ePlus Group Inc v. Cyntergy Corporation

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
EPLUS GROUP, INCORPORATED, 
Plaintiff-Appellant,
v.
ROBERT GRIMES,
Defendant-Appellee,
and  No. 02-1397
CYNTERGY CORPORATION; NATIONAL
TECHTEAM, INCORPORATED; TECHTEAM
CAPITAL GROUP; TECHTEAM RETAIL,
L.L.C.; TECHTEAM CYNTERGY, LLC,
Defendants.

Appeal from the United States District Court
for the Eastern District of Virginia, at Alexandria.
Claude M. Hilton, Chief District Judge.
(CA-01-1449-A)
Argued: December 3, 2002
Decided: January 15, 2003
Before WILKINSON, Chief Judge, KING, Circuit Judge,
and Joseph R. GOODWIN, United States District Judge for the
Southern District of West Virginia, sitting by designation.
Affirmed by unpublished per curiam opinion.
COUNSEL
ARGUED: Erica Steinacker Stoecker, Herndon, Virginia, for Appel-
lant. Wendelin Isadora Lipp, PALEY, ROTHMAN, GOLDSTEIN,
2 EPLUS GROUP v. GRIMES
ROSENBERG & COOPER, CHTD., Bethesda, Maryland, for Appel-
lee. ON BRIEF: Michael E. Geltner, GELTNER & ASSOCIATES,
P.C., Washington, D.C., for Appellant. Alan D. Eisler, PALEY,
ROTHMAN, GOLDSTEIN, ROSENBERG & COOPER, CHTD.,
Bethesda, Maryland, for Appellee.
Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).
OPINION
PER CURIAM:
ePlus Group, Inc. sued Robert Grimes, chairman and CEO of Cyn-
tergy Corporation, alleging that Grimes breached an oral agreement
to personally guarantee Cyntergy’s debt to ePlus. The district court
dismissed the claim against Grimes, finding that the contract alleged
in ePlus’s complaint did not create a legal obligation for Grimes to
pay Cyntergy’s debt. Because the parties never mutually assented to
enter into the alleged agreement, we affirm the judgment of the dis-
trict court.
I.
Plaintiff ePlus Group, Inc. is a commercial equipment lessor. On
November 21, 1997, ePlus entered into a lease agreement with Cyn-
tergy Corporation. The parties subsequently entered into several
schedules under which Cyntergy leased various items of computer
equipment from ePlus.
During the summer of 2001, Cyntergy fell in arrears on its lease
payments. ePlus notified Cyntergy that Cyntergy had defaulted on the
lease agreement and sought back monies owed under the lease. In
response to this correspondence Robert Grimes visited ePlus’s office
on September 10, 2001, to discuss the monies owed by Cyntergy.
During the meeting, ePlus informed Grimes that it intended to take
EPLUS GROUP v. GRIMES 3
possession of the leased equipment. In order to postpone ePlus’s
recovery of the equipment, Grimes promised ePlus that Cyntergy
would pay the past balance due. Grimes also told ePlus that "he would
make sure [ePlus] got paid" and that he would "take care of [ePlus]"
if they would "give him some slack." Based on these statements,
ePlus alleges that it "believed and reasonably believed . . . that Grimes
was promising that he would personally insure [ePlus] payment if
[ePlus] were to forbear seeking return of the equipment."
On September 20, 2001, ePlus filed a single count complaint
against Cyntergy seeking money damages for breach of the equip-
ment lease. On October 26, 2001, ePlus filed an amended complaint
that added five new parties and six new counts, including a breach of
contract claim against Grimes. The district court dismissed the claim
against Grimes for failure to state a claim. ePlus then filed a second
amended complaint, again alleging a breach of contract claim against
Grimes. On March 11, 2002, the district court dismissed the claim
against Grimes for failure to state a claim, with prejudice. ePlus now
appeals.
We review a dismissal for failure to state a claim de novo, GE Inv.
Private Placement Partners II v. Parker, 247 F.3d 543, 548 (4th Cir.
2001), and assume the facts as stated in the complaint are true. Jen-
kins v. Medford, 119 F.3d 1156, 1159 (4th Cir. 1997).
II.
In an action for breach of contract, a plaintiff must demonstrate (1)
an enforceable contract, (2) a violation or breach of that contract, and
(3) a consequential injury or damage to the plaintiff. See Westminster
Investing Corp. v. Lamps Unlimited, Inc., 379 S.E.2d 316, 317 (Va.
1989). To prove the formation of an enforceable contract, the plaintiff
must show that there was a meeting of the minds on all material
terms. E.g., Allen v. Aetna Casualty and Surety Co., 281 S.E.2d 818,
820 (Va. 1981).
III.
ePlus argues that Grimes and ePlus "entered into an express, oral
contract, providing that ePlus would forbear from repossessing its
4 EPLUS GROUP v. GRIMES
equipment and Grimes would [personally] ensure that ePlus was
paid." As evidence of this contract, ePlus relies on Grimes’ statements
that he would "take care of" ePlus and that he would make sure that
Cyntergy paid ePlus. In essence, ePlus argues that Grimes’ oral assur-
ances that Cyntergy would pay ePlus amounted to a contract whereby
Grimes personally guaranteed Cyntergy’s debt to ePlus.
It is clear, however, that Grimes had no intention of entering into
such a contract. "It is crucial to a determination that a contract exists
. . . that the minds of the parties have met on every material phase of
the alleged agreement." Chittum v. Potter, 219 S.E.2d 859, 863 (Va.
1975). Here, ePlus does not allege that ePlus and Grimes discussed
any of the material terms of the alleged contract. The parties did not
specify how long ePlus would forbear repossession, how much
Grimes would pay ePlus, when Grimes would make payments to
ePlus, or under what terms Grimes would make those payments.
At most, Grimes promised that Cyntergy would pay its debt. ePlus
"understood" this promise to mean that "Grimes was personally repre-
senting that [ePlus] would be paid." But ePlus has not alleged any
facts to demonstrate that Grimes understood his statements to mean
the same. In fact, the complaint does not even allege that Grimes spe-
cifically agreed to be personally obligated for Cyntergy’s debt. We
therefore find that the parties did not form an enforceable oral con-
tract. The judgment of the district court is
AFFIRMED.