Pegasus Development Corp. v. Hane , 314 F. App'x 489 ( 2009 )

Opinions of the United
2009 Decisions States Court of Appeals
for the Third Circuit
1-7-2009
Pegasus Dev Corp v. John Hane
Precedential or Non-Precedential: Non-Precedential
Docket No. 07-4095
Follow this and additional works at: http://digitalcommons.law.villanova.edu/thirdcircuit_2009
Recommended Citation
"Pegasus Dev Corp v. John Hane" (2009). 2009 Decisions. Paper 2066.
http://digitalcommons.law.villanova.edu/thirdcircuit_2009/2066
This decision is brought to you for free and open access by the Opinions of the United States Court of Appeals for the Third Circuit at Villanova
University School of Law Digital Repository. It has been accepted for inclusion in 2009 Decisions by an authorized administrator of Villanova
University School of Law Digital Repository. For more information, please contact Benjamin.Carlson@law.villanova.edu.
NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
__________
No. 07-4095
_________
PEGASUS DEVELOPMENT CORPORATION
v.
JOHN HANE
Defendant/Third Party Plaintiff
v.
MARSHALL W. PAGON
Third-Party Defendant
John Hane,
Appellant
On Appeal from the United States District Court
for the Eastern District of Pennsylvania
(D. C. No. 05-cv-06148)
District Judge: Hon. Mary A. McLaughlin
Submitted under Third Circuit LAR 34.1(a)
on December 11, 2008
Before: MCKEE, SMITH and ROTH, Circuit Judges
(Opinion filed: January 07, 2009)
OPINION
ROTH, Circuit Judge:
John Hane appeals from the District Court’s denial of his motion for summary
judgment, the grant of summary judgment in favor of Pegasus Development Corporation
(PDC) and Marshall Pagon, and the dismissal of Hane’s fiduciary duty claim against
PDC. We exercise plenary review, construing the claims and the evidence in the light
most favorable to the non-moving party. Sands v. McCormick, 502 F.2d 563, 267–68 (3d
Cir. 2007); Farrell v. Planters Lifesavers Co., 206 F.3d 271, 278 (3d Cir. 2000). We
assume the parties’ familiarity with the factual and procedural history, which we describe
only as necessary to explain our decision. We will affirm.
As an initial matter, we reject Hane’s contention that the District Court failed to
review each summary judgment motion on its own merits and instead analyzed the cross
motions together. The District Court merely considered the motions together for stylistic
purposes, an appropriate means of analysis considering that the parties’ relationship is
governed by the Securities Purchase Agreement (SPA), an unambiguous written contract
between Hane’s company, Highcast, and PDC. Contrary to Hane’s assertion, however,
the District Court properly placed the burden on the moving party for each motion to
show the absence of a genuine issue of material fact. See Celotex Corp. v. Catrett, 477
2
U.S. 317, 323 (1986). Unfortunately for Hane, defendants properly prevailed on each
motion.
First, no genuine issues of material fact precluded summary judgment in PDC’s
favor on its claim that it owed no further duty under the SPA. Section 4.2 sets forth
multiple conditions precedent to PDC’s obligation to purchase more shares in Highcast, at
least three of which have not been satisfied: (1) agreement on a “First Budget,” a term
narrowly defined in section 4.2(e),1 (2) delivery of a document “certifying that the
milestone applicable for such [share purchase] has been satisfied,” and (3) Hane’s
continued employment by PDC. For the same reason, the District Court appropriately
denied Hane’s summary judgment motion with respect to the share purchase.
The District Court also properly rejected Hane’s estoppel and waiver arguments.
Hane cannot seriously argue that he was unaware that the aforementioned conditions
precedent had not occurred and so cannot rely on estoppel. See Burge v. Fidelity Bond
and Mortg. Co., 648 A.2d 414, 420 (Del. 1994).2 Likewise, Hane failed to present
unequivocal facts demonstrating that PDC “intentionally relinquished” its contractual
right to require the satisfaction of the conditions precedent. Kallop v. McAllister, 678
1
Hane argues that the District Court placed undue emphasis on the lack of a particular
document titled “First Budget” in the record. The record contains no evidence suggesting
that Hane had even asked PDC to begin discussing a First Budget, however, and the
District Court was thus permitted to deduce that no First Budget was ever contemplated
or certified. See Celotex Corp., 477 U.S. at 323.
2
By its terms, the SPA is governed by Delaware law.
3
A.2d 526, 532 (Del. Super. 1996). Indeed, all conditions precedent explicitly “remain[ed]
in full force and effect” through the only Amendment made to the SPA.
Hane’s claim regarding PDC’s failure to provide administrative services to
Highcast is equally misplaced. Hane concedes that the SPA contains no provision
obligating PDC to provide such services; rather, he argues that the parties intended to
modify their agreement. Hane’s evidence in support of this assertion—a single e-mail
exchange in which Hane wrote, “[i]f [PDC] can handle the books at an administrative
level without affecting the underlying deal that would be great for both of us”—does not
meet his burden to overcome Delaware law’s aversion to oral modification of written
agreements. See Reeder v. Sanford School, Inc., 397 A.2d 139, 141 (Del. Super. 1979).
The District Court properly rejected Hane’s claim that Pagon—PDC’s
representative on the Highcast board—had breached his fiduciary duties to Highcast.
Highcast’s charter was revoked in 2001 for failure to pay taxes, and it has not been
revived. Any board actions after revocation would have been “nullities and consequently
of no force or effect.” Cloverfields Improvement Assoc., Inc. v. Seabreeze Properties,
Inc., 362 A.2d 675, 679 (Md. Ct. Spec. App. 1998).3 Therefore, Pagon could not have
breached any fiduciary duty by failing to attend a board meeting called for November 29,
3
Highcast was a Maryland corporation; thus, Maryland law applies to Hane’s fiduciary
duty claims. See In re: Reading Co., 711 F.2d 509, 517 (3d Cir. 1983).
4
2004.
Finally, as a minority shareholder, PDC owed no fiduciary duty to Highcast’s
shareholders. See Shaw v. Davis, 28 A. 619, 622 (Md. Ct. App. 1984). The district court
thus properly dismissed the fiduciary claim against PDC as a matter of law.
Accordingly, we will affirm the judgment of the District Court.
5