Sims v. Bayside Capital, Inc.

• Decision Date: 08 September 2014
• Docket Number: No. A13A1883.,A13A1883.
• Citation: 327 Ga.App. 47,755 S.E.2d 520
• Parties: SIMS v. BAYSIDE CAPITAL, INC. et al.
• Court: Georgia Court of Appeals

327 Ga.App. 47

755 S.E.2d 520

SIMS

v.BAYSIDE CAPITAL, INC. et al.

No. A13A1883.

Court of Appeals of Georgia.

March 25, 2014.

Reconsideration Denied April 10, 2014.

Certiorari Denied Sept. 8, 2014.

William F. Kaspers, Atlanta, for Appellant.

Arnall Golden Gregory, Theresa Ann Yelich Kananen, Ashley Steiner Kelly, Atlanta, for Appellees.

BOGGS, Judge.

Andrew J. Sims appeals from the trial court's grant of summary judgment in favor of Esquire Deposition Solutions, LLC, Bayside Capital, Inc., H.I.G. Capital, LLC, f/k/a Bayside Gallo Acquisition, LLC, and Jackson Craig (collectively “Esquire”), in this action stemming from the termination of his employment. For the following reasons, we affirm in part and reverse in part.

On appeal from the grant of summary judgment, “we apply a de novo standard of review.” (Citations and punctuation omitted.) Georgia Cash America v. Greene, 318 Ga.App. 355, 358(2), 734 S.E.2d 67 (2012). “[T]he moving party must demonstrate that there is no genuine issue of material fact and that the undisputed facts, viewed in the light most favorable to the nonmoving party, warrant judgment as a matter of law.” Lau's Corp. v. Haskins, 261 Ga. 491, 405 S.E.2d 474 (1991); see also OCGA § 9–11–56(c).

So viewed, the record reveals that in 2006, Sims was hired as the CFO of Alexander Gallo Holdings, LLC (“AGH”), a court reporting company. Sims's employment was pursuant to a 2006 employment agreement with AGH, which was later superseded by a 2011 employment agreement.

Beginning in 2011, AGH began to suffer from financial difficulties, and on September 7, 2011 it filed a voluntary Chapter 11 bankruptcy petition. AGH requested permission of the court to sell its assets pursuant to 11 USC § 363, and negotiated an October 6, 2011 asset purchase agreement (“APA”) naming AGH and others as the seller and Bayside Gallo Acquisition, LLC (subsequently renamed “Esquire”), as the buyer. The APA was amended on November 8, 2011, and on November 10, 2011, the bankruptcy court approved the APA and set a hearing to consider any objections to the assumption or assignment of any “Assumed Contracts.” The APA was again amended for a final time on November 23, 2011, the day the asset purchase closed.

Pursuant to the APA, as amended, the assets in AGH's bankruptcy estate were divided into acquired assets and liabilities, which Esquire would purchase, and excluded assets and liabilities, which it would not purchase. Sims's employment agreement with AGH was listed as an “excluded contract” on Schedule 1.1(b)(ii) of the October 6 and November 8 versions of the APA.¹

On November 14, 2011, nine days prior to the closing of the asset purchase, AGH published a press release announcing the bankruptcy court's approval of the APA. At the time of the final amendment to the APA on November 23, 2011, and the closing of the purchase on the same day, however, Sims's employment agreement with AGH was listed as a designated (or pending) contract, but was later deemed an excluded asset under the APA.²

Although Esquire did not acquire Sims's employment agreement at the closing of the APA, Sims nevertheless began employment with Esquire following the closing on an at-will basis. On November 28, 2011, five days following the closing of the asset purchase, Esquire informed Sims that his employment would be terminated.

Sims subsequently filed a verified complaint against Esquire, its affiliates, and Jackson Craig, its managing director, alleging breach of an oral contract, breach of a written contract, “promissory estoppel and detrimental reliance,” fraudulent inducement, and unjust enrichment. He also sought attorney fees and costs.

The parties filed cross-motions for summary judgment, and following a hearing, the trial court granted Esquire's motion, and denied Sims's motion. It is from this order that Sims appeals.

1. Sims argues that the trial court erred in granting summary judgment to Esquire on his claim for breach of an oral agreement that he claims was reached between

him and Craig, Esquire's managing director, on the day he was terminated. Esquire argues that while the parties discussed severance pay and litigation expenses, no agreement was ultimately reached, and that any alleged agreement based upon terms discussed on November 28 would fail for lack of consideration. But construing the evidence most favorably to Sims, during the meeting on November 28 where Sims was informed he would be terminated, Craig agreed to pay Sims six months of his salary as severance or what “equated to six months of salary,” health insurance coverage through the end of 2011, and a payment of $175,000 as reimbursement for legal fees and expenses Sims and Alexander Gallo (CEO of AGH) incurred during the bankruptcy. In return, Sims agreed to remain available through the end of December 2011.

A contract is an agreement between two or more parties for the doing or not doing of some specific thing. In order that there may be an agreement, the parties must have a distinct intention common to both and without doubt or difference. Until all understand alike, there can be no assent, and, therefore, no contract. Both parties must assent to the same thing in the same sense, and their minds must meet as to all the terms. If any portion of the proposed terms is not settled, or no mode is agreed on by which it may be settled, there is no agreement.

(Citations, punctuation and footnote omitted.) BDI Laguna Holdings v. Marsh, 301 Ga.App. 656, 663–664(3), 689 S.E.2d 39 (2009).

It is undisputed that Sims was an at-will employee of Esquire who was later terminated. In the absence of an agreement requiring Esquire to pay Sims severance or provide him with health benefits or reimbursement for legal fees, Esquire was under no obligation to do so. The offer to make these concessions would therefore be “a mere gratuity.” (Citation and punctuation omitted.) Mgmt. Search v. Morgan, 136 Ga.App. 651, 653(1), 222 S.E.2d 154 (1975) (bonus not based upon any new consideration was mere gratuity); see also Gale v. Hayes Microcomputer Products, 192 Ga.App. 30, 30–31(1), 383 S.E.2d 590 (1989) (at-will employee not entitled to further payments after termination). Sims agreed, however, to “be available” and assist with the transition of the “finance function” for an additional month as consideration for the oral agreement. Even if that consideration is wholly inadequate, in the absence of “ ‘great disparity of mental ability in contracting a bargain,’ ” a contract cannot be set aside for inadequate consideration. Kimbrell v. Connor, 218 Ga.App. 812, 813–814, 463 S.E.2d 376 (1995); see OCGA § 23–2–2. Indeed, OCGA § 13–3–46 provides that “[m]ere inadequacy of consideration alone will not void a contract.”

“[W]here there is a conflict in the evidence as to the existence of an oral contract or as to its terms, the matter must be submitted to a jury for resolution.” (Citations and punctuation omitted.) Rome v. Polyidus Partners, 322 Ga.App. 175, 178(2), 744 S.E.2d 363 (2013). Because Sims has presented evidence creating a genuine issue of material fact regarding whether the parties reached an oral agreement, the trial court erred in granting Esquire's motion for summary judgment with regard to that agreement.³

2. Sims next complains that Esquire committed fraud by leading him to believe that he would receive a written officer of employment for a definite term following

the closing of the APA, while Esquire knew before the closing that it intended to terminate his employment.

“The tort of fraud has five elements: a false representation by a defendant, scienter, intention to induce the plaintiff to act or refrain from acting, justifiable reliance by plaintiff, and damage to plaintiff.” (Citation and punctuation omitted.) Stiefel v. Schick, 260 Ga. 638, 639 (1), 398 S.E.2d 194 (1990). “To survive a motion for summary judgment in an action for fraud (including fraudulent inducement), a plaintiff must come forward with some evidence from which a jury could find each of the [foregoing] elements.” (Citations, punctuation and footnote omitted.) JarAllah v. Schoen, 243 Ga.App. 402, 403–404(1), 531 S.E.2d 778 (2000). “And significantly, when the representation consists of general commendations or mere expressions of opinion, hope, expectation and the like, the party to whom it is made is not justified in relying upon it, and thus, it cannot serve as the basis for either a fraud or a negligent misrepresentation claim.” (Citations, punctuation and footnotes omitted.) Bithoney v. Fulton–DeKalb Hosp. Auth., 313 Ga.App. 335, 343(2), 721 S.E.2d 577 (2011).

Sims points to statements in Esquire's press release, published nine days before the closing, that the “[e]ntire management team” (of which he was a part) was “excited to continue leading the Company”; an e-mailed letter on the same day to Esquire employees stating that “[o]ur entire management team ... [is] committed to continuing to build the business”; and a notation at the bottom of Schedule 1.1(b)(ii) (Excluded Contracts) referring to Sims and several other employees and stating: “Buyer intends to make offers of employment to such persons pursuant to and in accordance with ... the Purchase Agreement.” Sims contends that it was reasonable to infer from these representations that he would receive a written offer of employment from Esquire following the closing. He argues that because Craig deposed that he had decided prior to the November 14 press release that he was going to replace Sims as CFO, the press release, e-mail and the notation in the APA were false representations.

First, Sims has failed to show that the statements in the press release and e-mail were false representations. He has provided no evidence showing that management, including himself, did not in fact look forward to continuing to lead the company. See Marshall v. King & Morgenstern, 272 Ga.App. 515, 521(5), 613 S.E.2d 7 (2005) (no evidence of false representation where...