Virginia Lawyers Weekly VA Lawyers Weekly
Although a party sued for allegedly breaching a master subcontract agreement, or MSA, argued that it was an unenforceable agreement to agree, because parties must be given the opportunity to test their theories and defenses through the crucible of discovery, including a fact-intensive review of “the facts and circumstances surrounding the teaming agreement,” its motion for judgment on the pleadings was denied.
Background
On Jan. 15, 2021, Elevate Group LLC sued Amyx Inc., asserting multiple claims arising out of their MSA. The parties thereafter stipulated to the dismissal of all claims, save one for breach of contract.
Amyx has now moved for judgment on the pleadings on that remaining claim. Amyx argues that (1) the parties had a mere agreement to agree; (2) the MSA’s 35 percent workshare guarantee did not apply to non-Office of Compliance and Examinations, or OCIE, work at the Securities and Exchange Commission, or SEC; (3) Amyx’s obligations under the contract had expired; and (4) Amyx was not precluded from contracting with Datascience or Datascience’s employee, Bradley Meyer.
Agreement to agree
Amyx argues the MSA is an unenforceable agreement to agree. Its argument hinges largely on this court’s ruling in Cyberlock Consulting, Inc. v. Info. Experts, Inc., 939 F. Supp. 2d 572 (E.D. Va. 2013), in which the court held unenforceable a “Second Teaming Agreement” because it was a mere agreement to agree.
Cyberlock teaches that where the enforceability of a particular contract provision turns not only on contract interpretation principles but on a fact-intensive review of “the facts and circumstances surrounding the teaming agreement,” the parties must be given the opportunity to test their theories and defenses through the crucible of discovery.
The parties to this litigation will now proceed to discovery; to dismiss Elevate’s contract-breach claim on the basis that it is a mere agreement to agree would deprive the parties of that opportunity.
Guarantee
Amyx argues that the parties did not agree that the 35 percent workshare provision applied to all of Amyx’s revenue under its prime contract vehicle with the SEC. While this reading of the contract might hold some persuasive force, it is not the only plausible reading. It is at least plausible that the 35 percent workshare guarantee that applies to OCIE would inform the pecuniary arrangement for work performed under the same prime contract for other SEC components. As a result, the court declines to grant judgment on the pleadings based on this theory.
Expiration
Amyx next seeks judgment on the pleadings on the ground that its obligations under the contract had expired. The relevant provision in the MSA makes extension of the MSA contingent on the extension of the prime contract. Because Elevate alleges that the prime contract was extended, and the court takes this allegation as true, as it must at this stage of litigation, Elevate has plausibly pleaded that Amyx’s contractual duties under the MSA continued when the prime contract was extended. The court therefore declines to grant judgment on the pleadings on the basis that the parties’ contract had purportedly expired.
Non-solicitation
Amyx argues that the MSA’s restrictive covenant applies to employees, agents, consultants, officers and representatives of Elevate, but not to subcontractors or independent contractors like Datascience. Notably, Amyx cites no case law for the proposition that an independent contractor cannot act as a party’s “consultant” or “representative.”
Without ample authority supporting that result, this court remains unpersuaded that judgment on the pleadings may be granted on such a one-dimensional reading of the restrictive covenant. What is more, the text of the MSA calls into question this narrow reading of the “any employee, agent, consultant, officer or representative of the other party” language.
Defendant’s motion for judgment on the pleadings denied.
Elevate Group LLC v. Amyx Inc., Case No. 1:21-cv-48, Aug. 30, 2022. EDVA at Alexandria (Alston). VLW 022-3-384. 15 pp.
