Matthew v. Laudamiel ( 2014 )

EFiled: Oct 30 2014 04:26PM EDT
Transaction ID 56270437
Case No. 5957-VCN
COURT OF CHANCERY
OF THE
STATE OF DELAWARE
JOHN W. NOBLE 417 SOUTH STATE STREET
VICE CHANCELLOR DOVER, DELAWARE 19901
TELEPHONE: (302) 739-4397
FACSIMILE: (302) 739-6179
October 30, 2014
Thad J. Bracegirdle, Esquire Seth J. Reidenberg, Esquire
Wilks, Lukoff & Bracegirdle, LLC Tybout, Redfearn & Pell
1300 North Grant Avenue, Suite 100 750 Shipyard Drive, Suite 400
Wilmington, DE 19806 Wilmington, DE 19801
Mr. Christophe Laudamiel DreamAir LLC
313 West 19th Street, Apt. 32 c/o Christophe Laudamiel, President
New York, NY 10011 210 11th Avenue, Suite 1002
cl@leschristophs.com New York, NY 10001
cl@dreamair.mobi
Paul D. Brown, Esquire
Chipman Brown Cicero & Cole, LLP
1007 North Orange Street, Suite 1110
Wilmington, DE 19801
Re: Matthew v. Laudamiel, et al.
C.A. No. 5957-VCN
Date Submitted: September 3, 2014
Dear Mr. Laudamiel and Counsel:
Plaintiff Stewart Matthew has moved for summary judgment as to Count I of
the Counterclaims of Defendant Christophe Laudamiel. Mr. Laudamiel is now
Matthew v. Laudamiel, et al.
C.A. No. 5957-VCN
October 30, 2014
Page 2
proceeding as a self-represented litigant.1 That status, unfortunately, complicates
consideration of the motion. The recurring procedural problem is the requirement
that the party opposing a motion for summary judgment “made and supported as
provided in [Court of Chancery Rule 56]” must provide “specific facts” supported
by affidavit or equivalent to demonstrate that a material fact is in dispute that
would save the claim for trial.2
In Count I, Mr. Laudamiel alleges that the Plaintiff breached Aeosphere’s
limited liability company (“LLC”) agreement. The allegation is significant for
several reasons, the foremost being that the Court denied Plaintiff’s motion for
summary judgment on his claim that Mr. Laudamiel breached the LLC agreement
because of the allegation of prior material breach by Plaintiff (that would have
excused any breach by Mr. Laudamiel). Plaintiff anticipates that obtaining
judgment dismissing Count I will clear the way for summary judgment in his favor
on his claim that Mr. Laudamiel breached the LLC agreement by dissolving
Aeosphere without Plaintiff’s approval.
1
His counterclaims were filed by counsel who subsequently withdrew.
2
Ct. Ch. R. 56(e).
Matthew v. Laudamiel, et al.
C.A. No. 5957-VCN
October 30, 2014
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More specifically, Mr. Laudamiel claims that Plaintiff materially breached
the LLC agreement by: (1) unilaterally approving actions and entering into
contracts on behalf of Aeosphere without Mr. Laudamiel’s knowledge or
agreement; (2) refusing to take action on various contracts and transactions on
behalf of Aeosphere; (3) unreasonably refusing to seek agreement on various
contracts and actions for which Plaintiff’s approval was required or to allow a tie-
breaking vote; (4) unreasonably refusing to cooperate in managing Aeosphere;
(5) refusing to attend key meetings and events on behalf of Aeosphere;
(6) diverting Aeosphere’s resources to the Scent Opera for his own benefit; and
(7) refusing to attend or otherwise participate in an emergency board meeting on
May 4, 2010.3
The Court’s analysis as to whether there are no material facts in dispute and
Plaintiff is entitled to judgment as a matter of law will necessarily draw on the
record before the Court, built by deposition, affidavit, or the like, and not on
3
Defs. Christophe Laudamiel’s, Roberto Capua’s, Action 1 SRL’s and DreamAir LLC’s
Verified Answer to Third Am. Verified Compl. and Verified Countercls. ¶ 54, Apr. 23,
2013. Briefing on the instant motion was directed at the April 2013 answer and
counterclaims. Mr. Laudamiel filed an amended answer and counterclaims just prior to
oral argument on the motion. The text of Count I of both counterclaims is substantially
the same.
Matthew v. Laudamiel, et al.
C.A. No. 5957-VCN
October 30, 2014
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various statements or writings that do not satisfy the requirements of Court of
Chancery Rule 56. Given the voluminous record, the Court depends upon
guidance offered by counsel and the parties; it will not engage in an investigation
of all documents that may somehow be considered part of the record.
Count I of Mr. Laudamiel’s counterclaims asks the Court to analyze the
record on two levels: first, did Plaintiff breach any of his contractual obligations
and, second, did Plaintiff materially breach any of his contractual obligations?
Typically, whether a breach is material is a question of fact that cannot readily be
resolved under the summary judgment standard.4 Nonetheless, a question of
materiality does not inevitably defeat a summary judgment motion if the alleged
breach, as a matter of law, was not material.5 This case provides an example of the
latter situation. Whether Plaintiff breached his obligations is debatable and not
4
See, e.g., Matthew v. Laudamiel, 2012 WL 2580572, at *10 (Del. Ch. June 29, 2012)
(“[T]he ‘issue of materiality . . . is . . . predominately a question of fact, which is not
generally suited for disposition by summary judgment.’” (quoting Branson v. Exide
Elecs. Corp., 645 A.2d 568, 1994 WL 164084, at *2 (Del. Apr. 25, 1994) (TABLE))).
5
See, e.g., Tex. Instruments Inc. v. Qualcomm Inc., 2004 WL 1631356, at *1 (Del. Ch.
July 14, 2004), aff’d, 875 A.2d 626 (Del. 2005); cf. HIFN, Inc. v. Intel Corp., 2007 WL
1309376, at *11-13 (Del. Ch. May 2, 2007) (finding, at the summary judgment stage, that
delay was not reasonable, while acknowledging that reasonableness generally poses a
question of fact).
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C.A. No. 5957-VCN
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amenable to resolution by summary judgment. It is, however, clear that his
contractual breaches, if any, were not material.
Plaintiff’s failures, as framed by Mr. Laudamiel, fall generally into three
categories: (1) acting unilaterally without approval; (2) failing to agree on or
approve various contracts or courses of action for Aeosphere; and (3) failing to
attend important meetings and events. It may be that the disputes were a matter of
divergent—but honestly held—views. There is no doubt that Plaintiff and
Mr. Laudamiel had disagreements. Yet whether they acted reasonably is difficult
to discern. How much information was shared and how legitimate their differences
were are but two of the many questions arising out of the eventual breakup of
Plaintiff’s business relationship with Mr. Laudamiel. For example, Plaintiff’s
conduct during the lease negotiations in New York cannot be fully assessed.
Perhaps he breached his duties, and damages resulted. Similarly, whether Plaintiff
acted reasonably with respect to the Firmenich Exclusive Supplier Agreement is
open to factual debate. Thus, there are material factual disputes that would
interfere with a summary judgment analysis if the question were merely one of
whether Plaintiff breached any obligation.
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October 30, 2014
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On the other hand, the various breaches identified by Mr. Laudamiel are not
material as a matter of law.6 Plaintiff’s actions had no material effect on
Aeosphere, and thus no material effect on Mr. Laudamiel. Bringing the third
director (Capua) into the process would have, presumably, provided Mr.
Laudamiel with a working majority of the board, and Mr. Laudamiel has not
explained why the board could not have overridden or circumvented Plaintiff’s less
than cooperative behavior.7 The record also does not reflect material financial
damage.8 As for the failure to attend meetings and events, such conduct might
6
Materiality, in the context of contractual breach, is explained in Biolife Solutions, Inc. v.
Endocare, Inc., 838 A.2d 268, 278 (Del. Ch. 2003). One factor in determining
materiality is “‘the extent to which the injured party will be deprived of the benefit which
he reasonably expected.’” Id. (quoting Restatement (Second) of Contracts § 241 (1981)).
7
Mr. Laudamiel’s counterclaims suggest that perhaps there could be no tie-breaking vote
without Plaintiff’s first voting against a proposal, but Mr. Laudamiel’s arguments on
summary judgment do not pursue this contention. It does appear, however, that Mr.
Laudamiel and Mr. Capua used the tie-breaking authority to approve the Firmenich
Exclusive Supplier Agreement and the New York Lease. See App. of Dep. Trs. Cited in
Supp. of Pl.’s Mot. for Summ. J. Ex. 4, at 100-01.
8
With respect to the examples of potential breach, such as those involving the New York
Lease and the Firmenich Exclusive Supplier Agreement, the record does not show that
any resulting damage suffered by Aeosphere would have been significant.
Other breaches alleged by Mr. Laudamiel involved Plaintiff’s entry into contracts on
behalf of Aeosphere and taking a number of actions without his consent. Whether the
contracts and actions were proper raises a factual question, but the expenditures—
especially when assessed in relation to the then-current financial condition of
Aeosphere—were not material to Aeosphere.
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qualify as material had Plaintiff’s absence mattered. The topic for the emergency
board meeting, for example, was the dissolution of Aeosphere, which could not be
achieved without either unanimous approval of the members9 or resort to the
judicial process. Plaintiff, however, would have opposed dissolution, and his
presence would have been of no consequence.10 Thus, Plaintiff’s motion for
summary judgment on Count I of Mr. Laudamiel’s counterclaims is granted to the
extent that it alleges material breach.11
IT IS SO ORDERED.
Very truly yours,
/s/ John W. Noble
JWN/cap
cc: Register in Chancery-K
9
See Matthew, 2012 WL 2580572, at *7-8 (concluding that the LLC agreement, Section
5.2.6(b)(iii), required unanimous approval for the members to wind-up Aeosphere).
10
Mr. Laudamiel also has not presented evidence to show that failure to attend testing or
other events had a material effect on Aeosphere.
11
The Court does not dismiss claims for non-material breach which, perhaps, could
justify minimal or nominal damages.