Boim v. National Data Products, Inc.
| Decision Date | 05 July 1996 |
| Docket Number | No. 94-2083-CIV-T-17E.,94-2083-CIV-T-17E. |
| Parties | David S. BOIM, Plaintiff, v. NATIONAL DATA PRODUCTS, INC. and Philip Doganiero, Defendants. |
| Court | U.S. District Court — Middle District of Florida |
Nelson D. Blank, Trenam, Kemker, Scharf, Barkin, Frye, O'Neill & Mullis, P.A., Tampa, FL, for plaintiff.
Frederick Stewart Schrils, John E. Phillips, Jr., Holland & Knight, Tampa, FL, for defendants.
This cause of is before the Court on Defendants' Motion for Summary Judgment (Docket No. 24), and Plaintiff's response (Docket No. 30).
This circuit clearly holds that summary judgment should only be entered when the moving party has sustained its burden of showing the absence of a genuine issue as to any material fact when all the evidence is viewed in the light most favorable to the non-moving party. Sweat v. Miller Brewing Co., 708 F.2d 655-56 (11th Cir.1983). All doubt as to the existence of a genuine issue of material fact must be resolved against the moving party. Hayden v. First National Bank of Mt. Pleasant, 595 F.2d 994, 996-97 (5th Cir.1979), quoting Gross v. Southern Railroad Co., 414 F.2d 292 (5th Cir.1969). Factual disputes preclude summary judgment. As the district court in Coghlan v. H.J. Heinz Co., 851 F.Supp. 808 (N.D.Tex. 1994), summarized:
Although a court must "review the facts drawing all inferences most favorable to the party opposing the motion," the non-movant may not rest on mere allegations or denials in its pleadings; in short, "the adverse party's response ... must set forth specific facts showing that there is a genuine issue for trial." FED.R.CIV.P. 56(e). However, merely colorable evidence or evidence not significantly probative will not defeat a properly supported summary judgment. The existence of a mere scintilla of evidence will not suffice.
Id. at 810-11, (citations omitted).
The Supreme Court of the United States held, in Celotex Corp. v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986):
In our view, the plain language of Rule 56(c) mandates the entry of summary judgment, after adequate time for discovery and upon motion, 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. at 2552.
The Court also said, "Rule 56(e) therefore requires the non-moving party to go beyond the pleadings and by her own affidavits, or by the `depositions, answers to interrogatories, and admissions on file,' designate `specific facts showing that there is a genuine issue for trial.'" Id. at 324, 106 S.Ct. at 2553.
Viewed in the light most favorable to the nonmoving party, the facts reflect that Plaintiff was initially hired by Defendant Doganiero in September, 1992 to build the telesales and training organizations of Defendant National Data Products ("NDP"). Plaintiff was then promoted to Vice President of Sales and Marketing, and became Manager of the Orlando and South Florida branches as well. Although he did not receive a raise along with this promotion, Plaintiff was offered a stock purchase option in the amount of 2% of the company for each of the succeeding three years totaling 6% of NDP at a $6,000,000 valuation. By the terms of the agreement, this stock purchase option would vest after three years of Plaintiff's continued employment, or on the date the company was sold, whichever came first. It is undisputed that Plaintiff was promoted, and numerous individuals corroborate the existence of the stock option.
Upon Plaintiff's inquiry, Defendant Doganiero assured Plaintiff that there was no deal pending for the sale of NDP. Plaintiff was later terminated by Defendant on November 10, 1994, at which time he was presented with Defendant NDP's first ever separation agreement, whereby Plaintiff waived his stock purchase option rights, and any other claims against Defendant. Defendant Doganiero did not on that date mention any pending sale of the company. Further, the terms of the separation agreement allowed for a revocation period to extend to November 17, 1994. On November 18, 1994, one day after termination of the revocation period, a public announcement was made regarding the sale of the company, a sale which would have immediately vested Plaintiff's stock purchase option rights.
Defendants, for the purposes of this Motion, accept the existence of the alleged oral contract, and move for summary judgment on the basis that Plaintiff's employment was "at will," and could be terminated at any time by either party.
Defendants do not consider that the oral contract modifies the existing at will employment contract, and results in an accompanying obligation to act in good faith. That Plaintiff's stock purchase options had not vested is not significant, since Defendants' actions served to sever those rights and, if done in bad faith, amount to a breach of the oral contract.
Although summary judgment is warranted against a party who fails to make a showing sufficient to establish the existence of an essential element upon which that party will bear the burden of proof at trial, the facts alleging those essential elements are viewed in the light most favorable to the party opposing the summary judgment. Celotex, 477 U.S. at 322, 106 S.Ct. at 2552. Furthermore, the evidence of the nonmoving parties need not necessarily be admissible at trial. Id. at 324, 106 S.Ct. at 2553. Summary judgment may be inappropriate even where the parties agree on the basic facts, but disagree on the factual inferences that should be drawn from the facts. Warrior Tombigbee Transportation Company v. M/V Nan Fung, 695 F.2d 1294, 1296 (11th Cir. 1983).
Plaintiff's complaint alleges four counts: (1) a violation of SEC Rule 10(b)-5; (2) a violation of the Florida Securities and Investor Protection Act (FSIPA); (3) common law breach of contract; and (4) common law fraud. The Court will address the facts of each count in turn.
The elements of a Rule 10(b)-5 case are: 1) a misstatement or omission; 2) of a material fact; 3) made with scienter; 4) on which Plaintiff relied; 5) that proximately caused his or her injury. Knight v. E.F. Hutton and Co., Inc., 750 F.Supp. 1109, 1114 (M.D.Fla.1990).
Viewing the facts in the light most favorable to the nonmoving party, Defendant Doganiero affirmatively told Plaintiff that the sale of the company, which would vest Plaintiff's stock purchase option, was dead. Alternatively, Defendant failed to inform Plaintiff that the sale of the company was not dead. These acts independently satisfy the "misstatement or omission" element of the Rule 10(b)-5 claim. A reasonable jury could further find that the sale of the company, which would vest Plaintiff's stock purchase option, would be a "material fact" affecting Plaintiff's decision to sign the separation agreement and thereby waive his option rights. That Defendant's affirmative statement regarding the absence of a pending sale of the company satisfies the "scienter" requirement goes without saying. A reasonable jury may alternatively infer from the circumstances surrounding Plaintiff's dismissal that Defendant's omission was similarly made with the requisite scienter. That Plaintiff relied on the statement and/or omission to his detriment are questions of fact which are best left to the jury, and a reasonable jury could find that Plaintiff did so rely on Defendant's conduct to his detriment.
Because Plaintiff has satisfied his burden of showing the existence of facts sufficient to support the essential elements of his Rule 10(b)-5 claim, the Court denies Defendants' Motion for Summary Judgment with regard to Count I.
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