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Good v. Uniloc Luxembourg, S.A.

United States District Court, S.D. Mississippi, Northern Division

October 23, 2017

ALEXANDER GOOD PLAINTIFF
v.
UNILOC LUXEMBOURG, S.A. DEFENDANT

          ORDER

          DANIEL P. JORDAN III, UNITED STATES DISTRICT JUDGE

         Defendant Uniloc Luxembourg, S.A., seeks an order dismissing Plaintiff Alexander Good's Complaint [1] saying it fails to state a claim for which relief can be granted. Because the contracts at issue are ambiguous with regards to the clauses raised in Counts I and II, and the fee-shifting provision raised in Count III does not violate public policy or other equitable doctrines, the Court denies Uniloc's Motion to Dismiss [6].

         I. Facts and Procedural History

         This dispute stems from contracts relating to Alexander Good's departure from Uniloc Luxembourg, S.A. Uniloc hired Good as its Chief Executive Officer in 2012 and agreed to a severance package payable to Good if Uniloc ever terminated him without cause. In early 2014, both parties agreed to terminate Good's employment through an Employee Employment Separation and Consulting Agreement (“Separation Agreement”) [1-2], in which Good waived his right to receive the severance package pursuant to certain conditions. At the same time, Good and Uniloc entered into a Security Agreement [1-3] to collateralize certain assets in accordance with the Separation Agreement. A few months later, the parties signed a contract entitled “Amendment to the Security Agreement And Employee Employment Separation And Consulting Agreement And Revised Employment Agreement” (“Amendment”) [1-4].

         Good complains that Uniloc breached these agreements in three ways: (1) disparaging his performance as CEO; (2) failing to disclose financial information; and (3) failing to pay his attorneys' fees. Pl.'s Compl. [1] at G-9. As a result, he claims that he is now due the severance package he agreed to waive in the Separation Agreement. Uniloc disagrees and has filed a Motion to Dismiss [6]. The issues have been fully briefed, and the Court has personal and subject-matter jurisdiction.

         II. Standards

         In considering a motion under Rule 12(b)(6), the “court accepts ‘all well-pleaded facts as true, viewing them in the light most favorable to the plaintiff.'” Martin K. Eby Constr. Co. v. Dall. Area Rapid Transit, 369 F.3d 464, 467 (5th Cir. 2004) (quoting Jones v. Greninger, 188 F.3d 322, 324 (5th Cir. 1999) (per curiam)). But “the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions. Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). To overcome a Rule 12(b)(6) motion, a plaintiff must plead “enough facts to state a claim to relief that is plausible on its face.” Twombly, 550 U.S. at 570. “Factual allegations must be enough to raise a right to relief above the speculative level, on the assumption that all the allegations in the complaint are true (even if doubtful in fact).” Id. at 555 (citations and footnote omitted). In ruling on a Rule 12(b)(6) motion, the Court generally considers “the contents of the pleadings, including attachments thereto.'” Brand Coupon Network, L.L.C. v. Catalina Mktg. Corp., 748 F.3d 631, 635 (5th Cir. 2014) (quoting Collins v. Morgan Stanley Dean Witter, 224 F.3d 496, 498 (5th Cir. 2000)). In this case, that would include the contracts.

         Interpreting a contract generally is a question of law. Cunningham & Co. v. Consolidated Realty Mgmt., Inc., 803 F.2d 840, 842 (5th Cir. 1986). And when addressing that question, the Court looks first “to the ‘four corners' of the contract” to determine what it says. Facilities, Inc. v. Rogers-Usry Chevrolet, Inc., 908 So.2d 107, 111 (Miss. 2005). Only if the contract is unclear or ambiguous can a court go beyond the text to determine the parties' true intent. Facilities, 908 So.2d at 111. “[T]he mere fact that the parties disagree about the meaning of a contract does not make the contract ambiguous as a matter of law.” Id. Instead, “[a] contract is ambiguous if it is susceptible to two reasonable interpretations.” Epperson v. SOUTHBank, 93 So.3d 10, 19 (Miss. 2012) (citation and punctuation omitted). Finally, a breach-of-contract claim is subject to dismissal where the allegations of the complaint fail to show a breach of the unambiguous language of the contract. See New Orleans City v. Ambac Assurance Corp., 815 F.3d 196 (5th Cir. 2016).

         III. Analysis

         A. Disparaging Comments Regarding Good's Performance

         In Count I of his Complaint, Good says Uniloc breached the Separation Agreement by making disparaging comments about his performance as CEO. He premises the claim on statements Uniloc made about Good in a mostly unrelated case that Uniloc filed against its former attorneys in 2016. See Uniloc Compl. [1-6] ¶ 12. That suit averred that Good took certain actions for “his own benefit and not the benefit of the Company.” Id. Uniloc did not, however, sue Good, and the parties now dispute whether the Separation Agreement prohibited such comments in general or just when made by Uniloc in litigation it brings against Good.

         All of this turns on subparagraph 2(d) of the Separation Agreement, which states as follows:

Good has performed his duties as the Chief Executive Officer under the Revised Employment Agreement and as a member of the Company's Board of Directors in full compliance with any and all duties of loyalty or any and all duties of care that Good may have to the Company under applicable law, and the Company agrees that except as may be required by applicable law it shall not take any position to the contrary, including without limitation, by alleging any breach by Good of any duty of loyalty or any duty of care that Good may have to the Company under applicable law, in any proceeding or suit against Good by the Company, any of its subsidiaries or affiliates or any board members of stockholders thereof.

Separation Agreement [1-2] ¶ 2(d) (emphasis added).

         According to Uniloc, this provision prevents it from disparaging Good only in lawsuits Uniloc initiates against Good. It gets there by construing the punctuation, saying that the commas around the italicized phrase above make it a non-restrictive clause that may be excised without changing the meaning of the underlined text. See Def.'s Mem. [7] at 14-16 (citing The Chicago Manual of Style ¶¶ 6.22, 6.31 (16th Ed. 2010)). Thus, the contract should be read to say that Uniloc acknowledges Good's compliance with the duty of loyalty and promises “it shall not take any position to the contrary . . . in any proceeding or suit against Good by the Company, any of its subsidiaries or affiliates or any board members of stockholders thereof.” Separation Agreement [1-2] ¶ 2.

         Of course Good sees it differently, arguing that Uniloc is trying to re-write the contract by taking out the phrase “including without limitation.” Good thus says that the second underlined phrase dealing with suits by the company against Good is merely an example of prohibited conduct. In other words, Uniloc acknowledges in subparagraph 2(d) that Good violated no duties while serving as CEO and then promises to “not ...


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