UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE

Scott Baker Case No. 18-cv-0913-PB v. Opinion No.

Paul Montrone, et al.

MEMORANDUM AND ORDER

Scott Baker has sued Paul Montrone, Paul Meister, Perspecta

Holdings LLC, and several related entities. His principal

claims are based on the Americans with Disabilities Act of 1990

(“ADA”),

et seq., and the New Hampshire Law

Against Discrimination,

-A (“Section

354-A”). This Memorandum and Order addresses defendants’ motion

to compel arbitration of Baker’s companion claims for fraudulent

inducement, breach of fiduciary duty, unjust enrichment, and

breach of contract.

I. STANDARD OF REVIEW

The First Circuit Court of Appeals has yet to identify the

proper standard of review for a motion to compel arbitration.

Landry v. Time Warner Cable, Inc., No. 16-cv-507-SM,

, at *1 (D.N.H. Sept. 27, 2018) (citing Pla-Fit

Franchise, LLC v. Patricko, Inc., No. 13-cv-489-PB,

, at *3 (D.N.H. May 20, 2014)). In my view, “[i]f the

answer is apparent on the face of the complaint, the Rule 12(b)(6) standard will suffice. If the court must consult

evidence to resolve the issue, the summary judgment standard

must be employed.” Pla-Fit Franchise,

, at *3

(citing Guidotti v. Legal Helpers Debt Resolution, L.L.C.,

, 773–74 (3d Cir. 2013)). Defendants’ motion turns

primarily on evidence that a court ordinarily may consider in

resolving a Rule 12(b)(6) motion: namely, allegations made in

the complaint and statements made in other documents referenced

therein, such as incorporation documents and contracts. 1 See

Wilson v. HSBC Mortg. Servs., Inc.,

(1st Cir.

2014). Accordingly, I employ the Rule 12(b)(6) standard.

To survive a Rule 12(b)(6) motion, a plaintiff must allege

sufficient facts to “state a claim to relief that is plausible

on its face.” Ashcroft v. Iqbal,

,

,

(2009) (quoting Bell Atl. Corp. v.

Twombly,

,

,

(2007)). Because, however, defendants’ arbitration demand must

be treated as an affirmative defense, see Sevinor v. Merrill

Lynch, Pierce, Fenner & Smith, Inc.,

(1st Cir.

1 The parties also reference “affidavits” in their pleadings, which in some circumstances must be evaluated under the summary judgment standard, but the function of these affidavits is merely to provide the court with copies of the relevant agreements, the authenticity of which is not disputed by either party. No part of this order is dependent upon the affidavits themselves.

2 1986), they are entitled to prevail only if the facts

establishing their right to arbitration are clear on the face of

the complaint and any other documents that a court may consider

when ruling on a Rule 12(b)(6) motion. See Zenon v. Guzman,

(1st Cir. 2019) (applying Rule 12(b)(6) standard

to an affirmative defense). In resolving the motion, I assume

the truth of Baker’s well pleaded factual assertions and view

the facts in the light most favorable to him. See Germanowski

v. Harris,

(1st Cir. 2017).

II. BACKGROUND

In addition to Montrone, Meister, and Perspecta Holdings,

Baker has sued five other interrelated entities: Bayberry

Financial Services Corp., Liberty Lane Services Company LLC,

Perspecta Trust LLC, Perspecta Entities LLC, and Perspecta

Investments LLC. Am. Compl., Doc. No. 30 at 1. I begin by

describing the relationships among the institutional defendants

and then turn to the agreements that serve as the basis for

defendants’ demand for arbitration.

A. Corporate Structure

Meister and Montrone directly or indirectly control all of

the institutional defendants. Meister directly holds his

interest in Perspecta Holdings, Liberty Lane, and Bayberry

Financial, while Montrone holds his interests in the same

3 entities through Bayberry BP LLC and Woburn BP LLC. 2 Doc. No. 30

at 4; Perspecta Holdings LLC Equity Award and Admission

Agreement, Doc. No. 35-3 at 14. Perspecta Holdings, in turn,

holds controlling interests in Perspecta Trust, Perspecta

Entities, and Perspecta Investments. Perspecta Entities LLC

Agreement, Doc. No. 35-8 at 56; Perspecta Investments LLC

Agreement, Doc. No. 35-12 at 56. Baker’s employment

discrimination claims arise from his joint employment as

“Principal” and later as President of Perspecta Trust, Liberty

Lane, and Bayberry Financial (collectively “Perspecta”). Doc.

No. 30 at 4. His common law claims arise from a 2012 Equity

Award and Admission Agreement (“2012 Equity Agreement”) between

Baker and Perspecta Holdings, Doc. No. 35-3, and 2016 Profit

Interest and Equity Award Agreements between Baker and Perspecta

Entities and Baker and Perspecta Investments (collectively “2016

Equity Agreements”), Doc. No. 35-7, Doc. No. 35-11. The

relationships among the parties, as Baker describes them, are

2 In a subsequently filed motion for summary judgment, defendants state that “Baker . . . held a 20% interest [in Perspecta Holdings]; an entity controlled by Montrone’s family (Bayberry BP, LLC); and an entity controlled by Meister’s family (Woburn BP LLC) held the remaining 80% interest.” Mem. of Law in Supp. of Defs.’ Mot. for Summ. J., Doc. No. 61-1 at 3. The slight difference in the descriptions of the corporate structure has no bearing on my analysis or decision of this motion. In any event, I follow the 12(b)(6) standard and assume the truth of Baker’s well pleaded factual assertions. See Germanowski,

.

4 depicted in the diagram attached to this Memorandum and Order as

Exhibit A.

B. Initial Hiring and Employment

Baker was hired to work at Perspecta in 2009. Doc. No. 30

at 3–4. Throughout his employment, Baker reported to Montrone

and Meister — Perspecta’s co-founders and managers. Doc. No. 30

at 5. In addition to a base salary and a bonus, Baker’s offer

of employment included a promise that “on [his] start date, [he

would] initially be awarded stock options representing 3% of the

equity in Perspecta over and above a base starting value of

$15,000,000 . . . [and that a]dditional grants would be

considered in the future on a periodic basis as recommended by

the Compensation Committee.” Doc. No. 30 at 3. Notwithstanding

this promise, Baker did not receive an equity interest in

Perspecta or any related business until 2012. Doc. No. 30 at 4.

C. 2012 Equity Award

Baker entered into the 2012 Equity Agreement with Perspecta

Holdings on July 2, 2012. Doc. No. 35-3 at 2. The Company’s

Limited Liability Company Agreement recognizes two classes of

membership interests that are referred to as “Class A Units” and

“Class B Units.” Doc. No. 35-4 at 19. Class A Units represent

capital interests and Class B Units represent profit interests.

Doc. No. 35-4 at 19. The 2012 Equity Agreement granted Baker

sufficient Class B Units to give him a right to 20% of Perspecta

5 Holdings’ profits when the units became fully vested. Doc. No.

35-3 at 14. One thousand of Baker’s Class B units vested

immediately upon execution of the Agreement, with the remainder

vesting at a rate of 500 units annually until his interest fully

vested on January 1, 2015. Doc. No. 35-3 at 3.

By entering into the 2012 Equity Agreement, Baker also

became a party to the Perspecta Holdings Limited Liability

Company Agreement. Doc. No. 35-3 at 2. That agreement includes

the following arbitration clause (“2012 Arbitration Clause”):

In the event of any controversy between the parties as to the enforcement or interpretation of the terms and provisions of this Agreement, including the right to recover payments due hereunder, such controversy shall be determined by binding arbitration. . . .

Doc. No. 35-4 at 36. The LLC Agreement also defines “Agreement”

as:

This Limited Liability Company Agreement including all Admission Agreements and amendments adopted in accordance with the Agreement and the [Delaware Limited Liability Company] Act.

Doc. No. 35-4 at 4. Accordingly, disputes between the parties

concerning the enforcement or interpretation of the 2012 Equity

Agreement are subject to the 2012 Arbitration Clause because the

Equity Agreement is an “Admission Agreement.” Doc. No. 35-3 at

2.

The 2012 Equity Agreement permitted Perspecta Holdings to

repurchase units awarded to Baker at a defined “Repurchase

6 Value” if Baker’s employment were terminated. Doc. No. 35-3 at

3–4. Baker, in turn, was entitled under a “Put Right” provision

to require Perspecta Holdings to repurchase his units at a

specified percentage of the Repurchase Value, which varied

depending upon when the repurchase occurred. Doc. No. 35-3 at

7.

D. Restructuring of Baker’s Interest

In late 2015, Montrone informed Baker that the 2012 Equity

Agreement would be terminated and replaced with a new and “much

better” agreement. Doc. No. 30 at 8. In fact, however, Meister

and Montrone intended that the new agreement would “purposely

decrease the value of Baker’s stake in Perspecta in anticipation

of a planned, but undisclosed termination.” Doc. No. 30 at 15.

The restructuring that eventually occurred took place in

two phases: (1) a redemption of Baker’s interest in Perspecta

Holdings, negotiated in 2015 and effective January 1, 2016 (the

“2015 Redemption Agreement”); and (2) an award of profit

interests in Perspecta Entities and Perspecta Investments on

December 1, 2016 pursuant to the 2016 Equity Agreements.

1. Redemption Agreement

Perspecta Holdings and Baker agreed in the Redemption

Agreement that the company would redeem Baker’s interest in

Perspecta Holdings for $886,000. Defs.’ Mem. of Law in Support

of Mot. to Compel Arbitration, Doc. No. 35-1 at 2. Neither

7 party alleges that the redemption was triggered by either of the

events prescribed by the 2012 Equity Agreement (namely, Baker’s

termination or a “Put Right” redemption initiated by Baker).

Rather, the redemption was the product of an independent

agreement between Montrone and Meister (as managers of Perspecta

Holdings) and Baker. Doc. No. 35-1 at 2.

Baker alleges that the redemption price received for his

interest in Perspecta Holdings was “unreasonably low.” Doc. No.

30 at 16. He states that he knew at the time that the price was

low, but that he relied upon Montrone’s representations that he

would not be harmed by the low redemption price because his new

equity award would be “much better.” Doc. No. 30 at 16.

Specifically, Baker was told that the award would give him “true

equity” and be more similar to the equity plans used by another

related entity, Ballentine Partners. Doc. No. 30 at 15. Baker

understood this to mean that his Class B profit interests would

be replaced with Class A capital interests. Doc. No. 30 at 15.

Baker also alleges that he was told that he would not be harmed

by the low valuation used for his redemption because the

forthcoming equity award would use the same low valuation. Doc.

No. 30 at 26. Baker claims that he relied on Montrone’s

representations that the new equity award would be superior to

the 2012 Equity Agreement and he asserts that he would not have

8 redeemed his interest in Perspecta Holdings if he had known the

content of the 2016 Equity Agreements. Doc. No. 30 at 19.

2. 2016 Equity Agreements

Baker and Montrone first discussed the terms of a new

equity award during a January 2016 meeting, where Baker told

Montrone that he was not in an emotional position to negotiate

the terms but trusted Montrone’s representations that the new

plan would be an improvement. 3 Doc. No. 30 at 8. Baker alleges

that he was not informed during the meeting that the award would

be changed from profit interests in Perspecta Holdings to

reduced and unvested profit interests in two of the company’s

subsidiaries, Perspecta Entities and Perspecta Investments.

Doc. No. 30 at 16.

In late 2016, Baker was presented with the 2016 Equity

Agreements, which granted him unvested profit interests in

Perspecta Entities (a 7.1% stake) and Perspecta Investments (a

4.55% stake). Doc. No. 30 at 18. These units vested at a rate

of 25% per year, starting on December 31, 2016. Perspecta

Entities Equity Award, Doc. No. 35-7 at 3; Perspecta Investments

Equity Award, Doc. No. 35-11 at 3.

3 Baker alleges that his inability to effectively negotiate the terms of this restructuring is related to the disability underlying his ADA and Section 354-A claims. Doc. No. 30 at 8, 16.

9 Baker agreed in the 2016 Equity Agreements to be bound by

the terms and conditions of the Perspecta Entities and Perspecta

Investments LLC Agreements (collectively “2016 LLC Agreements”).

Doc. No. 35-7 at 2; Doc. No. 35-11 at 2. The Equity Agreements

also each specifically provide that:

[a]ny dispute arising under this Equity Award shall be resolved exclusively in accordance with the provisions of the LLC Agreement Section 13 (Dispute Resolution).

Doc. No. 35-7 at 8; Doc. No. 35-11 at 8.

Section 13 of the 2016 LLC Agreements (collectively “2016

Dispute Resolution Procedures”) establish an elaborate process

for the resolution of disputes. Parties must first attempt to

resolve a dispute through negotiation. Doc. No. 35-8 at 31;

Doc. No. 35-12 at 31. They must then turn to mediation if

negotiation fails. Doc. No. 35-8 at 31; Doc. No. 35-12 at 31.

If mediation does not resolve the matter, and if the Company is

party to the Dispute, the procedures specify that “[t]he company

shall determine in its sole discretion whether the dispute will

be subject to arbitration in accordance with Section 13.4 or

subject to adjudication in accordance with Section 13.4.9.”

Doc. No. 35-8 at 32; Doc. No. 35-12 at 32. If the company

elects to arbitrate, Section 13.4.1 states that “the party

commencing the dispute must submit the matter to binding

arbitration in accordance with the American Arbitration

Association (“AAA”) rules and procedures for the arbitration of

10 commercial disputes.” Doc. No. 35-8 at 32; Doc. No. 35-12 at

32. Section 13.4.9 provides, however, that:

[n]otwithstanding anything in this Section 13.4 to the contrary, if any party to this Agreement required immediate injunctive relief or other equitable relief, such party may file an action for such relief in the courts of the State of New Hampshire (the “Designated Courts”), to which jurisdiction the parties agree. The parties consent to the exclusive personal jurisdiction of the Designated Courts for all such purposes.

Doc. No. 35-8 at 33; Doc. No. 35-12 at 33. Section 13.5,

captioned “Adjudication,” then applies “[i]n the event that a

Dispute is subject to adjudication in accordance with Section

13.3, or for injunctive or equitable relief as provided in

Section 13.4.9.” Doc. No. 35-8 at 34; Doc. No. 35-12 at 34.

E. Baker’s Termination

Following his May 2017 meeting with Montrone and Meister,

Baker experienced what he refers to as “pressure . . . to

resign.” Doc. No. 30 at 12. On December 1, 2017, Perspecta’s

counsel informed Baker that his last day of employment would be

December 8, 2017. Doc. No. 30 at 13. The end of Baker’s

employment was listed as a “resignation” on the agenda

circulated to Board members before their December 8, 2017

meeting. Doc. No. 30 at 13. When Baker saw this, he sent a

letter to Montrone, copying the other Board members, informing

them that he had not resigned and did not intend to resign.

Doc. No. 30 at 13.

11 At the December 8, 2017 Board meeting, Baker alleges he was

told that his employment was “ending,” with no indication

whether the termination was for cause or without cause. Doc.

No. 30 at 13. Meister conceded that as of December 8, 2017,

Perspecta considered Baker’s termination to be “without cause,”

but that Perspecta changed Baker’s termination to “for cause” as

defined in the 2016 Equity Agreements following Baker’s

initiation of proceedings with the Equal Employment Opportunity

Commission (“EEOC”) and the New Hampshire Human Rights

Commission (“HRC”). Doc. No. 30 at 13.

Under the terms of the 2016 Equity Agreements, if Baker had

been terminated without cause, his interests in Perspecta

Entities and Perspecta Investments would have accelerated and

vested. Doc. No. 30 at 20. However, once his termination was

categorized as for cause, his stake in both companies was

forfeited. Doc. No. 30 at 20.

F. Baker’s Causes of Action

Baker’s Amended Complaint consists of nine counts. Counts

I–V describe alleged violations of the ADA and Section 354-A.

Doc. No. 30 at 20–25. His remaining counts raise common law

claims of fraudulent inducement, breach of fiduciary duty,

unjust enrichment, and breach of contract. 4 Doc. No. 30 at 25–

4 Neither party specifies whether Baker’s state common law causes of action are brought under the laws of Delaware or New

12 33. Only the common law claims are subject to the motion to

compel arbitration. Defs.’ Mot. to Compel Arbitration, Doc. No.

35. 5 I outline each of the pertinent claims below.

1. Count VI — Fraudulent Inducement

Baker alleges in Count VI that Montrone, Meister, and

Perspecta Holdings fraudulently induced him to redeem his 20%

profit interest in Perspecta Holdings. This allegation is

twofold: first, Baker asserts that defendants knowingly

misrepresented the value of his units; and second, Baker claims

that Meister and Montrone represented to him that his redeemed

Hampshire. Both parties cite freely to both states’ laws. See, e.g., Pl.’s Mem. of Law in Supp. of Obj. to Defs.’ Mot. to Compel Arb., Doc. No. 53-6 at 10, 11 (Plaintiff’s citations to Delaware and New Hampshire law, respectively); Defs.’ Mem. of Law in Supp. of Renewed Mot. to Compel Arbitration, Doc. No. 51- 3 at 10, 13 (Defendants’ citations to Delaware and New Hampshire law, respectively). Ultimately, however, I need not address whether New Hampshire or Delaware law applies to these claims because the parties have not identified any meaningful difference between the two and I am able to discern none. See, e.g., Fratus v. Republic Western Ins. Co.,

(1st Cir. 1998); Emery v. Merrimack Valley Wood Prods., Inc.,

, 989 n.4 (1st Cir. 1989).

5 In their Reply to Baker’s Objection to the first Motion to Compel Arbitration, Defendants argued cursorily that, because the arbitration clauses incorporate the American Arbitration Association (“AAA”) Commercial Arbitration Rules, the question of arbitrability was arguably one for the arbitrator and not for the courts. Defs.’ Reply to Pl.’s Obj. to Mot. to Compel Arbitration, Doc. No. 40 at 2. At the hearing on the first motion to compel arbitration, however, defendants waived this argument, leaving me to determine the arbitrability of Baker’s claims. Transcript of Sept. 19, 2019 Hearing, Doc. No. 50 at 10.

13 interest in Perspecta Holdings would be replaced with a “much

better” equity plan, even though Meister and Montrone in fact

planned to reduce Baker’s interest as a part of an undisclosed

plan to terminate him. Doc. No. 30 at 25–28. To remedy this

violation, Baker seeks an order compelling the defendants to

reinstate his profit interests in Perspecta Holdings. Doc. No.

30 at 27–28.

Defendants assert that this claim is arbitrable under the

2012 Arbitration Clause. Defs.’ Renewed Mot. to Compel

Arbitration, Doc. No. 51 at 2.

2. Count VII — Breach of Fiduciary Duty

Baker alleges in Count VII that Montrone and Meister, as

managers and controlling LLC members, owed him fiduciary duties

of good faith and loyalty. He identifies two sets of actions

taken by Montrone and Meister that he claims constitute a breach

of those duties. First, he alleges that Montrone and Meister

breached their fiduciary duties by inducing Baker to redeem his

Perspecta Holdings profit interest at an unreasonably low price,

freeze him out of the business, and ultimately terminate him.

Doc. No. 30 at 28–30. Second, Baker alleges that, once his

equity was reduced, Montrone and Meister breached their

fiduciary duties by seeking to force his resignation and,

ultimately, terminating him in a manner that caused him to

forfeit his profit units in Perspecta Entities and Perspecta

14 Investments. Doc. No. 30 at 28–30. Baker asserts that he is

entitled to an order reinstating his profit interests in

Perspecta Holdings, Perspecta Equities and Perspecta Investments

to remedy defendants’ breaches of their fiduciary duties. Doc.

No. 30 at 30.

Defendants argue that the first part of Baker’s breach of

fiduciary duty claim is arbitrable pursuant to the 2012

Arbitration Clause. Doc. No. 51 at 2. Although they do not

specifically argue that the second part of their claim is

arbitrable, I assume for purposes of analysis that if it is, it

is because of the arbitration clause embedded in the 2016

Dispute Resolution Procedures.

3. Count VIII — Unjust Enrichment

Baker’s allegations of unjust enrichment again deal with

two distinct sets of facts. First, he alleges that Perspecta

Holdings was unjustly enriched when Baker redeemed his profit

interest in that company for an “unreasonably low value.” Doc.

No. 30 at 30. Second, Baker alleges that Perspecta Entities and

Perspecta Investments were unjustly enriched when his

termination was changed from “without cause” to “for cause,”

resulting in the forfeiture of his unvested profit units in

those companies. Doc. No. 30 at 31. Baker again argues for an

order reinstating his profit units in Perspecta Holdings,

15 Perspecta Equities, and Perspecta Investments to remedy

defendants’ unjust enrichment. Doc. No. 30 at 31.

Defendants assert that Baker’s unjust enrichment claim is

arbitrable under the 2012 Arbitration Clause. Doc. No. 51 at 3.

They then assert that the rest of the claim is arbitrable under

the arbitration clauses embedded in the 2016 Dispute Resolution

Procedures. Doc. No. 51 at 3.

4. Count IX — Breach of Contract

Baker alleges in Count IX that Perspecta Entities and

Perspecta Investments were contractually obligated to grant him

profit units as set forth in the 2016 Equity Agreements and that

the vesting of those units should have accelerated upon his

“without cause” termination. Doc. No. 30 at 32–33. He claims

that the “post hoc” change from a “without cause” termination to

a “for cause” termination constituted a breach of that contract,

which wrongfully resulted in the forfeiture of his unvested

units. Doc. No. 30 at 32–33. To remedy this violation, Baker

seeks an order compelling defendants to reinstate his profit

units in Perspecta Equities and Perspecta Investments. Doc. No.

30 at 33.

Defendants assert that this claim is arbitrable under the

arbitration clauses embedded in the 2016 Dispute Resolution

Procedures. Doc. No. 51 at 2–3.

16 III. ANALYSIS

I begin by acknowledging the strong federal presumption in

favor of arbitration. See Moses H. Cone Memorial Hosp. v.

Mercury Constr. Corp.,

, 24–25,

,

(1983) (“The Arbitration Act establishes that, as a

matter of federal law, any doubts concerning the scope of

arbitrable issues should be resolved in favor of arbitration

. . .”); Dialysis Access Ctr. v. RMS Lifeline, Inc.,

(1st Cir. 2011) (“[D]ue regard must be given to the

federal policy favoring arbitration, and ambiguities as to the

scope of the arbitration clause itself resolved in favor of

arbitration.”). At the same time, “[a]rbitration is strictly a

matter of consent, and thus is a way to resolve those disputes —

but only those disputes — that the parties have agreed to submit

to arbitration.” Dialysis Access Center,

(emphasis in original) (quoting Granite Rock Co. v. Int’l Bhd.

of Teamsters,

, 299,

,

(2010)). “While ambiguities in the language of the

agreement should be resolved in favor of arbitration, [courts]

do not override the clear intent of the parties, or reach a

result inconsistent with the plain text of the contract, simply

because the policy favoring arbitration is implicated.”

E.E.O.C. v. Waffle House, Inc.,

,

,

(2002) (citation omitted). Therefore,

17 “courts must rigorously enforce arbitration agreements according

to their terms.” Am. Exp. Co. v. Italian Colors Rest.,

,

,

(2013) (internal

quotation marks omitted). A party seeking to compel arbitration

must demonstrate “that a valid agreement to arbitrate exists,

that the movant is entitled to invoke the arbitration clause,

that the other party is bound by that clause, and that the claim

asserted is within the clause’s scope.” Dialysis Access Center,

.

Defendants base their demand for arbitration in part on the

2012 Arbitration Clause and in part on the somewhat differently

worded arbitration clauses embedded in the 2016 Dispute

Resolution Procedures. I examine their arguments with respect

to each clause in turn.

A. Arbitrability of disputes under the 2012 Equity Agreement

Defendants argue that Baker’s fraudulent inducement claim

and parts of his fiduciary duty and unjust enrichment claims are

subject to the 2012 Arbitration Clause. That clause (quoted in

full in Section II-C above) applies only to controversies that

involve “the enforcement or interpretation of the terms of this

Agreement . . . .” Baker challenges defendants’ argument by

contending that the claims at issue are not arbitrable because

they do not require either the enforcement or the interpretation

of the Perspecta Holdings LLC Agreement.

18 As a preliminary matter, I note that Baker’s argument is

based upon the mistaken assumption that only claims that require

the enforcement or interpretation of the LLC Agreement are

subject to the 2012 Arbitration Clause. In fact, the

arbitration clause covers claims that require either the

enforcement or interpretation of “This Agreement,” which the LLC

Agreement defines to include both the LLC Agreement itself, and

“Admission Agreements” such as the 2012 Equity Agreement. Thus,

the arbitration clause by its terms requires the arbitration of

any dispute that involves the enforcement or interpretation of

either the Perspecta Holdings LLC Agreement or the 2012 Equity

Agreement. With this fact in mind, I examine each of the claims

at issue to determine whether they require the enforcement or

interpretation of either agreement.

1. Fraudulent Inducement Claim

To state a claim for fraudulent inducement, a plaintiff

must show that the defendant (1) made a misrepresentation; (2)

had the purpose to induce the plaintiff to act or refrain from

action in reliance on that misrepresentation; (3) the plaintiff

acted in justifiable reliance upon the misrepresentation; and

(4) the plaintiff suffered some pecuniary loss. Restatement

(Second) of Torts § 525 (1977). 6

6 Both Delaware and New Hampshire have adopted the Restatement’s definition of fraudulent inducement. See Gray v. First NH

19 Baker’s allegation, in essence, is that he justifiably

relied on the defendants’ knowing misrepresentations that the

2012 Equity Agreement would be replaced with a “much better”

award, and that the 2016 Equity Agreements left him worse off.

To evaluate this claim, I must, at minimum, compare Baker’s

financial position under the 2016 Equity Agreements to the

position he would have been in, had he retained his profit

interest under the 2012 Equity Agreement. I see no way to

evaluate whether Baker suffered any loss by relying on

defendants’ alleged misrepresentation without interpreting the

terms of the 2012 Equity Agreement. Because the plain text of

the Perspecta Holdings LLC Agreement unambiguously consigns such

interpretative issues to the arbitrator, Baker’s fraudulent

inducement claim is within the scope of the arbitration clause

and must be arbitrated.

2. Breach of Fiduciary Duty Claim

“To establish liability for the breach of a fiduciary duty,

a plaintiff must demonstrate that the defendant owed her a

fiduciary duty and that the defendant breached it.” Estate of

Eller v. Bartron,

(Del. 2011) (quoting Heller

v. Kiernan, No. Civ. A. 1484-K,

, at *3 (Del. Ch.

Banks,

(1994) (citing Restatement (Second) of Torts § 525 (1977)); Harman v. Masoneilan International, Inc.,

(Del. 1982) (same).

20 Feb. 27, 2002)); see also Schneider v. Plymouth State Coll.,

(1999) (evaluating breach of fiduciary duty claim

by first addressing the nature, if any, of the fiduciary duty

owed). Under both New Hampshire and Delaware law, LLC managers

owe fiduciary duties by default. See

-C:108, 304-C:110 (imposing default duties of care and

loyalty); Feely v. NHAOCG, LLC,

, 660–61 (Del. Ch.

2012) (explaining that LLC managers owe “default fiduciary

duties,” although the Delaware “LLC Act does not explicitly

provide for fiduciary duties of loyalty or care”). LLCs may,

however, disclaim those duties under the laws of both New

Hampshire and Delaware. See

-C:107

(“[D]uties may be expanded or restricted or eliminated by

provisions in the operating agreement”); Feely,

(explaining that duties may be “eliminated, restricted, or

otherwise displaced by express language in the LLC operating

agreement”).

Because I cannot determine whether a duty has been breached

unless I know the nature of that duty, adjudicating Baker’s

breach of fiduciary duty claim would require me to interpret

both the Perspecta Holdings LLC Agreement and the 2012 Equity

Agreement to determine the nature of the duty he was owed.

Section 5.11 of the Perspecta Holdings LLC Agreement, for

example, purports to disclaim or limit many aspects of the

21 Managers’ fiduciary duties. Doc. No. 35-4 at 16. To determine

whether these disclaimers or limitations of fiduciary duty are

valid and whether the acts alleged by Baker breach any remaining

fiduciary duty, I would necessarily have to interpret Section

5.11. The parties have consigned such interpretative issues to

the arbitrator. I therefore conclude that Baker’s breach of

fiduciary duty claim is within the scope of the 2012 Arbitration

Agreement and must be arbitrated.

3. Unjust Enrichment Claim

“Unjust enrichment is an equitable remedy, found where an

individual receives ‘a benefit which would be unconscionable for

him to retain.’” Clapp v. Goffstown Sch. Dist.,

(2009) (emphasis omitted) (quoting Kowalski v. Cedars of

Portsmouth Condo. Assoc.,

(2001)); see also In

re Verizon Ins. Coverage Appeals, ___ A.3d ___,

,

at *7 (Del. Oct. 31, 2019) (“Unjust enrichment is the unjust

retention of a benefit to the loss of another, or the retention

of money or property of another against the fundamental

principles of justice or equity and good conscience.”) (internal

citation and quotation marks omitted). Central to Baker’s

unjust enrichment claim against Perspecta Holdings is his

contention that his 20% equity interest in Perspecta Holdings

was redeemed “for an unreasonably low value.” Doc. No. 30 at

30.

22 I see no logical way to determine the reasonable value of

Baker’s interest in Perspecta Holdings under the 2012 Equity

Agreement without interpreting the Agreement. I would need, for

example, to determine whether Baker’s interest had vested at the

time he redeemed it, and what, if any, redemption price he was

entitled to under the 2012 Equity Agreement’s put right

provision. This would require me to interpret, at minimum,

Sections 1(c) and 4 of the 2012 Agreement. Doc. No. 35-3 at 3,

7. Yet again, this is a matter of interpretation that the

parties have consigned to the arbitrator. Thus, Baker’s unjust

enrichment claim against Perspecta Holdings is within the scope

of the arbitration clause and must be arbitrated.

B. Arbitrability of disputes under the 2016 Equity Agreements

Defendants argue that Baker’s remaining claims are subject

to the arbitration clauses embedded in the 2016 Dispute

Resolution Procedures. Baker responds by contending that his

claims are exempt from arbitration pursuant to the equitable

relief exemption contained in Section 13.4.9 of the 2016 LLC

Agreements. This disagreement turns on whether Section 13.4.9

is merely an aid in arbitration provision, as defendants argue,

or whether it more broadly exempts all claims for equitable

relief from the arbitration requirement, as Baker claims.

23 I resolve this dispute by using general rules of contract

interpretation. 7 See Sherman v. Graciano,

(2005) (citing Robbins v. Salem Radiology,

(2000)). In reviewing a contract, I “give its language the

interpretation that best reflects the parties’ intentions.”

Robbins, 145 N.H. at 417–18 (quoting Butler v. Walker Power,

Inc.,

(1993)). “Absent ambiguity, the

parties’ intent will be determined from the plain meaning of the

language used in the contract.” In re Liquidation of Home Ins.

Co.,

(2008) (quoting Cloutier v. City of

Berlin,

(2006)). I must also “consider the

parties’ intent by examining the contract as a whole . . . .”

N.A.A.P. Realty Trust v. CC Enters.,

(2001).

Here, the plain language of Section 13.4.9 establishes that

all claims for equitable relief are exempt from the arbitration

requirement. This is so because Section 13.4.9 is expressly

cast as an exemption (“[n]otwithstanding anything in this

Section 13.4 to the contrary”) and it applies without limitation

“if any party to this agreement required [sic] injunctive relief

or other equitable relief . . . .” Doc. No. 35-8 at 33; Doc.

7 Both LLC Agreements name New Hampshire in their choice-of-law provisions. Doc. No. 35-8 at 35-36, Doc. No. 35-12 at 35–36. I can see no reason refer to Delaware law for these state common law claims, and neither party has suggested one.

24 No. 35-12 at 33. Because Section 13.4.9 applies broadly to all

claims for equitable relief, I cannot rewrite the parties’

agreement to frame it as merely an aid in arbitration provision.

See, e.g., Archer & White Sales, Inc. v. Henry Schein, Inc.,

, 283–84 (5th Cir. 2019) (clause requiring arbitration

of disputes “except for actions seeking injunctive relief . . .”

does not compel arbitration of equitable claims); Frydman v.

Diamond, No. 1:14–cv–8741–GHW,

, at *7 (S.D.N.Y.

Sept. 10, 2015) (arbitration clause subject to exception for

“any dispute . . . between the Parties which gives rise to

injunctive or equitable relief pursuant to the terms of this

Agreement . . .” does not require arbitration of equitable

claims).

Any claim that Section 13.4.9 is merely an aid in

arbitration provision is further undermined when Section 13.4.9

is construed together with the rest of Section 13. Section

13.3.1 treats Section 13.4.9 as an alternative to arbitration

rather than an aid in arbitration provision because it requires

the company to determine whether a dispute involving the company

“will be subject to arbitration in accordance with Section 13.4

or subject to adjudication pursuant to Section 13.4.9.” Doc.

No. 35-8 at 32 (emphasis added); Doc. No. 35-12 at 32 (emphasis

added). Section 13.3.2 treats Section 13.4.9 the same way

because it specifies that “[a]ll Disputes that do not include

25 the Company as a party will be subject to adjudication pursuant

to Section 13.4.9, unless all parties agree to arbitrate in

accordance with Section 13.4.” Doc. No. 35-8 at 32 (emphasis

added); Doc. No. 35-12 at 32 (emphasis added). In light of

these provisions, to read Section 13.4.9 merely as an aid in

arbitration provision, I would also have to ignore the plain

language of Sections 13.3.1 and 13.3.2. I see nothing in the

text of Section 13 that would support such a bizarre

construction.

Defendants cite several cases from other circuits in which

a court construed a broad equitable exemption from a

comprehensive arbitration clause as an aid in arbitration

provision. See, e.g., Remy Amerique, Inc. v. Touzet Distrib.,

S.A.R.L.,

(S.D.N.Y. 1993); Info. Sys. Audit &

Control Ass’n Inc. v. Telecom. Sys., Inc., No. 17 C 2066,

, at *1 (N.D. Ill. June 23, 2017); Davis v. SEVA

Beauty, LLC, C17-547 TSZ, 2017 U.S. Dist. Lexis 148434, at *5

(W.D. Wash. Sept. 13, 2017). These decisions are unpersuasive

to the extent that they effectively ignore the plain language of

the exemption in an effort to reconcile it with an arbitration

clause. In any event, the present case is distinguishable

because the 2016 Dispute Resolution Procedures do not include a

comprehensive arbitration clause. Instead, Section 13 requires

negotiation and mediation before arbitration and Sections 13.3.1

26 and 13.3.2 specifically contemplate that covered disputes will

be decided by adjudication in some cases pursuant to Section

13.4.9 rather than through arbitration pursuant to Section

13.4.1. Because the arbitration clause at issue here does not

mandate the arbitration of all covered claims, it is not in

tension with an exemption that permits equitable claims to be

resolved by adjudication rather than arbitration. 8

IV. CONCLUSION

For the reasons explained above, defendants’ renewed motion

to compel arbitration, Doc. No. 51, is granted with respect to

Count VI against Montrone, Meister, and Perspecta Holdings;

Count VII against Montrone and Meister for claims arising under

the 2012 Equity Award; and Count VIII against Perspecta

Holdings. The motion is denied with respect to Count VII

against Montrone and Meister for claims arising under the 2016

Equity Award; Count VIII against Perspecta Entities and

8 By referring to Baker’s claims as “so-called ‘Equity Claims,’” defendants also appear to contest whether the relief Baker seeks is truly equitable in nature. Doc. No. 35-1 at 4. Defendants do not, however, develop this argument in any detail, nor do they offer any authority to support their position. Because defendants’ argument remains undeveloped, I decline to consider it. See J. Cajigas & Assoc., PSC v. Municipality of Aguada, No. 13-1359 (JAF),

, at * 2 (D.P.R. Jan. 29, 2014) (“Perfunctory and undeveloped arguments, and arguments that are unsupported by pertinent authority, are deemed waived.”) (citing Medina–Rivera v. MVM, Inc.,

, 140–41 (1st Cir. 2013) (“developing a sustained argument out of . . . legal precedents” is a party’s “job”) (internal quotation marks omitted).

27 Perspecta Investments; and Count IX against Perspecta Entities

and Perspecta Investments.

SO ORDERED.

/s/ Paul J. Barbadoro Paul J. Barbadoro United States District Judge

January 10, 2020

cc: Jennifer B. Furey, Esq. Jennifer Mikels, Esq. Terri L. Pastori, Esq. Beth A. Deragon, Esq. Debra Weiss Ford, Esq. Martha Van Oot, Esq.

28 Exhibit A