Aleron Group, LLC v. Ferguson
1:21-cv-01445
| E.D. Va. | Jul 28, 2023Background:
- Aleron Group (Plaintiff) signed a March 25, 2020 Teaming Agreement with Brown and Gorey to help identify/prepare a proposal for a hand sanitizer supplier for Aleron’s customer (IPF); Aleron drafted the Agreement.
- Brown and Gorey introduced David Ferguson as the supplier/broker who represented capacity to supply large quantities and available bottles; Brown and Gorey did not claim they themselves could supply product.
- The Teaming Agreement vested procurement and pricing discretion in Aleron, contemplated subsequent statements of work/subcontracts with Brown and Gorey, and provided an indemnity clause; it also promised Brown and Gorey 50% of Aleron’s net profit if a deal closed and they performed.
- Aleron paid a $500,000 deposit to Ferguson (using Brown as an intermediary because Brown and Ferguson shared a bank); the order later was canceled and the deposit was not returned; Brown and Gorey did not retain the deposit and were not paid for later efforts.
- Procedurally, Brown and Gorey moved for summary judgment on the remaining claims against them: breach of contract (Count I), fraudulent inducement (Count IV), and contractual indemnity (Count X).
- The court granted summary judgment for Brown and Gorey on all three counts and explained that remaining counterclaims/third-party claims will proceed to trial.
Issues:
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Breach of contract: Did Brown & Gorey breach the Teaming Agreement by failing to provide goods after payment? | Aleron: Brown & Gorey induced the agreement and are liable because their introduction led to the failed deal and loss of deposit. | Brown & Gorey: The Agreement only required them to assist in finding a supplier; they had no obligation to deliver goods; Aleron, not they, controlled procurement. | Court: For defendants. Agreement did not obligate them to supply goods; they fulfilled their role by introducing Ferguson and assisting with a draft purchase order. |
| Fraudulent inducement: Did Brown & Gorey make false pre-contractual representations to induce Aleron to sign? | Aleron: Brown & Gorey represented that Ferguson owned/represented a manufacturer and could procure sanitizer and bottles. | Brown & Gorey: No admissible evidence they made false pre-contractual statements; relied-upon statements are by Ferguson or post-date the agreement; plaintiff offers conclusory affidavits and texts after execution. | Court: For defendants. Plaintiff produced no admissible evidence of false statements by Brown & Gorey made before contract formation. |
| Contractual indemnity: Does the indemnity clause require Brown & Gorey to indemnify Aleron for its suit against them? | Aleron: Indemnity clause obligates Brown & Gorey to indemnify Aleron for losses (including legal fees). | Brown & Gorey: Under Florida law, indemnity clauses presumptively cover third-party claims; to indemnify the contracting party itself requires clear, unequivocal language not present here. | Court: For defendants. The clause is broad/general and, construing ambiguities against drafter (Aleron), applies only to third-party claims. |
Key Cases Cited
- Celotex Corp. v. Catrett, 477 U.S. 317 (summary judgment standard)
- Anderson v. Liberty Lobby, 477 U.S. 242 (materiality and genuine dispute standard at summary judgment)
- Colgan Air, Inc. v. Raytheon Aircraft Co., 507 F.3d 270 (enforcement of choice-of-law clause)
- Taurus Holdings, Inc. v. U.S. Fid. & Guar. Co., 913 So. 2d 528 (contract interpretation under Florida law)
- Evaluation Research Corp. v. Alequin, 439 S.E.2d 387 (elements of fraudulent inducement in Virginia)
- Dade County Sch. Bd. v. Radio Station WQBA, 731 So. 2d 638 (indemnity as protection against third-party liability under Florida law)
- Int’l Fid. Ins. Co. v. Americaribe-Moriarty JV, 906 F.3d 1329 (Florida indemnity clauses presumed to apply to third-party claims absent clear language)
- Univ. Plaza Shopping Ctr. v. Stewart, 272 So. 2d 507 (Florida requires clear and unequivocal language to extend indemnity to disputes between contracting parties)
- Golden Door Jewelry Creations, Inc. v. Lloyds Underwriters, 117 F.3d 1328 (ambiguities construed against drafter under Florida law)