134 F. Supp. 3d 926
D. Maryland2015Background
- Camp White Mountain (later Timber Ridge Camp) was owned and operated by Fred Greenberg and Jill Goden through entities TRI and YWL; each held 50% as of 2010. Luis Rullan, a longtime camper and counselor from Spain, negotiated involvement beginning in late 2010.
- In December 2010 meetings in Florida, parties discussed Rullan becoming Goden’s partner, recruiting European campers, and an employment arrangement; disputes exist over whether a binding employment deal was made.
- In August 2011 the parties signed a two‑page document titled “Partnership and Stock Agreement” (PSA) in West Virginia that purports to transfer 50% of TRI and YWL to Rullan for $500,000 payable $50,000/year over ten years; the PSA was signed by Greenberg, Goden, and Rullan.
- Rullan wired approximately $105,000 to U.S. accounts (including $55,000 capitalizing YWI and $50,000 later described as a loan) and worked at the Camp in 2011; disputes arose over undisclosed Camp debts (including a $2.425 million loan) and corporate finances.
- Relations collapsed in mid‑2012; Rullan sued (diversity jurisdiction) for breach of the PSA and related claims (fraudulent inducement, unjust enrichment, shareholder oppression, fiduciary breach, accounting). Goden later filed bankruptcy; motions for summary judgment followed.
Issues
| Issue | Plaintiff's Argument (Rullan) | Defendant's Argument (Greenberg/Goden) | Held |
|---|---|---|---|
| Enforceability of the PSA (contract vs. letter of intent) | PSA is a binding agreement transferring stock; parties intended to be bound and partially performed | PSA is a mere letter of intent (due diligence/legal papers show reservation) | PSA is a binding contract (Type I); triable issues remain as to performance and breaches |
| Breach of PSA by Greenberg | Greenberg breached by repudiating sale, refusing to transfer stock, and retaining benefit of Rullan’s payments and labor | Rullan breached first (failed payments, didn’t assume guarantees, didn’t complete due diligence) | Summary judgment denied to Greenberg; material factual disputes about who breached first preclude judgment |
| Fraudulent inducement / omissions | Goden (and Greenberg as beneficiary/agent) made material misrepresentations/omissions about finances and partnership, inducing Rullan to invest | Defendants deny misrepresentations; argue no duty to disclose and no justifiable reliance | Denied as premature for Greenberg and Goden (fact questions, Goden not yet deposed; potential vicarious liability for Greenberg) |
| Statute of Frauds re: oral employment agreement (Florida) | Oral one‑year employment/partnership agreement was performed or superseded by PSA | Oral agreement is unenforceable under Florida statute of frauds (not in writing; not fully performed) | Court grants summary judgment to Goden on the oral employment claim (barred by Florida statute of frauds) |
Key Cases Cited
- Libertarian Party of Va. v. Judd, 718 F.3d 308 (4th Cir. 2013) (summary‑judgment standards for genuine disputes of material fact)
- Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (U.S. 1986) (standard for materiality and genuine issue at summary judgment)
- Burbach Broad. Co. of Delaware v. Elkins Radio Corp., 278 F.3d 401 (4th Cir. 2002) (distinguishing Type I and Type II preliminary agreements/letters of intent)
- Teachers Ins. & Annuity Ass’n v. Tribune Co., 670 F. Supp. 491 (S.D.N.Y. 1987) (treating informal agreements as binding where parties intended to be bound)
- Wellington Power Corp. v. CNA Sur. Corp., 217 W.Va. 33, 614 S.E.2d 680 (W. Va. 2005) (elements of a contract under West Virginia law)