Mimm v. Vanguard Dealer Services, LLC et al

Filing 113

MEMORANDUM AND ORDER DENYING 70 MOTION for Summary Judgment filed by Martin Newark Dealership, Inc. Signed by Chief Judge Gregory M. Sleet on 2/25/2014. (asw) (Main Document 113 replaced on 2/25/2014) (asw).

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE

DONALD L. MIMM, III,
Plaintiff,
V.

VANGUARD DEALER SERVICES, LLC,
JAMES R. POLLEY, and MARTIN NEWARK
DEALERSHIP, INC.
Defendants.

VANGUARD DEALER SERVICES, LLC, and
JAMES R. POLLEY
Counter Claimants,

v.

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Civil Action No. 11-736-GMS

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DONALD L. MIMM, III,
Counter Defendant.

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MEMORANDUM
1.

The plaintiff, Donald L. Mimm, III ("Mimm"), filed the instant action against defendants
Vanguard Dealer Services, LLC ("Vanguard"), James R. Polley ("Polley"), and Martin
Newark Dealership, Inc. ("Martin") 1 on August 19, 2011. (D.I. 1.) Mimm's Complaint
sets forth two causes of action against Martin. Specifically, Count I, Breach of Contract,
alleges that Martin breached an oral agreement entered into by the parties, and Count II,
Promissory Estoppel, alleges that Mimm relied on Martin's representations regarding its
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Mimm's Complaint originally named Scott Imports, Inc. and Martin Honda as defendants, but
the parties later jointly agreed to substitute Martin Newark Dealership, Inc. as a defendant. (D.I. 58.)

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willingness to employ him to his detriment. (Id.,

ml 57-65.)

Presently before the court is

Martin's Federal Rule of Civil Procedure 56(c) motion for summary judgment against
Mimm on the breach of contract and promissory estoppel claims. (DJ. 70.) For the
reasons that follow, the court will deny Martin's motion.
2.

In determining the appropriateness of summary judgment, a court must review the record
as a whole and "draw all reasonable inferences in favor of the nonmoving party, [but]
may not make credibility determinations or weigh the evidence." Reeves v. Sanderson

Plumbing Prods., Inc., 530 U.S. 133, 150 (2000). If a court determines that "there is no
genuine issue as to any material fact and that the movant is entitled to judgment as a
matter oflaw," summary judgment is appropriate. Hill v. City of Scranton, 411F.3d118,
125 (3d Cir. 2005) (quoting FED. R. CIV. P. 56(c)).
3.

Martin raises three arguments against Mimm's breach of contract claim (Count One).
First, Martin challenges whether a valid contract was formed. It contends that any oral
employment offer it made was explicitly based upon a condition precedent that Mimm be
released from the Noncompete Agreement ("NCA") that he was bound by pursuant to his
employment contract with Vanguard. (DJ. 71 at 2.) Martin argues that Mimm was never
released from the NCA, and as a result, the condition precedent to the contract formation
was never satisfied. (Id.) Additionally, Martin contends that its corporate policy requires
prospective employees to engage in an application process and there is no evidence in the
record that the application process took place. (Id. at 11.)

4.

The court finds, based on its review of the parties' submissions and the cited record, that
material facts remain in dispute as to whether Martin's General Manager, Hommey
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Poursaied ("Poursaied"), ever communicated to Mimm that his employment was
contingent upon "Vanguard's blessing" or the completion of an application process.
Further, viewing the record in the light most favorable to Mimm, a reasonable jury could
conclude Martin abandoned the "blessing" pre-condition when Poursaied assured Mimm
that Martin still wanted to hire him after Vanguard's President, James Polley ("Polley"),
informed Martin that Mimm was bound by the NCA. 2 (See D.I. 74, Ex. E ("Mimm Tr.")
at 127:17-128:14; 130:2-130:9; 131:7-131:17; 210:15-210:20; D.I. 92at1-4.)
5.

Second, Martin argues that if a valid contract was formed, it lawfully terminated Mimm's
at-will employment because he was in violation of the NCA. (D.I. 71 at 14-15.) An atwill employer's "authority to terminate an employee is limited by the implied covenant of
good faith and fair dealing ... where the employer misrepresents an important fact and
the employee relies on it when deciding to accept a new position or to remain at a present
one." Bailey v. City of Wilmington, 766 A.2d 477, 480 (Del. 2001).

6.

Here, the court finds that there are sufficient disputed material facts from which a
reasonable jury could conclude that Martin breached its implied covenant of good faith
and fair dealing by misrepresenting its willingness to hire Mimm regardless of
Vanguard's position on the NCA, and Mimm relied upon that representation when he
2

At this stage of the proceedings, the court is not persuaded by Martin's argument that Mimm' s
June 13, 2011 e-mail, which was sent more than a week after the alleged oral contract was formed and
rescinded, demonstrates that the contract was contingent upon the express condition precedent that Mimm
be released from the NCA. (See D.I. 98 at 1-2.) The June 13, 2011 e-mail states in pertinent part:
I am asking Martin Honda that Martin Honda reconsider the decision made to rescind the
offer for my employment as a F&I manager. I ask this due to the fact that the decision to
rescind the offer was made with incorrect information. The employment offer was
originally made with the understanding that I was released from the alleged contract. I
would like to point out that I was released by an officer at Vanguard and the fact that it
appears as though no contract ever existed.
(D.I. 75 at A-420.)

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resigned from his employment with Vanguard. (See D.I. 92 at 3-4, 8-9.)
7.

Third, Martin argues that Mimm's breach of contract action should be dismissed pursuant
to the Statute of Frauds because Mimm submitted an expert report based on twelve years
of damages. Martin contends that Mimm's damages position is wholly inconsistent with
the principle that an oral contract for at-will employment is not barred by the Statute of
Frauds because at-will employment could be completed within one year. Thus, Martin
urges the court to dismiss Mimm's breach of contract claim pursuant to the Statute of
Frauds, or limit Mimm' s damages to be capped at the annual projected earnings for one
year. (D.I. 71 at 12.)

8.

The court rejects Martin's Statute of Frauds argument and shall not limit Mimm's
prospective damages to the annual projected earnings for one year. Mimm's alleged oral
contract does not run afoul of the Delaware Statute of Frauds. 3 Further, Martin provided
no legal authority to support its theory that the Statute of Frauds operates as

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affirmative "sword" to limit damages where, as here, it is inapplicable to the employment
contract at issue.

Indeed, if the court were to adopt Martin's position, any at-will

employee claiming breach for unlawful termination would be limited to one year's
wages.
9.

Finally, Martin argues that Mimm's promissory estoppel claim (Count Two) must be
dismissed because he failed to establish that Martin made a "real promise" to him that he

3 Under Delaware law, there is a "heavy presumption that a contract for employment, unless
otherwise expressly stated, is at-will in nature with duration indefinite." Merrill v. Crothall-American,
Inc., 606 A.2d 96, l 02 (Del. 1992). Further, "[ e]mployment contracts of indefinite duration may be
completed within one year and, thus, may be enforced notwithstanding the Statute of Frauds." Brandner
v. Del. State Haus. Auth., 605 A.2d 1, 2 (Del. Ch. 1991) (emphasis added).

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reasonably

relied upon. (D.I. 71 at 3.) Again, Martin relies upon Mimm's June 13,

2011 e-mail to argue that Mimm understood that his release from the NCA was a
condition precedent to contract formation; that Martin had no control over whether
Mimm could be released from the NCA; and therefore, Mimm did not reasonably rely on
any promise proffered by Martin regarding employment when he resigned from
Vanguard on June 5. 4 (Id. at 16.)
10.

"In order to establish a claim for promissory estoppel, a plaintiff 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, 748 A.2d 393, 399 (Del. 2000). Viewing the evidence in the light most
favorable to Mimm, the court finds that a reasonable juror

~ould

find Mimm satisfies the

necessary elements. 5 After Vanguard's President, Polley, informed Martin about the
NCA, Martin represented that it still wish to hire Mimm, that representation was made to
induce him to leave his position with Vanguard, and Mimm relied on that representation
to his detriment. (See Mimm Tr. at 127:17-128:14; 130:2-130:9; 131:7-131:17; 210:154

Martin argues that Vanguard's President, Polley, is the only individual with the authority to
release Mimm from the NCA, and that in Mimm's June 13, 2011 e-mail, he improperly stated he was
released from any NCA by other high-ranking Vanguard executives. (D.I. 98 at 2-3.) However, that
argument appears to support Mimm' s promissory estoppel claim because the record, viewed in the light
most favorable to Mimm, indicates that Polley discussed the NCA with Martin, and Martin represented
that it still wished to hire Mimm, notwithstanding the conversation about the NCA.
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The court notes that it "may not make credibility determinations or weigh the evidence" when
considering Martin's motion for summary judgment. Reeves, 530 U.S. at 150. Therefore, the jury will
need to decide whether Mimm has established the necessary elements under the heightened "clear and
convincing" standard.

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210:20; D.I. 92 at 3-4.)
11.

Accordingly, having considered the parties' submissions, as well as the relevant law, the
court concludes that there are a number of disputes regarding material facts, which raise
genuine issues for trial regarding Mimm' s breach of contract and promissory estoppel
claims. Therefore, the court denies Martin's Motion for Summary Judgment, (D.1. 70).

Dated: February } )

, 2014

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IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE

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DONALD L. MIMM, III,
Plaintiff,
V.

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VANGUARD DEALER SERVICES, LLC,
JAMES R. POLLEY, and MARTIN NEWARK
DEALERSHIP, INC.
Defendants.

VANGUARD DEALER SERVICES, LLC, and
JAMES R. POLLEY
Counter Claimants,

v.
DONALD. L. MIMM, III,
Counter Defendant.

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Civil Action No. 11-736-GMS

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ORDER

At Wilmington, this?-5 day of February, 2014, consistent with the Memorandum issued
this same date, IT IS HEREBY ORDERED THAT:
Martin Newark Dealership, Inc.'s Motion for Summary Judgment, (D.I. 70), ·s DENIED.

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