United States Court of Appeals For the First Circuit

No. 22-1141

FINSIGHT I LP,

Plaintiff, Appellant,

v.

ROBERT SEAVER and JAMES TOGA,

Defendants, Appellees.

APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MASSACHUSETTS

[Hon. Richard G. Stearns, U.S. District Judge]

Before

Lynch, Selya, and Howard, Circuit Judges.

Israel F. Piedra, with whom Welts, White & Fontaine, P.C., Steven C. Reingold, Bridgitte E. Mott, and Saul Ewing Arnstein & Lehr LLP were on brief, for appellant. Robert L. Kirby, Jr., with whom Scott M. Zanolli and Pierce & Mandell, P.C. were on brief, for appellees.

October 4, 2022 SELYA, Circuit Judge. This case stands for a simple

proposition: when the clear text of a contractual provision gives

a party the right to terminate, that party may terminate according

to the provision's terms. Concluding, as we do, that defendants-

appellees Robert Seaver and James Toga properly exercised their

contractual right of termination, we affirm the district court's

entry of summary judgment in their favor.

I

We briefly rehearse the relevant facts and travel of the

case, arraying those facts in the light most favorable to the

nonmoving party (here, plaintiff-appellant FinSight I LP). See

Suzuki v. Abiomed, Inc.,

(1st Cir. 2019); Flovac,

Inc. v. Airvac, Inc.,

(1st Cir. 2016).

FinSight wished to purchase shares of stock in Unity

Technologies, Inc. (Unity). The defendants wished to sell some of

their Unity shares. Striving to achieve a meeting of the minds,

the defendants' broker, Prabjeet Rattan, effected an email

introduction of the parties. In due course, FinSight agreed to

purchase 50,000 shares of Unity stock (25,000 from each defendant)

for $29 per share.

To facilitate the sale, FinSight and the defendants

negotiated the terms of a stock transfer agreement (the STA)

through an exchange of emails. The defendants successfully

negotiated for the inclusion of a termination clause, which

- 2 - provided in part that "[i]f the Closing has not taken place within

7 business days of the date specified above, other than due to a

breach of this Agreement by Transferor, Transferor shall have the

right to terminate this Agreement immediately via email without

further notice to Transferee." The closing of the transaction was

subject to the condition that Unity approve the stock transfers

"on the terms and conditions hereof."

The STA was dated June 11, 2020; it was signed by the

defendants on June 12; and it was signed by FinSight on June 15.

Nobody transmitted the STA to Unity for a signature at that time,

although there was a space in the signature block for Unity to

sign.

Seaver emailed Unity on June 16, seeking its approval of

the transfers. Rattan followed up in the same email thread on

June 17 and again on June 29, attaching the signed STA both times

but not asking Unity to sign it either time. Unity conditionally

approved the transfers on July 20 but required the transfers to be

governed by its "own form of transfer agreement" (instead of the

STA). Unity submitted its preferred form of transfer agreement —

the secondary stock purchase agreement — to FinSight on July 29.1

1 In point of fact, Unity sent FinSight two separate but identical agreements, one for Seaver's stock and one for Toga's stock. For ease in exposition, we refer to these agreements together as "the SSPA."

- 3 - FinSight forwarded it to the defendants for their signatures on

July 29.

In the intervening time, the price of Unity stock had

soared. The defendants did not sign the SSPA. Instead — on August

2 — Seaver responded to FinSight's email (forwarding the SSPA),

stating "[w]e'll need to review the agreement and get legal review

also. However, the price has moved up considerably during the

delay. . . . I wouldn't be interested in proceeding with the deal

at the old price." The next day, Seaver replied to a separate

email thread that "I think we're going to have to pass on moving

forward with this." Konstantin Deykalo, a member of FinSight's

transactions team, responded, insisting that attempting to secure

a deal at a higher price risked losing Unity's approval; that any

higher price quoted by another broker was not secure; and that

FinSight considered the STA to be binding and would seek

reimbursement for the time and money it had invested in the deal

if the defendants welched.

On August 4, Seaver responded by terminating the STA

pursuant to the termination clause "to the extent [the STA] was

ever in effect." Four days later — in response to a letter from

FinSight — Seaver asserted that the defendants had properly

exercised their right to terminate and that, "[i]n any case, Unity

said they would not permit the sale based on [the STA]." The SSPA,

he added, had "different terms" from the STA.

- 4 - FinSight did not walk away quietly from the ruins of the

deal. Instead, it sued the defendants in the United States

District Court for the District of Massachusetts, alleging breach

of contract and other related causes of action. Federal

jurisdiction was based on diversity of citizenship and the

existence of a controversy in the requisite amount. See

(a). After the close of discovery, the defendants moved for

summary judgment. See Fed. R. Civ. P. 56(a). FinSight opposed

the motion.

The district court granted the defendants' motion and

entered summary judgment in their favor. The court concluded,

among other things, that no enforceable contract had been formed

and that, even if the STA constituted an enforceable contract, the

defendants had properly exercised their termination right. See

FinSight I LP v. Seaver,

, at *2-3 (D. Mass. Feb.

10, 2022). This timely appeal followed.

II

We review the district court's entry of summary judgment

de novo. See Gen. Hosp. Corp. v. Esoterix Genetic Lab'ys, LLC,

, 308 (1st Cir. 2021). In conducting this tamisage, "we

take the facts in the light most hospitable to the

nonmovant . . . and draw all reasonable inferences therefrom to

that party's behoof." Id.; see Mason v. Telefunken Semiconductors

Am., LLC,

(1st Cir. 2015). We will affirm "when

- 5 - the record, read in this way, demonstrates that there is no genuine

issue as to any material fact and that the moving party is entitled

to judgment as a matter of law." Alston v. Int'l Ass'n of

Firefighters, Local 950,

, 24 (1st Cir. 2021) (citing

Fed. R. Civ. P. 56(a)). Such an affirmance may rest on any ground

supported by the record. See Houlton Citizens' Coal. v. Town of

Houlton,

(1st Cir. 1999).

Because this case arises in diversity jurisdiction, we

look to federal law for the summary judgment framework and to state

law for the substantive rules of decision. See Esoterix, 16 F.4th

at 308. As to which state is implicated in this formulation,

FinSight suggests that we apply either Massachusetts or Delaware

law and tells us that there is no substantive difference between

the two as to the questions of contract formation and breach that

are implicated here. The defendants are less explicit, but they

cite primarily to Delaware cases. As there is no real dispute

between the parties on this point, we will accept Delaware law as

furnishing the substantive rules of decision without performing a

full choice-of-law analysis. Cf. Borden v. Paul Revere Life Ins.

Co.,

(1st Cir. 1991) (explaining that when "the

parties have agreed about what law governs, a federal court sitting

in diversity is free, if it chooses, to forgo independent analysis

and accept the parties' agreement").

- 6 - We divide our analysis into three segments. First, we

interpret the text of the termination clause and the bounds of the

right granted by that clause. Next, we assess FinSight's claims

based on the STA. Finally, we address FinSight's equitable claims.

A

FinSight first contends that the district court erred in

concluding that there was no genuine dispute of material fact as

to whether the parties entered into an enforceable agreement. We

do not need to reach this issue, though, because the district

court's alternative holding is dispositive here: even if we assume

(favorably to FinSight) that the STA was an enforceable contract,

the defendants properly terminated it. Our reasoning follows.

Under Delaware law, the interpretation of a contract is

a question of law for the court. See Paul v. Deloitte & Touche,

LLP,

(Del. 2009). To determine the correct

interpretation of a contract, we give priority to the intention of

the contracting parties, looking first to the text of the contract

"to conclude whether the intent of the parties can be determined

from its express language."

In interpreting the text,

"[c]lear and unambiguous language . . . should be given its

ordinary and usual meaning." Lorillard Tobacco Co. v. Am. Legacy

Found.,

(Del. 2006) (second alteration in

original) (quoting Rhone-Poulenc Basic Chems. Co. v. Am. Motorists

Ins. Co.,

(Del. 1992)). "When the language of

- 7 - a . . . contract is clear and unequivocal, a party will be bound

by its plain meaning . . . ."

(first alteration in original)

(quoting Rhone-Poulenc,

). Thus, we will look

outside the margins of the contractual text for evidence of the

contract's meaning only when the text is ambiguous. See Eagle

Indus., Inc. v. DeVilbiss Health Care, Inc.,

(Del. 1997).

1

In resolving the question of whether the defendants

properly exercised their right to terminate under the STA, we begin

with the language of the termination clause itself. In its

entirety, that clause reads:

Subject to satisfying of Conditions Precedents (as provided in clause 3 hereof), the closing of the sale and purchase of the Transferred Shares shall take place at 10:00 a.m. California time on the date hereof (the "Closing") or as soon as reasonably practicable following satisfaction or waiver (by the applicable party) of the conditions set forth in this Section 2 (other than conditions which can on their terms be satisfied only at Closing), or at such other time or place as the parties may mutually agree. The Closing shall take place remotely via the exchange of documents, electronically or otherwise. If the Closing has not taken place within 7 business days of the date specified above, other than due to a breach of this Agreement by Transferor, Transferor shall have the right to terminate this Agreement immediately via email without further notice to Transferee.

- 8 - As an initial matter, the parties do not dispute in this

court that "the date specified above" refers to the STA's execution

date. They disagree, however, as to whether the execution date is

June 11 (the date inscribed in the contract itself) or June 15

(the date on which the last of the parties — FinSight — signed the

STA). Taking the facts in the light most favorable to the

nonmoving party — as we are required to do — we assume that the

date of execution is June 15.

With that assumed fact in place, the termination clause,

stripped to bare essence, provides unambiguously that if the

closing does not take place within seven business days of June 15

and the delay is not due to a breach by the defendants, the

defendants will have an unqualified right to terminate the STA

forthwith. What is more, the undisputed facts show that the

defendants properly exercised this right: the transaction did not

close within seven business days next following the execution date,

and the defendants gave their notice of termination subsequent to

the expiration of that period.

FinSight demurs. It asserts that we should interpret

the text of the termination clause to provide that the defendants

lose their termination right if they breach the contract at any

time, not just if they commit a breach within the seven days. But

this assertion is decisively rebutted by the plain language of the

termination clause itself. That clause states that the defendants

- 9 - may terminate if the closing "has not taken place within 7 business

days of the [execution] date . . . , other than due to a breach of

this Agreement by [the defendants]." The phrase "other than"

indicates that the potential breach contemplated by the

termination clause is a restriction on the accrual of the

termination right, not a requirement that applies after the right

has vested. See 2 Oxford English Dictionary 962 (2d ed. 1989)

(defining "other than" as "besides, except, apart from"). The

termination clause thus clearly states that the defendants had the

right to terminate the STA if the closing did not take place within

seven business days of the execution date, unless that delay was

attributable to their breach.

Even if we found the text to be ambiguous — and we do

not — the undisputed evidence shows that the defendants

specifically negotiated for the seven-day termination clause

because they did not want to be "tied up indefinitely" while the

stock price was subject to fluctuation. The defendants even

offered to delay execution if FinSight believed it could not

satisfy the conditions within the seven-day window. FinSight could

have balked at including such a termination clause in the contract,

negotiated for either a longer period of time or a clause

embroidered with more contingencies, or gotten its ducks in a row

before executing the STA. FinSight did none of these things. The

undisputed evidence supports the plain reading of the text: the

- 10 - defendants' termination right vested, as the parties intended,

after seven business days.

Here, moreover, it is uncontroverted that the defendants

did nothing in the seven business days following June 15 either to

breach the STA or to undermine the closing of the deal. The

defendants sought to carry out the conditions of the contract

within that time span. Seaver emailed Unity on June 16 seeking

its approval to transfer the defendants' shares, pursuant to the

STA's requirement that Unity approve the transfer prior to the

closing. Unity did not respond to that email or subsequent emails

from the defendants' broker until June 29, well after seven

business days had elapsed. The fact that the deal did not close

within seven business days of June 15 was not "due to a breach of

th[e] Agreement by [the defendants]" but, rather, due to Unity's

foot-dragging. Consequently, the defendants' right to terminate

vested at the expiration of seven business days. And the

defendants thereafter exercised that right as they were entitled

to do.

2

In an effort to change the trajectory of the debate,

FinSight mounts a flanking attack. It contends that — even if the

STA gave the defendants a right to terminate that vested after

seven days — the defendants could not properly exercise that right.

FinSight raises this argument in two, slightly different,

- 11 - iterations. First, it claims that once the conditions precedent

were satisfied, performance was required under the contract and

the termination right vanished. Second, it claims that the

defendants acted in bad faith and breached the STA based on their

purported reasons for terminating the contract. In analyzing these

claims, we assume — albeit without deciding — that Unity's approval

was provided on terms and conditions materially equivalent to those

set forth in the STA, such that the condition of its approval was

satisfied.

As to the first argument, we understand FinSight to mean

that the defendants' termination right went up in a puff of smoke

once Unity approved the transfer and the STA's conditions precedent

were satisfied. We see the logic behind FinSight's argument

insofar as the power to terminate operates "prospectively" to

discharge only a party's "contractual duty to perform promises

that are still wholly executory." 13 Sarah Howard Jenkins, Corbin

on Contracts § 68.9, at 250 (Joseph M. Perillo rev. ed. 2003). It

follows that there may be nothing to terminate if no promises

remain to be performed.

But this is not such a case. There is simply no basis

in the text of the STA for concluding that once the conditions

precedent were satisfied, the contract was completed such that the

termination right vanished or that the failure to transfer shares

constituted an immediate breach.

- 12 - We must look to the text of the contract to determine

what obligations it places on the parties. See VLIW Tech., LLC v.

Hewlett-Packard Co.,

(Del. 2003) (explaining

that a breach of contract requires "the breach of an obligation

imposed by that contract"); see also Airborne Health, Inc. v. Squid

Soap, LP,

(Del. Ch. 2009) (concluding no breach

of contract where contract provisions did not by their terms impose

those obligations on defendant which plaintiffs sought to

enforce). In support of its argument that the defendants lost

their termination right once Unity approved the deal, FinSight

points to language in the termination clause decreeing that the

closing "shall take place . . . on the date hereof . . . or as

soon as reasonably practicable following the satisfaction or

waiver" of the conditions precedent. This mandatory language,

FinSight argues, left no choice for the defendants but to transfer

their shares or commit a breach.

There is simply no principled basis for concluding that

all the obligations under the contract were fulfilled at that

point. After all, the parties had not yet transferred the shares

or the money. And there is no reason to read the cited language

as affecting the termination right: that section of the paragraph

refers to the effect of conditions on the closing, not the

termination right. If those conditions had been satisfied within

the seven-day period before the termination right vested, the

- 13 - defendants may well have had an obligation to close "as soon as

reasonably practicable." But nothing in the text supports an

inference that the completion of the conditions precedent would

subvert the termination right that already had vested.2

We turn to the second version of FinSight's argument.

FinSight claims that the defendants violated an implied covenant

of good faith and fair dealing by asserting in bad faith that the

basis for their termination was the SSPA's materially different

terms and by endeavoring to "kill the deal" by asking Unity to

withdraw its support. But this argument muddles the order of

events: by the time that the defendants asserted that the terms

of the STA and SSPA were materially different and reached out to

Unity to ask it to revoke its support, they already had terminated

the deal. Their actions after that point are immaterial.

Next, FinSight directs us to Section 5.7 of the STA,

entitled "Company Information," in which the defendants "[gave] up

the opportunity to sell the Transferred Shares at a possible higher

price in the future," as evidence that the defendants breached the

2 Along the same lines, we reject FinSight's attempted reliance on the "further assurances" clause of the STA, which provides that "[t]he parties agree to execute such further documents and instruments and to take such further actions as may be reasonably necessary to carry out the purposes and intent of this Agreement." FinSight reads that clause to create an obligation for the defendants to renegotiate the terms of the SSPA if it contained material differences from the STA. But there is nothing in the further assurances clause that suggests that it operates as a restriction on the defendants once that termination right has vested.

- 14 - STA and acted in bad faith before they invoked the termination

clause. Noting that Seaver wrote on August 2 that he "wouldn't be

interested in proceeding with the deal at the old price," FinSight

suggests that the defendants both breached Section 5.7 and operated

in bad faith when they later cited the differences between the STA

and the SSPA as a reason for their exercise of the termination

right.

It is black letter law that contract provisions must be

read as a whole, taking context into account. See, e.g., New

Castle Cnty. v. Nat'l Union Fire Ins. Co. of Pittsburgh,

(3d Cir. 1999) (explaining that a "single clause or

paragraph of a contract cannot be read in isolation, but must be

read in context" (quoting Cheseroni v. Nationwide Mut. Ins. Co.,

(Del. 1979))).

Read as a whole, Section 5.7 is obviously meant to state

and delimit the full extent of the defendants' relevant knowledge

about the company. Nothing in Section 5.7 suggests that its final

line is intended to be read as a hidden circumscription of the

power to terminate, such that termination would be allowed for any

reason except a rise in the market price. We will not assume,

without more, that the purpose of a separate provision discussing

"Company Information" is to imply such a restriction.

And here, there is no "more." The termination clause

included only two restrictions: that it could not be exercised

- 15 - for seven business days after the date of execution and that it

could not be exercised thereafter if the delay was caused by the

defendants' breach. The parties specifically negotiated the

termination clause and could have incorporated further

restrictions in it. They did not. Our obligation, then, is to

enforce the termination clause that the parties wrote into the

contract, not to enforce hypothetical termination provisions that

they might have written. See Gilbert v. El Paso Co.,

(Del. Ch. 1984), aff'd,

(Del. 1990)

(explaining that, in the context of a termination clause, when

"the conditions are expressed, the motivation of the invoking party

is, in the absence of fraud, of little relevance"). Under the

terms of the STA, any subsequent discussions of the defendants'

reasons for terminating were irrelevant to the question of whether

they had properly exercised their right of termination in the first

place.

3

We turn next to the final version of FinSight's argument

as to whether a breach preceded the defendants' invocation of their

termination right. In this variant, FinSight maintains that an

action for breach lies even if the defendants properly exercised

their termination right — as we have concluded they did.

This argument is past its expiration date. FinSight did

not make this argument below. Even in this court, FinSight

- 16 - squarely presented the argument for the first time in its reply

brief. As such, we deem the argument doubly waived. See

Teamsters, Local No. 59 v. Superline Transp. Co.,

(1st Cir. 1992) ("If any principle is settled in this circuit, it

is that, absent the most extraordinary circumstances, legal

theories not raised squarely in the lower court cannot be broached

for the first time on appeal."); Sandstrom v. ChemLawn Corp.,

(1st Cir. 1990) (explaining that because argument was

not made "in appellant's opening brief, surfacing only in his reply

brief, it has been waived").

That ends this aspect of the matter. Even assuming that

the parties were bound by an enforceable contract, FinSight cannot

escape the terms of that contract. The termination right is

clearly stated, and the defendants properly exercised it.

B

FinSight proposes two alternative theories of recovery,

neither of which sounds in breach of contract. First, it alleges

that the defendants are liable under a theory of promissory

estoppel. Second, it alleges that the defendants are liable for

unjust enrichment. We address these plaints separately.

- 17 - 1

To succeed on a claim for promissory estoppel, FinSight

"must show by clear and convincing evidence that: (i) a promise

was made; (ii) it was the reasonable expectation of the promisor

to induce action or forbearance on the part of the promisee; (iii)

the promisee reasonably relied on the promise and took action to

his detriment; and (iv) such promise is binding because injustice

can be avoided only by enforcement of the promise." Lord v.

Souder,

(Del. 2000). "The prevention of

injustice is the 'fundamental idea' underlying the doctrine of

promissory estoppel." Chrysler Corp. (Del.) v. Chaplake Holdings,

Ltd.,

(Del. 2003) (quoting Chrysler Corp. v.

Quimby,

(Del. 1958)). Recovery under promissory

estoppel presupposes the lack of an enforceable contract. See

Chaplake Holdings,

.

In advancing this theory of liability, FinSight relies

primarily on Ramone v. Lang,

(Del. Ch. Apr. 3,

2006). There, the defendant promised the plaintiff that,

regardless of whether they reached an agreement in their

negotiations over the joint ownership of a property (which they

did not), the plaintiff could lease the property. See

at *6-

7, *14. Here, in contrast, FinSight does not allege a comparably

definite promise to close the deal on which it would have been

reasonable for it to rely.

- 18 - FinSight claims that the substance of the STA should be

enforced — even if the agreement itself is unenforceable — on the

basis that the defendants negotiated the STA, were aware of

FinSight's efforts to close the transaction, and pursued Unity's

approval. But FinSight also claims that it believed the STA to be

in effect following its June 15 signing of that document. Thus,

there is no question that FinSight was aware of the defendants'

termination right. It would not have been reasonable for FinSight

to rely on the defendants to refrain from exercising their right

to terminate under an agreement that FinSight believed to be in

effect.

FinSight responds that the defendants' actions signaled

their intent to waive their termination right and that, in light

of that waiver, FinSight could reasonably rely on their eschewal

of the termination right. In support, FinSight directs our

attention to the actions of the defendants' broker, Rattan, who

continued to pursue Unity's approval after the seven business days

had passed and indicated that the defendants would be willing to

sign a second agreement if Unity demanded it. But this is merely

shouting into the wind: even if Rattan was the defendants' agent

and, through him, the defendants indicated that they might be

willing to wait until Unity approved the deal, those actions would

not be enough for the defendants to reasonably anticipate that

FinSight would rely on them as a waiver of the termination clause.

- 19 - It would not have been reasonable for FinSight to assume that

Rattan's indication of continued interest through occasional

emails overrode the express language of the termination right.

Put another way, the defendants' actions in this case could not

reasonably have been expected to induce reliance, nor were those

actions of such a character that the only way to avoid injustice

would be to enforce the terms of the STA outside the bounds of

contract law.

2

This leaves FinSight's claim for unjust enrichment.

That claim is presented in conclusory fashion, devoid of developed

argumentation. Because FinSight has failed to flesh out that claim

with either law or argument, we deem it waived. See United States

v. Zannino,

(1st Cir. 1990) ("[I]ssues adverted to

in a perfunctory manner, unaccompanied by some effort at developed

argumentation, are deemed waived.").

III

We need go no further. The terms and conditions of the

STA are clear and unambiguous. It says what it means and — once

the seven-day window had closed — the defendants were free to

exercise the termination right that the STA afforded to them. For

the reasons elucidated above, the judgment of the district court

is

Affirmed.

- 20 -