Sands v. Ridefilm Corp.

• Decision Date: 07 March 2000
• Docket Number: No. 99-2006,99-2006
• Citation: 212 F.3d 657
• Parties: (1st Cir. 2000) HOWARD SANDS, PLAINTIFF, APPELLANT, V. RIDEFILM CORPORATION AND BERNARD PLISHTIN, DEFENDANTS, APPELLEES. Heard
• Court: U.S. Court of Appeals — First Circuit

Page 657

212 F.3d 657 (1st Cir. 2000)

HOWARD SANDS, PLAINTIFF, APPELLANT,

V.

RIDEFILM CORPORATION AND BERNARD PLISHTIN, DEFENDANTS, APPELLEES.

No. 99-2006

United States Court of Appeals For the First Circuit

Heard March 7, 2000

Decided May 18, 2000

[Copyrighted Material Omitted] Edward C. Cooley, with whom Giarrusso, Norton, Cooley & McGlone, P.C. was on brief for appellant.

Scott C. Moriearty, with whom Daniel J. Jackson and Bingham Dana Llp were on the brief for appellees.

Before Boudin, Circuit Judge, Bownes, Senior Circuit Judge, and Lynch, Circuit Judge.

Bownes, Senior Circuit Judge.

Plaintiff-Appellant Howard Sands brought suit for damages in the United States District Court for the District of Massachusetts against Defendants-Appellees Ridefilm Corporation and its vice-president, Bernard Plishtin. The plaintiff asserted diversity jurisdiction under 28 U.S.C. § 1332(a) (1994), and alleged breach of contract (Count I), breach of the implied covenant of good faith and fair dealing (Count II), fraud (Count III), negligent misrepresentation (Count IV) and promissory estoppel (Count V). The defendants moved for summary judgment on all counts. The magistrate judge (Neiman, M.J.) recommended that summary judgment be allowed as to Counts I, II and III, but denied as to Counts IV and V. The district court (Ponsor, J.) granted defendants' motion for summary judgment on all counts, disposing of the case in its entirety. This appeal followed.

I.

In April 1993, Plishtin, vice president of Ridefilm, and an employee of its parent company, Trumbull Company, Inc., placed a job listing at the Harvard University Graduate School of Business Administration, seeking applications for "general management positions." It explicitly stated that "[t]he Company is now in the process of finalizing its initial financing and expects to be in a position . . . to hire a full-time manager . . . ." Sands submitted his application. After a series of interviews with Plishtin and various other employees, Plishtin informed Sands that he had been chosen for the position. Shortly thereafter, the defendants flew Sands to Las Vegas to meet company personnel and acquaint him with one of the defendants' projects.

The defendants also invited Sands, his parents and his fianceee to visit the company's headquarters in the Berkshire Mountains in Massachusetts on June 10 and 11, 1993. During this visit, Sands and Plishtin met to discuss the specifications of Sands's employment. Sands alleges that they reached agreement with respect to salary, bonus, moving expenses and health and life insurance. The defendants contend, however, and the record reflects, that at that point they did not reach agreement on all of those terms. In fact, at his deposition, Sands indicated that the parties had not reached complete agreement on all of these terms. Specifically, Sands stated in his deposition: "We were very close on base compensation, though we hadn't finalized that. . . . We agreed that there would be an equity position in the one-to-two- percent range of the company, though the details of that would have to be worked out later." The parties discussed an equity share for Sands, but agreed that they would make a final determination of the exact amount of equity when the company secured equity financing. The plaintiff alleges that Plishtin assured Sands that the equity deal was "imminent and expected to close within weeks."

On June 18, 1993, Plishtin wrote a memorandum to Doug Trumbull (president of Trumbull/Ridefilm), indicating that he would like to draft a letter to Sands "in which we can outline the basis of his deal . . . [and] the letter will be constructed such that it is clear that we will only be able to commit to a starting date and construct a formal employment agreement upon confirmation of a source of funding." The memorandum concluded: "Howard understands that we are no longer interviewing for this position and I have told him that he is our choice for the job. Needless to say, we will look forward to making this official as soon as possible."

On June 24, 1993, Plishtin sent Sands a letter memorializing their previous conversations. The letter stated that Sands's starting date would be "approximately July 15, but no later than July 29. . . . [and a]t the time that we confirm this starting date an interim employment contract will be drafted," that will contain information concerning salary, moving expenses, health benefits, and an equity and compensation plan. The letter concluded:

You understand that we are no longer interviewing for this position and you are our choice for the job. Needless to say, we will look forward to making this official as soon as possible. We will be able to commit to a starting date and construct a formal employment agreement upon confirmation of a source of funding.

On July 1, 1993, Plishtin wrote to Sands, indicating that financing remained a problem. The letter stated, in pertinent part:

I'm sorry that I'm not writing today with a binding offer. Getting . . . funding remains the hurdle, since our arrangement and our ability to set a formal starting date for you remains contingent upon this funding.

The funding never materialized. Plishtin sent Sands a letter on November 23, 1993, which read, in pertinent part:

I find no basis for your suggestion that you are due something from Ridefilm. To repeat what I believe has been made more than evident to you a number of times in our conversations and correspondences with you, our ability to hire you has from the outset been contingent upon successful financing of the Ridefilm business. . . . Your decision to stop interviewing was clearly made despite the contingent nature of this situation. As you know, I suggested you not pass on other opportunities and have in fact recommended you for other positions, at least one of which you have pursued.

To repeat, an employment arrangement between you and Ridefilm along the lines described in my letter of June 24 would have been constructed upon confirmation of a source of funding for this business, and the contingent nature of this offer was repeated in my letter of July 1. Unfortunately[,] this funding has not taken place even at this late date. . . . Given the disturbing positions taken and contentions made in your letter, I believe there is nothing further for us to discuss with you.

Sands remained unemployed until March 1994. He claimed that the defendants represented that financing was not an issue. Sands also claims to have reasonably believed that he had a job with the defendants and alleges that he rejected other employment opportunities offered to him.

II.

We review the district court's grant of summary judgment de novo. See Dubois v. United States Dep't of Agric., 102 F.3d 1273, 1283 (1st Cir. 1996). Summary judgment may be granted only when "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed. R. Civ. P. 56(c). "[T]he mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986). Rather, to be considered material, a disputed fact must have the potential to "affect the outcome of the suit under the governing law." Id. at 248.

The party moving for summary judgment, here the defendants, bears the initial burden of demonstrating that there are no genuine issues of material fact for trial. See Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). This burden "may be discharged by 'showing'--that is, pointing out to the district court--that there is an absence of evidence to support the nonmoving party's case." Id. at 325. After such a showing, the "burden shifts to the nonmoving party, with respect to each issue on which he has the burden of proof, to demonstrate that a trier of fact reasonably could find in his favor." DeNovellis v. Shalala, 124 F.3d 298, 306 (1st Cir. 1997) (citing Celotex, 477 U.S. at 322-25).

In the final analysis, upon examining the facts in the light most favorable to the nonmoving party and drawing all reasonable inferences in his favor, see Dubois, 102 F.3d at 1284, we are required to determine if "there is sufficient evidence favoring the nonmoving party for a jury to return a verdict for that party." Anderson, 477 U.S. at 249.

A. Breach of Contract (Count I)

The plaintiff alleges that the defendants breached their agreement with him by reneging on a binding employment agreement. "It is axiomatic that to create an enforceable contract, there must be agreement between the parties on the material terms of that contract, and the parties must have a present intention to be bound by that agreement." Situation Management Sys., Inc. v. Malouf, Inc., 430 Mass. 875, 878 (2000); see Wilcox, Inc. v. Shell E. Petroleum Prods., Inc., 283 Mass. 383, 388 (1933). "[I]t is essential to the existence of a contract that its nature and the extent of its obligations be certain. This rule has been long established." Caggiano v. Marchegiano, 327 Mass. 574, 579 (1951).Defendants argue that an enforceable contract was never created because the parties failed to reach agreement on all essential terms of an employment contract. Specifically, the defendants contend that the parties had not yet reached agreement on the plaintiff's compensation. The amount of compensation is an essential term of an employment contract. See Ferrera v. Carpionato Corp., 895 F.2d 818, 822 (1st Cir. 1990).

The magistrate judge found that, although the essential terms of the contract lacked specificity, all essential terms of employment were stated, and "it may well be considered contractually binding." He also stated, however, that the conditional language of the letters created ambiguity...