Lockwood v. Madeiros
| Decision Date | 30 November 2020 |
| Docket Number | CIVIL ACTION NO. 18-40143-TSH |
| Citation | 506 F.Supp.3d 73 |
| Parties | Ana Flavia DeMoura LOCKWOOD, Plaintiff, v. Todd MADEIROS, and the Auto Shops LLC d/b/a AllthingsJeep.com, Defendants. |
| Court | U.S. District Court — District of Massachusetts |
Robert H. Bowen, Bowen & Bowen, Lunenburg, MA, for Plaintiff.
Howard M. Brown, Boston Employment Law PC, Brookline, MA, for Defendants.
HILLMAN, D.J.
Ana Flavia De Moura Lockwood ("Lockwood" or "Plaintiff") has filed claims against Todd Madeiros ("Madeiros") and The Auto Shops, LLC d/b/a AllthingsJeep.com ("ATJ" and, together with Madeiros "Defendants") for Breach of Contract (Count I), Quantum Meruit/Unjust Enrichment (Count II), and Quasi-contract/Implied Contract (Count III) seeking payment of a bonus which she alleges Madeiros agreed to give her on the sale of ATJ. This Memorandum and Order of Decision addresses Defendants’ Motion for Summary Judgment (Docket No. 47). For the reason set forth below, that motion is granted.
Summary Judgment is appropriate where, "the pleadings, depositions, answers to interrogatories and admissions on file, together with affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Carroll v. Xerox Corp. , 294 F.3d 231, 236 (1st Cir. 2002) (citing Fed. R. Civ. P. 56(c) ). " ‘A "genuine" issue is one that could be resolved in favor of either party, and a "material fact" is one that has the potential of affecting the outcome of the case.’ " Sensing v. Outback Steakhouse of Florida, LLC , 575 F.3d 145, 152 (1st Cir. 2009) (quoting Calero-Cerezo v. U.S. Dep't. of Justice , 355 F.3d 6, 19 (1st Cir. 2004) ).
When considering a motion for summary judgment, the Court construes the record in the light most favorable to the nonmoving party and makes all reasonable inferences in favor thereof. Sensing , 575 F.3d at 153. The moving party bears the burden to demonstrate the absence of a genuine issue of material fact within the record. Id., at 152. " ‘Once the moving party has pointed to the absence of adequate evidence supporting the nonmoving party's case, the nonmoving party must come forward with facts that show a genuine issue for trial.’ " Id. (). " ‘[T]he nonmoving party "may not rest upon mere allegations or denials of the [movant's] pleading, but must set forth specific facts showing that there is a genuine issue of material fact as to each issue upon which [s/he] would bear the ultimate burden of proof at trial." Id. (). The nonmoving party cannot rely on "conclusory allegations" or "improbable inferences." Id. (). " ‘The test is whether, as to each essential element, there is "sufficient evidence favoring the nonmoving party for a jury to return a verdict for that party." ’ " Id. ().
Lockwood, who has a background in business administration, accounting, and finance was employed by ATJ, which sold Jeep products, from June 2010 to August 2018, when ATJ was sold to Turn5. From 2010 to April 2016, Lockwood was the director of operations of ATJ and from April 2016 until August 2018 she was the general manager. As general manager, Lockwood was responsible for reporting ATJ's profits and losses to Madeiros.
Over the course of her employment with Defendants, Lockwood's compensation increased substantially: Her gross wages, which were $20,250 in 2011, more than quadrupled to $83,760 in 2017, her last full year of employment. Additionally, in 2017, ownership of a car worth $24,000 was transferred to her. Aside from the fact that Lockwood did not receive the bonus at issue here, Lockwood believes she was fairly compensated by ATJ in 2017. Lockwood acknowledges that the company's failure to achieve some of its financial goals affected her earnings because she did not get proposed bonuses that were tied to the company's performance.
In 2017, Madeiros and Lockwood had a conversation in which he offered to pay her $250,000.00 if he was able to sell ATJ for $5,000,000. According to Lockwood, during other conversations Madeiros "probably" promised to pay her 5% of the ultimate sale price of the company. However, she was unable to provide any details about those alleged other conversations, including the year and date when they took place or any specifics as to what she and Madeiros discussed. More specifically, Lockwood states that Madeiros and she "probably" talked about the sale of the company somewhere between 2015 and the Spring of 2017 and the reference to her receiving a 5% bonus "probably built up [sic.] of several different conversations we had."
In January 2018, Madeiros had discussions with Drake Automotive Group ("Drake") regarding the potential sale of ATJ to Drake. The sale to Drake would have included an initial payment of $3,000,000, with an additional possible "earn out" payment of up to $1,000,000, based on incremental sales growth during the year following the sale. On January 2, 2018, Madeiros offered to pay Lockwood a bonus if the sale to Drake was completed and she remained employed following the sale. The proposed bonus would have consisted of a payment of $75,000 if she remained with Drake through a three to six-month post-sale transition period and another $100,000 if the sale to Drake included an "earn out provision" and if she remained employed by Drake for 12 months after the sale, and ATJ's revenues increased by $1,000,000. The offer was made in a phone conversation on January 2, 2018 and summarized in a text message Madeiros sent Lockwood on January 2, 2018. Lockwood did not accept this offer. Instead, on January 3, 2018, she e-mailed Madeiros a counterproposal of "4% of the sale price under the same conditions attached to your sale." Madeiros did not accept Lockwood's counterproposal. However, later that same evening, Madeiros and Lockwood had a phone conversation during which they agreed on terms regarding a bonus to be paid if the sale to Drake was concluded and if Lockwood remained employed by Drake. Lockwood does not remember the specifics of the deal. She has testified that she was to receive a total of 4% of the sale price with an initial payout of $100,000. She has also testified that she was to receive 4.375% of the sale price consisting of an initial payout of $100,000 and total potential bonus payouts which would bring the total amount to $150,000 or $175,000.2 For various reasons, the Drake deal fell through leaving ATJ to look for another buyer.
In February 2018, after the Drake deal fell apart, Lockwood and Madeiros had a telephone conversation regarding her receiving a bonus if ATJ was sold to another company. Lockwood asked Madeiros for a written agreement and Madeiros responded that in his mind, the issue was already settled—it was the same deal they had with Drake. Lockwood stated that in her mind, this was about 4-4.3%. and Madeiros responded that they would have to determine the terms. Lockwood asked Madeiros to get back to her and he said he would, but he never did. Based on that conversation, Lockwood understood that the that the bonus was set to about 4% of the sale price, but they would further negotiate the payment terms which would depend on the details of the sale.
In connection with the potential sale of ATJ to Turn5, Madeiros offered Lockwood a bonus if she remained an employee of Turn5 following the sale. Specifically, on June 19, 2018, during a conference call between Madeiros, Lockwood and another employee, Madeiros offered Lockwood a $75,000 bonus in connection with the sale to Turn5, and stated that payment was conditioned on Lockwood remaining an employee of Turn5 for four to six months after completion of the sale. Lockwood did not accept this offer and she and Madeiros did not reach an agreement regarding a potential bonus upon the consummation of a sale to Turn5. After June 19, Lockwood stopped "engaging" with Madeiros and all future communications took place with her attorney. Lockwood never accepted the $75,000 offer.
In August 2018, ATJ was sold to Turn5 for $2,253,881.56, with $1,008,354.67 to be paid at closing, and the remainder to be paid in monthly installments over a 36-month period, subject to an adjustment of the purchase price based on a reduction in inventory value as of the date of the closing. There was also a potential "earn out" payment of up to $600,000. Turn5 felt that Lockwood had an intimate knowledge of ATJ which would assist in making the acquisition successful and therefore, payed her a $75,000 retention bonus to remain with the company after the sale.
Lockwood contends that the bonus she is due (an amount which ranges from 4% to 5% of the sales price) is payment for her "sweat equity," i.e., the services she provided to ATJ during the years prior to the sale. Additionally Lockwood contends that she contributed a "lot" to the value of ATJ, but is not able to quantify the amount of that value.
The Defendants seek summary judgment on Lockwood's breach of contract claim on the grounds that: (1) she has failed to establish that the parties had agreed to the essential terms sufficient to create an enforceable agreement, (2) any such agreement fails for lack of consideration, and (3) if the parties’ did create an enforceable contract, she cannot establish that they breached its terms. Defendants argue that Lockwood's quantum meruit claim fails as a matter of law because she cannot establish all of the elements of such claim, i.e. , that she conferred a measurable benefit upon ATJ, that she reasonably expected to be compensated by the Defendants, and Defendants accepted the...
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