HOSPITAL MEDIA NETWORK, LLC v. JAMES G. HENDERSON ET AL.
AC 40197
Appellate Court of Connecticut
Argued September 18, 2018—officially released January 8, 2019
Alvord, Keller and Flynn, Js.
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Syllabus
The plaintiff sought to recover damages from the defendant H, its former employee, for, inter alia, breach of fiduciary duty. H was employed by the plaintiff as its chief revenue officer until the plaintiff terminated H‘s employment on September 5, 2013. The plaintiff thereafter brought the present action, claiming, inter alia, that H had a fiduciary relationship with the plaintiff and that H breached his fiduciary duty by working for G Co., a private equity investment firm, to raise capital to acquire C Co., which was involved in the same business sector as the plaintiff, without the plaintiff‘s permission or knowledge. G Co.‘s acquisition of C Co. closed on September 26, 2013, upon which H was paid a $150,000 finder‘s fee by either G Co. or C Co., awarded a three year consulting contract with C Co. at $50,000 annually, and given the opportunity to purchase restricted stock of C Co. After H was defaulted for failure to comply with a discovery order, the trial court granted the plaintiff‘s motion for judgment on the default. Following a hearing in damages, the trial court awarded damages against H in the amount of $454,579.76 on the plaintiff‘s claim of breach of fiduciary duty, which included the entire salary and bonus H received from the plaintiff as a full-time employee in 2013, the finder‘s fee paid to H by G Co. or C Co., the consulting fees paid to H by C Co. from 2013 to 2016, and the value of the C Co. stock at the time of H‘s purchase. On H‘s appeal to this court, held that the trial court abused its discretion in ordering a wholesale forfeiture of the salary and bonus paid to H by the plaintiff in 2013, and requiring H to disgorge in full all profits received from C Co. and G Co., as the award of monetary relief was disproportionate to the misconduct at issue and failed to take into account the equities in the case: although the remedies of forfeiture of compensation paid by an employer and disgorgement of amounts received by the employee from third parties are available when an employer has proven a breach of the fiduciary duty of loyalty by the employee, the imposition of those remedies is dependent on the equities of the particular case, and trial court‘s findings here that H provided significant value to the plaintiff by contributing to the plaintiff‘s rapid growth, despite his breach of fiduciary duty, and that H did not act with a bad motive or reckless indifference, but rather failed to comprehend or ignored the differences between being an employee and a consultant, should have weighed in favor of a measured forfeiture rather than H‘s full salary and bonus; moreover, full disgorgement of the benefits conferred on H by C Co. and G Co. was improper, as H rendered some of the services for which he was compensated by C Co. and G Co. both prior and subsequent to his full-time employment with the plaintiff, and the commensurate portion of the compensation received in exchange for those services should not have been included in the court‘s order of disgorgement.
Procedural History
Action to recover damages for, inter alia, breach of fiduciary duty, and for other relief, brought to the Superior Court in the judicial district of Stamford-Norwalk, where the defendants filed a counterclaim; thereafter, the court, Hon. A. William Mottolese, judge trial referee, granted the plaintiff‘s motion for default against the defendants and for nonsuit on the defendants’ counterclaim; subsequently, the court, Hon. A. William Mottolese, judge trial referee, granted the plaintiff‘s motion for judgment on the default and rendered judgment of nonsuit as to the defendants’ counterclaim; thereafter, following a hearing in damages, the court, Hon. Taggart D. Adams, judge trial referee, rendered judgment for the plaintiff, from which the defendants appealed to this court. Reversed in part; further proceedings.
James G. Henderson, self-represented, with whom was Taylor Henderson, self-represented, the appellants (defendants).
Gary S. Klein, with whom was Liam S. Burke, for the appellee (plaintiff).
Opinion
The following facts and procedural history are relevant to the resolution of this appeal. In November, 2013, the plaintiff commenced this action alleging that the defendant, its former employee, violated the Connecticut Uniform Trade Secrets Act (CUTSA),
With respect to its breach of fiduciary duty count, the plaintiff alleged that it employed the defendant as its chief revenue officer and paid him substantial compensation from January 1 to September 2013. On September 5, 2013, the plaintiff terminated the defendant‘s employment “for cause for several reasons including, without limitation [the defendant‘s] actively working for various companies unrelated to [the plaintiff] for his own benefit and without [the plaintiff‘s] permission or knowledge during regular business hours.” Specifically, it alleged that the defendant worked for or on behalf of Generation Partners (Generation), a private equity investment firm, “to raise capital for other digital media companies including but not limited to” Captivate Network Holdings, Inc. (Captivate), and used the plaintiff‘s computers and infrastructure to conduct business for those other digital media companies without the plaintiff‘s permission or knowledge. The plaintiff claimed that the defendant played golf on a social basis and otherwise took time off during regular business hours without the plaintiff‘s permission.
The plaintiff further alleged that the parties had a fiduciary relationship “by virtue of the trust and confidence” the plaintiff placed in the defendant as its chief revenue officer, a senior executive position. Among the duties allegedly owed to the plaintiff were the duty of loyalty, the duty to act in good faith, and the duty to act in the best interest of the plaintiff. The plaintiff asserted that the defendant breached these duties in advancing his own interests to the detriment of the plaintiff. Lastly, the plaintiff alleged that the defendant‘s breach caused it to sustain damages.3
The defendant answered and filed an amended counterclaim, alleging breach of contract, wrongful termination, misrepresentation and deceit, and violation of the Connecticut Unfair Trade Practices Act (CUTPA),
The parties engaged in discovery disputes, resulting in an April, 2016 order from the court that the parties “confer face-to-face in an effort to resolve these discovery disputes, bearing in mind that reasonable good faith efforts at compromise are essential to every discovery dispute.” On June 27, 2016, after finding the defendant‘s objections to the plaintiff‘s discovery requests “intentionally evasive and intended to obstruct the process,” the court ordered full compliance within thirty days. On July 28, 2016, the plaintiff filed a motion for default and nonsuit on the basis that the defendant had failed to comply with the court‘s June 27 order. The court granted the motion, finding that the “[p]laintiff is clearly prejudiced by these obstructive tactics and the only appropriate remedy proportionate to the infraction is default.” On September 26, 2016, the court rendered judgment for the plaintiff on its affirmative claims and against the defendant on his counterclaim.
On September 27, 2016, the court held a hearing in damages. The plaintiff presented the testimony of Andrew Hertzmark, an employee of Generation;4 Christopher Culver, chief executive officer of the plaintiff; Taylor Henderson; and James Henderson. At the conclusion of the hearing, the court requested posttrial briefing, which the parties submitted on October 18, 2016.
On February 15, 2017, the court issued a memorandum of decision. In its memorandum, the court reviewed the evidence presented during the hearing in damages. From 2011 to 2013, the defendant was a consultant to the plaintiff, and the plaintiff compensated the defendant by making payments to his consulting company, St. Ives Development Group. On January 1, 2013, the defendant became a full-time employee and chief revenue officer of the plaintiff. The plaintiff paid him a salary of over $12,000 per month, totaling $121,579.84 in 2013, and also paid him a sales target bonus of $25,000 in May, 2013. That bonus was paid to St. Ives Development Group.5 Just weeks after becoming a full-time employee of the plaintiff, the defendant communicated with Hertzmark, identifying the plaintiff as a possible investment target for his fund, and included the plaintiff‘s revenues and possible buyout price.
In 2013, Hertzmark was working on a potential transaction in which Generation would acquire Captivate from Gannett Company, Inc. (Gannett).6 Both Captivate and the plaintiff are involved in the
The plaintiff terminated the defendant‘s employment on September 5, 2013, and Generation‘s acquisition of Captivate from Gannett closed on September 26, 2013. Upon the transaction‘s closing, the defendant was paid a finder‘s fee of $150,000, awarded a consulting contract with Captivate for three years at $50,000 annually, and given the opportunity to purchase restricted stock of Captivate.9
The court found that “during the events in this case [the defendant] either never comprehended or ignored the different consequences of being a company employee and being a consultant,” referring to the defendant‘s testimony in which he described himself as a “consultant employee” of the plaintiff. The court referenced the testimony of Culver, the plaintiff‘s chief executive officer, that the plaintiff‘s sales increased from $1.9 million in 2010 to $6.6 million in 2013. The court additionally noted Culver‘s testimony that the plaintiff “held itself out to be the fastest growing company of its kind during this period” and his recognition that the defendant was part of this “terrific growth.” Crediting Culver‘s testimony, the court found that “there was a sharp increase in the company‘s sales” while the defendant worked for the plaintiff.
Turning to the plaintiff‘s claimed damages, the court first found that the plaintiff was not entitled to the defendant‘s “compensation from Captivate” on the theory that the defendant usurped a corporate opportunity. Specifically, the court found that the opportunity the defendant took was “employment” at Captivate, which was not an opportunity available to the plaintiff. The court determined, however, that damages were appropriate on the plaintiff‘s claim of the breach of fiduciary duty of loyalty, and measured the damages “by the gain to the faithless employee.”10 The
The court declined to award attorney‘s fees under CUTSA, finding that “there was minimal or no misappropriation of trade secrets in this case, and no justifiable basis for awarding fees under that statute.” The court further declined to award attorney‘s fees as punitive damages under the common law, on the basis that the defendant “has been penalized severely already by this court‘s decision. To add hundreds of thousands of dollars more, would not only be punitive, it would be overkill.” It additionally found that although the defendant‘s actions were “uninformed, and even stupid,” his conduct did not meet the common-law standard for awarding attorney‘s fees, which, the court observed, requires that the conduct be “outrageous, done with a bad motive, or with reckless indifference.” This appeal followed.
On appeal, the defendant claims that the plaintiff was “unable to offer proof as to any of [its] damages by a preponderance of [the] evidence” and therefore is “not entitled to any award of damages.”
We begin by addressing the effect of the default. The defendant was defaulted for failure to comply with the court‘s discovery order, and he concedes that he did not file a notice of intent to present defenses.12 “[C]ase law makes clear . . . that once the defendants had been defaulted and had failed to file a notice of intent to present defenses, they, by operation of law, were deemed to have admitted to all the essential elements in the claim and would not be allowed to contest liability at the hearing in damages.” (Internal quotation marks omitted.) Abbott Terrace Health Center, Inc. v. Parawich, 120 Conn. App. 78, 85, 990 A.2d 1267 (2010). “A default admits the material facts that constitute a cause of action . . . and entry of default, when appropriately made, conclusively determines the liability of a defendant. . . . If the allegations of the plaintiff‘s complaint are sufficient
Because of the default entered against the defendant, he is precluded from challenging his liability to the plaintiff under the claims pleaded. “In an action at law, the rule is that the entry of a default operates as a confession by the defaulted defendant of the truth of the material facts alleged in the complaint which are essential to entitle the plaintiff to some of the relief prayed. It is not the equivalent of an admission of all of the facts pleaded. The limit of its effect is to preclude the defaulted defendant from making any further defense and to permit the entry of a judgment against him on the theory that he has admitted such of the facts alleged in the complaint as are essential to such a judgment. It does not follow that the plaintiff is entitled to a judgment for the full amount of the relief claimed. The plaintiff must still prove how much of the judgment prayed for in the complaint he is entitled to receive.” (Emphasis in original; internal quotation marks omitted.) Id., 271–72.
Throughout his principal and reply briefing and during oral argument before this court, the defendant raises arguments challenging his liability to the plaintiff. Specifically, he argues that the plaintiff waived its claims of breach of the duty of loyalty when hiring the defendant, in that the plaintiff hired him with full knowledge that he would continue to consult for other companies. The central contention expressed in the defendant‘s reply brief is that the duty of loyalty never applied to his relationship with the plaintiff, and that “[w]here there was no duty of faithfulness, loyalty, or an agency or fiduciary relationship implicit in the parties’ agreement, logically there cannot be any breach of it. Without a breach, damages are not available as a matter of fact and law.” Such arguments are unavailing given the entry of a default, which operates as an admission by the defendant of the facts alleged in the complaint that are essential to the judgment rendered in favor of the plaintiff on its claim of breach of fiduciary duty.
The defendant is entitled, however, to challenge the determination of monetary relief awarded by the court. Our standard of review is as follows. “As a general matter, [t]he trial court has broad discretion in determining whether damages are appropriate. . . . Its decision will not be disturbed on appeal absent a clear abuse of discretion. . . . Our review of the amounts of monetary awards rendered pursuant to various equitable doctrines is similarly deferential.”13 (Citation omitted; internal quotation marks omitted.) Wall Systems, Inc. v. Pompa, 324 Conn. 718, 729, 154 A.3d 989 (2017).
After a bench trial, the court awarded damages to the plaintiff arising out of the kickback scheme in the amounts of $14,400, for jobs on which the defendant had increased the contract price, and $43,200, representing treble damages as a result of the defendant‘s statutory theft. Id., 726. The trial court declined to require the defendant to forfeit the compensation he earned from either the plaintiff or its competitor, citing a lack of evidence that the plaintiff had been harmed due to the defendant‘s working for the competitor, and finding that the defendant had worked for the competitor on his own time. Id., 726–27. On appeal, the plaintiff claimed as a matter of law that the trial court improperly declined to order the defendant to forfeit his earnings from the plaintiff and to require the defendant to disgorge the compensation he received from the competitor. Id., 727–28. Our Supreme Court, recognizing that the remedies of forfeiture and disgorgement are available once an employer has proven breach of the fiduciary duty of loyalty, nevertheless held that the remedies are not mandatory, but “are discretionary ones whose imposition is dependent upon the equities of the case at hand.” Id., 729.
The court in Wall Systems, Inc. provided: “The law of restitution and unjust enrichment . . . creates a basis for an [employee‘s] liability to [an employer] when the [employee] breaches a fiduciary duty, even when no loss to the employer is shown. 2 Restatement (Third), [Agency] § 8.01 comment (d) (1), p. 258 [(2006)]. More specifically, if an employee realizes a material benefit from a third party in connection with his breach of the duty of loyalty, the employee is subject to liability to deliver the benefit, its proceeds, or its value to the [employer]. Id.; see also id., § 8.02, comment (e), p. 285. Accordingly, [a]n employee who breaches the fiduciary duty of loyalty may be required to disgorge any profit or benefit he received as a result of his disloyal activities, regardless of whether the employer has suffered a corresponding loss. . . .
“Additionally, an employer may seek forfeiture of its employee‘s compensation. Cameco, Inc. v. Gedicke, 157 N.J. 504, 519, 724 A.2d 783 (1999); 2 Restatement (Third), supra, § 8.01, comment (d) (2), pp. 258–59. Forfeiture of a disloyal employee‘s compensation, like disgorgement of material benefits received from third parties, is an equitable rather than a legal remedy. . . . It is derived from a principle of contract law: if the employee breaches the duty of loyalty at the heart of the employment relationship, he or she may be compelled to forego the compensation earned during the period of disloyalty. The remedy is substantially rooted in the notion that compensation during a period in which the employee is disloyal is, in
Our Supreme Court made clear that the remedies of forfeiture of compensation and disgorgement of material benefits are discretionary, especially in “cases involving breaches of the duty of loyalty due to their highly fact specific nature.” Id., 736. The court further articulated the following nonexhaustive list of factors a trial court should consider in determining whether to invoke forfeiture and disgorgement: “the employee‘s position, duties and degree of responsibility with the employer; the level of compensation that the employee receives from the employer; the frequency, timing and egregiousness of the employee‘s disloyal acts; the wilfulness of the disloyal acts; the extent or degree of the employer‘s knowledge of the employee‘s disloyal acts; the effect of the disloyal acts on the value of the employ-ee‘s properly performed services to the employer; the potential for harm, or actual harm, to the employer‘s business as a result of the disloyal acts; the degree of planning taken by the employee to undermine the employer; and the adequacy of other available remedies, as herein discussed. . . . The several factors embrace broad considerations which must be weighed together and not mechanically applied. . . . [T]he judicial task is to search for a fair and reasonable solution in light of the relevant considerations . . . and to avoid unjust enrichment to either party. . . . Additionally, when imposing the remedy of forfeiture of compensation, depending on the circumstances, a trial court may in its discretion apply apportionment principles, rather than ordering a wholesale forfeiture that may be disproportionate to the misconduct at issue. . . . Conversely, the court may conclude that all compensation should be forfeited because the employee‘s unusually egregious or reprehensible conduct pervaded and corrupted the entire [employment] relationship.” (Citations omitted; internal quotation marks omitted.) Id., 737–38.
The factors articulated in Wall Systems, Inc., are designed to assist the trial court in reaching “a fair and reasonable solution” and to “avoid unjust enrichment to either party.” Id., 738. Specifically, the court in Wall Systems, Inc. noted that in certain circumstances the application of apportionment principles may be more appropriate than “a wholesale forfeiture that may be disproportionate to the misconduct at issue.” Id. In the present case, we conclude that the award of monetary relief was disproportionate to the misconduct at issue and failed to take into account the equities of the case at hand.14
Although the court in the present case did not have the benefit of the Wall Systems, Inc., factors at the time it rendered its decision, our Supreme Court noted that the factors had been “gleaned from existing jurisprudence.” Id., 737. The court did, in its memorandum of decision, make factual findings, fully supported by the record and corresponding with the Wall Systems, Inc., factors, but ultimately failed to give proper weight to these findings in fashioning its damages award. Specifically, the trial court expressly recognized the value of the services the defendant provided the plaintiff, finding “a sharp increase in the company‘s sales” while the defendant worked for the plaintiff, and concluding that the defendant was part of this “terrific growth.” That finding corresponds with the Wall Systems, Inc., factor prompting consideration of “the effect
Indeed, as the court in Wall Systems, Inc., explained, forfeiture as a remedy “is substantially rooted in the notion that compensation during a period in which the employee is disloyal is, in effect, unearned.” Id., 734. In accord with this principle, courts in other states have recognized that an employee may be entitled to retain some portion of his compensation where the breach is minor or the employee has provided value to the employer in the form of services properly rendered. See Cameco, Inc. v. Gedicke, supra, 157 N.J. 521 (“if the employee‘s breach is minor, involves only a minimal amount of time, or does not harm the employer, the employee may be entitled to all or substantially all of his or her compensation“); Futch v. McAllister Towing of Georgetown, Inc., 335 S.C. 598, 609, 518 S.E.2d 591 (1999) (noting that “[t]he goal is to avoid the unjust enrichment of either party by examining factors such as . . . the value to the employer of the services properly rendered by the employee“).
The 2 Restatement (Third), supra, § 8.01 comment (d) (2) also suggests that forfeiture in full is disproportionate under certain circumstances. It provides: “Although forfeiture is generally available as a remedy for breach of fiduciary duty, cases are divided on how absolute a measure to apply. Some cases require forfeiture of all compensation paid or payable over the period of disloyalty, while others permit apportionment over a series of tasks or specified items of work when only some are tainted by the agent‘s disloyal conduct. The better rule permits the court to consider the specifics of the agent‘s work and the nature of the agent‘s breach of duty and to evaluate whether the agent‘s breach of fiduciary duty tainted all of the agent‘s work or was confined to discrete transactions for which the agent was entitled to apportioned compensation.”
In the present case, the court also made a finding related to the wilfulness of the defendant‘s actions, another of the Wall Systems, Inc., factors. The court characterized the defendant‘s actions as “uninformed, and even stupid.” By declining to award attorney‘s fees as punitive damages under the common law on this basis, it is evident that the court rejected any notion that the defendant‘s conduct was “outrageous, done with a bad motive, or with reckless indifference.” The court also found that the defendant had “either never comprehended or ignored the different consequences of being a company employee and being a consultant,” referring to the defendant‘s testimony in which he described himself as a “consultant employee” of the plaintiff. Despite recognizing that the defendant potentially “never comprehended” the distinction between serving as an employee and a consultant and finding that the defendant‘s behavior was “uninformed” rather than done with a bad motive, the court failed to give proper weight to these findings when fashioning its award.
We acknowledge that a trial court “may conclude that all compensation should be forfeited because the employee‘s unusually egregious or reprehensible conduct pervaded and corrupted the entire [employment] relationship.” (Internal quotation marks omitted.) Wall Systems, Inc. v. Pompa, supra, 324 Conn. 738. The court in Wall Systems, Inc., recognized
We further note briefly that forfeiture was not the sole remedy available to the court, as the court had before it evidence of the benefit the defendant received from third parties Generation and Captivate. Cf. id., 734 (“[f]orfeiture may be the only available remedy when . . . the [employee] realizes no profit from the breach“). The court found those benefits, including the finder‘s fee, value of the stock purchased, and the three year consulting agreement, to amount to a total of $307,992.92, and ordered disgorgement in full. That amount, however, appears to reflect compensation that the defendant had earned for consulting that he performed both prior to and subsequent to his nine month period of full-time employment with the plaintiff.15
To the extent the defendant rendered some of the services for which he was compensated by third parties both prior and subsequent to his full-time employment with the plaintiff, some commensurate portion of the compensation received in exchange for those services cannot be said to have been gained by the defendant‘s breach and should not have been included in the court‘s order of disgorgement. See id., 733 (“[a]n employee who breaches the fiduciary duty of loyalty may be required to disgorge any profit or benefit he received as a result of his disloyal activities” [emphasis added; internal quotation marks omitted]); New Hartford v. Connecticut Resources Recovery Authority, 291 Conn. 433, 460, 970 A.2d 592 (2009) (explaining that restitutionary remedies are “not aimed at compensating the plaintiff, but at forcing the defendant to disgorge benefits that it would be unjust for him to keep” [internal quotation marks omitted]); XL Specialty Ins. Co. v. Carvill America, Inc., Superior Court, judicial district of Middlesex, Complex Litigation Docket, Docket No. X04-CV-04-4000148-S (May 31, 2007) (43 Conn. L. Rptr. 536) (“[t]he principal is entitled to any loss resulting from or caused by the breach, and the agent may as well be required to forfeit any profit gained by the breach” [emphasis in original]).
“[C]ourts exercising their equitable powers are charged with formulating fair and practical remedies appropriate to the specific dispute. . . . In doing equity, [a] court has the power to adapt equitable remedies to the particular circumstances of each particular case. . . . [E]quitable discretion is not governed by fixed principles and definite rules . . . . Rather, implicit therein is conscientious judgment directed by law and reason and looking to a just result.” (Citations omitted; internal quotation marks omitted.) Wall Systems, Inc. v. Pompa, supra, 324 Conn. 736. In fashioning its damage award, the court failed to formulate a remedy appropriate to the particular circumstances of this case, in light of its own factual findings which weighed in favor of a measured award. Ultimately, the award of wholesale forfeiture and disgorgement in full failed to take into account the equities of the case at hand and did not achieve a just result.
The judgment is reversed only as to the award of damages against James G. Henderson, and the case is remanded for a new hearing in damages. The judgment is affirmed in all other respects.
In this opinion the other judges concurred.
Notes
He first contends that the court erred in requiring him to repay amounts earned prior to September 5, 2013, arguing that Connecticut law does not permit the forfeiture of past compensation upon finding a breach of duty of loyalty. The defendant maintains that future compensation only may be subject to forfeiture, citing Dunsmore & Associates, Ltd. v. D‘Alessio, Superior Court, judicial district of New Haven, Docket No. 409906 (January 6, 2000) (26 Conn. L. Rptr. 228), in support of his argument. That superior court case involved claims of breach of contract and breach of the implied covenant of good faith and fair dealing, and thus is both distinguishable and not binding on this court. In contrast, Wall Systems, Inc. v. Pompa, supra, 324 Conn. 733–34, provides generally that “[i]f the employee breaches the duty of loyalty at the heart of the employment relationship, he or she may be compelled to forego the compensation earned during the period of disloyalty.” (Emphasis added.)
Second, the defendant argues that because the plaintiff prospered during the period of the defendant‘s employment, the plaintiff cannot show it was damaged by his acts and is not entitled to recover damages for lost profits. Although the court abused its discretion in fashioning its damage award, it did not use lost profits as the measure of damages, and, thus, the defendant‘s argument is inapposite.
Third, the defendant argues that “[t]he proper measure of damages for breach of covenant not to compete is the nonbreaching party‘s losses, not the breaching party‘s gains. . . . Where the judge reversed this standard in his memo on damages, he applied an incorrect standard, which rendered an incorrect award of damages” to the plaintiff. Because this action contains no claim of breach of a covenant not to compete, the defendant‘s argument and supporting case law is inapplicable.
Fourth, recognizing that no damages were awarded on the plaintiff‘s count alleging violation of CUTSA, the defendant nevertheless argues, in the event that the plaintiff “may choose to raise [the CUTSA claim] in this appeal,” that no recovery under CUTSA is proper. Specifically, he argues, citing Dunsmore & Associates, Ltd. v. D‘Alessio, supra, 26 Conn. L. Rptr. 228, that the plaintiff is not entitled to recover compensatory damages under
Moreover, although Hertzmark testified that the three year, $150,000 prospective consulting contract was part of the defendant‘s compensation for working on the Captivate transaction in 2013, he later clarified that the defendant “has been given $50,000 per year for his work on the transaction and since the transaction has closed.” (Emphasis added.) He further testified that “I would say through the work we did together in 2013, we saw that he would be a valuable post-transaction consultant, and so we signed him up to a three year agreement, post closing.” Thus, although he was provided the opportunity to sign the agreement as a consultant on the basis of his work in 2013, he performed the services specified in the agreement and earned the $50,000 per year subsequent to the termination of his employment with the plaintiff.