Deese-Laurent v. Real Liquidity, Inc.
Deese-Laurent v. Real Liquidity, Inc.
Opinion of the Court
This case arises out of a dispute over payment and benefits allegedly owed pursuant to several agreements contemporaneously entered into by the parties. Plaintiff Zachary Deese-Laurent entered an Employment Agreement with defendant Real Liquidity, Inc. ("RLI"), a corporation offering a secondary market for the trading of real estate shares. The parties concurrently executed a Stock Restriction Agreement, a confidentiality agreement, a Note Purchase Agreement, and a Convertible Promissory Note. Together, these agreements not only created an employment relationship, but also established plaintiff as defendants' creditor; without the $100,000 equity investment in stock benefits memorialized across all agreements, plaintiff alleges he would not have accepted employment with defendant.
Essentially arguing that defendant terminated him so as to prevent his stock from vesting, plaintiff brings this action against RLI and its principals, Kevin Guy and Stanley Sprenger, for payment of wages, commissions, and common stock *282benefits. Defendants move to dismiss for lack of personal jurisdiction, or alternatively for failure to state a claim (Docket # 7), and, relying on a forum selection clause located only in the Note Purchase Agreement, move to transfer venue to the United States District Court for the Middle District of Florida pursuant to
I. Background
A. The Parties
Plaintiff Zachary Deese-Laurent is a Massachusetts resident with a home office in the town of Newton Center. He is by profession an entrepreneur and investor who focuses on real estate, private equity, credit and venture capital. Defendant RLI, a Delaware corporation with a principal place of business in Florida, provides technology for the marketing and trading of private securities of syndicated real estate assets. Defendant Kevin Guy is a Florida citizen and RLI's Chief Executive Officer. Defendant Stanley Sprenger is a citizen of British Columbia, Canada, and RLI's Chief Operating Officer.
B. The Agreements
Deese-Laurent learned of RLI's business in the fall of 2015, and met soon thereafter with Guy to discuss possible collaboration. After many months of negotiations, plaintiff entered employment and confidentiality agreements with RLI on or about August 15, 2016. Although he normally required a monthly salary in the $20,000 range, plaintiff accepted a $4,000 monthly wage based on the understanding that RLI would provide him with a significant equity interest in the company in the form of common stock. Contemporaneously with the Employment Agreement, plaintiff also signed a stock restriction agreement ("SRA"), convertible promissory note ("Note"), and note purchase agreement ("NPA"). Pursuant to the Note, NPA, and SRA, Deese-Laurent as manager of Vineyard Group Holdings, LLC,
The SRA explicitly disclaims any obligation to continue plaintiff's employment, providing that RLI "may terminate such Business Relationship
At the time Deese-Laurent became RLI's Director of Listing Services, he also became, through Vineyard, a creditor of RLI. In exchange for Deese-Laurent's $100,000 loan and the NPA and SRA, the Defendants agreed to an RLI stock acquisition and vesting scheme for Deese-Laurent. Through these instruments, Deese-Laurent would obtain RLI common stock and a significant ownership stake in RLI. But for this stock grant under the SRA, Deese-Laurent would not have lent the $100,000 to RLI or become an employee of RLI.
First Amended Complaint ("FAC") (Docket # 5), ¶ 25.
All agreements include a Florida choice-of-law provision, but only the NPA also *283contains a forum selection clause, identifying the federal court in the Middle District of Florida as the location for the filing of any action "arising out of or based upon this Agreement." Docket # 20-3; Guy Aff., ¶¶ 17, 20.
On January 30, 2017, Guy notified Deese-Laurent by email that 229,165 of his allotted shares of RLI stock had vested. The next day, Sprenger notified Deese-Laurent by email that RLI was changing his status from employee to independent contractor, retroactively effective to January 1, 2017. On February 21, 2017, Guy notified Deese-Laurent by email that RLI was terminating his employment and buying back his unvested shares. In April 2017, Plaintiff brought this action, which defendants then removed to federal court.
II. Legal Standard
A motion to transfer under
After Atlantic Marine, it is thus true that "in the vast majority of cases when a forum-selection clause is included, a § 1404(a) motion to transfer will be allowed." Kebb Mgmt. v. Home Depot U.S.A., Inc.,
III. Analysis
Defendants contend that the forum-selection clause in the NPA establishes the State of Florida as the appropriate, exclusive forum and identifies two possible venues therein, and that transfer under
A. Application of Forum-Selection Clause
The forum-selection clause in the NPA provides as follows:
The parties (a) hereby irrevocably and unconditionally submit to the jurisdiction of the state courts of Florida and to the jurisdiction of the United States District Court for the Middle District of Florida for the purpose of any suit, action or other proceeding arising out of or based upon this Agreement, (b) agree not to commence any suit, action or other proceeding arising out of or based upon this Agreement except in the state courts of Florida or the United States District Court for the Middle District of Florida, and (c) hereby waive, and agree not to assert, by way of a motion, as a defense, or otherwise in any such suit, action or proceeding, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that the suit, action or proceeding is brought in an inconvenient forum, that the venue of the suit, action or proceeding is improper or that this Note or the subject matter hereof may not be enforced in or by such court.
Docket # 20-3, at 11 (emphasis added). The First Circuit has construed the "any action" language of the instant clause to be "unambiguously broad." Carter's,
Extrinsic evidence aside, plaintiff argues that his claims neither "arise out of," nor are "based upon," the NPA, and that as such the plain language of its forum-selection clause cannot govern. His own complaint, however, belies this argument and reveals all five interrelated agreements as integral to the deal ultimately struck-and thus to the claims arising from its dissolution.
In his complaint, plaintiff alleges both that (1) "[t]he NPA allows Deese-Laurent to purchase the Note and invest in RLI"; and that (2) "[i]n exchange for Deese-Laurent's $100,000 loan and the NPA and SRA, the Defendants agreed to an RLI stock acquisition and vesting scheme for Deese-Laurent. Through these instruments , Deese-Laurent would obtain RLI common stock and a significant ownership stake in RLI. But for this stock grant under the SRA, Deese-Laurent would not have lent the $100,000 to RLI or become an employee of RLI." FAC, ¶ 12, 25 (emphasis added). Plaintiff's basic premise is that his acceptance of employment was contingent on the SRA, but the SRA was in turn contingent on the NPA and Note that structured plaintiff's investment. Indeed, the preamble to the Employment Agreement demonstrates this interrelatedness:
*285A. Real Liquidity is engaged in the business of facilitating the trading of private securities.
B. Real Liquidity desires to have the services of ZDL.
C. ZDL is willing to be employed by Real Liquidity.
D. In connection with the execution and delivery of this Agreement, ZDL via an affiliated entity, RL Vineyard Investor, LLC is lending Real Liquidity $100,000 pursuant to a convertible promissory note of contemporaneous date herewith in said amount made by Real Liquidity payable to said Lender (the "Note")
Therefore, the parties agree as follows ...
Docket # 20-2, at 2. Accordingly, the present dispute would not have occurred absent the NPA. See Kebb Mgmt.,
Counts II and IX of the Complaint explicitly invoke the NPA, alleging that defendants made material misrepresentations to induce plaintiff to enter into "the Employment Agreement, the Note, the NPA, and the SRA," FAC, ¶ 40, and into the "Employment Agreement, the NPA, and the SRA." FAC, ¶ 79. Because the deal struck depended on each interrelated agreement, the NPA's forum-selection clause may fairly reach even the counts that do not expressly highlight that agreement. See Lambert v. Kysar,
B. Parties in Interest to Note Purchase Agreement
Plaintiff nonetheless contends that he cannot be bound by an agreement to which he was not a contracting party. In support, he distinguishes between his individual interests and those of the entity for which he signed the NPA in an effort to style himself a "nonparty" to the NPA. Neither the agreements, nor his complaint, nor the law, comports with this position.
The NPA was entered into between RLI and RL Vineyard Investor, LLC. Plaintiff signed the NPA as manager of Vineyard Group Holdings, LLC, which in turn is the manager of Vineyard Investor, LLC-both Delaware limited liability companies. RLI issued a Note on the loan to RL Vineyard Investor, LLC. Just the same, the Employment Agreement recognizes plaintiff as the real party in interest to the NPA and Note, characterizing the Note as "issued by Real Liquidity to ZDL". Docket # 20-2, at 4. Plaintiff's complaint similarly belies any real distinction between himself and the Vineyard entities:
11. Contemporaneously with Deese-Laurent's appointment as Director of Listing Services, an entity of Deese-Laurent, RL Vineyard Investor, LLC ("Vineyard") loaned RLI $100,000 ...
25. At the time Deese-Laurent became RLI's Director of Listing Services, he also became, through Vineyard , a creditor of RLI ... But for this stock grant under the SRA, Deese-Laurent would not have lent the $100,000 to RLI or become an employee of RLI."
FAC ¶¶ 11, 25 (emphasis added).
"Federal courts within the First Circuit agree that when a corporate entity is so 'closely related' that it 'becomes foreseeable that it will be bound' by a forum-selection clause, the clause is enforceable against it."
*286Noel v. Walt Disney Parks and Resorts U.S., Inc., No. 10-40071-FDS,
IV. Conclusion
Because plaintiff and defendants are subject to the forum-selection clause, and because it is enforceable, the motion to transfer (Docket # 19) is GRANTED. The court therefore need not reach the other bases on which defendants have moved for relief, and their further motion to dismiss for lack of personal jurisdiction or for failure to state a claim on which relief may be granted (Docket # 7) is DENIED AS MOOT. See Doe v. Seacamp Ass'n, Inc.,
The Note Purchase Agreement was signed by the plaintiff as the manager of Vineyard Group Holdings, LLC, a Delaware limited liability company, which in turn is the manager of RL Vineyard Investors, LLC, also a Delaware limited liability company. In conjunction with the Note Purchase Agreement, a Convertible Promissory Note was issued by Real Liquidity, Inc. to RL Vineyard Investors, LLC. Plaintiff entered the Employment Agreement, confidentiality agreement, and SRA solely in his individual capacity.
Defined as "service to the Company or its successor in the capacity of an employee, officer, or if so determined by the Board of Directors, as a consultant or director." Docket # 20-6, at 3.
Reference
- Full Case Name
- Zachary DEESE-LAURENT v. REAL LIQUIDITY, INC., Kevin Guy, and Stanley Sprenger
- Cited By
- 3 cases
- Status
- Published