Friedman & Fuller, P.C. v. Funkhouser

• Decision Date: 01 September 1995
• Docket Number: No. 151,151
• Citation: 666 A.2d 1298,107 Md.App. 91
• Parties: FRIEDMAN & FULLER, P.C. v. Gregg N. FUNKHOUSER, et al. ,
• Court: Court of Special Appeals of Maryland

Page 91

107 Md.App. 91

666 A.2d 1298

FRIEDMAN & FULLER, P.C. v. Gregg N. FUNKHOUSER, et al.

No. 151, Sept. Term, 1995.

Court of Special Appeals of Maryland.

Nov. 6, 1995.

Roy Niedermayer (Shawn, Mann & Niedermayer, L.L.P., on the brief), Washington, DC, for Appellant

John E. Prominski, Jr. (Wilkes, Artis, Hedrick & Lane, Chartered, on the brief), Washington, DC, for Appellees.

Argued Before WENNER, FISCHER and CATHELL, JJ.

CATHELL, Judge.

Appellant, Friedman & Fuller, P.C. (F & F), appeals entry in the Circuit Court for Montgomery County of summary judgment in favor of the appellees, Gregg Funkhouser (Funkhouser), and Hollrah & Bernstein, P.C., and its principals, Jeffrey Bernstein and Glenn Hollrah (collectively, H & B). Appellant brought suit, alleging, inter alia, breach of an employment contract with Funkhouser, to which appellees asserted a Statute of Frauds defense. On appeal, appellant poses the following questions for our review:

1. Did the trial court err by granting summary judgment based on the Maryland Statute of Frauds where Funkhouser acknowledged the existence of an agreement in his deposition testimony?

2. Did the trial court err by granting summary judgment based on the Maryland Statute of Frauds where Funkhouser signed [ ] one of several connected writings constituting the entire memorandum?

3. Did the trial court err by granting summary judgment based on the Maryland Statute of Frauds where F & F's performance removed the Employment Agreement from within the Statute of Frauds?

4. Did the trial court err by granting summary judgment based on the Maryland Statute of Frauds where Funkhouser's promises to prepare and sign a writing estopped him from raising the Statute of Frauds as a defense to the Employment Agreement?

5. Did the trial court err by granting summary judgment based on the Maryland Statute of Frauds where the parties intended to save provisions performable within a year even if other provisions were unenforceable under the Statute of Frauds?

6. Did the trial court err by granting summary judgment on F & F's interference with contract and p[ro]spective business advantage claims solely because the Employment Agreement was not enforceable under the Statute of Frauds?

THE FACTS

Funkhouser was hired by F & F in July of 1990 to market the firm's accounting services to government contractors. In July of 1992, Funkhouser and F & F's president, Barry Friedman, began negotiating a new employment relationship, under which Funkhouser would be placed on a track leading him toward an ownership interest in the firm. In drafting the agreement, Funkhouser and F & F worked from a sample contract normally used by F & F, on which Funkhouser noted modifications in accord with the negotiations. Funkhouser agreed to draft and present for signature a memorial of the agreed-upon terms and modifications of the sample contract. The proposed terms allegedly included, inter alia, the noncompetition and trade secrets provisions at issue in the instant case. Also incorporated within the contemplated agreement were provisions respecting Funkhouser's acquisition of an ownership interest in F & F. Specifically, Funkhouser was to receive a retroactive salary increase of $5,000 and "career path incentive" bonuses upon the achievement of differing levels of total sales revenues.

It is undisputed that Funkhouser began drafting the agreement, utilizing F & F's computers and that, on August 3, 1992, consonant with the as yet unmemorialized employment agreement, he applied for and received a specified bonus and increase in salary for achieving $250,000 in total sales, benefits he would not otherwise have been entitled to receive previously. As of the receipt of the benefits, a written rendering of the agreement had not been completed.

In the fall of 1992, Funkhouser requested and was granted a change in the noncompetition provision. Again, Funkhouser agreed to memorialize the agreement to conform with the negotiations. Indeed, Funkhouser had prepared several revisions of the agreement as the negotiations progressed and terms were refined and finalized. In his affidavit, Friedman avers that, between January and May of 1993, his repeated requests for a copy of the completed agreement went unheeded; Funkhouser assured him that the draft, encompassing all Although the precise date is not clear, by the middle of 1993, Funkhouser had begun discussions regarding employment with H & B. It was also around that time that F & F began detecting a "deterioration" in Funkhouser's work product. On August 9, 1993, Funkhouser tendered his resignation from F & F and began working at H & B. F & F alleges that Funkhouser then "immediately" began soliciting its clients. On December 23, 1993, F & F filed a Complaint, naming Funkhouser as a defendant, seeking injunctive relief and damages for Funkhouser's alleged violation of the noncompetition and trade secrets provisions of the employment agreement. As discovery progressed, F & F verified H & B's involvement in the matter and, on May 2, 1994, amended its Complaint to include H & B. In addition to seeking permanent injunctive relief against appellees for breach of the covenant and misappropriation of trade secrets (Count 1) and damages therefor (Counts 2, 3, and 6), F & F also sought damages for fraud and negligent misrepresentation (Count 4), tortious interference with prospective business advantage and unfair competition (Count 5), civil conspiracy (Count 7), and conversion (Count 8).

agreed-upon terms and modifications, was completed and affirmed his commitment thereto but failed to produce one bearing his signature.

On May 16, 1994, appellees filed their Answer, along with a Motion to Dismiss Amended Complaint. In the motion, appellees sought dismissal of Counts 1, 2, 4, 5, and 7 on Statute of Frauds grounds, supporting same with Funkhouser's affidavit attesting to his failure to sign the agreement. Pursuant to Rule 2-322(c), ¹ appellees' motion was considered to be a

motion for summary judgment. Appellant opposed the motion, relying on, inter alia, Barry Friedman's affidavit. The trial court ordered that summary judgment be entered in favor of all appellees on counts 1, 2, 4, and 7 on September 28, 1994. Appellant agreed, per Rule 2-506(a), to a voluntary dismissal of the remaining claims, without prejudice, rendering the September 28, 1994 Order final for purposes of appeal. Appellant then noted this appeal from that Order.

THE STANDARD OF REVIEW

In reviewing the grant of a summary judgment motion, we are concerned with whether a dispute of material fact exists. King v. Bankerd, 303 Md. 98, 110-11, 492 A.2d 608 (1985). See also Hartford Ins. Co. v. Manor Inn of Bethesda, Inc., 335 Md. 135, 144, 642 A.2d 219 (1994); Arnold Developer, Inc. v. Collins, 318 Md. 259, 261-62, 567 A.2d 949 (1990); Bachmann v. Glazer & Glazer, Inc., 316 Md. 405, 408, 559 A.2d 365 (1989); Nationwide Mut. Ins. Co. v. Scherr, 101 Md.App. 690, 694, 647 A.2d 1297, cert. denied, 337 Md. 214, 652 A.2d 670 (1994); Markey v. Wolf, 92 Md.App. 137, 170, 607 A.2d 82 (1992). "A material fact is a fact the resolution of which will somehow affect the outcome of the case." King, 303 Md. at 111, 492 A.2d 608 (citing Lynx, Inc. v. Ordnance Prods., Inc., 273 Md. 1, 8, 327 A.2d 502 (1974)). "A dispute as to a fact 'relating to grounds upon which the decision is not rested is not a dispute with respect to a material fact and such dispute does not prevent the entry of summary judgment.' " Seaboard Sur. Co. v. Richard F. Kline, Inc., 91 Md.App. 236, 242-43, 603 A.2d 1357 (1992) (quoting Salisbury Beauty Schs. v. State Bd. of Cosmetologists, 268 Md. 32, 40, 300 A.2d 367 (1973)). In order for there to be disputed facts sufficient to render summary judgment inappropriate, "there must be evidence on which the jury could reasonably find for the plaintiff." Seaboard, 91 Md.App. at 244, 603 A.2d 1357. If the motion and response thereto demonstrate that there is no

genuine dispute as to any material fact, the moving party is entitled to judgment as a matter of law. See Lowman v. Consolidated Rail Corp., 68 Md.App. 64, 70, 509 A.2d 1239, cert. denied, 307 Md. 406, 514 A.2d 24 (1986) (Once the moving party has provided the trial court with sufficient grounds for summary judgment, "[i]t is ... incumbent upon the other party to demonstrate that there is indeed a genuine dispute as to a material fact."). See also King, 303 Md. at 112, 492 A.2d 608; Hurt v. Stillman & Dolan, Inc., 35 Md.App. 644, 647, 371 A.2d 1137 (1977).

DISCUSSION

A.

Appellant avers that there existed a genuine issue of material fact as to the existence of a memorandum sufficient to satisfy the Statute of Frauds or sufficient to except it from the Statute's requirement of a writing, so as to preclude entry of summary judgment in favor of Funkhouser. We agree and reverse the judgment of the trial court in that respect. We explain.

In approaching any matter potentially involving the Statute of Frauds, we first determine whether the case is one that falls within its provisions, as set forth in Maryland Code (1957, 1993 Repl.Vol.), Art. 39C § 1. If it does, we address the sufficiency of the writing involved; otherwise, the Statute is not applicable. If the writing contains the requisite formalities, our inquiry ceases. If not, we look to find whether the contract is enforceable under equitable theories of estoppel or part performance. See Snyder v. Snyder, 79 Md.App. 448, 558 A.2d 412, cert. denied, 317 Md. 511, 564 A.2d 1182 (1989).

1. APPLICABILITY OF THE STATUTE OF FRAUDS

In order to prevent fraud against one sought to be charged under a contract, the law has determined that certain contracts are so subject to prevarication that they shall not be No action may be brought:

enforced unless in writing. Contracts to which this rule is made applicable are enumerated in the Statute of Frauds, which "grew out of a purpose to intercept the frequency and...