Taft v. Dickman
| Decision Date | 06 August 2013 |
| Docket Number | No. COA12–943.,COA12–943. |
| Citation | 749 S.E.2d 112 |
| Parties | Robert B. TAFT, Jr. and RTB, Inc., Plaintiffs, v. J. Scott DICKMAN; Pinnacle Packaging Company, Inc.; Oracle Packaging Company of North Carolina, Inc.; and Oracle Flexible Packaging, Inc., Defendants. |
| Court | North Carolina Court of Appeals |
OPINION TEXT STARTS HERE
Appeal by plaintiffs from orders entered 9 January 2012 by Judge Gary M. Gavenus in Polk County Superior Court. Heard in the Court of Appeals 9 January 2013.
Northup McConnell & Sizemore, PLLC, by Brady J. Fulton, for plaintiffs-appellants.
Smith Moore Leatherwood LLP, by Richard A. Coughlin and L. Cooper Harrell, for defendants-appellees.
Plaintiffs Robert B. Taft, Jr. and RTB, Inc. appeal from the order denying their motion for a continuance of a summary judgment hearing and from the order granting defendants J. Scott Dickman, Pinnacle Packaging Company, Inc., Oracle Packaging Company of North Carolina, Inc., and Oracle Flexible Packaging, Inc.'s motion for summary judgment. Plaintiffs primarily contend on appeal that the trial court erred in granting defendants' motion for summary judgment because the court relied on a contract purportedly set out in emails when Mr. Taft's deposition provided evidence that he accepted an offer made over the phone with different terms. At the trial level, however, plaintiffs never relied upon that oral contract theory, but rather pursued a claim that defendants breached the email contract. It is well established that a party may not, in arguing that summary judgment was improper, rely upon new theories not made in the trial court. Since we find plaintiffs' other arguments also unpersuasive, we affirm.
Mr. Taft, who works as a salesman in the packaging industry, is also the sole shareholder of RTB, Inc., which provided sales services to various suppliers of ink for packaging services. Both Mr. Taft and RTB provide sales services for Siegwerk, a company that manufactures ink for packaging.
In 2003, Mr. Taft was serving as the Siegwerk representative for both R.J. Reynolds Packaging Company (“RJRP”) and defendant Oracle Packaging Company of North Carolina. During discussions with Jim Hummer, the plant manager of Oracle Flexible Packaging Company (a sister company of Oracle Packaging), Mr. Taft mentioned that RJRP was up for sale. Mr. Hummer indicated that defendant J. Scott Dickman, the CEO of Pinnacle Packaging Company, which was the sole shareholder of both Oracle Flexible Packaging Company and Oracle Flexible Packaging, Inc., was looking for a company to acquire. Mr. Hummer suggested that Mr. Taft speak with Mr. Dickman about the possibility of Pinnacle acquiring RJRP.
Mr. Taft spoke with Mr. Dickman in early 2003 and Mr. Dickman expressed interest in purchasing RJRP. Mr. Dickman was concerned, however, that since prospective buyers had to be invited to participate in the bidding process for RJRP, Pinnacle would not be able to get on the list to make an offer for the company. Mr. Taft agreed to help Pinnacle obtain an invitation to bid.
After that conversation, Mr. Taft introduced Mr. Dickman to Ric Engels, the President of RJRP, and Pinnacle was subsequently invited to be on the list of authorized bidders for the company. As the bidding process progressed, Mr. Taft and Mr. Dickman entered into discussions regarding how Mr. Taft would be compensated for his services.
Mr. Dickman first emailed Mr. Taft on 2 June 2003, confirming that Pinnacle was very interested in acquiring RJRP. Mr. Dickman also acknowledged the value of Mr. Taft's services in connection with the possible transaction and proposed that in exchange for Mr. Taft's good faith and exclusive assistance to Pinnacle with regard to the transaction, Pinnacle would pay Mr. Taft a consulting fee equal to .005% of the total Purchase Price. That fee was to “not be less than $200,000.00 nor more than $350,000.00.” The proposal also specified that the fee was to be “deemed to be earned upon the Closing of a purchase of RJR Packaging by Pinnacle or a related party[,]” but “no consulting fee [would] be earned by [Mr. Taft] or paid until and unless a transaction for Pinnacle, Oracle or related party to purchase RJR Packaging from RJR Tobacco [was] completed.” Additionally, the proposed agreement provided that “[u]pon Closing of a purchase transaction of the RJR Packaging operations, [Pinnacle] [would] work with [Mr. Taft] on a good faith basis to negotiate a long term (3–5 years) supply agreement [for ink] with the understanding that it [would] have safeguards to [e]nsure the pricing [was] competitive.”
The next day, Mr. Taft responded by email rejecting the proposed consulting fee of .005 % of the purchase price. He indicated, however, that he would be “willing to adjust, downward, [his] request [that he be paid 2% of the purchase price], assuming that [Mr. Dickman] [would be] willing to meet at a mutually agreed level.”
Mr. Dickman responded by email on 4 June 2003, asserting that he was “in a position of having to justify the amount paid.” He again acknowledged the value of Mr. Taft's services, but wrote that he could “not guarantee” that Pinnacle would be able to amend its offer. Mr. Dickman did commit to reopening the discussion regarding Mr. Taft's compensation after an upcoming series of meetings with RJRP regarding the potential transaction.
Mr. Dickman next emailed Mr. Taft on 19 June 2003 confirming that after his meetings in Winston–Salem with the management team of RJRP, he had been favorably impressed and Pinnacle would pursue acquisition of RJRP. He indicated that he had spoken with his senior management team regarding the issue of Mr. Taft's compensation, and they had expressed concern that Mr. Dickman's initial offer to Mr. Taft was too generous. Mr. Dickman, however, assured Mr. Taft that he would stand by his initial offer of .005% of the purchase price if Pinnacle successfully acquired all of RJRP's assets:
Even though this may exceed our Senior Management team's estimate, I will stand by the offer of .005% of the total amount of the Purchase Price, excluding the reimbursement for Working Capital, Inventory, Accounts Receivable and Accounts Payable. Based on our last offer to RJR, this would equate to a fee between $200,000 and $350,000. As you know this arrangement is totally conditioned upon Pinnacle or a related company actually closing the transaction and purchasing all of the assets of RJRP. In the event no transaction is closed, you will not be entitled to or paid any fee.
(Emphasis added.)
Two hours later, Mr. Taft responded agreeing to a deal with Mr. Dickman:
I do not want to be a problem, within this possible transaction. Jim Hummer called me the other day and made his position clear. I want you to always think positively of me and my involvement toward a successful business arrangement. As I have mentioned, there are various ways that I might be of service and I would like you and your group to consider me a team player. I will accept your offer and trust that going forward I can continue to be an asset to your group. I would hope that this can be a long lasting relationship and look forward to assisting Oracle in its printing ink requirements. As mentioned, I would like to have RTB, inc. [sic] as the company in which [sic] any monies go through. I am going to trust you and hope that you will do the same by me. Let's get it done.
(Emphasis added.)
Although Pinnacle contends that this email was accepting Mr. Dickman's offer set out in the 2 June and 19 June 2003 emails, Mr. Taft testified in his deposition that during the two hours between Mr. Dickman's email and Mr. Taft's response, the two men had a telephone conversation in which Mr. Dickman agreed to pay Mr. Taft $250,000.00 and further agreed that Pinnacle would purchase 2% of its ink requirements from Siegwerk for a period of three to five years. Mr. Taft claimed that his 19 June 2003 email was accepting the offer made over the telephone and not the offer made by email. According to Mr. Taft, the telephone offer did not condition payment of the consulting fee on Pinnacle's purchase of “all of the assets” of RJRP.
During the course of the negotiations between R.J. Reynolds (“RJR”) and Pinnacle, RJR decided that it would divide up RJRP for purposes of sale, with Pinnacle buying only RJRP's external business of supplying packaging to companies other than RJR. RJR decided to sell RJRP's internal business, which serviced RJR's own packaging needs, to four separate companies other than Pinnacle. Pinnacle closed on its purchase of RJRP on 1 May 2005.
After the transaction closed, Mr. Dickman and Mr. Taft had a conversation in which Mr. Dickman indicated to Mr. Taft that Mr. Taft was not due the full amount of his compensation because Pinnacle had not purchased all of RJRP's assets. Mr. Dickman, however, offered to pay Mr. Taft some amount for his services. Mr. Taft testified that the two men agreed that Mr. Taft would be paid $110,000.00 and that Pinnacle would enter into a requirements contract with Siegwerk, through RTB, for 2% of all inks purchased by Pinnacle:
So I continued to negotiate down from the [$]250,000 and landed on $110,000 assuming, which he assured me, I would have all the ink requirements. I mentioned to him at that point in time, I've got to have the ink requirements and if you don't buy the ink from me, I need to be compensated. And he told me 2 percent of all inks bought would be a fair arrangement. That's why I agreed to the [$]110,000.
Mr. Dickman, in his affidavit, acknowledged that during the 2005 conversation, he agreed to pay Mr. Taft through RTB $110,000.00. He testified, however, that he only agreed to treat Siegwerk as a “preferred supplier-meaning that Siegwerk inks would be used as long as they were price competitive and qualified.” It is undisputed that after this 2005 conversation, the amount of ink purchased from Siegwerk by Pinnacle decreased.
Plaintiffs filed suit against defendants on 12 January...
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