NEC v. NMCG, No. 04-CV-233.

• Decision Date: 11 August 2005
• Docket Number: No. 04-CV-233.
• Citation: 881 A.2d 1087
• Parties: NEW ECONOMY CAPITAL, LLC, Appellant, v. NEW MARKETS CAPITAL GROUP, et al., Appellees.
• Court: D.C. Court of Appeals

881 A.2d 1087

NEW ECONOMY CAPITAL, LLC, Appellant, v. NEW MARKETS CAPITAL GROUP, et al., Appellees.

No. 04-CV-233.

District of Columbia Court of Appeals.

Argued June 16, 2005.

Decided August 11, 2005.

Pamela J. Bethel, with whom Jonathan T. Williams, Washington, DC, was on the brief, for appellant.

Angela Givens, with whom Steven G. Reade, Washington, DC, was on the brief, for appellees.

Before SCHWELB and REID, Associate Judges, and BELSON, Senior Judge.

REID, Associate Judge:

The issue in this case, which involves a civil complaint by appellant New Economy Capital, LLC ("NEC") against appellees New Markets Capital Group ("NMCG"), Milicent Hodge, and Alan D. Wheat, is whether the trial court properly granted summary judgment in favor of appellees. NEC contends that the trial court's order granting summary judgment was improper, mainly because there are genuine issues of material fact. We affirm the trial court's order insofar as it grants judgment as a matter of law on NEC's "breach of promise" and breach of oral contract claims, including those against Ms. Hodge and Mr. Wheat in their individual capacities. However, we reverse the order as it relates to NEC's quantum meruit claim against NMCG and remand the case to the trial court for further proceedings with respect to that claim.

FACTUAL SUMMARY

Janice Booker, President and manager of NEC, a District of Columbia limited liability company, filed a first amended complaint in December 2002, against defendants NMCG, a Delaware limited liability company which transacted business in the District, and Mr. Wheat and Ms. Hodge in their individual and corporate capacities. NEC's complaint contained three counts: Count I, breach of promise, Count II, breach of oral contract, and Count III, quantum meruit. As relief, NEC demanded $241,000.00 relating to consulting services; no demand pertaining to fundraising work was made.

Ms. Booker alleged that she "provided substantial consulting and fundraising services to [appellees] . . . in connection with a private equity fund called the New Markets Equity Fund" whose general partner is NMCG. No written contract was executed for these alleged services, but Ms. Booker claimed that Mr. Wheat and Ms. Hodge, both partners and managing members of NMCG, orally promised compensation for her services. In her deposition testimony of June 20, 2003, however, Ms. Booker ultimately testified that she discussed compensation only with Ms. Hodge. Ms. Booker stated that her (NEC's) consulting services would be paid on an hourly basis, but ultimately acknowledged that no written or oral agreement was reached concerning the amount of the hourly fee, even though she claimed $150.00 per hour for her consulting services.¹ During Ms. Booker's deposition testimony, a letter of March 24, 2000 from Ms. Hodge to Ms. Booker was introduced which stated: "I am glad that you approached us about working with the NMEF and that we were able to reach an understanding. We look forward to you joining our team as a fundraising consultant on the terms noted below." Below this message was a document titled, "Final Terms—New Markets Equity Fund (Incorporates March terms and October notes . . .)." In that section, the New Markets Equity Fund ("NMEF") specified its response to Ms. Hodge's proposed payment options:

Unfortunately, NMEF can not agree to these terms. All compensation packages are connected to capital being raised. As we discussed, all compensation to our fundraiser shall be based on a commission structure to avoid taking on such an obligation as a start-up. This is a deal breaker for us. (3/24/00). Any consulting fees paid to the Consultant shall serve as an advance on any commission that may later become due. . . .

Unfortunately, we can not agree to pay a monthly fixed fee or any other flat fee. In the event that you would like to do such work for us, there must be a mutual agreement, in advance, on an as-needed basis, in a signed writing that limits the cost up-front and that will be paid out of capital raised by you. Unless there is such a written agreement, we have agreed that all work perform[ed] by you or your firm is being performed on a commission basis. To date, such work (Public Affairs, Corporate Strategy & Community Affairs), if needed, has been provided by other members of the Fund and/or by a public relations firm. Again, this would have been and still is a deal breaker for us. We want to avoid surprise costs. (10/25).

The NMEF agreed to compensate NEC/Ms. Booker on a "graduated fee structure. . . as a percent of the capital contracts originated and closed or closed only by the Consultant." Ms. Booker was asked about the March 24, 2000 document at her deposition. She denied receiving it. She also denied being aware of the above referenced NMEF position as stated in that document.

Ms. Booker worked with the New Markets Equity Fund from March 13, 2000 "through the end of 2001." NEC was paid $5,000.00 in expenses and fees, with a check dated March 27, 2001; the legend on the check stated "commission advance."² Thereafter, conflicts arose among the parties concerning compensation. Ms. Booker claimed $65,000.00 in outstanding fees, but her complaint alleges that she received a check in the amount of $20,000.00 from Ms. Hodge in early July 2002 as "`full and final' payment for consulting services rendered by [NEC] to [NMCG]." Included in NEC's answers to appellees second set of interrogatories is a response to Interrogatory No. 5(c) which states in part: "Check number 1136 dated June 26, 2002 in the amount of $20,000.00 and noted as the `Full Settlement Consulting Fee 2000-2002' was received by Plaintiff from Defendant Hodge." That check "was written on the account of [NMCG]. . . ." When Ms. Booker informed Ms. Hodge that the amount was incorrect, Ms. Hodge allegedly stopped payment on the check.

During her 2003 deposition testimony, Ms. Booker claimed that she had put in 1,640 hours in consulting services in behalf of NMCG. She was asked whether she had "detailed records of the time [she] spent doing consulting services." Ms. Booker replied: "From a professional standpoint, you do not keep detailed records but rather you show the results that [have] been performed through providing the advisory services to the client." She "did not keep a time sheet." She reached 1,640 hours by making "a determination of the amount of time [she] had spent working on New Markets."³ Appellees' first set of interrogatories to NEC contained Interrogatory No. 5 which stated: "Identify each and every consulting service rendered by Plaintiff to Defendants. Identify all documents thereto." NEC/Ms. Booker responded:

The consulting services provided to Defendants include, but are not limited to the following: participating in weekly conference calls, attending team meetings, reviewing and revising sections of the private placement memorandum, development and execution of a "road show" wherein team members made presentations to various investors in several states, provided advice on "public purpose" and Community Reinvestment Act Investments, prepared the submissions to investors, and prepared the Due Diligence Information binders. See items listed in Answer to Interrogatory 2 for further details (In addition, various e-mails are being provided in response to Defendant's Request for Production of Documents under Response Number 8 that reflect correspondence and communications regarding Plaintiff's consulting services. See a brief summary on pages 880-881, 2219-2222).⁴

Appellees moved for summary judgment in September 2003. They maintained that under Delaware and District of Columbia law, both Mr. Wheat and Ms. Hodge should be dismissed as defendants because: (1) they were sued based upon their personal guarantee and "an alleged oral, personal guaranty, [is] barred by the District of Columbia Statute of Frauds"; and (2) Mr. Wheat and Ms. Hodge as officers of NMCG "cannot be held liable under applicable law for the contractual obligations of the corporation." With respect to NMCG, appellees asserted that there were no genuine issues of material fact in dispute, and that both appellants' evidence, and their own, establish NMCG's entitlement to summary judgment. Specifically they argued the non-existence of any enforceable contract between the parties, and a lack of evidence "establish[ing] a claim for quantum meruit." Appellees did not file a separate statement of material facts not in dispute with their motion.⁵

NMCG acknowledged that there was a fundraising agreement between NEC and NMCG, but contended that compensation was to be paid "solely on a commission basis," that is, NEC "would be paid a percentage of the capital that it actually raised for the fund." NMCG disputed, however, the existence of any oral agreement for compensation for consulting services based on an hourly rate or a fixed rate. NMCG also insisted that NEC failed to substantiate its claim that it performed 1,640 hours of consulting services. NMCG relied mainly on Ms. Booker's deposition testimony to support its contentions. It filed no affidavits in behalf of the corporation, Ms. Hodge or Mr. Wheat.⁶

Appellant's opposition to the motion for summary judgment emphasized the existence of genuine issues of material fact. Specifically, NEC argued that: "The central-genuine issue of fact is the Plaintiff alleges in its complaint that it performed substantial consulting work, which was duly accepted by the Defendants, and Plaintiff is thereby entitled to payment." It contrasted its position, that the oral contract was for fundraising and consulting services, with that of NMCG that the agreement was for a commission based on the amount of capital raised. NEC contended that the evidence established the existence of an oral agreement, and that it was not barred by the Statute of Frauds because it "[could] be performed in one year." And, with respect to the individual defendants, "[e]ven...