Court Opinion

ID: 4433552
Source: CourtListenerOpinion
Date Created: 2019-08-27 15:00:22.846517+00
Date Added: 2024-06-11T13:32:59.087636
License: Public Domain

NOT RECOMMENDED FOR PUBLICATION
                                File Name: 19a0452n.06

                                           No. 18-5543

                          UNITED STATES COURT OF APPEALS
                               FOR THE SIXTH CIRCUIT

 CHARLESTON LABORATORIES, INC.,                          )                        FILED
                                                         )                  Aug 27, 2019
        Plaintiff-Appellee,                                             DEBORAH S. HUNT, Clerk
                                                         )
                                                         )
        v.
                                                         )
                                                         )      ON APPEAL FROM THE
 JOHN F. AMELING,                                               UNITED STATES DISTRICT
                                                         )
        Defendant,                                       )      COURT FOR THE EASTERN
                                                         )      DISTRICT OF KENTUCKY
 SIDIS CORP.; PRIME DP, LLC,                             )
        Defendants-Appellants.                           )

BEFORE:        COLE, Chief Judge; BATCHELDER and DONALD, Circuit Judges.

       ALICE M. BATCHELDER, Circuit Judge. Defendant SIDIS Corp. appeals the orders

of the district court granting Plaintiff Charleston Labs’s motion for judgment on the pleadings and

denying SIDIS Corp.’s motion for judgment on the pleadings. Defendant Ameling does not appeal

the dismissal of his crossclaim. Charleston Labs’s claim arises from a contractual dispute

regarding a Stockholder’s Agreement among the founders of the company, including Ameling.

Charleston Labs alleges that a separate contract, the Settlement Agreement, between Ameling and

SIDIS Corp., violated the Stockholder’s Agreement between Ameling and Charleston Labs.

       Under the Settlement Agreement, Ameling pledged a portion of the proceeds of any future

sale of his shares of Charleston Labs’s stock to SIDIS Corp. as consideration for settlement of an

unrelated dispute. The Settlement Agreement did not transfer ownership or control of any of

Ameling’s shares; it merely pledged a portion of proceeds of any future sale of the shares. The
No. 18-5543, Charleston Labs, Inc., v. Ameling

pre-existing Stockholder’s Agreement between Charleston Labs and Ameling, however,

prohibited the sale, pledge, encumbrance, or transfer of any interest in shares of the company’s

stock without Charleston Labs’s consent.

        Applying Delaware law, through the choice-of-law provision under the Stockholder’s

Agreement, the district court held that (1) the right to receive proceeds from the sale of stock is an

interest in the underlying stock, and (2) such a transfer restriction is valid. Accordingly, the district

court held that the Settlement Agreement violated the Stockholders Agreement and granted

Charleston Labs’s motion for judgment on the pleadings with respect to its request for declaratory

judgment that the Settlement Agreement between the Defendants is void. The district court also

denied the SIDIS Corp.’s motion for judgment on the pleadings with respect to its four-count

counterclaim for tortious interference with a contract, fraudulent transfer, civil conspiracy, and

punitive damages.

        Having carefully considered the record on appeal, the briefs of the parties, and the

applicable law, we conclude that the district court’s opinion and orders, granting Charleston Labs’s

motion for judgment on the pleadings and denying SIDIS Corp.’s motion for judgment on the

pleadings, thoroughly and accurately set out the undisputed facts, properly interpreted the contracts

among the parties, and properly applied the governing law. Because the issuance of a full opinion

would serve no jurisprudential purpose and would be duplicative, we AFFIRM on the basis of the

district court’s well-reasoned opinion and orders.

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