Court Opinion

ID: 221646
Source: CourtListenerOpinion
Date Created: 2011-07-22 18:47:11+00
Date Added: 2024-06-11T17:28:51.072348
License: Public Domain

UNPUBLISHED

                  UNITED STATES COURT OF APPEALS
                      FOR THE FOURTH CIRCUIT

                             No. 10-2229

VAHID SEDGHI,

                Plaintiff - Appellant,

          v.

PATCHLINK CORPORATION, a Delaware Corporation,

                Defendant - Appellee.

Appeal from the United States District Court for the District of
Maryland, at Baltimore.     J. Frederick Motz, Senior District
Judge. (1:07-cv-01636-JFM)

Submitted:   June 14, 2011                 Decided:   July 22, 2011

Before TRAXLER, Chief Judge, SHEDD, Circuit Judge, and HAMILTON,
Senior Circuit Judge.

Affirmed in part, reversed in part, and remanded by unpublished
per curiam opinion.

Francis J. Collins, Darragh L. Inman, KAHN, SMITH & COLLINS,
P.A., Baltimore, Maryland; Clay M. Barnes, LAW OFFICE OF CLAY M.
BARNES, Towson, Maryland, for Appellant.       John Alan Doran,
Juliet Speisman Burgess, Phoenix, Arizona; Steven M. Schneebaum,
GREENBERG TRAURIG, LLP, Washington, D.C., for Appellee.

Unpublished opinions are not binding precedent in this circuit.
PER CURIAM:

            Vahid Sedghi appeals a district court order granting

summary judgment against him in his action against his former

employer arising out of an alleged failure to honor a promise to

pay him a commission.        We affirm in part, reverse in part, and

remand.

                                      I.

            Viewing   the    facts   in    the     light    most     favorable   to

Sedghi, as we must in reviewing a grant of summary judgment

against him, the record reveals the following.                 PatchLink was a

small software company based in Arizona.                   In 2004, a group of

venture capital firms invested approximately $35 million in the

company.    At that time, the company was managed by its founder,

Sean Moshir, and his brother, Kourosh Moshir.                 Shortly after the

closing of the venture capital investment, Sean asked Sedghi,

whom he knew from college, to join the company.

            On   September    4,     2004,       Sedghi     signed    PatchLink’s

standard employment agreement, the compensation portion of which

provided:

     a.     As compensation for the services provided by
            employee under this AGREEMENT, EMPLOYER will pay
            EMPLOYEE an initial annual salary of $135,000
            dollars . . . .

     b.     Employer will provide          N/A    stock    option     to   the
            employee . . . .

                                       2
       c.     Commission is paid according to PatchLink sales
              policy.

       d.     There are no other compensation, incentive,
              bonuses, payments, stocks, deferred payments,
              deferred salary, stock options or any other
              payment due to the employee other than what is
              set forth in this agreement unless otherwise
              added as amendment to this cont[r]act and signed
              by both the EMPLOYEE and the president of the
              company.

J.A. 353.         Unlike with some PatchLink employees who had clearly

defined,     written       commission      plans,    no    writing      identified    the

rate of Sedghi’s commission or what products or services would

warrant a commission.              The agreement provided that it “shall be

construed and enforced in accordance with the laws of the State

of Arizona.”           J.A. 358.    Sedghi began work on September 7, 2004.

              According to Sedghi and the Moshirs, around the time

that Sedghi signed his employment contract, Sean also orally

promised Sedghi that he would be entitled to a commission of one

percent      of    PatchLink’s       sales.        Sedghi      would    be   paid    this

commission        in    October    2005,   at     which    time   the    parties    would

memorialize this obligation in writing.                        However, the Moshirs

were    no    longer       PatchLink    employees         by   October    2005.       The

obligation was never memorialized and Sedghi never received the

commission.

              Sedghi brought this action against PatchLink—which is

now called “Lumension Security, Inc.”—asserting several claims

regarding PatchLink’s failure to pay him the commission he was

                                              3
allegedly promised.                  Among other claims, he alleged causes of

action      for    breach       of    contract,        loss    of    commission     under      the

Maryland      Wage        Payment       and       Collection         Law    (“MWPCL”),         and

promissory         estoppel.           Considering          cross-motions         for    summary

judgment,         the    district       court      granted         PatchLink’s     motion      and

denied Sedghi’s.

              The       district       court       ruled      that    Sedghi’s      breach      of

contract      claim       was    governed         by   Arizona       law   and    that    it   was

barred by the Arizona statute of frauds because the September

2004   oral       promise       to    pay    Sedghi     a     one-percent        commission     in

October      2005       could    not    be    performed        within      one    year    of   the

making of the promise.                  See Ariz. Rev. Stat. § 44-101(5).                        In

this regard, the court determined that there was no evidence

that   Sedghi       was    entitled          to   any   such       commission      if    he    left

PatchLink before October 2005.

              As is relevant here, the court ruled that Sedghi’s

MWPCL claim was barred because there is no cause of action that

may    be   brought       under       the    MWPCL      for    a    promise      that    was    not

enforceable under the statute of frauds.                            And, applying Maryland

law to Sedghi’s promissory estoppel claim, the court determined

that the claim failed because it was inequitable by its nature,

as we will explain.

                                                   4
                                         II.

            Sedghi first argues that the district court erred in

ruling    that     his    claim   that    he     was   promised    a    one-percent

commission as part of his compensation was barred by the statute

of frauds because the promise could not be performed within one

year.    We disagree.

            Sedghi does not dispute that the oral promise was made

more than one year prior to October 2005.                However, he maintains

that it could have been performed in one year or less because

Sedghi was an at-will employee and PatchLink would have been

obligated to pay him his one-percent commission if he had been

terminated prior to October 2005.                 Although the district court

rejected this argument on the basis that there was no evidence

that the parties had agreed Sedghi would be entitled to any of

the commission if his employment terminated prior to October

2005, Sedghi simply argues that “there is no evidence whatsoever

in this record that PatchLink would not be obligated to pay

Sedghi his one percent commission on all sales prior to the

expiration    of    one    year.”        Brief    of   Appellant       at   16.    By

advancing only a conclusory argument, Sedghi has likely waived

the issue.       See Eriline Co. S.A. v. Johnson, 440 F.3d 648, 653

n.7 (4th Cir. 2006) (holding that conclusorily assigning error

without providing supporting argument is insufficient to raise

issue).      However,      even   if     the   issue    were   not     waived,    the

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district   court   correctly   concluded   that   Sedghi    forecasted    no

evidence that he was promised any commission in the event that

he was no longer with the company in October 2005.

           To the extent that the oral promise made in September

2004 required Sedghi to still be in the company’s employ in

October 2005 to become entitled to the commission, the district

court correctly concluded that the statute of frauds barred an

action to enforce that promise because, under the very terms of

such an agreement, performance could not be completed within one

year.   Sedghi argues at length that the district court should

have considered parol evidence that the parties actually did

orally agree that he would be entitled to that commission.           This

argument misses the point, however.         That the parties actually

orally agreed that Sedghi would receive the commission does not

allow Sedghi to avoid the statute of frauds.               To do that, he

needs a writing supporting his entitlement to the one-percent

commission that is signed by PatchLink’s representative.                 See

Ariz. Rev. Stat. § 44-101(5).

                                  III.

           Sedghi next challenges the district court’s conclusion

that the MWPCL does not confer a cause of action for enforcement

of a promise when an action on that promise is barred by the

statute of frauds.    We disagree.

                                     6
                The MWPCL requires each employer to pay its employee

“all wages due for work that the employee performed before the

termination of employment, on or before the day on which the

employee would have been paid the wages if the employment had

not   been       terminated.”       Md.    Code,        Lab.    &     Empl.    § 3-505(a).

Sedghi maintains that even if the applicable statute of frauds

would generally bar him from filing suit on the alleged oral

promise     of    a   one-percent     commission,         he    may    bring    an    action

under     the    MWPCL.        However,   as     the    district       court   concluded,

there     is    simply    no    indication       that     the   Maryland       legislature

intended that the MWPCL would essentially trump the statute of

frauds     or    other    prohibitions         on   the    enforcement         of    certain

promises. 1        Thus, the district court properly granted summary

judgment on this claim.

                                          IV.

                Sedghi finally argues that the district court erred in

granting summary judgment on his claim for promissory estoppel.

We agree.

      1
       Like the Arizona statute of frauds, the Maryland statute
of frauds prohibits the bringing of an action that cannot be
performed within one year of the making of the agreement unless
the agreement, “or some memorandum or note of it, is in writing
and signed by the party to be charged or another person lawfully
authorized by that party.”   Md. Code, Cts. & Jud. Proc., § 5-
901.

                                             7
            To prevail on a claim of promissory estoppel under

Maryland law, the plaintiff must show that there was “(1) a

clear    and    definite    promise;    (2)     where      the    promisor    has    a

reasonable      expectation   that     the    offer   will       induce   action    or

forbearance on the part of the promisee; (3) which does induce

actual and reasonable action or forbearance by the promisee; and

(4)   causes     a   detriment   which       can    only    be    avoided    by    the

enforcement of the promise.”           Pavel Enters. v. A.S. Johnson Co.,

674 A.2d 521, 532 (Md. 1996) (emphasis omitted).                   The       district

court acknowledged that “[m]echanical application of these four

elements may seem to indicate that [Sedghi] does have a viable

promissory      estoppel    claim.”      J.A.      918.     The    district       court

nonetheless noted that Pavel requires that

      in applying the fourth element, the trial court, and
      not a jury, must determine that binding the defendant
      is necessary to prevent injustice. This element is to
      be enforced as required by common law equity courts—
      the Plaintiff must have clean hands. This requirement
      requires   the  further  determination  that  justice
      compels the result.

J.A. 918-19 (internal quotation marks and alterations omitted).

The     court    reasoned     that     under       this    principle,        Sedghi’s

promissory estoppel claim was “by its nature . . . inequitable”:

      It is based upon the assertion that (1) Plaintiff was
      orally promised a substantial commission by his
      college roommate, who was then an owner of defendant;
      (2) the alleged promise was unenforceable under the
      statute of frauds and inconsistent with the language
      of   the  written   employment  agreement  into  which
      Plaintiff   entered;   (3)  Plaintiff  was  handsomely

                                         8
    compensated for the work that he performed for
    defendant   without   consideration  of  the   alleged
    commission; (4) Plaintiff bases his claim solely upon
    the testimony of himself, his former college roommate,
    and his former college roommate’s brother, and (5)
    Plaintiff’s college roommate and his brother, as well
    as plaintiff, would benefit from holding defendant
    liable in this case because Plaintiff’s college
    roommate and his brother have now started a business
    that competes with Plaintiff.

J.A. 919.

            We hold that the district court’s analysis is flawed.

Viewed in the light most favorable to Sedghi, as it must be at

the summary judgment stage, the forecasted evidence shows that

Sedghi and the Moshir brothers testified truthfully regarding

the commission promise.       In that event, their prior relationship

would be irrelevant as would any other incentive the Moshirs had

to testify as they did.       It appears that the district court, in

concluding otherwise, erred in making credibility determinations

at the summary judgment stage.             Additionally, that Sedghi was

well compensated is not dispositive of his claim so long as

PatchLink’s promise nevertheless induced actual and reasonable

action or forbearance by him.              Finally, that the statute of

frauds   bars   enforcement    of    the    oral    promise   only   supports

Sedghi’s    promissory    estoppel    claim    as    it   leaves   promissory

estoppel as his only remaining possible avenue for relief for

the loss incurred.       Thus, we conclude that the facts identified

                                      9
by   the    district      court    do   not    justify   the   grant      of   summary

judgment against Sedghi on his promissory estoppel claim.

                                          V.

              In sum, we reverse the grant of summary judgment to

PatchLink on Sedghi’s promissory estoppel claim but otherwise

affirm the district court’s judgment.                    We therefore remand to

the district court for further proceedings consistent with this

opinion. 2       We dispense with oral argument because the facts and

legal      contentions     are    adequately     presented     in   the    materials

before     the    court   and     argument     would   not   aid    the   decisional

process.

                       AFFIRMED IN PART, REVERSED IN PART, AND REMANDED

      2
        PatchLink requests that we award it attorneys’ fees and
costs for defending this appeal.     See Ariz. Rev. Stat. § 12-
341.01.    We do not address this issue but leave it to the
district court to resolve at the appropriate time.

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