Opinion ID: 2469348
Heading Depth: 2
Heading Rank: 4

Heading: Count I: Wrongful Termination

Text: L-7 stated a claim for declaratory judgment for all three prongs of Count I. First, L-7 stated a claim for declaratory judgment that Old Navy failed to comply with the notice and cure provisions of the Agreement. Before either party could terminate the Agreement, section 5 required (1) notice of a material breach, (2) 30 days' opportunity to cure, (3) failure to cure the material breach, and (4) notice of termination. See Agreement § 5. But Old Navy's Termination Letter provided only notice of terminationeffective immediatelywithout providing L-7 with notice of its alleged breaches and 30 days' opportunity to cure. Old Navy conceded as much in its motion for judgment on the pleadings. See Old Navy's Memorandum of Law in Support of Motion for Judgment on the Pleadings at 23. Therefore, this claim should have survived. Second, for the same reasons, L-7's claim for declaratory judgment that the Termination letter did not effect a termination of the Agreement should have survived. Third, L-7 stated a claim for declaratory judgment that Old Navy wrongfully terminated the Agreement. Old Navy notified L-7 that it had materially breached the [Agreement] by [ (1) ] filing a lawsuit against Old Navy and (2) by failing to satisfy certain unspecified performance obligations. Ex. 29. [B]ringing suit to determine the meaning of an agreement is not a breach of that agreement absent some explicit contractual provision that the party will not bring suit. Prudential Equity Grp., LLC v. Ajamie, 538 F.Supp.2d 605, 611-12 (S.D.N.Y.2008). Moreover, as L-7 explained to the District Court, none of the vague, unspecified issues mentioned in the Termination Letter had been previously raised with L-7.... To the contrary, Mr. Oldham had been repeatedly and widely praised by Gap and Old Navy executives and staff throughout his Old Navy tenure. L-7 App. Brief at 50 (citing multiple allegations in, and documentary evidence supporting, the Complaint). Old Navy made no argument, and pointed to no evidence, contradicting these well-pled facts. Therefore, accepting L-7's allegations as true and drawing every inference in its favor, L-7 plausibly alleged that it was in compliance with the Agreement, which was therefore wrongfully terminated. The District Court dismissed Count I upon its determination that Old Navy had no duty to provide L-7 with an opportunity to cure because such cure would have been futile. (Of course, if the alleged grounds for L-7's termination did not constitute breach or material breach, then it is irrelevant whether L-7 could have cured.) Thus, the District Court concluded that Oldham was unlikely to have been able to perform [his] duties after he sued Old Navy and unlikely to have withdrawn his complaint if Old Navy had sent a notice of breach. But this appears to be speculative. That conclusion, and the conclusion that withdrawal of the complaint could not have undone the harm caused by the public filing of a lawsuit against Old Navy, 2010 WL 157494, at  (emphasis added), rests on the public nature of the litigation. However, it is undisputed that both of L-7's complaints were filed under seal. For all of these reasons, Count I survives Old Navy's 12(c) motion as a matter of law.