DAVID H. HENNESSY, Magistrate Judge.
Plaintiff Ana Flavia De Moura Lockwood has sued Defendants Todd Madeiros and his company The Auto Shops, LLC, doing business as AllThingsJeep.com (the "Company").
Because I find that Plaintiff has failed to carry her burden to attach, the motion for attachment is DENIED.
Plaintiff alleges in a verified complaint, dkt. no. 1-1, that she has worked for the Company since 2010 and has reported to Madeiros at all relevant times. Madeiros spends most of his time in California but periodically travels to Massachusetts on business.
The complaint contains the following general allegation concerning Plaintiff's compensation: "Throughout the course of [Plaintiff]'s employment, the plaintiff [sic], in recognition of her value added to the Company, promised to compensate her for that value."
In 2017, Madeiros began considering offers to purchase the Company. At an unspecified time, Madeiros promised Plaintiff that if the Company sold for $5,000,000, he would give Plaintiff $250,000—a sum that amounted to 5% of the $5 million purchase price.
In June 2017, Plaintiff, while using a computer screen shared with Madeiros, discovered that Madeiros was watching pornography on a company computer, and was making the pornography visible to her and other employees. This went on for several months. In or around that September, Plaintiff confronted Madeiros about his behavior and "gave [him] an ultimatum that this behavior had to stop."
In or around January 2018, Drake Automotive Group ("Drake") emerged as a potential purchaser of the Company. Madeiros travelled to Massachusetts that month in connection with the potential sale. During that trip, Madeiros informed Plaintiff that he did not believe he owed Plaintiff anything. But Plaintiff insisted that she was owed, and Madeiros ultimately offered her $175,000 if the sale to Drake occurred, subject to unspecified contingencies. That amount was 4.3% of the potential sale price.
The sale to Drake fell through. Plaintiff told Madeiros she wanted to put their agreement in writing. Defendant replied that "`in [his] mind' it is the same agreement we have always had."
Plaintiff kept working for Defendants "[i]n continued reliance on the oral promises of compensation."
If the Company is sold, Plaintiff will have the opportunity to agree to work for the buyer. But Madeiros's unspecified actions and inactions allegedly are interfering with her ability to do so. Madeiros's conduct also allegedly caused Plaintiff to suffer emotional distress and high blood pressure, for which Plaintiff has been prescribed medication.
I now summarize relevant facts in Madeiros's affidavit opposing attachment, dkt. no. 8. According to the affidavit, Plaintiff started working for the Company as a part-time bookkeeper in 2010. She was promoted several times and is now the general manager. Her compensation in 2017 was $118,560, 57% more than she made in 2016.
In May 2017, Madeiros and Plaintiff agreed on a strategic plan for the Company, and agreed that Plaintiff would be responsible for executing the plan. They agreed that if the plan were successful, the Company's value could increase from somewhere between $3.5 million and $4 million to $5 million. In May 2017, Madeiros told Plaintiff that if he sold the Company in 2018 for $5 million, he would pay her a $250,000 bonus. Madeiros never offered Plaintiff a specific percentage of the Company's sale price. The offer was expressly conditioned on the Company being sold for at least $5 million.
In August 2017, Plaintiff sent Madeiros a monthly statement indicating that the Company's revenues had declined. Plaintiff expressed to Madeiros that the decline was not her fault and that Madeiros had "set her up to fail."
The day of Plaintiff's text message (September 17, 2017), Madeiros approached two potential buyers: Drake, and Turn5. Four days later, Plaintiff and Madeiros agreed that Plaintiff would keep working for the Company through January 31, 2018 and would receive a $20,000 bonus for doing so. Plaintiff did so, and Madeiros paid her the $20,000 bonus.
On December 13, 2017, Madeiros entered into a letter of intent with Drake to buy the Company for $3 million at closing, plus an additional $1 million if the Company's revenues increased by $1 million in the year following the sale. Madeiros discussed with Plaintiff the negotiations with Drake. Plaintiff expressed concern about what the sale would mean for her continued employment and threatened to "blow up" the deal.
Concerned about Plaintiff's threat, Madeiros offered her a bonus conditioned on the sale to Drake going through. First, he offered Plaintiff $75,000 if she worked for Drake for a transition period to be agreed upon, "most likely four to six months."
Plaintiff declined this bonus and made a counteroffer by email dated January 3, 2018. The counteroffer was a bonus of 4% of the sale price to Drake, plus 4% of the additional $1 million that Drake would owe Madeiros if the Company's revenues increased by $1 million in the year after the sale.
In May 2018, Madeiros received an offer from Turn5 to purchase the Company. On July 20, 2018, Madeiros and Turn5 agreed that Turn5 would purchase the Company's assets for approximately $2.25 million, with approximately $1 million due at closing and the rest due in 36 monthly installments.
During a phone call with Plaintiff on June 20, 2018, Madeiros offered Plaintiff a bonus of $75,000 if she agreed to employment with Turn5 for 4 to 6 months after the sale. Plaintiff at first declined, and then said she would think about it while Madeiros and Turn5 conducted due diligence. On June 25, 2018, Madeiros received an email from Plaintiff's counsel rejecting the $75,000 bonus offer.
Madeiros denies ever sexually harassing Plaintiff, subjecting Plaintiff to a hostile work environment, or retaliating against Plaintiff. He notes that he and Plaintiff often stayed at each other's houses and with each other's families while travelling on business; that Madeiros promoted Plaintiff and increased her pay numerous times; that Madeiros paid her a $20,000 bonus for staying with the Company through January 2018; and that in June 2017, Madeiros gave Plaintiff his car "to show my appreciation for her taking on the role of general manager."
In a federal civil action, attachment is available "under the law of the state where the court is located." Fed. R. Civ. P. 64. In Massachusetts, attachment of property is governed by Mass. Gen. Laws ch. 223, §§ 42-83, and is implemented through Mass. R. Civ. P. 4.1. An order of attachment may issue only
Mass. R. Civ. P. 4.1(c). A motion for attachment must be supported by one or more affidavits that "shall set forth specific facts sufficient to warrant the required findings and shall be upon the affiant's own knowledge, information or belief . . . ."
The central issue to be considered by the Court is whether the plaintiff is "likely to prevail on the merits and obtain damages in the necessary amount."
Here, the limited record before the Court (which is not a fulsome evidentiary record that may be developed at trial), fails to establish the requisite showing for an order of attachment. The verified complaint asserts six causes of action. Count I alleges breach of contract. Count II sounds in quantum meruit. Count III seeks relief under the doctrine of quasi-contract. Count IV is labeled "Constructive Trust."
"The essential elements of a valid contract are an offer, an acceptance, and consideration."
A counteroffer generally is a rejection of a prior offer, which terminates the power of acceptance of the prior offer.
"A condition precedent defines an event which must occur before a contract becomes effective or before an obligation to perform arises under the contract. If the condition is not fulfilled, the contract, or the obligations attached to the condition, may not be enforced."
On the basis of the parties' submissions, I find that Plaintiff has failed to show reasonable likelihood of success on Count I. Specifically, the evidence fails to show a meeting of the minds on essential elements of a contract. Plaintiff asserts that Madeiros made an unconditional promise to reward Plaintiff's work by paying her a percentage of the proceeds of the sale of the Company. The following parts of the record support this assertion:
Madeiros vigorously challenges Plaintiff's assertion that he promised her an unconditional bonus upon the sale of the Company. He asserts that he did not offer Plaintiff a bonus based on her years of service to the Company, nor did he unconditionally offer her a percentage of the Company's sale price.
The first instance—in which Madeiros offered to pay Plaintiff $250,000 if the Company sold for $5 million—involved what Plaintiff herself characterized as "an example" of the bonus calculation. Dkt. no. 9, ¶ 11. Madeiros agrees that he promised to pay Plaintiff $250,000. However, according to Madeiros, this promise was expressly conditioned on the Company's sale for $5 million. Dkt. no. 8 ¶ 11. Moreover, according to Madeiros, at the time of this discussion—May 2017—he estimated that the Company's value was around $3.5 to $4 million, and his offer was conditioned on Plaintiff executing a business strategy to increase the value of the Company so that it would sell for $5 million.
The second instance involved a letter of intent from Drake to buy the Company for $3 million. According to a text message proffered by Madeiros,
The third instance involves the pending sale of the Company's assets to Turn5. According to Madeiros, he entered into an asset purchase agreement in July 2018 under which Turn5 will pay approximately $2.2 million—approximately $1 million due at closing, and the balance (to be calculated based on the value of the Company's inventory) in 36 monthly payments.
The record shows that Plaintiff clearly was a highly valued employee; indeed, Madeiros concedes, and it is undisputed, that he lowered the sale price to Turn5 by tens of thousands of dollars, precisely because he could not guarantee Plaintiff's employment to Turn5, even for 4 to 6 months. Similarly, the record recounts that after Plaintiff quit in September 2017, Madeiros managed to reemploy her only with a $20,000 bonus.
However, the record fails to show that Plaintiff's value to the Company was memorialized in a bonus agreement that reflected a meeting of the minds. On this record, both sides plausibly can point to evidence supporting their positions, but neither side carries the day. In particular, Plaintiff can point to her January 3 email, written before pending litigation provided some arguable motive to fabricate, claiming that Madeiros discussed with her an unconditional bonus of 4% of the Company's sale price. Similarly, Madeiros can point to the parties' negotiation history (and supporting correspondence) as evidence that offers of bonuses expressly contemplated conditions precedent that Plaintiff would need to fulfill.
Given these supportable differences over plainly "essential terms," it appears that the parties' negotiations did not result in a contract "definite and certain so that the intention of the parties may be discovered, the nature and extent of their obligations ascertained, and their rights determined."
"Recovery in quantum meruit presupposes that no valid contract covers the subject matter of a dispute."
"To recover under quantum meruit, [a plaintiff] must show: (1) that it conferred a measurable benefit upon the defendants; (2) that the claimant reasonably expected compensation from the defendants; and (3) that the defendants accepted the benefit with the knowledge, actual or chargeable, of the claimant's reasonable expectation."
I find that Plaintiff has failed to show a reasonable likelihood of prevailing on a theory of unjust enrichment. Among other things, there simply is not enough evidence that Madeiros was unjustly enriched at Plaintiff's expense. As noted, there is no question that Plaintiff was a highly valued employee. However, the record also shows that Plaintiff was compensated for her services. Her average annual salary, including significant bonuses, was more than $62,000,
For these reasons, I deny the motion to attach inventory as to Plaintiff's quantum meruit and unjust enrichment claims.
To prevail on a claim for intentional interference with advantageous business relationships,
I find that Plaintiff has not shown a reasonable likelihood of prevailing on this Count. I assume that her allegations support the existence of an advantageous prospective employment relationship with Turn5. Nevertheless, her evidence fails to show that Madeiros knowingly and intentionally interfered with that relationship. Rather, Madeiros has conditioned payment of a bonus to Plaintiff on Plaintiff's commitment to work for Turn5 for 4 to 6 months; but Plaintiff was always free to reject that offer—and indeed, she has.
However, even if the record did so, there is an absence of persuasive evidence that Madeiros' motivations were improper. Arguably, the only allegation evidencing "actual malice" by Madeiros is Plaintiff's accusation that Madeiros treated her with hostility after she confronted him about viewing pornography on the Company's shared computer system.
The complaint alleges both negligent and intentional infliction of emotional distress.
To prevail on a claim of negligent infliction of emotional distress, Plaintiff must show: "1) negligence; 2) emotional distress; 3) causation; 4) physical harm manifested by objective symptomatology; and 5) that a reasonable person would have suffered emotional distress under the circumstances of the case."
I find that the evidence offered does not establish that Plaintiff is reasonably likely to prevail on this claim. Plaintiff does not appear to accuse Defendants of conduct related to her disputed bonuses that can fairly be described as negligent, nor does she allege that either defendant owed her a duty of care that was breached. Madeiros's viewing of pornography in the workplace might support an NIED claim, but as noted above, Madeiros disputes Plaintiff's allegations concerning pornography. Whether Plaintiff ultimately can prove those allegations with the benefit of discovery is a separate question from the assessment that the Court must make on the limited record presented. Lastly, even assuming that by viewing pornography on a Company computer, Madeiros breached a duty of care he owed Plaintiff, Plaintiff's evidence of injury and causation presents a close question. As the Court understands Plaintiff's testimony at the August 23 hearing, Plaintiff's primary concern was that another employee, Marcela, was exposed to pornography on a computer Marcela accessed from home, where she lives with children. Similarly, in her rebuttal affidavit, Plaintiff avers that Madeiros repeatedly watched porn on a computer another employee was using.
Second, to prevail on a claim of intentional infliction of emotional distress (also alleged in Count VI), Plaintiff must show:
Plaintiff does not accuse Defendants of engaging in conduct that meets the demanding definition of "extreme and outrageous." Madeiros's negotiation tactics are perhaps sharp, but they do not rise to extreme and outrageous. Plaintiff comes closer to meeting this standard by alleging that Madeiros made pornography visible to her in the workplace. However, even assuming for argument's sake that such conduct were extreme and outrageous, Plaintiff has not alleged that it caused her to suffer "severe" emotional distress. The complaint does not describe Plaintiff's emotional distress, other than labeling it "significant." Dkt. no. 1-1 ¶ 37. The complaint also refers to "the stress" that Plaintiff sustained, and alleges that the stress caused Plaintiff's high blood pressure.
Finally, as to both the negligent and intentional infliction of emotional distress claims, there is sufficient record evidence to attribute any distress Plaintiff suffered merely to the stress of being in the middle of the sale of the Company, with its accompanying deadlines and stream of demands. To Plaintiff's counsel's credit, he concedes that there are potential causation issues in connection with Plaintiff's infliction of emotional distress claims.
As to both claims of infliction of emotional distress, I find that the record fails to show Plaintiff is reasonably likely to prevail. I therefore deny the motion to attach.
Plaintiff's motion for attachment, dkt. no. 4, is DENIED.
