Opinion
218-2021-CV-00238
05-15-2023
James Golden v. Contour Enterprises Intl., Inc.
*Issued Under Seal*
ORDER ON DEFENDANT'S MOTION FOR SUMMARY JUDGMENT
David A. Anderson, Associate Justice
Plaintiff James Golden filed suit on March 8, 2021, against Defendant Contour Enterprises Intl., Inc. alleging one count each of breach of contract, failure to pay wages, quantum meruit, and specific performance. Defendant now moves for summary judgment on Plaintiff's breach of contract, quantum meruit, and specific performance claims. (Def's. Mot. Summ. J. (Doc. 47.)) Plaintiff objects. (Pl's. Obj. Def. Mot. Summ. J. (Doc. 54.)) Defendant filed a further response to Plaintiff's objection. (Def's. Resp. (Doc. 64.)) Thereafter, Plaintiff filed a surreply. (Pl's Surreply (Doc. 68.) The Court initially granted Defendant's Motion on January 19, 2023 because Plaintiff failed to timely object. (Doc. 45.) The Court then ruled on March 9, 2023 that it would allow Plaintiff to file a late objection to Defendant's motions. (Doc. 58.) For the reasons stated below, the Court GRANTS Defendant's motion for summary judgment in part and DENIES it in part.
The Court dismissed Plaintiff's wage claim on July 30, 2021.
The Court notes that specific performance is a remedy and not a claim, but will refer to it as a claim throughout the Order since both parties treat it as one in their pleadings.
Fates
The following facts are undisputed unless otherwise noted and are drawn from the parties' consolidated statement of material facts and exhibits. (Doc. 62.) Steve Wang founded Defendant in 1995 to design, sell, and manufacture ergonomic computer mice. (Id. ¶ 1.) Defendant sold and manufactured its products worldwide and generated sales of over $20 million per year by 2020. (Id. ¶¶ 3-4.) Plaintiff started working for Defendant in 1996 as its Vice President of Sales and Marketing. (Id. ¶¶ 11-12.) Plaintiff's main job responsibilities remained consistent over the years as he provided oversight of Defendant's non-European sales and its marketing function. (Id. ¶¶ 12-13.)
In late 2019, Defendant began conversations with German computer company REDACTED about REDACTED potential acquisition of Defendant. (Id. ¶ 5.) Around that time, Wang told Plaintiff that REDACTED may acquire Defendant and that it had been valued at approximately (id. ¶ 14.) In October 2019, Plaintiff and
Wang further discussed the potential sale of Defendant REDACTED (Id. ¶ 15.) In particular, Wang informed Plaintiff that he wanted "to take care of the people that got me here, and this deal from REDACTED may go through, and if it goes through, you know, you would get X." (Doc. 50, Ex. B at 24:20-24:22.) Wang further clarified for Plaintiff that "X" referred to REDACTED or roughly 2 percent of the company. (Doc. 62 ¶ 16.) Wang suggested that they should draft a contract to memorialize the deal but such a contract was never created. (Id. ¶¶ 17-18.) In November 2019, Plaintiff followed up with Wang about his promise, and Wang told him, "there's a lot of boxes built up in tech support and everything is all messed up here and, you know, I don't want to do it." (Doc. 50, Ex. B at 28:23-29:1.) The parties dispute whether Wang formally revoked his promise to Plaintiff. Wang and Kenneth Schach, Defendant's employee, agreed that Schach would purchase warrants prior to the REDACTED acquisition. (Doc. 62 ¶ 56.) The REDACTED acquisition ultimately fell through by mid-2020. (Id. ¶ 6.) Defendant honored Schach's agreement even though the REDACTED deal did not happen. (Id. ¶ 57.)
In October 2020, REDACTED a Nordic private equity firm, approached Wang about potentially acquiring Defendant. (Id. ¶ 7.) In November 2020, Plaintiff conversed with Wang about receiving payment if Defendant was ultimately sold. (Id. ¶ 22.) During the conversation, Wang told Plaintiff, "I'll take care of you; don't worry about it. . . but wait for the deal to be done." (Doc. 50, Ex. B at 29:8-29:12.) Plaintiff testified at his deposition that Wang would not commit to a number but instead told him, "you'll be happy, don't worry about it. Just help me get the company sold, and then I'll take care of you after the deal's done." (Id. at 35:16-35:18.) Also during this conversation, Keyur Patel walked into the office and Wang told Patel, "we're just having a one-on-one conversation. He's been with me 25 years and I promised him two percent of the company." (Doc. 54, Ex. B at 33:22-34:5.) Plaintiff had no subsequent discussions with Wang about potential compensation regarding the REDACTED acquisition. (Doc. 62 ¶ 26.) REDACTED completed the acquisition of Defendant in spring 2021. (Id. ¶ 8.) REDACTED paid REDACTED acquire Defendant and Wang retained a 20% equity share in Defendant. (Id. ¶ 9.) Wang profited REDACTED from the sale to REDACTED (Id. ¶ 10.) Plaintiff never received any compensation after Defendant's acquisition and this lawsuit followed.
It is not clear from the parties' pleadings exactly who Patel is.
Analysis
To prevail on a motion for summary judgment, the moving party must establish that there is "no genuine issue as to any material fact" and that it is "entitled to judgment as a matter of law." Sabato v. Fed. Nat'l Mortg. Ass'n, 172 N.H. 128, 131 (2019). The Court decides summary judgment motions by considering "the affidavits and other evidence, and all inferences properly drawn from them, in the light most favorable to the non-moving party." New London Hosp. Ass'n v. Town of Newport, 174 N.H. 68, 71 (2021). In order to defeat summary judgment, the non-moving party "must put forth contradictory evidence under oath sufficient to indicate that a genuine issue of material fact exists." Brown v. Concord Grp. Ins. Co., 163 N.H. 522, 527 (2012). "An issue of fact is 'material' for purposes of summary judgment if it affects the outcome of the litigation under the applicable substantive law." Crowe v. Appalachian Stitching Co., LLC, 174 N.H. 679, 682 (2021). "If there is no genuine issue of material fact, and if the moving party is entitled to judgment as a matter of law, the grant of summary judgment is proper." Cincinnati Specialty Underwriters Ins. Co. v. Best Way Homes, 175 N.H. 142, 146 (2022); see also RSA491:8-a, III.
I. Breach of Contract
There are two potential contracts at issue here, one related to the REDACTED acquisition and one related to the REDACTED acquisition. As to the REDACTED acquisition, Defendant argues that it is entitled to summary judgment as a matter of law on because Wang's promise to give Plaintiff REDACTED or two percent of the company was expressly conditioned on REDACTED successful acquisition of Defendant. (Doc.46 at 4-7.) Plaintiff argues that the discussion around the REDACTED acquisition showed that Wang wanted to provide Plaintiff compensation and thus creates a dispute of material fact. (Doc. 54 at 5-8.) As to the REDACTED transaction, Defendant contends that any promises Wang made regarding potential compensation were too indefinite to be enforceable. (Doc. 46 at 4-7.) Plaintiff argues there is a dispute of material fact over whether an enforceable agreement between Plaintiff and Wang exists because of the comments Wang made to Patel in Plaintiff's presence and Defendant's history of honoring similar deals conditioned on REDACTED successfully acquiring Defendant. (Doc. 54 at 5-8.)
"Under New Hampshire law, a breach of contract occurs when there is a failure without legal excuse to perform any promise which forms the whole or part of a contract." Teatotaller, LLC v. Facebook, Inc., 173 N.H. 442, 447 (2020) (quotation omitted). The party seeking to prove a breach of contract must do so by a preponderance of the evidence. See Audette v. Cummings, 165 N.H. 763, 770 (2013). "Offer, acceptance, and consideration are essential to contract formation." Syncom Indus., Inc. v. Wood, 155 N.H. 73, 82 (2007). "The terms of a contract must be definite in order to be enforceable." Id. "When there is a disputed question of fact as to the existence and terms of a contract, it is to be determined by the trier of fact." Id.
First, the Court finds that Wang's promise to provide Plaintiff two percent of the company or REDACTED the REDACTED acquisition went through is not enforceable because the REDACTED acquisition was a condition precedent that never occurred. "Where the occurrence of a condition is required by the agreement of the parties, rather than as a matter of law, a rule of strict compliance traditionally applies." Renovest Co. v. Hodges Dev. Corp., 135 N.H. 72, 78 (1991). Condition precedents are disfavored in the law but the Courts will honor them if they are included in the plain language of a parties' agreement. Greenwald v. Keating, 172 N.H. 292, 298 (2019). "As a rule of thumb, provisions which commence with words such as 'if,' 'on condition that,' 'subject to' and 'provided' create conditions precedent." Id.
Here, the parties do not dispute that Wang told Plaintiff that he would receive REDACTED or two percent of the company only if the REDACTED acquisition went through. (Doc. 62 ¶ 16.) Thus, it is clear to the Court that the plain language of the parties' agreement, especially Wang's use of the word "if, established that REDACTED acquisition of Defendant was a condition precedent. Greenwald, 172 N.H. at 298. The parties do not dispute that REDACTED never acquired Defendant. (Doc. 62 ¶ 6.) The parties dispute whether Wang revoked his offer but the Court need not reach the issue because it finds that the REDACTED promise is otherwise unenforceable. See Crowe, 174 N.H. At 682. Accordingly, because the condition precedent never occurred, Wang was not under a legal duty to give Plaintiff REDACTED See Renovest, 135 N.H. at 78-79; see also Catlaw v. Rodrigue, no. 2021-0226, 2021 WL 6333054, at *2 (N.H. Dec. 3, 2021) ("Upon the failure of the condition precedent, the defendant had no duty to perform, and the agreement was unenforceable as a matter of law.").
The Court, however, reaches a different conclusion as to Wang's alleged promise that he would provide Plaintiff compensation related to the REDACTED transaction. The parties dispute whether Wang's alleged promise was definitive enough to be enforceable. "An offer must be so definite as to its material terms or require such definite terms in the acceptance that the promises and performances to be rendered by each party are reasonably certain." Phillips v. Verax Corp., 138 N.H. 240, 245 (1994). "While it is true that contracts, both oral and written must be definite in order to be enforceable, the standard of definiteness is one of reasonable certainty and not 'pristine preciseness.'" Sawin v. Carr, 114 N.H. 462, 465 (1974). The parties agree that while Patel was in the office with Wang and Plaintiff, Wang told Patel that he promised two percent of Defendant to Plaintiff. (Doc. 62 ¶ 51.) Defendant argues that Wang was merely referring historically to the REDACTED Plaintiff contends that Wang was prospectively promising Plaintiff two percent of the company in connection with the REDACTED transaction.
The Court agrees with Defendant that Wang telling Plaintiff that he would "take care of him" is too indefinite to form an enforceable agreement. See Dombrowski v. Somers, 362 N.E.2d 257, 257 (N.Y. 1977) (finding that the phrase "take care of' was too vague to create an enforceable promise). However, the parties do not agree on whether Wang's comment to Patell that he promised Plaintiff two percent of Defendant was made historically or prospectively. Moreover, it is not clear to the Court the context in which Wang made that comment, as Wang did not explicitly say he was referring to the REDACTED If Wang was talking prospectively about the REDACTED acquisition, promising two percent of the company would be sufficiently definite to form an enforceable promise. See Phillips, 138 N.H. at 245 (holding that a promise for a specific number of shares a plaintiff would receive was definitive enough to be enforceable). Since questions relating to contract formation are questions of fact best left to the fact finder, Syncom, 155 N.H. at 82, the Court finds that a dispute of material fact exists sufficient to defeat Defendant's motion for summary judgment. RSA 491:8-a, III.
Accordingly, the Court DENIES Defendant's motion for summary judgment on Plaintiff's breach of contract claim.
II. Quantum Meruit
Defendant argues that it is entitled to summary judgment as a matter of law on Plaintiff's quantum meruit claim because Plaintiff did not take on any responsibilities because of Wang's promise and Plaintiff did not act in reliance upon the promise. (Doc. 46 at 7.) Plaintiff does not argue otherwise. The claim of quantum meruit centers on the value of services that the plaintiff provided a defendant. Gen. Insulation Co. v. Eckman Constr., 159 N.H. 601, 612 (2010). "A valid claim in quantum meruit requires [that]: . . . (1) services were rendered to the defendant by the plaintiff; (2) with the knowledge and consent of the defendant; and (3) under circumstances that make it reasonable for the plaintiff to expect payment." Id.
Here, Plaintiff has provided no evidence that he agreed to render additional services beyond his typical job responsibilities in exchange for two percent of Defendant. Nor is there any evidence that Plaintiff did in fact render services to Defendant for which Defendant failed to compensate Plaintiff. Id. at 612. Further, Plaintiff does not argue that Defendant failed to pay him for his regular job duties that he rendered. The notion that community standards require payment when goods or services are rendered is the bedrock of quantum meruit. See Burgess v. Queen, 124 N.H. 155, 162 (1983). Therefore, because Plaintiff fails to articulate what services he rendered in exchange for Wang's promise of two percent of the company, Defendant is entitled to summary judgment as a matter of law. Id.; RSA 491:8-a, III.
Accordingly, the Court GRANTS Defendant's motion for summary judgment as to Plaintiff's quantum meruit claim.
III. Specific Performance
Defendant lastly argues that Plaintiff is not entitled to specific performance because no agreement existed for which specific performance could be granted. (Doc. 46 at 8.) Plaintiff does not otherwise argue. As discussed above, the Court finds that there is a genuine dispute of material fact over whether an agreement existed between Plaintiff and Defendant. Nevertheless, the Court agrees that specific performance would not be an appropriate remedy in this case. "The propriety of affording equitable relief rests in the sound discretion of the trial court to be exercised according to the circumstances and exigencies of the case." Livingston v. 18 Mile Point Drive, Ltd., 158 N.H. 619, 626 (2009). "Specific performance will be denied if the plaintiff has an adequate remedy at law." Tuttle v. Palmer, 117 N.H. 477, 478 (1977). "The adequacy of damages must be determined after a careful weighing of all the peculiar circumstances of the case." Id.
Here, two percent of Defendant is readily calculable, as Plaintiff knew that Defendant was valuated REDACTED meaning Plaintiff would be entitled to REDACTED dollars if he were to prevail on his breach of contract claim. Further, the Court notes that since REDACTED successfully acquired Defendant it is unclear exactly in what entity Plaintiff would be entitled to a two percent stake. Plaintiff has failed in his objection to Defendant's motion to point to any evidence showing that REDACTED dollars would not be an adequate remedy at law or that the ownership of two percent of Defendant is unique. Therefore, the Court finds there are no circumstances in this case warranting specific performance and Defendant is entitled to judgment as a matter of law. Id:, RSA 491:8-a, III.
Accordingly, the Court GRANTS Defendant's motion for summary judgment as to Plaintiff's specific performance claim.
SO ORDERED.