Velten v. Regis B. Lippert, Intercat, Inc., 91-9061

Decision Date17 March 1993
Docket NumberNo. 91-9061,91-9061
Citation985 F.2d 1515
PartiesTerrance J. VELTEN, Plaintiff-Appellant, v. REGIS B. LIPPERT, INTERCAT, INC., Intercat Pacific, Inc., formerly Intercat, U.S.A., Defendants-Appellees.
CourtU.S. Court of Appeals — Eleventh Circuit

C. James McCallar, Jr. and Mark Bulovic, McCallar & Associates, Savannah, GA, for appellant.

Frank T. Laznovsky, Kirlin Campbell & Keating, New York City and Jane E. Fahey, Bondurant Mixson & Elmore, Atlanta, GA, for appellees.

Appeal from the United States District Court for the Southern District of Georgia.

Before KRAVITCH, Circuit Judge, GODBOLD and OAKES *, Senior Circuit Judges.

GODBOLD, Senior Circuit Judge:

This appeal concerns appellant Velten's claims that he is entitled to a one-third ownership interest in Intercat, Inc. or its monetary equivalent. He asserts two different theories entitling him to relief: (1) an oral agreement with defendant Lippert and/or defendant Intercat, Inc. that he be given a one-third interest, and (2) fraudulent inducement by Lippert inducing Velten to enter into a written contract of employment with Intercat, Inc. The district court granted defendants' motion for summary judgment on the oral agreement claim because it concluded that the parol evidence rule prevented Velten from introducing evidence of the alleged oral agreement. It granted summary judgment on the fraud claim on the ground that Velten had affirmed the employment contract with Intercat, thus waiving his fraud claim, and he had failed to present sufficient evidence of fraud. We affirm in part, reverse in part, and remand.

I. FACTUAL BACKGROUND

Velten, a chemical development engineer, and Lippert, an executive, have spent their careers in the petroleum industry's fluid cracking catalyst field. In April 1986 the two met in Savannah, Georgia, to discuss the development of a company to manufacture and market fluid cracking catalysts. What transpired at the meeting is disputed. Velten contends that Lippert proposed that they, along with Horacio Gonzales, form a company to be called Intercat. Velten would handle product development, Lippert would run the business affairs, and Gonzales would be in charge of marketing. Each would own one-third of the company to be formed. Velten contends that he agreed to this proposal. Lippert contends, however, that he did not offer to make Velten an owner in the company to be formed but only offered him a consulting position in Lippert's already existing business.

Regardless of what was said at the Savannah meeting, it is now clear that prior to the meeting Lippert had formed a company called Intercat USA Inc. 1 It is also clear that after the meeting, by written contract dated April 22, 1986, Velten agreed with Intercat USA Inc. to work as a consultant. The contract provided that, contingent upon the company's receiving a development contract, Velten was to be paid at a daily rate. Velten contends that he only agreed to be paid as a consultant on a contingent basis because he was going to be a one-third owner in the proposed company. According to Lippert the written consulting contract constitutes the sole agreement concerning Velten's compensation.

Intercat, Inc. was incorporated by Lippert on November 13, 1986 and succeeded by contract to the rights, obligations, and assets of Intercat USA Inc. 2 Velten began to work as a consultant as agreed and Intercat became successful. Velten contends that after he began working he repeatedly asked Lippert for documentation showing his one-third ownership interest and that Lippert responded that the paperwork should wait until the company's survival was assured. Velten signed a new consulting agreement with Intercat dated March 1, 1987, and the text of the contract revealed that the company was incorporated. According to Velten, he then began to request stock certificates representing a one-third interest. In spring 1988 Lippert produced a plan that gave 60% of Intercat to himself, 10% to his lawyers, and provided for the other 30% to be distributed among all the employees. In September 1988 he offered Velten 5%. Velten again asked for one-third and resigned when Lippert refused his request. Lippert agrees that he offered Velten 5% and that Velten resigned because he wanted a greater share of the company. He denies that he ever offered Velten a one-third interest in the company and asserts that the closest Velten ever came to asking for a one-third interest was in September 1988 when he requested 30% of the outstanding stock.

Velten sued Lippert, Intercat USA Inc., and Intercat, Inc. He claimed that he was owed money under the consulting agreements and that he was entitled to one-third of Intercat or its monetary equivalent on three different bases: he was fraudulently induced to work for Intercat; he was a party to an oral contract that he would be given a one-third interest in the company; and he was entitled to the value of one-third of Intercat under a quantum meruit theory. 3 The district court granted summary judgment to Velten on his claim that he was owed money under the consulting agreements. The defendants do not question this decision. On the oral agreement and the quantum meruit claims, the court granted defendants' motion for summary judgment on the ground that the parol evidence rule prevented Velten from establishing the existence of an oral agreement. It granted defendants' motion for summary judgment on Velten's fraud claim because it concluded that Velten had waived that claim by affirming the consulting agreements and that he had not presented sufficient evidence of fraud.

The issues on appeal are whether the court correctly concluded that the parol evidence rule prevented Velten from establishing the existence of an oral agreement to which he was a party and whether it correctly concluded that Velten had waived his fraud claim by affirming the consulting agreements and had not presented sufficient evidence of fraud. 4 We hold that the parol evidence rule does not prevent Velten from establishing an oral agreement between him and Lippert in his individual capacity, that Velten has not waived his right to fraud damages against Lippert or Intercat, and that he has presented enough evidence of fraud to survive summary judgment. We therefore, on Velten's oral agreement claim, affirm the district court's grant of summary judgment to Intercat, but reverse the summary judgment to Lippert individually, and remand. On Velten's fraud claim, we reverse the summary judgments to both Lippert and Intercat and remand.

II. STANDARD OF REVIEW

We review de novo the grant of summary judgment and all reasonable doubts are resolved in favor of the nonmovant. Browning v. Peyton, 918 F.2d 1516, 1520 (11th Cir.1990).

III. DISCUSSION
A. Choice of Law

Under Erie R.R. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938), and its progeny, Georgia's substantive law, including its choice of law principles, controls this case. See Day & Zimmermann, Inc. v. Challoner, 423 U.S. 3, 4, 96 S.Ct. 167, 168, 46 L.Ed.2d 3 (1975); Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 496, 61 S.Ct. 1020, 1021-22, 85 L.Ed. 1477 (1941). The Georgia conflict of laws rule for contracts is generally lex loci contractus. Ferrero v. Associated Materials Inc., 923 F.2d 1441, 1444 (11th Cir.1991). Parties are permitted to stipulate that another jurisdiction's law will apply, Manderson & Assocs. v. Gore, 193 Ga.App. 723, 389 S.E.2d 251, 254 (1989), cert. denied, (Ga. Jan. 11, 1990), unless that law is contrary to Georgia public policy, id., or the jurisdiction has no substantial relationship to the parties or the transaction, Ryder Truck Lines v. Goren Equip. Co., 576 F.Supp. 1348, 1354 (N.D.Ga.1983).

The April 22, 1986 consulting agreement contained a clause providing that it "shall be governed by the internal law of the State of New Jersey." New Jersey law provides:

In the absence of ambiguity in a written agreement which is complete, oral evidence cannot be introduced to explain or vary the agreement. If, through mistake or fraud, an agreement in writing does not express the contract which the parties intended to make, the remedy is in equity to reform it, but until it is so reformed it is unassailable by parol testimony.

Gabriel v. Glickman, 25 N.J.Misc. 120, 51 A.2d 106, 108 (1947); see also Fr. Winkler KG v. Stoller, 839 F.2d 1002, 1005 (3d Cir.1988) (applying New Jersey law). This is the well known parol evidence rule, and New Jersey's statement of it is not contrary to any of Georgia's public policies. In addition New Jersey has a substantial relationship because Intercat USA Inc., one of the parties to the April 22, 1986 consulting agreement, is a New Jersey corporation. Accordingly, under Georgia's conflict of laws rule, whether the consulting agreement prevents Velten from introducing evidence of a prior oral agreement giving him a one-third ownership interest in Intercat is governed by New Jersey law. 5

B. Parol Evidence

The April 22, 1986 consulting agreement contained a clause providing that "this agreement supersedes all prior understandings between the parties." It contained a compensation clause which provided "As compensation for the services to be rendered by Terry Velton [sic] the Company shall pay a fee at the rate of $250 per day ... provided the company is awarded a development contract by the principal." The district court concluded that the consulting agreement was integrated and unambiguous and thus that the parol evidence rule applied. It further concluded that the alleged oral agreement between Lippert and Velten pursuant to which Velten would be given a one-third ownership interest in Intercat concerned Velten's compensation for joining Lippert's efforts to create a new company. Because Velten's compensation was also addressed in the separate--and written--consulting agreement, the court concluded that introduction of evidence of "oral representations by...

To continue reading

Request your trial
29 cases
  • Welch v. Delta Air Lines, Inc.
    • United States
    • U.S. District Court — Northern District of Georgia
    • 19 Agosto 1997
    ...of any genuine issue of material fact, it is up to the plaintiff to produce some evidence in support of her claim. Velten v. Lippert, 985 F.2d 1515 (11th Cir.1993). Mere conclusory allegations of harassment are not enough to withstand a motion for summary judgment. Carter v. Miami, 870 F.2d......
  • Szomjassy v. Ohm Corp.
    • United States
    • U.S. District Court — Northern District of Georgia
    • 8 Marzo 2001
    ...Georgia courts will not apply another state's laws. Rayle Tech, Inc., 133 F.3d at 1409 (citing Velten v. Regis B. Lippert, Intercat, Inc., 985 F.2d 1515, 1519 (11th Cir.1993)). Similarly, Delaware courts, like Georgia courts, generally honor choice of law provisions, but they still require ......
  • Garland v. Advanced Medical Fund, L.P. II
    • United States
    • U.S. District Court — Northern District of Georgia
    • 18 Enero 2000
    ...at 739-40. The Eleventh Circuit, applying Georgia law, has apparently reached the same conclusion. See Velten v. Regis B. Lippert, Intercat, Inc., 985 F.2d 1515, 1521 (11th Cir.1993) (finding that harm occurred in Georgia where plaintiff resided in Georgia). In the instant action, the Garla......
  • Cardwell v. Bankr. Estate of Spivey (In re Douglas Asphalt Co.)
    • United States
    • United States Bankruptcy Courts. Eleventh Circuit. U.S. Bankruptcy Court — Southern District of Georgia
    • 20 Noviembre 2012
    ...(5th Cir. 1979), Southern Distributing Co. v. Southdown, Inc., 574 F.2d 824 (5th Cir. 1978)); see also Velten v. Regis B. Lippert, Intercat, Inc., 985 F.2d 1515, 1523 (11th Cir. 1993)(citing Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986)). A genuine issue exists where the evidence is su......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT