FI FTH DI VI SI ON

M CFA DDEN, P. J.

, M CM ILLI A N and BETHEL, JJ.

N O T IC E : M otions for r e c ons i de r a tion m us t be

ph y sic a l ly r e ce iv ed i n our c le r k ’s offic e w ithin te n

da y s of the da te of de c is ion to be de e m ed tim e ly file d.

http://w w w .ga a ppe a l s .us /r ule s

June 28, 2017



# I n th e Co u r t o f

A p p eals o f

G eo r g ia

A1 7 A0 31 4 . SOUZA v . BERBERIAN.

M C F A D D E N , Pres id i n g J u d g e.

J o h n So u za ap p eal s t he p art i al g ran t o f s u m m ary ju d g m en t t o J o hn Berb eri an

i n So u za’ s act i o n ari s i n g fro m a b u s i nes s di s p u t e. Th e t ri al co u rt g ran t ed Berb eri an ’ s

m o ti o n fo r s u m

m ary j u d gm en t o n So u za’ s cl ai m s t h at d ep en d o n t h e ex is ten ce o f a

co n tract b et ween t h em

. Th e co u rt al s o g ran t ed B e rb eri an ’ s m o t io n fo r s u m m ary

ju d g m en t o n So uza’ s cl ai m fo r b reach o f fi d u ci ary d u t y ; h i s cl ai m al l eg i n g b reach o f

a n o n-d is cl o s u re ag reem en t en t ered i n t o b y two n o n -p art ies ; an d h i s c l a i m fo r

p u n i t i v e d am ag es

. So u za’ s cl ai m s fo r un ju s t en ri ch m en t

, q u an t u m m eru i t

, an d

at t o rn ey fees rem ai n p en d i n g i n t h e t ri al co urt

.

So u za ap p eal s t h e g ran t o f Berb eri an ’ s m ot io n fo r s u m m ary ju dg m en t o n t h e

co n tract -b as ed cl ai m s an d o n t h e cl ai m fo r breach o f a n o n -d is cl os u re ag reem e n t

.So u za arg u es t h at wh et h er h e an d Berb eri an en t ered a co n tract dep en d s o n d i s p u t ed

fact s, b u t t h e em ai l o n w h ich h e rel i es t o es t ab l i s h co n t ract t erm s i s t o o in d efi n i t e to

b e en fo rceab l e as a co n t ract

. So u za arg u es t h at t h e tri al co u rt erred b y g ran t i n g

Berb eri an s u m

m ary ju d g m en t o n So u za’ s cl ai m fo r b reach o f t h e n o n -d i s cl o s u re

ag reem en t

, b ut as t he t ri al co u rt fo un d

, Berb eri an w as n o t a p art y t o th at ag reem en t

,

s o i t can n o t b e en fo rced ag ai n st h i m . Acco rd i n gl y , we affi rm t h e t ri al co u rt

.

1

. Co n t r a ct -b a s ed

cl ai ms

.

Su m m ary ju d g m en t i s pro p er wh en t h ere i s n o g en u i n e i s s u e o f

m at eri al fact an d th e m o v an t i s en t i t l ed t o ju d g m en t as a m at t er o f l aw.

OCGA § 9 -1 1 -5 6 (c). A d e n o v o st an d ard o f rev i ew ap p l ies t o an ap peal

fro m a g ran t or d en i al o f s u m m ary ju d g m en t, an d w e v i ew t h e ev id en ce,

an d al l reas on ab l e co n cl us i o ns an d i nferen ces d rawn fro m i t

, in t h e l i g h t

m o s t fav o rab le t o t h e n o n m o v an t

.

Bu r ns v. Dees

, 2 5 2 Ga. Ap p

. 5 98

, 5 9 9 (5 5 7 SE2 d 3 2) (2 0 0 1 ) (ci t at i o n an d pu n ct u at i o n

o m it t ed ).

So v i ewed

, th e reco rd sh o w s t h a t So u za k n ew b o t h Berb eri an

, wh o was

as s o ci at ed wi t h a co m

p an y cal l ed Un i t ed Al l erg y Serv i ces

, an d J eff G a l l u p s

, t h e

o wn er o f M i l t o n Su r g i cal As s o ci at es d/ b /a Th e ENT In s t i t u t e. So uza i n t ro d u ced

Berb eri an an d Gal l u p s

, b el i ev i n g t hat t h ey co u l d en t er a p ro fi t a b l e b u s i n es s

2rel at i o n s h i p w h ereb y Un i ted Al l erg y Serv i ces wo u l d p ro v i de al l erg y t es ti n g s erv i ces

an d t reat m en t t o ENT In s t i t u t e p at ien t s

.

Acco rd i ng to So u za, he an d Berb eri an ag reed to fo rm an d co -o wn an en t i t y t h at

wo u l d s i g n a co nt ract wi t h E N T I n s t i t u te to faci l i t at e i t s rel at i o n s h i p wi t h Un i t ed

Al l erg y Serv i ces

. He al l eg es t h at t h e t erm s of t h e ag reem en t are s et o u t i n an Au g u s t

1 9 em ai l fro m

Berb eri an , wh i ch i s t h e b as i s o f h i s co n t ract -b as ed cl ai m s

.

Bu t w h i le t hat em ai l s et s o u t m an y d et ai ls o f t h e co n t em p l at ed ag reem en t

, i t

d o es n o t s et o u t t h e t erm s es sen ti al to a co n t ract

. An d n o o t h er ev i d en ce fi l l s t h e g ap s

.

B e r b e r i a n w ro t e t h at h e an d So u za “ cam e to t erm s o f w h at t h e d eal p o i n t s are

. ” H e

o u t l i ned wh at h e referred t o as t h e “ u n o ffi ci al p o i n t s ,” i n cl ud i n g t h at So u za wo u ld

h av e 2 1 p ercen t o f “ eq u i t y ” b u t t h at h i s p ercen t ag e w as s u bject t o ch an g e i f Gal l up s

“ n eg o t i at e[d ] a b et t er d eal o n h i s s i d e.” B e r b e ri an b el i ev ed t h at t h e op erat i n g

ag reem en t fo r o n e o f h is co m p an i es co u l d s erv e as a m o d el o p erat i n g ag reem en t

, b ut

t h at t h ey “ w i ll n eed t o g o o v er i t i n d et ai l t o m ay b e ad d o r ch an g e s om e p o i n t s .” He

o u t l i ned s o m e of t h e p o i n t s t h at h e “ rem em b er[ed ] o ff t h e t o p o f [h i s ] h ead .”

Berb eri an co n cl u ded t hat , “ Th e [Un i t ed A l l erg y Serv i ces ] l icen s i n g ag reem en t wi l l

b e s i g ned b y o ur Newco w h ich I wi l l p u rch as e t o n ig h t

. It wi l l h av e referen ces t o ENT

3In s t i t u t e.

. . . I’ m cert ai n I h av e n o t co v ered al l t h e p o i n ts

, n o [r] i s t h is s et i n s t o ne.

Bu t i t i s h o wev er a h i g h l ev el v i ew o f wh at we h av e d i s cu s s ed .”

Two d ay s aft er s en d i ng t h i s e m a i l

, o n Au gu s t 2 1

, 20 1 4, Berb eri an fo rm ed

P i n n a c l e M SO, L LC. On Sep t em b er 1 3, 2 01 4

, Pi n n acl e en t ered an ag reem en t wi t h

ENT In s t i t u t e, an d U n it ed Al l erg y Serv ices b e g a n p ro vi d i n g s erv i ces t o ENT

In s t i t u t e.

In t h e m ean t i m e

, Berb eri an an d So u za, t hem s el v es an d t h ro u g h co u n s el

,

co n ti n u e d t o e x ch an g e co rres p o n d en ce reg ard in g t h ei r rel at i o n sh i p

. On Au g u s t 2 2,

2 0 1 4

, Berb eri an em ai led h i s co u n s el t hat “ De a l h a s b een accep t ed b y al l p art i es

.

So u za wi l l n o t b e a m em

b er o f Pi n n acl e MSO. He wi l l h av e p h an t o m sh ares

. Deal i s

at 5 5 / 4 5

. So u za get s 16 p ercen t .” In Sep t em b er o r Oct o b er, Berb eri an em ai l ed So uza

a draft o f a “ p h an to m u n i t ag reem en t ,” t h at g ran t ed So u za “ ph an t o m un i t s ” eq u al to

1 6 p ercen t “ o f t he Un it s o f [Pi n n acl e] .” So u za d i d n ot s i gn

.

On No v em

b er 1 1 So u za’ s co u n s el em ai l ed Berb eri an ’ s co u n s el t h at t h ere was

“ an ag reem en t o n p ay m en t o f 1 6 % o n al l erg y t es t i n g,” al th o u g h t he Au g us t 1 9 em ai l

u p o n wh i ch So u za b as es h i s c o n t ract cl ai m s st at ed t h at So u za’ s i n teres t was 2 1

p ercen t

. T h e p art i es co n t i n u ed t o d i s ag ree ab o u t ex act l y wh at So u za h ad a percen t ag e

o f. In Decem

b er, h i s co u ns el e m a i l ed Berb eri an ’ s co u n sel t h at So u za “ h ad n ev er

4ag reed t o 1 6% n et o f an y t h i n g .” (Em p h as i s s u p p l i ed ). Th e n ex t d ay

, So u za’ s co u n s el

em ai l ed Berb e r i an ’ s co u n s el t h at “ [r] at h er t h an a p han t o m s h are ag reem en t

, M r.

So u za, t hro ug h Rel ian t Bi o m ed i cal Gro u p, LLC, [ap p aren t l y o ne o f So u za ’ s

co m p an i es ] wi l l en t er i nt o a fee s h ari n g ag re e m en t wi t h Pi n n acl e” u n d er wh i ch

“ Pi nn acl e wi l l p ay t o Rel i an t 16 % o f t h e i n v oi ced am o un t b y t h e 2 5 t h of each m o n t h.

. . .” Co un sel ad d ed t h at “ [i ] n th e ev en t o f a s al e o f t h e c o m p an y (as s et s o r en t it y ),

Rel i an t wi l l g et 1 6 % o f t he g ro s s s al es p ri ce at cl o s i n g

. ” Berb eri an ’ s co u n s el

res p o n d ed t h at h e wo u l d co n s u l t h i s cl i en t

.

On Decem

b er 5

, Berb eri an ’ s co u n sel em ai l e d S o uza’ s co u ns el a d raft

ag reem en t b et ween So u za an d Pi n n acl e. Th e ag reem en t p ro v id ed t h at So u za wo u ld

h av e an u n sp eci fi ed am o u n t o f p h an t o m s h ares i n Pi n n acl e an d wo u l d “ b e p ai d 16 %

o f t h e n et p ro fi t s o f t h e Co m p an y .” So uza’ s co u n s el res p o nd ed w i t h a draft o f h i s o wn

t h at o m i t t ed t h e referen ces to p h an t o m s h ares an d p ro v i d ed t h at Rel ian t Bi o m ed i cal

Gro up wo u l d “ b e en t i t l ed t o recei v e s i x t een p ercen t (1 6%) of t h e g ro ss recei p t s p ai d

t o [Pi n n acl e] ari s in g fro m t h e d el i v ery o f al l erg y

s erv i ces .”

Berb eri a n ’s c o u n s el res p o n d ed t h at “ [t ] h e ag reem en t was n o t t o p ay a

p ercen t ag e o f g ro s s

. Di st ri b u ti o n s wi l l b e m ad e o ut o f n et .” In Jan u ary 2 0 1 5

, So u za’ s

co u ns el res p o n d ed i n t u rn wi t h an o th e r d raft

. He fo l l o wed u p wi t h an em ai l s t at i n g

5t h at So u za’ s p o s i t i o n w as t h at “ t h e p art i es had an e n fo rceab l e o ral ag reem en t (t h e

es s en t i al m at eri al t erm s o f wh i ch were t h at M r. So u za wo u l d g et 1 6 % o f t h e rev en u e

fro m al l erg y t es t i n g serv i ces p l u s 1 6 % if t h e co m p an y g o t so l d ) t h at h ad n o t b een

red u ced t o w ri t i n g .” J u s t o v er a m o nt h l at er, So u za fi l ed t h is act io n

. Two m o n t h s aft er

t h at , ENT In s t i t u t e t erm in at ed t h e ag reem en t wi th Pi n n acl e.

So u za arg u es t h at t h e part i es en t ered an en fo rceab l e co n t ract wi t h al l m at eri al

t erm s d efi n ed b y

t h e Au g u s t 1 9 em ai l. W e d i s ag ree.

“ It i s wel l -es t ab li s h ed t h at a co n t ract do es n o t ex i s t u n l es s t h e part i es ag ree o n

al l m at eri al term s

. OCGA § 1 3

- 3

- 2

. A c o n t r act can n o t b e en fo rced i f i t s term s are

i n co m pl et e, v ag u e, i n d efi n it e o r u n cert ai n.” Bu rn s

, 2 5 2 Ga. Ap p. at 6 0 1-6 0 2 (1 ) (a)

(ci t at i o n o m i t t ed ). Th e Au g u s t 1 9 em ai l i s t oo in d efi n i t e t o b e en fo rceab l e as a

co n tract

. On it s face, i t s t at es t h at t h e t erm s are n o t “ set i n st o n e.” It s t at es t h at s o m e

t erm s m ay n eed t o b e a d d e d a n d o t h ers ch an g ed

. It ex p l ici t ly s t at es t h at So u za’ s

p ercen t ag e i n t eres t “ wi l l ch an g e i f [Gal l up s ] n eg o ti at es a b et ter d eal .” Th e em ai l d o es

n o t ev en es t ab l i s h wh a t So u za wi l l h av e an i n t eres t i n : a co rp orat i o n ? a p art n ers h i p ?

a l im i t ed l i ab i li t y

co m p an y ? a s h are i n rev en u e?

Fu rt her, t h e p art i es ’ co n t i n ued n eg o t i at i o n s dem o ns t rat e t h at t h ey h ad n o t

reach ed ag reem en t o n al l m at eri al t erm s . Aft er t h e Au g u s t 1 9 em ai l

, t h e p art i es an d

6t h ei r co u ns el d is cu s s ed So u za’ s i n t eres t i n t h e en t erp ri s e as o wn i n g p h an t o m s h ares

i n Pi n n acl e, as recei v i n g a p ercen t ag e o f n et p ro fi t s

, as recei v i n g a p ercen t ag e o f g ro ss

p ro fi ts

, an d as recei v i n g a p o rt i o n o f t h e p ro ceed s r e a l i z e d f ro m an y s al e o f t h e

en t erp ri se. See Au ker ma n v. W i t mer

, 2 5 6 G a. Ap p

. 2 1 1

, 2 1 4-2 1 5 (1 ) (5 68 SE2 d 1 2 3 )

(2 0 0 2) (o ral ag reem en t t h at o n e p art y wo u l d b u y ot h er’ s s t ock fo r $ 1 m i l l i o n n et was

u n en fo rceab l e, w h ere i t di d no t p ro vi d e fo r s t ru ct u re o f t ran s act i o n

, pri ci n g s t ru ct u re,

o r res o l u t i o n o f t ax i s su es an d ev i d en ce s h o wed p art i es co n t i n u ed t o n eg o t i at e m an y

o f t h es e t erm s an d d i s cu s s al t ern at i v e t erm s aft er en t eri n g i n t o ag reem en t ).

As So u za t aci t ly

co nced es i n h i s rep l y b ri ef, t h e p art i es h ad n o t ev en reach ed

ag reem en t o n a nu m

b er, wh e t h e r 1 6 p e rcen t o r 2 1 p ercen t

. As d et ai l ed ab o ve,

al t h o u g h So u za’ s co u ns el rep eat ed l y referred t o 16 percen t in h i s co rres p o n d en ce, t h e

Au g u s t 19 em ai l u p on wh i c h So u za b as es h i s co n t ract cl ai m s s t at ed t h at So u za’ s

i n t eres t was 21 p ercen t an d i n h is co m p l ai n t

, So u za s o u g h t a d ecl arat i o n t h at h e o wn s

2 1 per c e n t o f Pi nn acl e. So u za arg u es t h at “ t he p o rt i o n of t h e ag reem en t t h at wo u ld

d et erm i n e t h e o wn ers h i p p ercen t ag es are i rrel ev an t t o t h e q u es t i o n o f as s en t .” Bu t t h e

s i ze o f So u za’ s i n teres t i n an y v en t u re wi th Berb eri an is a m at eri al t erm

. See

M c E lva ney v. Ro u mel co

, LLC

, 3 3 1 Ga. Ap p. 7 2 9

, 73 3 (1 ) (7 7 1 SE2 d 41 9 ) ( 2 0 1 5 )

(al t h ou g h o ral ag reem en t m a y n o t h a v e b een s uffi ci en t l y d efi n i t e as t o p art i es ’

7o wn ers hi p i n t eres t s i n co m p an y

, d efen d an t t wi ce ad m i t ted i n wri t i ng t h at p l ai n t i ff

o wn ed 4 7 p ercen t o f t h e co m p an y

, wh i ch was ev i d en ce t h at t h e p art ies h ad ag reed o n

t h i s m at eri al t erm ).

“ Th e fact s i n t h e reco rd d o n o t s h o w wi t h reas on ab le cert ai n t y wh at t h e p art i es

i n t en d ed t o d o i n th i s ag reem en t

. ” Bu r n s

, 2 5 2 G a. Ap p. at 6 0 4 (1 ) (a) (i ) (o ral

ag reem en t g iv i n g p art y 1 /3 i n t eres t i n p ro fi ts an d ul t i m at e s al e o f b u s i n es s v en t u re

u n en fo rceab l e b ecau s e i t l ack ed t erm s co n cern in g al l o c a t i o n o f co s t s an d l o s s es

,

freq uen cy o f p ay m en t s

, m an n er o f cal cu l at i n g p ro ceed s

, an d t i m e o f d i st ri b u t i o n ). See

al s o Ma s s i h v. Mu l l i n g

, 27 1 Ga. Ap p

. 6 8 5

, 6 8 6 -6 8 7 (1 ) ( 6 1 0 SE2 d 6 5 7 ) (2 0 0 5 )

(d efen d an t ’ s p ro m is e t h at p lai n t i ff wo u l d h av e a 2 0 p e r c en t o w n ers h i p i n n ew

co rp o rat i o n was u n en fo rceab l e b ecau s e det ai l s were n ev er res ol v ed , i n cl u d i n g h o w

p l ai n t i ff wo u l d recei v e h er o wn ers h i p i nt e r e s t a nd h o w t h e co rp o rat i o n w o u l d b e

s t ru ct u red ); Key v. Na

yl or

, In c.

, 2 6 8 G a

. Ap p

. 4 1 9

, 4 2 5 (3 ) (6 0 2 SE2 d 19 2 ) (2 0 0 4 )

(ag reem en t t o tran s fer 2 0 percen t o f s t o ck was u n en f o r c e a b l e wh ere ag reem en t d id

n o t p ro v i d e fo r wh en o r i f t ran sfer was t o b e m ad e, wh at s t o ck was t o b e co n v ey ed

,

an d wh at th e percen t ag e rel at ed t o ). Co n s eq u en t l y

, t h e t r i a l co u rt d i d n o t err by

g ran t i n g Berb eri an s u m

m ary ju d g m en t o n So uza’ s co n t ract -b as ed cl ai m s

.

2

. Th e n o n -ci r cu mven ti o n p r o vi s i o n o f t h e n on -d i scl o s u r e a g r eemen t

.

8So u za arg u es t h at t h e tri al co u rt erred b y g ran t i ng B e r be r ia n sum m a r y j ud g m en t

o n So u za’ s cl ai m to en fo rce a n o n -ci r c u m v e n t i o n p ro v i s i o n in a n o n -d i s cl o s u re

ag reem en t en t ered i n to b y t h i rd p art i es . W e d i s ag ree.

Befo re So u za i n t ro d u ced Berb eri an an d Gal l u p s

, t wo n o n -p art y co m p an i es

as s o ci at ed wi t h So u za an d Berb eri an

, Parad is e M ed i a Ve n t u res d / b /a In t eract i v e

M ed i a Ven t u res L L C a nd W e llC or pR x L L C

, e nt ered a n o n -d i s cl os u re ag reem en t

. Th e

ag reem en t i n cl u d ed a n o n

- c ir c um v en t i o n p ro v i s i o n t h at st at ed “ d u ri n g t h e t erm o f t h i s

ag reem en t an d fo r 3 y ears t h erea f t e r

, R e ci p i en t [d efi n ed i n th e ag reem en t as

W el l Co rp Rx ] wi l l n o t at t em p t t o d o b u s i n es s w i t h, o r o t h erwi s e s o l i ci t an y b u s i n es s

co n tact o r rel at i o n s h i p cr e a t e d o r referred by Own er [d efi n ed in t h e ag reem en t as

Parad i s e M ed i a Ven t u res ] d u ri n g t h e term o f t he ag reem en t .” T h e ag reem en t was

s i gn ed b y So u za as “ Ch ief St rat eg i s t ” o f Parad i s e M ed i a Ven tu res an d Berb eri an as

“ CEO an d Co -Fo u n d er” o f W el l Co rp Rx

.

As t h e t ri al co u rt fo un d

, “ [t ] h e NDA o n i t s face d id no t pro h i bi t t h e co n d u ct o f

Berb eri an an d So uza i n d i v id ual l y

. Th e NDA was b et ween two en t i ti es t h at ar e n ot

p art i es t o t h i s s u i t .” “ A s a g en eral ru l e, an act i o n o n a co nt ract

. . . s h al l b e b ro u g ht

. . . ag ai n s t t h e p art y

wh o m ad e i t . . . .” OCGA § 9 -2 -2 0 (a). “ [I] t is ax i o m at i c t h at a

p ers o n wh o i s n o t a p art y t o a co n t ract i s n o t b ou n d b y i t s t erm s .” Pr i ma r y

9In ves t men t

s, LLC v. W

ee Ten d er Ca r e III

, 3 2 3 Ga. A p p

. 1 9 6, 1 9 9 (1 ) (7 46 SE2 d 8 2 3 )

(2 0 1 3) (ci t at i o ns an d p u n ct uat i o n o m it t ed ). Here, t he p art i es t o t h e n o n -d i s cl o s u re

ag reem en t are Parad is e M ed ia Ven t u res d / b / a In t eract i ve M ed i a Ven t ures L LC an d

W el l Co rp Rx LLC. Becau se Berb eri an was n o t a p art y t o t h e ag reem en t

, So uza can n ot

en fo rce i t ag ai n st h i m

. Th e tri al c o u r t d id n o t err i n g ran t in g Berb eri an s u m m ary

ju d g m en t o n t hi s c l a i m

. Bu t s ee Rymer v. Po l o G o l f & Co un t r

y Cl u b Ho meo wn er

s

As s n

. , 33 5 Ga. Ap p

. 1 6 7

, 1 7 0 (1 ) (a) (7 8 0 SE2 d 9 5) (2 0 1 5) (“ If

. . . . s u bs eq u en t t o an

ap p el l at e d eci s i o n , t h e ev id en t i ary p o s t u re o f t h e cas e ch an g es i n t h e t ri al co u rt , t h e

l aw o f t h e c a s e ru le d o es n ot l i m i t o r n eg at e t h e effect t h at s u ch ch an g e wo u ld

o t h erwi s e m an d at e. Th e p o s t u re o f t h e cas e can be ch an g ed b y an am en d m en t t o t h e

co m p l ai n t or b y t h e s u b m i s s i on o f ad d i t i o n al ev i d en ce.”) (ci tat i on s an d pu n ct u at i o n

o m it t ed ).

Ju d g men t a f f i r m ed . McMi l l i a n a n d

Bet hel , JJ., co n cu r

.

10