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Bravia Capital Partners, Inc. v. Fike

August 25, 2010


The opinion of the court was delivered by: John F. Keenan, United States District Judge

Opinion and Order

Before the Court is Defendant Maryanne Fike's ("Fike" or "Defendant") motion to dismiss this declaratory judgment employment action and Plaintiff Bravia Capital Partners' ("Bravia" or "Plaintiff") cross motion to dismiss the Fifth, Sixth, Seventh, Eighth, Ninth, and Tenth counterclaims. For the reasons that follow, Defendant's motion is denied and Plaintiff's motion is granted in its entirety.

I. Background

A. Employment Agreement

The following facts, as alleged in the Answer and the employment contract submitted by both parties, are accepted as true for the purposes of these motions. Bravia is a New York corporation which provides financing and other services to the aviation industry. In an attempt to expand its business, on November 1, 2006, Bravia hired Fike, a New Jersey resident, as an independent contractor. Her official title was Director of Business Development, and her main job function was "bringing in new clients (primarily commercial airlines) that [Bravia] might look to offer [its] structured finance products or [its] private equity investments." (Compl., Ex. A). The parties memorialized this employment arrangement in a single page letter dated December 14, 2006. Remarkable for its vagueness, the employment letter's main purpose is to define "our financial arrangements." (Id.). The parties contemplated a tiered compensation system for Fike based on "any transactions that close": she would receive a flat fee of 5% of any gross fees paid to Bravia related to an "in-house" transaction on which she worked, i.e., a transaction with Bravia's existing client, but for any new client that she brought to the firm, she would receive 10% of the first $500,000 in gross fees Bravia earned, 15% of fees between $500,000 and $1 million, and 20% of any fees in excess of $1 million. (Id.). Thus, under the broadly phrased agreement, the only condition precedent to Fike's receipt of commission payments is the closing of a transaction with a client she serviced. The employment contract does not include any terms requiring Fike to be employed at the time a transaction closes in order to be paid.

In January 2008, the parties decided to modify the compensation schedule in the December 14, 2006 employment letter. Beginning January 31, 2008, Fike would receive a monthly salary of $5,000 and a reduced percentage of gross fees earned. Specifically, for any new client Fike brought to Bravia for which a transaction closed, she would receive 9% of the first $500,000 in gross fees earned. Bravia terminated Fike's employment in February of 2009.

B. Disputed Transactions

Bravia subsequently brought this declaratory judgment action seeking judgment that Bravia does not owe Fike any additional compensation in connection with various deals. In six of her counterclaims, Fike contends that Bravia owes her commissions and expenses related to transactions that have closed (including, but not limited to, deals in which Bravia provided structured finance products or private equity investment), transactions that are in the process of closing, and transactions that are expected to close in the future with clients Fike introduced to Bravia. Only those counterclaims that are the subject of the instant motion are discussed below.

1. Galaxy Airlines

In December 2008, Bravia entered into a letter of intent with Galaxy Airlines, Co. Ltd. ("Galaxy Airlines") for the purchase of one airliner. The deal was originally slated to close in December of 2008, but it did not. In her fifth counterclaim, Fike alleges that Bravia acted in bad faith by engaging in a series of pretexts to delay the closing of the agreement with Galaxy Airlines, and that the Galaxy Airlines transaction fell through in January 2009 due to Bravia's failure to execute the purchase contract. Further, Fike alleges that Bravia and Galaxy Airlines nonetheless continue to discuss the proposed transaction. Fike claims that she sustained damages in excess of $3 million -- that is, the compensation she expected to earn on the Galaxy Airlines deal -- due to Bravia's bad faith failure to complete the transaction.

2. Air Berlin

In February 2009, Bravia entered into an agreement with Air Berlin to arrange financing for the purchase of several aircraft. Fike made the initial contact with Air Berlin. In her sixth counterclaim, Fike alleges that the Air Berlin deal consisted of an initial financing for ten aircraft, with additional financing for other planes to be negotiated later.

She claims that an unnamed Bravia employee was hostile to Air Berlin's attorney, and, as a result, the attorney "indicated that she was unwilling to continue with the transaction." (Answer ¶ 136). Fike alleges that Bravia's expected fees for the first tranche of aircraft financing was in excess of $10 million, with an additional $10 million to follow from other aspects of the transaction. Consequently, she claims that Bravia's hostile conduct and failure to close the Air Berlin deal will or has deprived her of at least $2 million in compensation.

C. Additional Counterclaims

Fike pleads four additional counterclaims relating to her termination. In her seventh counterclaim, she alleges that her discharge was the result of negligent or willful misconduct by Bravia to prevent her from earning compensation, entitling her to $10 million in damages. In her eighth counterclaim, Fike alleges that Bravia continues to pursue fee-generating transactions with unspecified clients she brought in, entitling her to $10 million in damages to compensate for Bravia's unjust enrichment. Her ninth counterclaim appears to be premised on wrongful termination. Finally, in her tenth counterclaim, Fike alleges that Bravia has refused to produce documents, supplied her with false and ...

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