Kent Arett v. Gardens Alive Farms LLC
21-3811
| 6th Cir. | Apr 6, 2022Background
- Kent Arett was an executive at Gardens Alive who negotiated a phased-retirement arrangement reducing hours and replacing his existing bonus with a "variable bonus based on agreed upon results and deadlines."
- VP/COO Felix Cooper emailed a proposed calculation: 10% of the "first year savings" times three, but stated metrics for measuring "savings" would be provided later and asked Arett for an "initial proposal."
- Arett replied "I agree" but never submitted the proposed metrics or otherwise finalized how "savings" would be measured; he did not raise the bonus again until after his termination.
- After termination Gardens Alive offered ~ $12,000; Arett claimed his savings entitled him to > $500,000 and sued for breach of contract, promissory estoppel, and unjust enrichment (age-discrimination claim not pursued on appeal).
- The district court granted summary judgment for Gardens Alive on the contested claims; the Sixth Circuit affirmed, focusing on contract definiteness, unenforceability of "agreements to agree," ambiguity for promissory estoppel, and plaintiff’s responsibility for the calculation difficulty.
Issues
| Issue | Plaintiff's Argument (Arett) | Defendant's Argument (Gardens Alive) | Held |
|---|---|---|---|
| Breach of contract: was there an enforceable bonus agreement? | Cooper's email fixed a formula (10% of "first year savings" × 3), so Gardens Alive is bound to pay under that formula. | The key term "savings" was left indefinite; parties agreed to negotiate metrics later (an unenforceable "agreement to agree"). | No enforceable contract; term not reasonably certain; summary judgment for Gardens Alive. |
| Promissory estoppel: was there a clear, enforceable promise? | Gardens Alive promised to pay per the emailed formula and to negotiate metrics in good faith. | The promises are ambiguous or are agreements to agree; lack the clear and unambiguous terms required for estoppel. | Promissory estoppel fails; promises not sufficiently clear; summary judgment for Gardens Alive. |
| Unjust enrichment: did Gardens Alive unjustly retain benefits of Arett's cost savings? | Arett conferred substantial savings (~$3M) and it would be unjust for Gardens Alive to keep that benefit without the larger bonus. | Arett failed to supply the metrics he was tasked to provide; his omission caused the calculation difficulty, so retention is not unjust. | No unjust enrichment; plaintiff responsible for uncertainty; summary judgment for Gardens Alive. |
Key Cases Cited
- Bank of N.Y. Mellon v. Rhiel, 122 N.E.3d 1219 (Ohio 2018) (requirement that essential contract terms be reasonably certain)
- Westfield Ins. Co. v. Galatis, 797 N.E.2d 1256 (Ohio 2003) (contract interpretation focuses on parties' manifested intent)
- M.J. DiCorpo, Inc. v. Sweeney, 634 N.E.2d 203 (Ohio 1994) ("agreements to agree" unenforceable absent definite terms)
- Cohen & Co. v. Messina, 492 N.E.2d 867 (Ohio Ct. App. 1985) (promissory estoppel requires clear, unambiguous promise)
- Hummel v. Hummel, 14 N.E.2d 923 (Ohio 1938) (elements of unjust enrichment)
- Johnson v. Microsoft Corp., 834 N.E.2d 791 (Ohio 2005) (unjust enrichment: benefit conferred, awareness, and unjust retention)
- Andersons, Inc. v. Consol, Inc., 348 F.3d 496 (6th Cir. 2003) (defendant’s responsibility for plaintiff’s detrimental position relevant to unjust enrichment)
- Hobart Corp. v. Waste Mgmt. of Ohio, Inc., 758 F.3d 757 (6th Cir. 2014) (analysis of unjust enrichment and allocation of responsibility)
- First Nat’l Bank of Omaha v. iBeam Sols., LLC, 61 N.E.3d 740 (Ohio Ct. App. 2016) (courts must have reasonably certain terms to fashion contract remedies)