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James R. Huck Dba Human Resources International v. Pfizer

July 25, 2011


The opinion of the court was delivered by: M. James Lorenz United States District Court Judge


In this breach of contract and fraud action, Defendant filed a motion for summary judgment, which Plaintiff opposed. For the reasons which follow, Defendant's motion is GRANTED IN PART AND DENIED IN PART.

Plaintiff James R. Huck holds a Ph.D. in organizational psychology and provides consulting services to various corporate entities in the area of human resources and leadership assessment and development. Plaintiff provided consulting services to Defendant in its Asia region from 2001 through 2005. Defendant paid Plaintiff a quarterly retainer, a fixed fee for specific assessments and surveys, as well as Plaintiff's costs and expenses, including travel and living expenses. During the course of the consulting relationship, Defendant's demand for Plaintiff's services increased. According to Plaintiff, Defendant required him to provide his services exclusively to Defendant. Plaintiff contends that Defendant promised him work into 2007, but instead terminated the relationship in August 2005.

Plaintiff filed a complaint in state court. Defendant answered and removed the action to this court based on diversity jurisdiction pursuant to 28 U.S.C. Section 1332. In his operative first amended complaint, Plaintiff stated claims for breach of contract, breach of the implied covenant of good faith and fair dealing, intentional misrepresentation, concealment, negligent misrepresentation, unjust enrichment, quantum meruit, unfair business practices pursuant to California Business and Professions Code Section 17200 et seq. ("UCL"), and for work, labor and services provided. He seeks to recover in excess of $800,000 in damages.

Defendant moved for summary judgment with respect to several claims. Rule 56 of Federal Rules of Civil Procedure empowers the court to enter summary judgment on factually unsupported claims or defenses, and thereby "secure the just, speedy and inexpensive determination of every action." Celotex Corp. v. Catrett, 477 U.S. 317, 325, 327 (1986). Summary judgment is appropriate if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show 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. Fed. R. Civ. P. 56(c).

The moving party's burden on summary judgment depends on whether it bears the burden of proof at trial with respect to the claim or defense at issue. "When the party moving for summary judgment would bear the burden of proof at trial, it must come forward with evidence which would entitle it to a directed verdict if the evidence went uncontroverted at trial. In such a case, the moving party has the initial burden of establishing the absence of a genuine issue of fact on each issue material to its case." See C.A.R. Transp. Brokerage Co., Inc. v. Darden Restaurants, Inc., 213 F.3d 474, 480 (9th Cir. 2000) (citations omitted). If the moving party does not bear the burden at trial, it can meet its burden on summary judgment by pointing out the absence of evidence with respect to any one element of the claim or defense. See Celotex, 477 U.S. at 325.

If the movant meets its burden on summary judgment, the burden shifts to the non-movant to show summary adjudication is not appropriate. Celotex, 477 U.S. at 317, 324. In this regard, the non-movant must "go beyond the pleadings" and rely on "evidentiary materials" such as his "own affidavits, or . . . the depositions, answers to interrogatories, and admissions on file" to designate specific facts in opposition to the summary judgment motion. Celotex, 477 U.S. at 324 (internal quotation marks omitted). These evidentiary materials must show that genuine factual issues remain which "can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986). The non-movant does not meet this burden by showing "some metaphysical doubt as to material facts." Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986).

When ruling on a summary judgment motion, the non-movant's evidence is to be believed, and all justifiable inferences are to be drawn in his or its favor. Anderson, 477 U.S. at 255. Determinations regarding credibility, the weighing of evidence, and the drawing of legitimate inferences are jury functions, and are not appropriate for resolution by the court on a summary judgment motion. Id.

Plaintiff claims breach of contract by relying on Defendant's August 3, 2004 letter and October 21, 2004 memorandum. Defendant argues that these documents are insufficient to establish the existence of a written contract. The court disagrees. California substantive law applies in this diversity action. See Intri-Plex Technol., Inc. v. Crest Group, Inc., 499 F.3d 1048, 1052 (9th Cir. 2007) & Erie R.R. Co. v. Tompkins, 304 U.S. 64 (1938).

Plaintiff relies in part on the August 3, 2004 letter from Alan Taylor, Pfizer's Regional President. The letter confirms Defendant's existing consulting relationship with Plaintiff and states Defendant's "intent to formalize a contract for future provision of professional consulting services." (Def.'s Exh. 2 at 68.) As explained in the letter, this was prompted by Defendant's re-alignment of its internal accounting, whereby consulting services for the Asian markets would be paid by the individual markets rather than Defendant's Head Office in New York or its regional office in Hong Kong. In addition, Defendant wanted to change its arrangement with Plaintiff to be consistent with its other contracts with external consultants. The letter confirmed the contractual terms between the parties up to that point and in the interim period until the new contract was executed. Specifically, the letter provided:

In light of the existing relationship between the Parties, we consider it fair and reasonable to provide [Plaintiff] with sufficient notice of our intention to formalize the new arrangement. Hence, we aim to execute a new contract no later than 31 January 2005 ( in about 6 months' time). In the interim period, Pfizer will continue to remunerate [Plaintiff] in accordance with the past costing agreement, which has included a retainer fee (US $30,000 per quarter) plus agreed service costs for the running of Leadership Labs . . . as well as any approved follow-up services.

Please be advised that once the contract is signed by the Parties in late January 2005, a fixed fee for service arrangement will be determinative of all [Plaintiff's] remuneration for future services to be provided to the markets in Asia. . . .

Should you have any queries regarding the above, please kindly refer them directly to Mr. Paul Thompson, Human Resources Director, Pfizer-Asia. (Def.'s Exh. 2 at 68-69 (emphasis in original).) The parties did not execute a new contract as contemplated in the August 3, 2004 letter. Nevertheless, Defendant requested and Plaintiff performed services after the January 31, 2005 date.

Defendant argues that the August 3, 2004 letter is at most a letter of intent and not a written contract on which Plaintiff could base any of his claims.

Whether a writing constitutes a final agreement or merely an agreement to make an agreement depends primarily upon the intention of the parties. In the absence of ambiguity this must be determined by a construction of the instrument taken as a whole. The objective intent as evidenced by the words of the instrument, not the parties' subjective intent, governs our interpretation. [¶] Where the writing at issue shows no more than an intent to further reduce the informal writing to a more formal one the failure to follow it with a more formal writing does not negate the existence of the prior contract. However, where the writing shows it was not intended to be binding until a formal written contract is executed, there is no contract.

Harris v. Rudin, Richman & Appel, 74 Cal. App. 4th 299, 307 (1999) (internal quotation marks and citations omitted).

The letter memorializes specific terms of the agreement between the parties which had been followed in the previous years and which were to govern "in the interim." It also expresses an intent to change the terms in the future. Without violating the parties' intent as evident in the document, the August 3, 2004 letter can be reasonably interpreted as affirming the existing contract between the parties, which was to continue "in the interim." The remainder of the letter, which merely expresses an intent to change the current arrangement by a written contract executed at a later time, but does not specify the terms of the new arrangement, cannot be reasonably interpreted as a contract, but merely a letter of intent. To the extent Defendant argues that Plaintiff's breach of contract claim should be dismissed because there was no written contract at all, Defendant's motion is DENIED.

The parties disagree about the meaning of the term "in the interim period" as stated in the letter. Defendant argues that, at most, it entitled Plaintiff to continue the then-current payment terms through January 31, 2005, when Defendant anticipated a new contract would be in place. Plaintiff contends that it entitled him to continue the previous terms until a new contract was in place. The new contract contemplated in the letter was never executed. (Huck Depo. at 180.)

"When a dispute arises over the meaning of contract language, the first question to be decided is whether the language is reasonably susceptible to the interpretation urged by the party." Oceanside 84, Ltd. v. Fidelity Fed. Bank, 56 Cal. App. 4th 1441, 1448 (1997) (internal quotation marks and citation omitted). "If a contract is capable of two different reasonable interpretations, the contract is ambiguous." Id. (internal quotation marks and citation omitted). Based ...

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