.2d 15, 22 (1954) (emphasis added); see Gray v. Don Miller & Assocs., 35 Cal.3d 498, 198 Cal.Rptr. 551, 674 P.2d 253, 256 (1984) (quoting Gagne and holding that plaintiff “was entitled only to the ‘actual losses suffered because of the misrepresentation’ ”). Applying this rule, the court found that if the property the plaintiffs had purchased was worth less than they paid for it, then the defendant was liable for the difference plus any proven consequential damages resulting from the purchase. If the property was worth what the plaintiffs had paid for it, however, the Court found that the “plaintiffs were not damaged ... for even though they would not have bought the [property] had they known the truth, they nevertheless received property as valuable as that with which they parted.” Gagne, 275 P.2d at 22. Five years after Gagne, the California Supreme Court seemed to recognize in dictum a “fiduciary duty” exception to the “actual damages suffered” limitation for fraud: “In the absence of a fiduciary relationship, recovery in a tort action for fraud is limited to the actual damages suffered by the plaintiff.” Ward v. Taggart, 51 Cal.2d 736, 336 P.2d 534, 537 (1959) (emphasis added). iii. First District Court of Appeal cases After Ward, the First District Court of Appeal in California applied the “fiduciary duty” exception and stated that where the “defrauding party stands in a fiduciary relationship to the victim of fraud, the damages must be measured pursuant to the broad provisions of sections 3333 and 1709 regulating compensation for torts in general.” Pepitone v. Russo, 64 Cal.App.3d 685, 134 Cal.Rptr. 709, 711 (1976) (citations omitted) (emphasis added); see Salahutdin v. Valley of Cal., 24 Cal.App.4th 555, 29 Cal.Rptr.2d 463, 469 (1994); see also Walsh v. Hooker & Fay, 212 Cal.App.2d 450, 459, 28 Cal.Rptr. 16 (1963). The First District stated that the measure of damages under the “broad provisions” of Civil Code §§ 3333 and 1709 “tends to give the injured party the benefit of his bargain and insofar as possible to place him in the same position he would have been had the promisor performed the contract.” Pepitone, 134 Cal.Rptr. at 711; see Salahutdin, 29 Cal.Rptr.2d at 470. iv. Fifth and Fourth District Court of Appeal cases In contrast to the First Distinct Court of Appeal, the Fifth District held in Overgaard v. Johnson, 68 Cal.App.3d 821, 823-24, 137 Cal.Rptr. 412 (1977), that benefit-of-the-bargain damages are not available to tort plaintiffs under Civil Code § 3333: [S]ection 3333 does not set forth any benefit of the bargain rule. That section simply sets out the measure of damages long recognized in torts, namely, to compensate a plaintiff for a loss sustained rather than give him the benefit of any contract bargain (see Prosser, Law of Torts (4th ed.1971) § 110). The concept behind Civil Code section 3333 is to make the successful plaintiff whole. After setting forth benefit-of-the-bargain damages available for breach of contract causes of action contained in Civil Code § 3300, the court stated: “[Cjontrary to a number of cases, ... the measure of damages in Civil Code section 3333 and Civil Code section 3300 is not the same (although in a given factual situation the result may be the same).” Overgaard, 68 Cal.App.3d at 824, 137 Cal.Rptr. 412. The court also explained that the First District cases that have been interpreted to allow benefit-of-the-bargain damages under Civil Code § 3333 have been misinterpreted. Id. at 824-26, 137 Cal.Rptr. 412. Having distinguished the First District cases, the court reversed the trial court’s benefit-of-the-bargain damages award. Id. at 828, 137 Cal.Rptr. 412. More recently, the Fifth District, citing Civil Code § 3333 and relying on Overgaard, stated in Christiansen v. Roddy, 186 Cal.App.3d 780, 231 Cal.Rptr. 72, 78 (1986): The proper measure of tort damages is the “out-of-pocket” measure; successful tort plaintiffs are not entitled to have damages computed on a contract, or “benefit-of-the-bargain,” theory. “A plaintiff in a tort action is not, in being awarded damages, to be placed in a better position than he would have been had the wrong not been done.” (Citations omitted). As recently as July 2001, the Fifth Circuit reversed a trial court for instructing the jury to determine benefit-of-the-bargain damages and held that, even in cases involving fiduciary fraud, “the measure of damages ... is out of pocket damages, not the benefit of the bargain computation normally applicable to contract causes of action.” Hensley v. McSweeney, 90 Cal.App.4th 1081, 109 Cal.Rptr.2d 489, 491-92 (2001) (relying on Christiansen and Overgaard) (emphasis added). Consistent with the Fifth District Court of Appeal, the Fourth District has held that a defrauded party is “limited to recovering his ‘out-of-pocket’ loss, i.e., the difference between the value he parted with and the value he received.” Kenly v. Ukegawa, 16 Cal.App.4th 49, 19 Cal.Rptr.2d 771, 773 (1993) (citing Christiansen ). v. Southern Union is not entitled to benefit-of-the-bargain damages on the fraudulent inducement claim Here, Southern Union does not contend that Southwest owed Southern Union a fiduciary duty, and Southern Union does not cite a single case in which benefit-of-the-bargain damages were recoverable for fraud absent a breach of fiduciary duties. Thus, the Court finds that “[Southern Union’s] position is not supported by the main line of [California] case authority.” Eckert Cold Storage, Inc. v. Behl, 943 F.Supp. 1230, 1234 (E.D.Cal.1996). “Under this precedent, [Civil Code § ]3333 does not provide benefit of the bargain recovery[.]” Id. (citing Alliance Mortgage, 44 Cal.Rptr.2d at 367, 900 P.2d 601; Gray, 198 Cal.Rptr. 551, 674 P.2d at 255; Kenly, 19 Cal.Rptr.2d at 774; Christiansen, 231 Cal.Rptr. at 78). “Rather, [Southern Union’s] recovery [for fraudulent inducement] must be limited to the losses proximately caused by [Southwest’s] alleged misrepresentations: the damages awarded should place [Southern Union] in the position [it] would have occupied had the misrepresentations not occurred.” Id. (citing Gray, 198 Cal.Rptr. 551, 674 P.2d at 255; Kenly, 19 Cal.Rptr.2d at 774); see Auble v. Pacific Gas & Elec. Co., 55 F.Supp.2d 1019, 1022-23 (N.D.Cal.1999) (“In California, in the absence of a fiduciary relationship, recovery for the tort of fraud is limited to the actual, out-of-pocket damages suffered by the plaintiff.”) (citations omitted). d. punitive damages Cal. Civ.Code § 3294 provides that a party must prove fraud by clear and convincing evidence to obtain punitive damages: “In an action for the breach of an obligation not arising from contract, where it is proven by clear and convincing evidence that the defendant has been guilty of oppression, fraud, or malice, the plaintiff, in addition to the actual damages, may recover damages for the sake of example and by way of punishing the defendant,” Cal. Civ.Code § 3294(a). Southwest and Maffie assert that Southern Union cannot prove fraud by clear and convincing evidence and, thus, cannot obtain punitive damages. In its Response to Maffíe’s Motion for Summary Judgment, Southern Union asserts that the clear and convincing evidence standard has no place in the analysis of a summary judgment motion. Rather, the issue is whether there are sufficient facts for the jury to make a finding on punitive damages. See, e.g., Nat’l Consumer Co-op., Bank v. Madden, 737 F.Supp. 1108, 1115 (D.Haw.1990). Although Southern Union is mistaken regarding the evidentiary standard on a motion for summary judgment, see Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252-56, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986), the Court finds that because there are genuine issues of material fact regarding whether Southern Union was fraudulently induced to enter into the Standstill Agreement, there is a genuine issue of material fact on the issue of punitive damages. See Nat’l Consumer Co-op, 737 F.Supp. at 1115. III. SOUTHWEST’S MOTIONS FOR SUMMARY JUDGMENT ON SOUTHERN UNION’S BREACH OF CONTRACT AND BREACH OF THE COVENANT OF GOOD FAITH AND FAIR DEALING CLAIMS In Count Four of Southern Union’s Second Amended Complaint in the First Arizona Action, Southern Union alleges that Southwest breached the Standstill Agreement because it failed to evaluate Southern Union’s merger offer in good faith. In Count Five, Southern Union alleges that Southwest breached the covenant of good faith and fair dealing with respect to the Standstill Agreement. Because Southern Union claims that Southwest breached the covenant of good faith and fair dealing in the same manner that it breached the Standstill Agreement, the analysis of these claims is identical. Pursuant to the Court’s June 21, 2001 Order, California law governs both claims. In its September 26, 2001 Order, the Court granted Southwest’s Motion for Summary Judgment on Southern Union’s Claims Based on the Alleged Duty to Evaluate and for Damages (Doc. # 1033) and its Motion for Summary Judgment Re: Southern Union’s Contract Claims (Doc. # 1035) to the extent that Southern Union is seeking lost profit damages for the failed merger with Southwest, but denied the motions to the extent that Southern Union is seeking out-of-pocket damages on Counts Four and Five. A. Enforceability of Agreements to Evaluate/Negotiate in Good Faith As an initial matter, Southwest points out that Southern Union’s contract claims arise out of an alleged agreement between Southwest and Southern Union “to evaluate or negotiate” in good faith. (Mot. at 3). According to Southwest, Vestar establishes that “such agreements are not enforceable under California law.” (Id.). Southern Union argues that such agreements are enforceable under California law and, in any case, Southwest’s conduct with respect to the Standstill Agreement establishes that it is enforceable. Southwest’s reliance on Vestar is unavailing. In Vestar, the Ninth Circuit noted that “agreements to negotiate may be unenforceable as a matter of law in California” as suggested by several California courts of appeal decisions “when taken out of context.” Vestar, 249 F.3d at 961 (emphasis added). The Vestar court also observed that “no California court has affirmatively held that agreements to negotiate are enforceable, even for reliance damages.” Id. (emphasis in original). However, all of the cases cited in Vestar involved attempts to enforce the underlying substantive contract, not the agreement to negotiate. Moreover, in Racine & Laramie, Ltd., Inc. v. California Department of Parks & Recreation, 11 Cal.App.4th 1026, 14 Cal.Rptr.2d 335, 340-41 (1992), cited in Vestar, the California Court of Appeal found that while parties do not generally have a duty to negotiate and may break off negotiations for any reason, the parties can “by letter of intent or otherwise, agree that they will bargain in good faith for the purpose of reaching an agreement.” Id. Thus, California law does recognize the enforceability of at least some agreements to negotiate. The Court has concluded that the Standstill Agreement, together with Maf-fie’s alleged statement, required Southwest to evaluate Southern Union’s merger offer in good faith. (6/21/01 Order at 27-28). California law allows for the enforcement of such agreements, especially where, as here, a party alleges that it relied on the agreement to its detriment. Accordingly, Southern Union can seek damages for the alleged breach of the Standstill Agreement, including the breach of the covenant of good faith and fair dealing. As part of its damages for Southwest’s alleged breach of contract, Southern Union seeks lost profits for the failed merger. According to Southern Union, it was “reasonably certain” to merge with Southwest if it had received a good faith evaluation of its merger offer. Southwest argues that Southern Union’s proposal did receive a good faith evaluation and was rejected for valid business reasons, and that the Standstill Agreement itself precludes Southern Union from recovering any damages for failure to merge. B. Good Faith Evaluation Whether Southern Union’s merger offer received a good faith evaluation from Southwest is a question of fact. Southwest argues that its Board’s February 21, 1999 determination that Southern Union’s offer was a “Superior Proposal” within the meaning of the Southwest-ONEOK Merger Agreement establishes that the Board fairly evaluated Southern Union’s offer. Southwest also contends that Southern Union’s subsequent offer similarly received thorough consideration over a three-month period, as reflected in Board meetings and ongoing negotiations with Southern Union. Southern Union argues that Southwest’s bad faith is evidenced by Southwest management’s placement of false and misleading information about Southern Union before the Southwest Board during its merger deliberations. Southern Union also notes that the February 21, 1999 “Superior Proposal” determination predates the Standstill Agreement, so the good faith evaluation of that proposal has no bearing on the subsequent treatment of Southwest’s later merger offer. In light of these conflicting factual accounts, the Court finds a genuine issue of material fact regarding whether Southern Union received a good faith evaluation of its merger offer. C. Damages for Breach of Contract Southwest argues that Southern Union cannot recover damages for the alleged breach of the Standstill Agreement because it expressly disclaims any obligation to merge, as well as any liability for the failure to merge. In particular, paragraph 10 of the Standstill Agreement provides: Each party hereto agrees that unless and until a definitive agreement with respect to the Proposal referred to in the first paragraph of the Agreement has been executed and delivered, neither it nor the other party hereto will be under any legal obligation of any kind whatsoever with respect to such a transaction by virtue of the Agreement or any written or oral expression with respect to such a transaction by any of its Representatives or by any Representatives thereof except, in the case of the Agreement, for the matters specifically agreed to herein. (Standstill Agreement ¶ 10) (emphasis added). Southern Union argues that despite the Standstill Agreement’s disclaimer regarding the failure to merge, it does not preclude damages for Southwest’s failure to evaluate in good faith. Southern Union contends that as a consequence of Southwest’s breach of its duty to evaluate Southern Union’s offer in good faith, Southern Union lost profits it otherwise would have realized from a successful merger with Southwest. Southern Union’s right to seek damages for Southwest’s alleged breach of its duty to evaluate Southern Union’s merger offer depends on the interpretation of paragraph 10 of the Standstill Agreement. In California, “[t]he fundamental goal of contractual interpretation is to give effect to the mutual intention of the parties.” Foster-Gardner, Inc. v. National Union Fire Ins. Co., 18 Cal.4th 857, 77 Cal.Rptr.2d 107, 114, 959 P.2d 265 (1998) (citation and quotations omitted); AIU Ins. Co. v. Superior Ct., 51 Cal.3d 807, 274 Cal.Rptr. 820, 831, 799 P.2d 1253 (1990); Yount v. Acuff Rose-Opryland, 103 F.3d 830, 835-36 (9th Cir.1996) (citing Cal. Civ. Code § 1636). The intent of the parties “is to be inferred, if possible, solely from the written provisions of the contract.” Foster-Gardner, Inc., 77 Cal.Rptr.2d at 114, 959 P.2d 265 (citation and quotations omitted); AIU Ins. Co., 274 Cal.Rptr. at 831, 799 P.2d 1253. Clear and explicit language in a contract shall govern, and the provisions are to be interpreted in an “ordinary and popular sense.” Foster-Gardner, Inc., 77 Cal.Rptr .2d at 114, 959 P.2d 265; AIU Ins. Co., 274 Cal.Rptr. at 831, 799 P.2d 1253. “A court will look beyond the terms of the writing where it appears that the parties intended to ascribe a ‘technical’ or ‘special’ meaning to the terms used.” Yount, 103 F.3d at 836. If the language in a contract is clear, construction of the contract “becomes a matter of law determinable in a summary judgment proceeding.” Los Angeles Equestrian Ctr., Inc. v. City of L.A., 17 Cal.App.4th 432, 21 Cal.Rptr.2d 313, 322 (1993); Centigram Argentina, S.A. v. Centigram Inc., 60 F.Supp.2d 1003, 1007 (N.D.Cal.1999) (unambiguous contract may be interpreted as a matter of law). Finally, “[a] contract must receive such an interpretation as will make it ... reasonable ... if it can be done without violating the intention of the parties.” Binder v. Aetna Life Ins. Co., 75 Cal.App.4th 832, 851-55, 89 Cal.Rptr.2d 540 (1999) (quoting Cal. Civ.Code § 1643 and citing Restatement (Second) of Contracts § 203). Under the terms of the Standstill Agreement, the parties were not obligated to merge and were not liable for failure to merge. See Crane Co. v. Coltec Indus., Inc., 171 F.3d 733, 736 (2d Cir.1999) (holding that similar contract language did not give rise to a duty to merge). Indeed, the disclaimer of liability in paragraph 10 expressly limits damages for “matters specifically agreed to” in the Standstill Agreement, including the duty to evaluate in good faith. To allow Southern Union to recover for damages resulting from the parties’ failure to merge, which the disclaimer explicitly denies, would render paragraph 10 of the Standstill Agreement a nullity. The Court will not adopt an interpretation that has this unreasonable result. See Binder, 75 Cal.App.4th at 852, 89 Cal.Rptr.2d 540. Southern Union is entitled to seek damages for Southwest’s alleged breach of its duty to evaluate Southern Union’s merger offer in good faith, but is limited to recovering its actual out-of-pocket reliance damages for the expenses it incurred in rendering performance under the Standstill Agreement. Even if Southern Union were not limited to its out-of-pocket damages by the terms of Standstill Agreement, it would not be able to recover lost profits for the failed merger. As discussed above, under California law, lost profit damages may be recovered for breach of contract only where the lost profits can be shown with reasonable certainty. See Vestar Dev. II, LLC v. General Dynamics Corp., 249 F.3d 958 (9th Cir.2001), and as discussed more fully below in the context of Southern Union’s tortious interference claims, Southern Union cannot establish with reasonable certainty the amount, if any, of its lost profit damages from the failed merger with Southwest. IV. MOTIONS FOR SUMMARY JUDGMENT ON SOUTHERN UNION’S TORTIOUS INTERFERENCE CLAIMS Southern Union has asserted two tor-tious interference claims. Count Seven of Southern Union’s Second Amended Complaint in the First Arizona Action alleges tortious interference with a business relationship against Irvin, Rose, ONEOK, Eugene Dubay, and John Gaberino. Count Eight alleges tortious interference with a contractual relationship against Irvin, Rose, Dubay, and Gaberino. The basis for Southern Union’s tortious interference claims is