BenefitElect, Inc. v. Strategic Benefit Sols. Corp.
| Decision Date | 13 July 2022 |
| Docket Number | 6:19-cv-00797-MC,6:20-cv-01266-MC |
| Parties | BENEFITELECT, INC., COMMUNICATION PARTNERS, INC., Plaintiffs, v. STRATEGIC BENEFIT SOLUTIONS CORPORATION, Defendant. |
| Court | U.S. District Court — District of Oregon |
Plaintiffs BenefitElect, Inc. and Communication Partners, Inc. bring suit under Oregon contract law against a former work partner Defendant Strategic Benefit Solutions Corporation. Pls.' Second Am. Compl., ECF No. 40 (“SAC”). Plaintiffs bring claims for breach of contract, promissory estoppel, and unjust enrichment based on an alleged commission split fee agreement between the parties. SAC ¶¶ 6-16. Defendant moves for summary judgment on all claims. Def.'s Mot. Summ. J., ECF No. 54. Because Plaintiffs fail to demonstrate mutual assent to the split fee agreement, and fail to establish that Defendant was unjustly enriched Defendant's Motion for Summary Judgment (ECF No. 54) is GRANTED.
Plaintiffs and Defendant are corporations in the insurance benefits industry. In 2017, MetLife, a global insurance company awarded Defendant the position of MetLife's designated “Small Diverse Business.” Spiegel Decl. Ex. 4, at 1, ECF No. 55. In this position, Defendant would serve as the administrator of benefits and enrollment under a five-year voluntary benefits contract with the Commonwealth of Pennsylvania. Id. Based on their lengthy professional history, Defendant contacted Plaintiffs about providing the necessary technological support in order for Defendant to perform its contract with MetLife. Spiegel Decl. Ex. 33. Plaintiffs agreed to construct and operate the benefits computer program which would assist Pennsylvania state employees in obtaining insurance. Id. Both parties expressed hopes that this project could serve as an opportunity for future business endeavors with MetLife. Spiegel Decl. Ex. 17; Phan Decl. ¶ 20, ECF No. 56.
Some costly errors by Plaintiffs during the commencement of the enrollment period resulted in MetLife's forfeiture of premiums. Spiegel Decl. Ex. 23, at 1-2; see also Spiegel Decl. Ex. 6, at 1. The relationship between the parties continued to sour when they could not agree to the amount of compensation for Plaintiffs' work. Plaintiffs allege they had a commission splitting agreement with Defendant, under which Plaintiffs are owed $912,000 for their work. SAC ¶¶ 10, 14, 16. Because the agreed compensation structure is at issue, below is a synopsis of the relevant provisions and communications between the parties.
MetLife compensated Defendant through a flat commission on policies sold via Defendant's platform. Phan Decl. ¶ 25. The commission structure allocated 20% to Defendant and 3% to the technology provider, Plaintiffs, as a platform fee. Id.; see also Spiegel Decl. Ex. 7. The parties consented to 3% on the current project but planned to request 5% going forward.
Spiegel Decl. Ex. 10, at 1. Defendant also paid Plaintiffs' setup fees and postage expenses, as per their arrangement. Phan Decl. ¶ 28-30. The issue that brings the parties to court presently is the disputed existence of an agreement to share 50% of the total commissions paid to Defendant over the life of the contract. Pls.' Resp. Def.'s Mot. Summ. J. 6, ECF No. 59. On May 14, 2018, several months after Defendant contacted Plaintiffs regarding the MetLife work, Plaintiffs emailed Defendant stating they “propose a 50% commission split” for various services related to managing enrollments. Spiegel Decl. Ex. 16. Defendant responded on May 21, 2018, asking if Plaintiffs would “feel comfortable waiting to see where we stand after the Fall enrollment.” Spiegel Decl. Ex. 17. Plaintiffs responded the following day, agreeing to “defer firming up a fee split until after the initial July enrollment.” Id. Despite Plaintiffs' assertions otherwise, Defendant maintains that an agreement was never met and any conversations regarding a commission split were mutually deferred until after enrollment, at which point Defendant declined the split. Def.'s Mot. 16-23.
On May 1, 2019, Plaintiffs' counsel contacted Defendant and demanded payment in full, threatening to file suit if payment was not received within five business days. Hansen Decl., Ex. 1, at 1, ECF No. 27. Plaintiffs initially filed in Oregon alleging breach of contract and other related claims, but Defendant already filed suit in New Jersey alleging tortious interference and seeking declaratory relief on the alleged contract between the parties. Opinion and Order 2-3, ECF No. 31. Defendant moved to dismiss Plaintiffs' claims pursuant to the “first-to-file” rule. Id. However, on December 23, 2019, this Court refused to dismiss the claims because of jurisdictional considerations and instead stayed the case to allow resolution of the New Jersey case. Id. at 7-8. Before ruling on the merits, the New Jersey case was transferred to this Court and consolidated with Plaintiffs' case.
The court must grant summary judgment if there is no genuine issue of material fact, and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a). An issue is “genuine” if a reasonable jury could return a verdict in favor of the non-moving party. Rivera v. Phillip Morris, Inc., 395 F.3d 1142, 1146 (9th Cir. 2005) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)). A fact is “material” if it could affect the outcome of the case. Id. The court reviews evidence and draws inferences in the light most favorable to the non-moving party. Miller v. Glenn Miller Prods., Inc., 454 F.3d 975, 988 (9th Cir. 2006). When the moving party has met its burden, the non-moving party must present “specific facts showing that there is a genuine issue for trial.” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986) (quoting Fed.R.Civ.P. 56(e)). The mere existence of some alleged factual dispute will not defeat an otherwise properly supported motion for summary judgment. Anderson, 477 U.S. at 247-48. Rather, the non-moving party must proffer evidence that could reasonably affect the outcome of the suit. Miller, 454 F.3d at 988.
Defendant moves for summary judgment on all three of Plaintiffs' claims: breach of contract, promissory estoppel, and unjust enrichment. The Court addresses each in turn.
Plaintiffs allege that a contract existed between the parties which obligated Defendant to share 50% of the MetLife commissions with Plaintiffs. Pls.' Resp. 18. Plaintiffs argue that Defendant orally agreed to share 50% of the commissions throughout a series of phone conversations, which were later recorded in Plaintiffs' emails and proposals. Id. Defendant maintains that no oral contract was formed because it never agreed to the 50% commission split. Def.'s Mot. 32.
The party alleging breach must first establish the existence of an enforceable contract. Holdner v. Holdner, 29 P.3d 1199, 1203 (Or. Ct. App. 2001). Whether an enforceable contract exists is a matter of law in Oregon. E.g., State ex rel. Key W. Retaining Sys., Inc. v. Holm II, Inc., 59 P.3d 1280, 1283 (Or. Ct. App. 2002). To be enforceable, there must be a manifestation of mutual assent. Restatement (Second) of Contracts § 17 (Am. Law Inst. 1981). Oregon courts employ the objective theory of contracts for this assessment. Glob. Exec. Mgmt. Sols., Inc. v. Int'l Bus. Machs. Corp., 260 F.Supp.3d 1345, 1367 (D. Or. 2017). Under this theory, courts determine the existence of a contract by examining “the parties' objective manifestations of intent, as evidenced by their communications and acts,” rather than their subjective intent. Ken Hood Constr. Co. v. Pac. Coast Constr., Inc., 120 P.3d 6, 11 (Or. Ct. App. 2005). “When the dispute concerns an unwritten agreement, the conclusion that the parties manifested mutual assent must be constructed from evidence of their negotiations or other past conduct.” Kabil Devs. Corp. v. Mignot, 566 P.2d 505, 509 (Or. 1977).
In examining the parties' past acts, no reasonable jury could find sufficient evidence of Defendant's assent to the 50% commission split. As the proponent of the contract, Plaintiffs provide no proof of a definitive phone conversation or statement wherein Defendant manifested assent to the 50% split terms. Instead, they rely on what is “indicated in the declarations of Chris and Douglas Lonergan,” Owner and CEO of the Plaintiff companies, as support for the existence of some oral agreement. Pls.' Resp. 18. Such support is not found, however, because the testimony belies any conclusion that clear acceptance was conveyed by Defendant. When asked to pinpoint when the parties agreed to the commission split, Douglas Lonergan testified there were “many phone calls” but he could not recall the specific “dates and content.” Spiegel Decl. Ex. 1, at 13. When asked about the wording of Defendant's acceptance to the commission split, Chris Lonergan said he couldn't “remember specifically what word” or phone call reflected it, but that there were a lot of conversations about “deferring . . . the conversation.” Spiegel Decl. Ex. 2, at 13. When asked what indicated Defendant's acceptance, Douglas Lonergan explained that it was inferred from Defendant's permission to move forward on the project after proposals had been issued. Spiegel Decl. Ex. 1, at 14. Plaintiffs' testimonial timeline is also unconvincingly vague[1] and inadequate when compared to Defendant's pre-litigation statements that no such agreement occurred.[2] In this regard, Plaintiffs fail to show any requisite objective manifestations of Defendant's intent to be bound by the 50% split terms.
Plaintiffs also attempt to support the contract's existence by pointing to subsequent emails and...
To continue reading
Request your trial